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Cement

Helping cement companies plan strategic and operational responses to a shifting industry landscape.

The cement industry is changing. Demand is growing in emerging markets, but growth in mature markets has stalled. Major global players are continuing to consolidate, while local incumbents are investing outside of their home markets. And individual micro-markets within larger regions are developing in vastly divergent ways, generating a need for granular analysis and insights.

What we do

In the last five years alone, we have supported cement clients across five continents on over 100 projects, providing both strategic and tactical advice on how they can best respond to—and capitalize on—these shifts. We use a combination of industry experience, detailed geographic insights, and market outlooks to support our cement clients across five key functions: strategy, operations, organization, corporate finance, and marketing & sales.

Impact story

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We helped a global integrated cement player client with a strong tradition in engineering optimize their operations using digital and advanced analytics. Partnering with McKinsey’s Digital and Operations Practices, we conducted a thorough exercise that included extracting, structuring, and storing the client’s data, building the models, and sharing our domain expertise. After going through all their factories and sites, we chose one piece of equipment where we could drive peak performance. The financial impact was significant – where we had anticipated 3 to 6 percent in throughput improvements, we achieved 10 percent – a notable achievement especially for a mature process industry.

Examples of our work

  • We supported a major cement company that was facing increasing competition, rising energy costs, and a slowing market. We helped the CEO in the Asia region redesign its supply chain in order to create a competitive advantage. The company has reduced costs and increased revenues—while at the same time lowering freight charges to customers, increasing on-time deliveries, and reducing lead times in several regions.
  • We helped one of the top cement manufacturers in the world—heavily affected by the financial crises—cut costs and identify opportunities for growth. Using our proprietary research, we helped the company forecast cement demand and identify the most attractive micro-markets for greenfield and M&A growth. Top leadership is now aligned on the company's next steps for where and how to expand.
  • We provided support in the wake of a merger of two cement companies that had comparable revenue, outputs, and assets. We helped the new company optimize its distribution networks, transfer operational skills as necessary to ensure production was uninterrupted, and balance surplus capacity with surplus demand. The company achieved significant synergies.

Featured capabilities

  • Detailed market assessment and cement consumption projections through 2020 for core cement markets throughout the world.
  • In-depth assessments of the world's 50 largest micromarkets in terms of expected growth and EBITDA margins through 2020.
  • A 48-hour operations diagnostic that quickly helps cement plants gain a highly accurate understanding of both the key improvement levers and the overall size of the opportunity in their operations.

Partnerships and publications

In cooperation with the German Cement Association (VDZ), we published an in-depth report on the amendment to the European Directive on Emission Trading, and its impact on the German cement industry.

We worked closely with our colleagues throughout McKinsey, and with ten global organizations—The Carbon Trust, ClimateWorks, Enel, Entergy, Holcim, Honeywell, Shell, Vattenfall, Volvo, and WWF—on the 2009 report, "Pathways to a Low-Carbon Economy."

Featured expert

Christoph Schmitz

Senior Partner, Frankfurt

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