Internationalization at Cementos Argos

In October 2014, Jos Alberto V lez, a member of the Board of Directors of Cementos Argos, met with the company's management team to discuss future steps. Two of its largest global competitors, Holcim and Lafarge, had decided to merge, and the decision drove them to disinvest in some key markets, opening up a range of opportunities for Cementos Argos. V lez proposed an ambitious objective to the Board: expanding from US$2.5bn (hereafter $) to $10bn in revenues by 2030. The Board accepted the idea enthusiastically but questioned how to pursue such challenging growth targets. Several options were on the table, but all involved overseas expansion. "We have to enter new markets", Velez pointed out. "There is no way we can grow if we just stay in the markets where we are, and why should we just defend our position? Let's be ambitious." After a long brainstorming session, the Board decided to take some time and re-adjourn to make a decision within a week. Directors needed to decide whether or not to expand, if so, into which countries and through what means: organic growth or acquisitions. While various markets had been flouted as suitable options, most Board member's minds were focused on four markets: Brazil and Mexico, in Latin America, or the United States and Canada, further North. The company needed to study its alternatives carefully, as its choices would call for substantial resources - capital infusions in the order of hundreds of millions. Such an investment would condition the company's future for several years, for better or worse. Moreover, price wars were common in this industry: a faux pas would leave Argos vulnerable to retaliation by powerful incumbents -a painful scenario which could destroy massive shareholder value. INCAE's case collection