DRUG VIOLENCE SPURS CEMEX TO ACTION

In Monterrey, Mexico, Cement Giant Plays Role in Battle Against
Narcotics Cartels

MONTERREY, Mexico-One of this city's leading companies, cement giant
Cementos Mexicanos SAB, is lending a hand in an effort to rescue
Monterrey, Mexico's northern business capital, from the drug-related
violence that has engulfed it.

Like many of Monterrey's four million residents, executives at Cemex,
one of the world's biggest cement makers, have watched in horror as
the violence roiling much of Mexico's north has taken hold here with
dizzying speed.

So far this year, hundreds of people have been slain execution style,
gangs have stormed luxury hotels to snatch guests, and shootouts have
claimed lives in places ranging from the campus of the city's leading
university to the doorsteps of an American high school.

"It's surprising how fast it advanced," says Cemex Chairman and Chief
Executive Lorenzo Zambrano, a billionaire businessman who is fast
becoming a leading voice on the drug war in the city's business
community. "It is a new situation for us, definitely, something we had
not encountered before at all," he said in an interview.

The deadly clashes among drug gangs fighting each other and the
authorities has claimed some 30,000 lives since President Felipe
Calderon took office in late 2006 and declared war on organized crime.
The rising violence hasn't affected all parts of the country, however,
and in places like Mexico City there is often little sense of urgency
among politicians and business leaders about helping the federal
government stanch the bloodshed.

That's starting to change in Monterrey, though Mr. Zambrano concedes
that he didn't pay much attention to the drug war until it arrived on
his doorstep.

"Quite frankly, when I heard there were very severe security problems
in X state or Y city outside Monterrey, I said 'oh, well, that's
there,'" he said. "You don't have the sense of urgency until it
happens to you or to those close to you."

Mr. Zambrano caused a stir in this closely knit city when he used
Twitter to brand as "cowards" those who were leaving due to the
violence, particularly the rich who were headed for comfortable exile
in Texas.

The executive, whose company was forced to restructure its debt last
year after piling on liabilities during a period of breakneck growth,
was criticized by some Monterrey residents, who argued that it was
easy for a billionaire to protect himself. But he has stood by his
comments, saying they were aimed mostly at those who can afford
protection, but leave anyway rather than help their community overcome
the threat.

He also points out that his following on Twitter has mushroomed to
21,000 people from 1,500 and is growing. "The response has been
incredible. It just shows how sensitive people are to this topic."

Mr. Zambrano, who collects art, sports cars and has donated millions
to Monterrey's top university, is helping fund several civil and
security initiatives by the state government, although he and state
officials declined to comment on which ones.

Cemex itself is also involved to an unusual degree, either directly or
indirectly, in efforts to turn things around in Monterrey, a battle
that many security experts regard as critical for Mexico's future
stability. Several former top Cemex executives are now in federal and
state government posts related to security matters.

Javier Trevino, the state's deputy governor, is one. With Mr.
Zambrano's blessing, Mr. Trevino left his job as Cemex's vice
president of corporate affairs late last year to become the deputy to
newly elected Gov. Rodrigo Medina, a young politician whom residents
say has struggled to come to grips with the onslaught from organized
crime.

A Stanford University graduate like his former boss, the soft-spoken
Mr. Trevino has become the de facto point man in figuring out a
strategy to improve safety in the city. His first step has been to
increase cooperation with the federal government and military forces,
particularly given that state and local police are widely regarded as
corrupt and ineffective.

Every morning at 7 a.m., Mr. Trevino, high-ranking officers from the
army and marines, plus officials from the federal police and attorney
general's office, meet with a different municipality to discuss
security and improve coordination.

"We realized when we arrived that there was no coordination between
different levels of government," he says.

Among the problems: the state's different police forces all use
different radio frequencies. They also have different emergency
telephone numbers for citizens.

"This is like a merger and acquisition. We are doing the due
diligence, and then we're going to proceed with the post-merger
integration of all levels of government," says Mr. Trevino.

Another former Cemex employee involved in the drug war is Jorge Tello.
A former head of Mexico's national intelligence agency as well as one
of the chief architects of Mr. Calderon's anti-drug strategy, Mr.
Tello is in charge of bolstering coordination between federal and
state forces, particularly in the state of Nuevo Leon along the Texas
border.

Mr. Tello didn't respond to requests for an interview.

Current Cemex employees are also getting involved. Mauricio Doehner, a
young executive, now spends much of his time trying to revive a civic
organization called Ccinlac, which brings together groups ranging from
big business to local parent-teacher associations. In the mid-1970s,
the organization was a powerful voice of civil society, but it has
since faded into obscurity.

"We have no civil society to speak of here. We need to build one
fast," says Mr. Doehner. The executive leads a Ccinlac committee that
will monitor the state government's progress on fronts like cleaning
up state and local police, keeping track of key benchmarks, such as
the number of killings and kidnappings.

The Cemex boss will also be watching. "Politicians tend to promise too
much, and they think that signing an agreement or making a speech is
the solution. So we are following up on the execution of these plans
very closely," Mr. Zambrano said.

Mr. Zambrano is optimistic that Monterrey can confront its challenges.
The city has a per-capita income three times the national average, and
has the kind of human talent and money needed to make far-reaching
changes. He says Monterrey will rise to the occasion.

"We have to lead the way and show the rest of Mexico that things can
be done. It won't be easy, but we can do it," he said.