NextBillion.net - Development Through Enterprise - Immigrants Build Houses in Mexico with Remittances- The Case of Construmex - Comments

Reply to Lorenzo Zambrano's comment on NextBillion.net

Ana Escalante — Thu, 18 Oct 2007 10:39:53 -0400

I took some time to think about Mr. Zambrano's comment on my blogpost. I was distressed when he implied that I was being an irresponsible writer, so I went back and questioned my assumptions about Cemex's Construmex program and market realities that it faces. Here are my thoughts.

The Business Week article that I quoted briefly from in my Construmex post may provide additional context for my initial commentary:

"A bakery employee who works the night shift since the family came to the U.S. illegally in late 2003, Moreno is paying for $10,000 worth of cement, gravel, and bricks for the four-bedroom house he's building on the outskirts of the Mexican capital…Just as some U.S. companies are tapping the undocumented market, some Mexican companies see opportunity in following customers who head north of the border. After all, many migrants straddle both worlds -- working in the U.S. but maintaining homes in Mexico. So far most cross-border efforts are housing-related campaigns conducted through U.S. branch offices. Grupo Famsa, a Monterrey-based retailer of home appliances, has nine stores in California and three in Texas, where migrants can buy a product and have it delivered to relatives in Mexico."

I admire Cemex as a company a lot. They host many programs for the people living in the 'Base of Pyramid,' and they have positive and coherent Corporate Social Responsibility (CSR) practices. I did not mean to discredit Cemex in any way, and I feel that perhaps Mr. Zambrano may have misinterpreted my comments. I was not implying that Cemex employs illegal workers or has illegal practices. What I meant to say was that companies taping into 'immigrant' markets often face these issues because documented and undocumented workers often coexist in the same space, and are all part of the same target market.. Any of the remittance market companies (Western Union, Aryty…) encounter the same dilemma when they decide to market and sell their services to immigrants – by default, they should know that at least a percentage of their potential clients may be undocumented. It is not the responsibility of these companies to discriminate based on visa status. A market is a market, and the role of business is to identify and serve these markets, within the existing laws.

It is neither required nor appropriate that companies discriminate by asking for their clients' visa status before selling most goods and services to them. But if a corporation is aiming to tap these markets, it should have some type of 'foreign policy.' It is not a bad thing or a good thing. There is a huge potential for profit serving the immigrant market. If not Cemex, it will be some other company selling construction materials in the US to build homes in Mexico because it's a very good business and addresses inefficiencies in the current system of remittance transactions. People – regardless of their 'legal' or 'illegal' status in a country- still need to live, eat and build their homes. And, in fact, Cemex's Construmex program actually supports the desire of Mexican immigrants to return to their families and their homeland by enabling them to construct a better future for themselves and to build more prosperous communities in Mexico.

Cemex and immigration

Rob Katz — Wed, 03 Oct 2007 08:55:51 -0400

Thank you for your comment. The sentence has been removed and an editor's note informs readers of the incorrect information. NextBillion.net apologizes for the error.

Inorrect information

Lorenzo Zambrano, CEMEX CEO — Wed, 03 Oct 2007 00:07:20 -0400

"...businesses catering to illegal immigrants, because of their illegal status..." Very irresponsible comment, please erase this information, since we adhere and abide by all U.S. Laws including Immigration Laws as a Cemex business segment based out of the United States.

Immigrants Build Houses in Mexico with Remittances- The Case of Construmex

Ana Escalante — Mon, 30 Jul 2007 17:09:02 -0400

Many immigrants come to work in the US, and when they do, they usually leave family behind. Often, their primary objective is to make money and provide for their families back home. Some companies - like the Mexico-based multinational cement giant CEMEX - are taking advantage of this situation and are starting to productize remittances. Instead of sending cash to their families back home, immigrants using a program called Construmex send aid in the form of housing materials.

Productizing remittances is a secure way for workers abroad to provide what they think its priority to their families. Some may recall a post by Thamel dot Com founder Bal Joshi about this very subject. We recently covered a news story on NextBillion talking about CEMEX’s Construmex program:

Money transfers can be expensive, and family members back home frequently spend the money on other things. And many immigrants don't know how much cement to buy or how to build a roof, so their hard-earned savings often are wasted. That's where Construmex comes in: Its architects help clients design home plans and calculate how much material to deliver and at what time intervals. The company also finances the purchase of the construction materials.

In my opinion, this system is very intelligent, because, after all, it is the money of the person who is sending it and this system allows him to decide how it is spent. It ensures that the people back home get what he wants them to get - in the case of Construmex, a house.

According to Business Week, in two years, Monterrey-based Construmex has helped 4,500 migrants living in the U.S. build homes or small businesses in Mexico. This year it expects $3.8 million in revenue, a mere hint of the potential. "We're certain that there's a very large, unsatisfied demand out there," says Hector Ureta, CEMEX’s director for low-income programs. The company's studies show that 58% of Mexican migrants to the U.S. intend to build in their home towns.

Of course this is not CEMEX’s first foray into the BOP space; they already have a program in Mexico targeting the BOP called Patrimonio Hoy.

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