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To: Dealer who wrote (953)	9/13/2000 12:59:04 PM
From: Dealer	Respond to of 65232

CSCO--Mexico's Cemex launches Cisco-backed Internet venture By Pablo Garibian MEXICO CITY, Sept 13 (Reuters) - Mexican cement giant Cemex (NYSE:CX - news) on Wednesday announced the launch of new Internet subsidiary to buy and sell products over the Web supported by an alliance with Cisco Systems (NasdaqNM:CSCO - news). The new on-line venture will help Cemex -- the world's No. 3 cement producer -- diversify beyond its construction materials mainstay and make it a significant player in the high-tech world, Cemex President Lorenzo Zambrano said at a presentation in New York. The new Internet company, CxNetworks, would generate $100 million in revenues in 2001 and overall savings to Cemex of $120 million through improved efficiencies, Zambrano said in his presentation, beamed live via video feed to Mexico City. Initial investment in the firm would not exceed $200 million over the next two years, he said. The Internet venture would ``not only help us provide a large range of services and products on-line for our clients, and create new networks integral to success in a new digital era, but also contribute to the creation of an Internet culture in all of Cemex,'' Zambrano said. A far-flung multinational, Cemex last year had close to $5 billion in sales. Based in the northern Mexican city of Monterrey, the company's extensive international operations include cement plants in Europe, Asia, Africa and Latin America. ALLIANCE WITH CISCO SYSTEMS CxNetworks was forming an alliance with Cisco Systems of San Jose, Calif., the world's No. 1 supplier of computer networking products, for strategic consulting, personnel and other resources to develop the new subsidiary, Cemex said in a statement. Cemex said CxNetworks would become the holding company for all its diverse Internet projects, including cybernetic shopping centres where businesses can buy a broad range of products that they need for their operations, ranging from construction materials to office stationary. Among its priorities, it will focus on developing new markets, on-line procurement and expansion of Cemex subsidiary Cemtec, set up initially to develop internal Internet projects but which has evolved into a seller of information technology to businesses. SUBSIDIARY ANNOUNCEMENT A SURPRISE Cemex, also Mexico's largest cement producer, has a worldwide annual production capacity of 65 million metric tons. The creation of a new Internet subsidiary came as something of a surprise, as Cemex analysts had expected Cemex's New York presentation merely to explain what it had already done to become one of the world's most innovative corporate users of the World Wide Web. In April the company invested $50 million in PuntoCom (http://www.puntocomholdings.com), an incubator for Latin American Internet projects. In July, it joined with Mexican industrial conglomerate Alfa , a unit of Brazilian bank Bradesco and Brazil's industrial giant Votarantim to create an online shopping centre for regional firms, called Latinexus (http://www.latinexus.com). Immediately following Wednesday's announcement, Deutsche Banc Alex Brown said it started coverage of Cemex with a strong buy recommendation and 12-month target price of $35 per ADR, or American Depositary Receipt. Cemex shares showed little reaction o the news. Its CPO shares rose on the Mexican stock exchange by 0.10 peso, or 0.23 percent, to 44.10 pesos. Its ADRs in New York were off 1/16 at 23-3/4.