MONTERREY (Reuters) - 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 (CMXCPO.MX) 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 from investors.
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.”
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.”
Reporting by Elinor Comlay and Noe Torres; Editing by Simon Gardner, Dave Graham, Andre Grenon, Cynthia Osterman and Lisa Shumaker