(Adds details on wealth, board expected to meet)
MONTERREY May 12 Lorenzo Zambrano, one of
Mexico's best-known businessmen who turned Cemex into a global
cement giant but also nearly brought the company crashing down,
died on Monday aged 70.
Cemex said its chief executive of the past three
decades passed away in Madrid of natural causes. There had been
no reports of illness and it was unclear who will succeed
Zambrano, whose grandfather founded the company.
Among Mexico's wealthiest people in 2006, when he was worth
an estimated $1.8 billion, Zambrano's fortune tumbled after a
risky purchase of a rival the following year. He fell off
Forbes' rich list, which fellow Mexican Carlos Slim later led.
Before Zambrano took charge, Cemex was a financially solid,
domestic operation that had successfully avoided Mexico's
dramatic economic crashes but was risk averse.
Zambrano moved to change that, building it into one of
Mexico's first modern multinationals. A series of acquisitions
extended Cemex's reach to five continents, making him the public
face of one of Latin America's most successful companies.
But the $16 billion acquisition of Australian building
materials company Rinker in 2007, when the U.S. housing market
was already months into a downturn, turned Cemex into an early
victim of the subprime housing crash.
At the time, Zambrano put a brave face on it.
"We've shown that a company that is born in a developing
country can compete in the whole world, and we want to keep
doing it," he told Reuters in 2009.
Cemex, one of Mexico's biggest listed companies with a
market value of around 200 billion pesos ($15.4 billion), would
spend the following years struggling with large debts and
trimming costs by outsourcing and cutting jobs.
The company, which dominates the local market and was
accused by rivals of monopolistic practices, kept creditors well
informed as it worked through its debt problems, earning praise
Cemex said it would continue to operate normally after the
death of Zambrano, who was also chairman of the board at the
cement maker and was a board member at IBM Corp. It said its
board of directors was expected to meet in the coming days.
Zambrano's death came as a surprise.
Asked in a Mexican television interview in late April
whether he was thinking about a succession plan, a relaxed,
healthy-looking Zambrano said: "Not at all. There is a lot to be
done and I add value to the company."
Zambrano signed Cemex's annual report, filed with the U.S.
Securities and Exchange Commission at the end of April, and was
active on Twitter until earlier this month.
"I think there will be a little volatility tomorrow on this
news," said Fernando Bolanos, an analyst at Monex brokerage,
citing uncertainty over who will take the helm.
"We don't think there should be fundamental changes at the
company. We think they will maintain the same strategy."
WORST EVER CRISIS
Founded by Zambrano's grandfather more than a century ago,
the company started producing cement in the northern city of
Monterrey, which became one of Mexico's industrial hubs.
Lorenzo Zambrano was born March 27, 1944. Early in his
adolescence, Zambrano showed an interest in running the company,
unlike his father who never took the lead.
He joined the company straight after graduate school in
1968, when he earned his master degree in business
administration at Stanford University.
By 1985, at the age of 41, Cemex's board give him full power
as CEO and Zambrano set high ambitions for the company.
Known as a private person with a love for collecting and
racing vintage cars, Zambrano defied conservative Monterrey
society and never married or had children.
He showed his desire to grow Cemex into a global giant in
1992 when he bought two big Spanish cement firms.
Another milestone came in 2000, when Zambrano bought the
American firm Southdown for $2.8 billion, making Cemex one of
the largest cement producers in the United States.
His purchase of Australia's Rinker briefly drew applause,
but soon proved disastrous for Cemex when major western housing
markets crumbled in late 2008 and early 2009.
Zambrano's credibility was seriously questioned after
saddling the firm with debt it is still paying off and he called
it the "worst crisis" he had ever faced.
But he sought to defend his strategy, saying in 2010 the
company had gone from being "an elephant to being a greyhound."
($1 = 12.9578 Mexican Pesos)
(Reporting by Elinor Comlay and Noe Torres; Editing by Simon
Gardner, Dave Graham, Andre Grenon, Cynthia Osterman and Lisa