The ratings on Heidelberger Zement AG (Heidelberger) reflect the group's above-average business profile--it ranks fourth in the cement industry worldwide--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 fairly mature, cyclical demand for cement in developed markets; the group's limited, albeit growing, presence in emerging markets; and Heidelberger's leveraged financial structure resulting from significant external growth over the past two years. Following the acquisition of Sweden's Scancem AB, the leading cement producer in the Nordic region, Heidelberger has become a global participant in this industry dominated by large European players and in which size is a key factor for success. Heidelberger's broad spread of
