SWOT Analysis Report Presentation

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• SWOT Matrix Analysis

S Strengths W Weakness
O Opportunities T Threats
Oscar Reyes August, 2015
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Company Name Cementos Argos
Parent Company Grupo Argos
Category Business (for-profit) Construction Material
Sector Real Estate and Constructions
Tagline/Slogan Leadership, Investment and Diversification
USP The Argos business model focuses on the client and on sustainable development, which means it is economically viable, respects people, and is environmental friendly and responsible.
Segment Cement and Concrete
Target Group Builders, engineers and contractors, and large companies developing large urban projects and real estate.
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Positioning We care for the customer. We care for the customer.
Competitors U.S. National Cement of Alabama, Giant Cement, Lehigh Cement
Competitors LatAm Cemex, Holcim, Votorantim, Camargo Correa, Lafarge, Nassau, Cruz Azul, Cimpor.
Description Argos is an international producer and marketer of cement and concrete, with a presence in Colombia, the U.S. and the Caribbean. Argos is a leader in Colombia and in the cement business, as the fifth largest producer in Latin America and second largest in the southeastern of United States. It has nine plants in Colombia and two in the U.S. In the concrete business, Argos is a leader in Colombia and fourth largest producer in the United States. Argos has 308 plants in Colombia, United States, Haiti and Panama. The total installed capacity is 14.5 million cubic meters of concrete per year. Argos is an international producer and marketer of cement and concrete, with a presence in Colombia, the U.S. and the Caribbean. Argos is a leader in Colombia and in the cement business, as the fifth largest producer in Latin America and second largest in the southeastern of United States. It has nine plants in Colombia and two in the U.S. In the concrete business, Argos is a leader in Colombia and fourth largest producer in the United States. Argos has 308 plants in Colombia, United States, Haiti and Panama. The total installed capacity is 14.5 million cubic meters of concrete per year.
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Strengths
Advantages the competition may or does not have.

• Market concentration of more than 50.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.
• It has several manufacturing facilities in
  different countries located in strategic
  locations.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.
• It has several manufacturing facilities in
  different countries located in strategic
  locations.
• One of the best companies with revenues in
  Colombia.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.
• It has several manufacturing facilities in
  different countries located in strategic
  locations.
• One of the best companies with revenues in
  Colombia.
• It is the largest cement player in Colombia and
  the fifth in LATAM.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.
• It has several manufacturing facilities in
  different countries located in strategic
  locations.
• One of the best companies with revenues in
  Colombia.
• It is the largest cement player in Colombia and
  the fifth in LATAM.
• Wide logistics structure, composed by ports,
  grinding of clinker and terminals of receipt and
  packaging.

• Market concentration of more than 50.
• Barriers to entry for other companies, since it
  is very difficult and expensive to establish the
  infrastructure necessary to establish a cement
  company.
• It has several manufacturing facilities in
  different countries located in strategic
  locations.
• One of the best companies with revenues in
  Colombia.
• It is the largest cement player in Colombia and
  the fifth in LATAM.
• Wide logistics structure, composed by ports,
  grinding of clinker and terminals of receipt and
  packaging.

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Opportunities
Factors that can aid in reaching a goal.

• Increase of public expenditure in Colombia is
  areas such as construction, expansion of roads,
  housing development, etc.

• Increase of public expenditure in Colombia is
  areas such as construction, expansion of roads,
  housing development, etc.
• Oligopoly of cement and concrete that is in
  Colombia provided to ensure a set level of sales,
  since it is quite difficult to compete in this
  guild.

• Increase of public expenditure in Colombia is
  areas such as construction, expansion of roads,
  housing development, etc.
• Oligopoly of cement and concrete that is in
  Colombia provided to ensure a set level of sales,
  since it is quite difficult to compete in this
  guild.
• Colombia trade agreements with various countries
  can subscribe to facilitate the passage of the
  cement.

• Increase of public expenditure in Colombia is
  areas such as construction, expansion of roads,
  housing development, etc.
• Oligopoly of cement and concrete that is in
  Colombia provided to ensure a set level of sales,
  since it is quite difficult to compete in this
  guild.
• Colombia trade agreements with various countries
  can subscribe to facilitate the passage of the
  cement.
• The countrys wealth in natural resources, Argos
  gives a wide range of minerals needed for the
  production of their products.

• Increase of public expenditure in Colombia is
  areas such as construction, expansion of roads,
  housing development, etc.
• Oligopoly of cement and concrete that is in
  Colombia provided to ensure a set level of sales,
  since it is quite difficult to compete in this
  guild.
• Colombia trade agreements with various countries
  can subscribe to facilitate the passage of the
  cement.
• The countrys wealth in natural resources, Argos
  gives a wide range of minerals needed for the
  production of their products.

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Weakness
Characteristics that are at a disadvantage.

• Decision-making is slow because it needs a
  consensus to implement actions.

• Decision-making is slow because it needs a
  consensus to implement actions.
• The power in the management business managers
  possesses but not shareholders, which may
  ultimately pose a risk.

• Decision-making is slow because it needs a
  consensus to implement actions.
• The power in the management business managers
  possesses but not shareholders, which may
  ultimately pose a risk.
• Global awareness of Argos is very less as
  compared to International cement brands.

• Decision-making is slow because it needs a
  consensus to implement actions.
• The power in the management business managers
  possesses but not shareholders, which may
  ultimately pose a risk.
• Global awareness of Argos is very less as
  compared to International cement brands.

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Threats
Factors that the site does not have or are
ineffective

• As the cement made from mineral materials, there
  is a risk that these shortages.

• As the cement made from mineral materials, there
  is a risk that these shortages.
• Increased demands on environmental certificates
  both nationally and internationally that hurt
  production and higher costs may be awarded to the
  company.

• As the cement made from mineral materials, there
  is a risk that these shortages.
• Increased demands on environmental certificates
  both nationally and internationally that hurt
  production and higher costs may be awarded to the
  company.
• Climate change will cause some increase costs
  such as transportation.

• As the cement made from mineral materials, there
  is a risk that these shortages.
• Increased demands on environmental certificates
  both nationally and internationally that hurt
  production and higher costs may be awarded to the
  company.
• Climate change will cause some increase costs
  such as transportation.
• Enactment of antitrust laws by the national
  government.

• As the cement made from mineral materials, there
  is a risk that these shortages.
• Increased demands on environmental certificates
  both nationally and internationally that hurt
  production and higher costs may be awarded to the
  company.
• Climate change will cause some increase costs
  such as transportation.
• Enactment of antitrust laws by the national
  government.

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Product

• Cement Cements is a substance that unites or
  brings cohesion. It comes in powder and is
  obtained by crushing hard rocks (limestone and
  clay). It hardens with water and produces
  compounds that are highly resistant. Its
  duration prior to use depends on the proper
  storage of cement is made.
• Concrete Argos has three types of gray cement,
  the general purpose used in the vast majority of
  the constructs, the structural use and the oil
  use.

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Target Market

• Focus in buildings generally, so potential buyers
  would be those individuals and companies engaged
  in the construction area as workers, builders,
  engineers and contractors and large companies
  developing large urban projects and real state.
• The cement has a very low differentiation so the
  target market focuses on features and the product
  will establish additional specifications.

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Economic Results - 2014

• Cement volume (in millions of metric tons) 8.4
  higher than 2013.
• Concrete volume (in millions of cubic meters)
  18 higher than 2013.
• EBITDA (in billions of COP) 1,060 (8).
• Revenues (in trillions of COP) 5.8 (17).
• Revenues stemming from innovation USD 269
  million (COP 538.3 billion).
• Social investment in communities USD 20.9
  million (COP 50.08 billion).
• Savings stemming from innovation USD 2.39
  million (COP 5.7 billion).

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Key Facts (1/3)

• Announcement of Structural Expansion in Colombia
• Sogamoso Plant
• 450 US million
• 2.3 M T annual cement production
• 2,250 new Jobs created
• Construction of a new dry process production
  line.
• Most efficient plant in terms of costs in the
  Colombian Regional Division.

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Key Facts (2/3)

• Florida U.S.A.
• Acquisition by 720 US million.
• Agreement with Vulcan Materials Company.
• Acquisition of assets cement and concrete
  operations and port and concrete block
  manufacturing facilities
• 1.6 million tons (1 cement plant).
• 1.9 million tons (2 clinker grinding facilities).
• 3.3 million m3 (69 concrete plants).
• 2 port facilities.
• 109 million units / year (13 prefabricated
  concrete block manufacturing plants).
• 3.4 million tons (installed cement capacity).
• 3.3 million m3 (installed concrete capacity).

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Key Facts (3/3)

• French Guiana
• 50 million.
• Agreement with Lafarge
• Acquisition of 100 of Ciments Guyanais, the only
  local cement producer
• 200k tons (1 clinker grinding facility).
• 1 port facility.
• Leading manufacturer in French territory.
  Logistic synergies given the proximity to
  operations in Suriname and the Lesser Antilles.

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Economic Results - 2014

• Cement volume (in millions of metric tons) 8.4
  higher than 2013.
• Concrete volume (in millions of cubic meters)
  18 higher than 2013.
• EBITDA (in billions of COP) 1,060 (8).
• Revenues (in trillions of COP) 5.8 (17).
• Revenues stemming from innovation USD 269
  million (COP 538.3 billion).
• Social investment in communities USD 20.9
  million (COP 50.08 billion).
• Savings stemming from innovation USD 2.39
  million (COP 5.7 billion).

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Added Value

• Customers Products adapted to the specific needs
  of our customers and our environment.
• Suppliers Responsible supply chain.
• Communities Better socio-economic conditions for
  our neighboring communities.
• Authorities Diligence that goes beyond
  applicable norms.
• Employees Competent and proud employees.
• Shareholders Guarantee of sustainable investment
  for our shareholders.
• Environment Products with a smaller
  environmental impact throughout their lifecycle.

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Proposed Problem

• Time is changing, and cement industry, too. And,
  a high risk is an occurrence of a change of game
  rules, additions or modifications to the rules
  occurrences, in law, normativity or regulation.

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Problem

• One of the most recent changes happened in cement
  industry in Colombia was the Colombian Technical
  Norm NTC 121 (Norma Técnica Colombiana NTC
  121), which propose a new cement classification,
  since 2014, and with it a new way to think about
  cement.

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Normativity
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Proposed Solution

• Adapt the portfolio according to guides provided
  by NTC 21 norm. These adaptations impact
  positively Argos indicators, because most
  materials used in cement as active additions
  confer durability, regulating their stability and
  allowing concrete

• and mortars less permeable. And all these
  materials represent a reduction in costs, some
  benefits are

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Natural and Artificial Pozzolans

• Long-term mechanical resistance.
• Reduction the heat of hydration.
• Durability against the action of hard and acidic
  waters.

• Impermeability reducing porosity and increasing
  compactness.
• Stability against expansion due to the presence
  of free lime, sulfates, and alkali aggregate
  reaction, mainly.

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Slag

• High final resistance.
• Cements of low heat of hydration.

• Contain more number of pores but smaller (dense
  but low permeability).
• Durability (high resistance to sulfates, seawater
  and alkali-aggregate reaction).
• Improvements in the formulation of concrete
  (workability, settlement, impermeability).

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Limestone

• It has a physical effect on the mortar due to
  further densification.
• Increases work capacity.
• Consumes less or equal water despite its
  thinness.
• Provides control to set cement.

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