Cemex to cut 6,000 jobs worldwide; UK sales drop 19%

Cemex has announced that it is to cut 6,000 jobs worldwide, equivalent to 10% of its workforce, and put more than £1bn of assets up for sale, as it grapples with falling demand.

The moves come as part of an effort to reduce costs by £288m by the end of the year.

The cement and aggregates producer indicated that UK sales have dropped 19% in the UK, 26% in Spain, and 28% in the US. Overall sales have dropped 5% to £3.4bn.

The company said banks have agreed to extend the payment deadline for a £2bn loan it used to buy Australia's Rinker cement last year from 2009 to 2010 in return for higher interest rates.

Meanwhile the disposals of aggregate, concrete and cement plants to raise £1bn in cash are expected to come in Australia, Austria and Hungary.

Cemex, which has expanded aggressively over the past few years, has been hard hit by the slowdown in the US housing market.

The company said US cement volumes had fallen 19% in the third quarter. Readymix has fallen 30% and aggregates 31%. Cemex expects the trend to continue for the rest of the year.

In a statement a Cemex UK spokeswoman said: “Further to the announcement of the quarter three results CEMEX now expects UK cement volumes to decline by about 19%, readymix volumes to drop by about 20% on a like for like basis, and aggregates volume to decrease by approximately 14% for the year 2008.

"In the UK Cemex has already been working on improving efficiencies for several months, and initiatives include prioritising capital expenditure and investment in new projects and in some cases putting these on hold, reducing the cement and aggregate fleets to improve productivity, reducing shifts, overtime spend and head count across the business by at least 10% and closing and mothballing underutilised assets.

"At Cemex we are confident that we have the drive and determination to remain competitive during this challenging time, and fully committed to continue to deliver on our commitments to investors, customers and fellow employees."