The ratings on Heidelberger Zement AG (Heidelberger) reflect the group's above-average business profile--resulting from its number-three position in the worldwide cement industry--and competitive cost structure, which together translate into a strong ability to generate solid and growing cash flow. These strengths are tempered, however, by the relatively mature, cyclical demand for cement in developed markets; the group's rapidly growing presence in emerging markets; and the leveraged financial structure resulting from recent significant external growth. Following the 1999 acquisition of Sweden's Scancem AB, the leading cement producer in the Nordic region, Heidelberger's first-half 2000 sales reached €3.2 billion. Consequently, the group has become a global participant in this industry dominated by large European players and in which size is a key
