The ratings on Switzerland-based Holcim Ltd. reflect the group's large scale; very strong positions worldwide in cement, concrete, and aggregates; competitive cost structure; and considerable geographic diversity. Constraining the ratings are an intermediate financial profile and aggressive capital spending on capacity expansions and acquisitions. The highly local nature of markets--given generally unaffordable long-distance transportation--limited substitution risks, and increasingly scarce reserves are key credit positives of the industry, mitigated by inherent construction end-market cyclicality, commoditized products, and high capital and energy intensity. In first-half 2008, Holcim posted sales of Swiss franc (CHF)12.4 billion, after solid 8% organic growth driven by emerging markets which offset a decline in North America on the back of the difficult U.S. residential market. Holcim's EBITDA margin,
