With CEMEX's (NYSE:CX) recent acquisition of Rinker (NYSE:RIN), and Heidelberg Cement's purchase of Hanson (NYSE:HAN), the battle for cement supremacy shows no signs of stopping. To stay ahead of the competition, CEMEX is undertaking a unique program in Latin America's at-risk communities. The award-winning initiative, Patrimonio Hoy, drives CEMEX's sales growth while promoting a real social benefit: increased homeownership among low-income families.
As more competitors entered the Mexican market, CEMEX needed a new strategy to stay ahead of them. It partnered with Vision, a business-consulting firm, to explore ways to build a "sustainable competitive advantage" among low-income homebuilders, a segment representing 35% of Mexico's total cement market.
According to CEMEX's latest sustainability report, Mexico suffers from a housing shortage, particularly for low-income families. To address this need, CEMEX made basic building materials available to low-income families through an affordable pay-as-you-go credit facility. The report explains:
Families group together and commit to save for ten weeks, paying for the materials they need over that time. CEMEX provides the necessary materials in the second week, extending credit for the remaining weeks -- time enough to complete the building. We also offer technical assistance including architectural advice, and tailor our customer service to suit the needs of these customers.
Since kicking off Patrimonio Hoy in Mexico in 1998, this incredibly successful program has been replicated in Colombia, Nicaragua, Venezuela, and Costa Rica. All told, "more than 160,000 families have benefited from Patrimonio Hoy, showing that a company can grow its business and encourage community development at the same time." According to the company, CEMEX benefits, as the program exceeds the minimum standard of a 15% return.
CEMEX has also earned a lot of good will from investors in the Motley Fool CAPS community. The company sports a top-of-the-line five-star rating, which shouldn't surprise shareholders who have enjoyed its run over the past several years. Indeed, CEMEX has given shareholders plenty of reasons to hold its stock. CEMEX's efforts to simultaneously increase profits and improve the livelihood of low-income communities offers yet another.
CEMEX is a recommendation of both Motley Fool Global Gains and Motley Fool Stock Advisor. Both market-beating services offer 30-day free trials.
Fool contributor Jeremy MacNealy has no financial interest in any company mentioned. The Motley Fool has a disclosure policy.
