Mexico's Cemex closes U.S. plant, lays off workers

MONTERREY, Mexico (Reuters) - Mexico's Cemex, the world's No. 3 cement maker, is shutting another U.S. plant and laying off workers as the U.S. recession deepens, the company said on Friday.

The Davenport plant in California, which produces just under 1 million tons of cement a year, has been hurt by a sharp decline in new home construction in the state and cement demand is expected to further decrease, Cemex said.

"Based on the current recession and these market conditions, we've had to make some hard decisions and will be temporarily ceasing operations at the plant effective March 9, 2009 ... until conditions improve," Cemex said in an e-mail to Reuters.

"As part of this, we will be forced to temporarily lay off employees. While we will maintain employees on an active pay status until March 9, lay offs could begin sooner," the company said. The plant has some 120 employees.

Last year, Cemex closed its cement plant in Florida, and it aims to close its Barrington cement plant in the UK.

Citing California Building Industry Association data, Cemex said new home construction in California last year fell to its lowest level since records began in 1954, and was expected to get worse in 2009.

Cemex, which operates in more than 50 countries, is the topproducer of cement in the United States.

The company said it was not permanently shutting the Davenport plant, and that it aimed to call employees back to work when cement demand rises again.

Monterrey-based Cemex increased its presence in the United States last year after it bought Australia's Rinker, which had large U.S. operations.

Cemex is struggling with a $16.4 billion debt load since the Rinker takeover, as well as tight credit conditions because of the global recession and seizure of its assets in Venezuela.

(Reporting by Gabriela Lopez; Editing by Toni Reinhold)