Statement on the Illegal Occupation of Vulcan's Property in Mexico

Rhea-AI Summary

On March 21, 2023, Vulcan Materials Company (NYSE: VMC) reported that CEMEX (NYSE: CX), with armed police and military, forcibly occupied its port facilities in Playa del Carmen, Mexico, without legal authorization. The prior lease agreement expired on December 31, 2022, with Vulcan open to negotiations for a new contract. CEMEX is reportedly ignoring a federal court order mandating their vacate of the property, while the Mexican government unlawfully disrupts Vulcan's quarrying and shipping operations. Vulcan asserts ownership of the facilities and has not authorized CEMEX's use of their property.

Positive

• Vulcan owns the port facilities and has a legal concession.
• Vulcan is open to renegotiating the lease agreement with CEMEX.

Negative

• CEMEX's illegal occupation disrupts Vulcan's operations in Mexico.
• The Mexican government's shutdown of Vulcan's operations is ongoing.

BIRMINGHAM, Ala., March 21, 2023 /PRNewswire/ -- Vulcan Materials Company (NYSE: VMC), the nation's largest producer of construction aggregates, today issued the following statement:

On Tuesday, March 14, 2023, CEMEX (NYSE:CX), aided by armed Mexican police and military, forcibly entered Vulcan's port facilities near Playa del Carmen. They are still occupying the property.

There is no contract permitting CEMEX's use of Vulcan's port facilities. Although the companies had an agreement for CEMEX to lease a portion of Vulcan's property, that agreement expired on December 31, 2022, without any renewal. Prior to the expiration, CEMEX was formally made aware that negotiation of a new contract would be necessary. Vulcan has been and remains open to renegotiating the lease agreement.

Rather than looking for a mutually agreeable solution, CEMEX officers threatened to seek the aid of the Mexican government, including its armed forces, to use Vulcan's port facilities.

On March 14 and to this day, CEMEX, the military and the police have not presented any court order, warrant or other legal justification for their forceful entry and occupation of Vulcan's property. Contrary to CEMEX's position, a Mexican federal court ordered CEMEX to vacate the property, and another Mexican federal court order requires military and police forces to leave the property immediately.

The Mexican government continues its illegal shutdown of Vulcan's quarrying, processing and shipping operations. Nonetheless, Vulcan owns the four parcels of property that make up its Mexico operation, including the port facilities. Likewise, Vulcan lawfully holds the port concession. Use of Vulcan's private property by third parties, such as CEMEX, requires Vulcan's authorization.

About Vulcan Materials Company
Vulcan Materials Company, a member of the S&P 500 Index with headquarters in Birmingham, Alabama, is the nation's largest supplier of construction aggregates – primarily crushed stone, sand and gravel – and a major producer of aggregates-based construction materials, including asphalt and ready-mixed concrete.  For additional information about Vulcan, go to www.vulcanmaterials.com.

FORWARD-LOOKING STATEMENT DISCLAIMER
This document contains forward-looking statements.  Statements that are not historical fact, including statements about Vulcan's beliefs and expectations, are forward-looking statements.  Generally, these statements relate to future financial performance, results of operations, business plans or strategies, projected or anticipated revenues, expenses, earnings (including EBITDA and other measures), dividend policy, shipment volumes, pricing, levels of capital expenditures, intended cost reductions and cost savings, anticipated profit improvements and/or planned divestitures and asset sales.  These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "would," "expect," "project," "estimate," "anticipate," "intend," "plan," "will," "can," "may" or similar expressions elsewhere in this document.  These statements are subject to numerous risks, uncertainties, and assumptions, including but not limited to general business conditions, competitive factors, pricing, energy costs, and other risks and uncertainties discussed in the reports Vulcan periodically files with the SEC.

Forward-looking statements are not guarantees of future performance and actual results, developments, and business decisions may vary significantly from those expressed in or implied by the forward-looking statements.  The following risks related to Vulcan's business, among others, could cause actual results to differ materially from those described in the forward-looking statements: general economic and business conditions; a pandemic, epidemic or other public health emergency, such as the COVID-19 outbreak; Vulcan's dependence on the construction industry, which is subject to economic cycles; the timing and amount of federal, state and local funding for infrastructure; changes in the level of spending for private residential and private nonresidential construction; changes in Vulcan's effective tax rate; the increasing reliance on information technology infrastructure, including the risks that the infrastructure does not work as intended, experiences technical difficulties or is subjected to cyber-attacks; the impact of the state of the global economy on Vulcan's businesses and financial condition and access to capital markets; international business operations and relationships, including recent actions taken by the Mexican government with respect to Vulcan's property and operations in that country; the highly competitive nature of the construction industry; the impact of future regulatory or legislative actions, including those relating to climate change, biodiversity, land use, wetlands, greenhouse gas emissions, the definition of minerals, tax policy and domestic and international trade; the outcome of pending legal proceedings; pricing of Vulcan's products; weather and other natural phenomena, including the impact of climate change and availability of water; availability and cost of trucks, railcars, barges and ships as well as their licensed operators for transport of Vulcan's materials; energy costs; costs of hydrocarbon-based raw materials; healthcare costs; labor relations, shortages and constraints; the amount of long-term debt and interest expense incurred by Vulcan; changes in interest rates; volatility in pension plan asset values and liabilities, which may require cash contributions to the pension plans; the impact of environmental cleanup costs and other liabilities relating to existing and/or divested businesses; Vulcan's ability to secure and permit aggregates reserves in strategically located areas; Vulcan's ability to manage and successfully integrate acquisitions; the effect of changes in tax laws, guidance and interpretations; significant downturn in the construction industry may result in the impairment of goodwill or long-lived assets; changes in technologies, which could disrupt the way Vulcan does business and how Vulcan's products are distributed; the risks of open pit and underground mining; expectations relating to environmental, social and governance considerations; claims that our products do not meet regulatory requirements or contractual specifications; and other assumptions, risks and uncertainties detailed from time to time in the reports filed by Vulcan with the SEC.  All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.  Vulcan disclaims and does not undertake any obligation to update or revise any forward-looking statement in this document except as required by law.

Investor Contact:	Mark Warren (205) 298-3220
Media Contacts:	Janet Kavinoky (205) 298-3220
	Jack Bonnikson (205) 298-3220

 

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SOURCE Vulcan Materials Company

FAQ

What happened on March 14, 2023, involving Vulcan Materials and CEMEX?

CEMEX forcibly occupied Vulcan's port facilities in Playa del Carmen, Mexico.

Is there a legal agreement between Vulcan and CEMEX regarding the port facilities?

No, the lease agreement expired on December 31, 2022, and CEMEX has no current contract to use the facilities.

What actions has Vulcan taken against CEMEX's occupation?

Vulcan has reported the occupation and noted that a federal court has ordered CEMEX to vacate the property.

How is the Mexican government involved in the situation between Vulcan and CEMEX?

The Mexican government has unlawfully shut down Vulcan's operations and supported CEMEX's occupation.