World Cement Podcast

Our guest for this episode of the World Cement Podcast is Alfredo Carrato, Venture Capital Advisor for CEMEX Ventures. Listen in to the conversation as World Cement’s Senior Editor, David Bizley, and Alfredo discuss the role of venture capital and cleantech in enabling the cement industry’s green transition.

Topics covered include:
  • The role of venture capital in decarbonising cement
  • Defining ‘CleanTech’ and key application areas
  • Expanding the market for Green Cement
  • New technologies on the horizon

Creators and Guests

Host
David Bizley
As well as the day-to-day editing of content and working with article authors and advertisers, he is actively involved in the commissioning of material for both the magazine and its expanding online presence.
Guest
Alfredo Carrato
Venture Capital Advisor at CEMEX Ventures.

What is World Cement Podcast?

The World Cement podcast: a podcast series for professionals in the cement industry.

David Bizley:

Hello, and welcome to the World Cement podcast with me, David Bizley, senior editor of WorldCement. Today, I'm joined by Alfredo Carrato, venture capital adviser at CEMEX Ventures. He's here to discuss the role of venture capital and cleantech in building the cement industry of the future. I just wanted to take a moment to remind you to register for WorldCement. It's free of charge and gives you access to the latest issues of World Cement, both in print and online.

David Bizley:

Every issue comes packed full of regional analysis, technical articles, project case studies, and the latest industry news. Simply head over to worldcement.com, click the magazine tab, and register today. It's as simple as that. Happy reading. Alfredo, welcome to the World Cement podcast.

David Bizley:

Very glad to have you with us today.

Alfredo Carrato:

Thank you very much, David. I'm glad to be here too.

David Bizley:

K. Excellent. Now before we get into the sort of the real meat of today's discussion, tell us a bit more about CEMEX Ventures. Who are you guys, and what is your mission?

Alfredo Carrato:

CEMEX Ventures is the open innovation platform and also corporate venture arm of CEMEX, a global leader in the building materials industry worldwide. Our mission is to foster innovation and sustainability within the construction value chain by not only investing in, but also collaborating more strategically with transformative startups, aiming overall to drive the industry wide changes with new technologies, business models that can, first of all, revolutionize the way we build. But secondly, and probably more important, ensure a future that is more efficient, more sustainable, and more productive. Right. So probably that would be in a nutshell what CEMEX Ventures is all about.

David Bizley:

Okay. Excellent. And how does that mission tie in exactly with the goals of CEMEX more broadly on the cement production and sort of construction side of things?

Alfredo Carrato:

Yeah. So probably speaking about our parent company, the mission of CEMEX Ventures is deeply intertwined with those broader goals of our parent company and also the broader industry, I would say. By fostering innovation and sustainability like we do, CEMEX Venture strategically supports the development and the scale up of cutting edge solutions and technologies that can enhance efficiency, it can reduce environmental impact, and also drive growth within the industry. For instance, I'm starting probably with some of our focus areas here at CEMEX Ventures. Our emphasis, for instance, in green construction aligns with CEMEX's commitment to sustainability and our broader net zero targets by promoting practices and products and solutions that lower carbon emissions or energy consumption among others.

Alfredo Carrato:

Then we have other verticals or other focus areas such as enhanced productivity or construction supply chain that we will probably elaborate further in a while. But all of those focus areas allow that our objectives and our goals and our mission complements and enhances our parent company's pillars and goals, ensuring that the company at the end of the day remains at the forefront of industry advancements and operational excellence.

David Bizley:

Okay. Diving a bit more into exactly how you do things, when you choose to work with a particular startup, what exactly does that journey look like from start to finish?

Alfredo Carrato:

It's a very, probably long one, but exciting. When we start working with a startup, it all begins with a thorough, I would say vetting process. We start by scouting and identifying innovative solutions that align with the previously mentioned focus areas or targets that we have as a business unit. And once we identify a promising startup, then we engaged in more detailed discussions to better understand their vision, their technology, and the market potential. So after that, and after also reaching some sort of agreement that may include investment or not, by the way, then we move in that collaboration phase where we can provide resources, mentorship, R and D insights, and market exposure to help the startup scale their operations.

Alfredo Carrato:

And this usually involves regular check ins, workshops, and leveraging also our vast network of human resources to open doors and new opportunities for the company. So maybe resuming and throughout that journey, we emphasize that strategic partnership approach, I would say, making sure that both parties, Delta partner sales, share knowledge and growth, and it becomes a win win opportunity. And that collaborative effort culminates in the deployment of solutions across our operations in real world applications, driving both not only innovation, but also the implementation of those solutions for our company and for the whole construction industry.

David Bizley:

And we touched on this a little bit already, but looking at the types of companies you typically work with, you've decided to focus on what I can see as four market driven opportunity areas: green construction, enhanced productivity, the construction supply chain, and the future of construction. Tell us a bit more about the decision to focus on those specific areas. What makes them particularly important for you?

Alfredo Carrato:

Yeah, objective here was to align or to be aligned with our parent company's pillars, right? So that is why probably, and to start with green construction for us is paramount as it addresses the urgent need to reduce the environmental impact of our processes and our operations. Right? So with the objectives to become a net zero company by 02/1950, it was logical that we made sure that we had a chapter in our business unit that addressed such problematic. And that is why green construction is today one of the most active verticals that we tackle and that we take care of.

Alfredo Carrato:

We also devote a lot of efforts to the other verticals. For instance, enhanced productivity for us is a key focus area because optimizing productivity and reducing costs are essential, right, for the industry's growth. So at the same time, we're tackling sustainability related efforts. We also need to make sure that by collaborating with startups that provide advanced technologies, we aim to streamline construction processes and we enhance overall project performance right at the same time. Then just because of the nature of the company, supply chain is integral to ensuring that materials, the materials that we produce, and the resources that we provide to our end customers are managed effectively, right?

Alfredo Carrato:

We move materials all over the place. And that is why we need to seek solutions that can boost supply chain logistics, ensuring timely delivery and minimizing waste along the way, which in turn supports both economic and environmental sustainability at the end of the day. And then probably last, future of construction encompasses the adoption of probably very breakthrough or cutting edge technologies. Namely, it will be like artificial intelligence, three d printing, robotics, and these kinds of innovations probably will become very relevant for the industry in the mid to long term. And that is why we want to have a foot on the door and probably bet on some of these solutions that can make a difference at the end of the day.

Alfredo Carrato:

At the same time, you want to be part of that change, right? Making early engagement with solutions in these spaces is probably something that we do as a way of probably, being the eyes of the company in not only the next four or five years, but probably five to ten or even more years down the road.

David Bizley:

So it's about targeting those opportunities now.

Alfredo Carrato:

Yep. Absolutely. And making those early engagements so that we can learn to start with, and then also be probably a part of those big movements across the construction value chain moving forward.

David Bizley:

Okay. Now, on a related note, you've also created a cleantech construction map where you've highlighted some of the most promising cleantech solutions for 2025. Firstly, just to clarify things, what exactly do you mean by cleantech and what are the characteristics you're looking for when determining whether something counts as clean tech?

Alfredo Carrato:

Well, that's a good question. And I'm probably starting with the second question. What we understand as a clean tech essentially is clean technology, right? For us, clean technology refers to any solution, be it like hardware or software that tends to reduce environmental impact, right? So it can be that those environmental impacts that are reduced come through energy efficiency improvements, sustainable resource management, or environmental protection activities.

Alfredo Carrato:

Right? So through these hardware or software solutions, what we aim at is at identifying and investing in those companies that embody to start with those principles. But then second, have an impact in those, let's say KPIs as a response to your second question, determine if something qualifies as Cleantech or not. And maybe just to name a few, David, for instance, as a corporate venture arm, something that we like to look at is a degree of innovation of those solutions. Are they introducing a new technology?

Alfredo Carrato:

Are they introducing a novel approach? Or are they just incremental improvements? Second, the environmental impact that I was alluding to a minute ago. Do they have some sort of demonstrable positive effect on the environment? Are they reducing their carbon footprint?

Alfredo Carrato:

Are they reducing water consumption? Are they increasing energy efficiency? Those KPIs obviously are taken into account when assessing. Then also as being an active player on the startup ecosystem, how scalable are those solutions? Do they have the potential to scale up across multiple operations, multiple industries, or are they probably stuck with the solution that they have today?

Alfredo Carrato:

Are they viable or not viable from an economical standpoint? At the end of the day, these startups need to be profitable, right? So is there a potential to be economically viable? That's something that we also take into account. And then probably last but not least, when we do this early engagement with startups, we also need to keep an eye on the market readiness of them.

Alfredo Carrato:

We usually engage when companies are not yet commercial, but we need to make sure that for that go to market strategy that these startups pitch or sustain that the road to that big milestone is feasible and that we can support along the way. Bottom line here, when we invest, we try to invest not only capital, but what we call smart capital. Meaning that at the end of the day, we need to make sure that the money and the resources that we put into this have a return sooner or later. Right. But we try to make that assumption and drive that effort together with a startup.

Alfredo Carrato:

At the end of the day, I'm taking into account all of these, let's say points that I raised. We believe that we can work hand in hand with those companies, make sure that they hit the milestones that they need to hit before being viable, and not only that, but profitable for them and for all shareholders.

David Bizley:

And before we look at some of the specific technologies, and we've touched on this a little bit, in terms of applications, can you go into a little bit more about the areas you're looking to invest in? Are you focusing purely on decarbonization, for example, or are you looking at a broader range of sustainability focused approaches?

Alfredo Carrato:

So first of all, I wouldn't want to go without saying that we not only invest in, but I'd rather prefer to partner with because sometimes we partner with companies where we're not investing, but because of the strategic nature of the agreement, we end up doing very, let's say impressive things. So that's probably the first comment that I would make. And then on the areas that we're looking at, we mentioned some of them, not only decarbonization, but essentially when we look at our production process and probably at the core of our production process, then many of the levers that we are utilizing to meet our objectives as a building a material company are very much related to decarbonization. So everything that smells of carbon capture, carbon utilization, hydrogen, clean hydrogen, energy from waste, new cementitious products, even artificial intelligence to do with core processes that we're tackling. And the objective of those levers that we're introducing is essentially to reduce our carbon footprint, but making it in a smart manner, meaning that we want to be profitable at the end of the day.

Alfredo Carrato:

So that profitable decarbonization that we're aiming at needs to be based on solutions in those verticals that are proven successful. Right? So that's what we're working on close to our, let's say, core production processes. But then also, and taking probably one step back, we're also a player or one of the players, across the entire construction value chain. Right?

Alfredo Carrato:

So all of the partnerships that we're seeking upstream and downstream of our production processes, we obviously want sustainability embedded in them somehow. So it can probably be that we're not so bullish and we're not, let's say picky when we're looking at those solutions, but they need to have some sort of sustainability background for us to assess or even partner with solutions in that space.

David Bizley:

Okay. Excellent. Now we've talked about things in sort of general terms. Let's get into some specifics. What would you say were some of the highlights from the cleantech construction map over recent years, technologies that really stood out?

Alfredo Carrato:

In that regard and looking at the trend over the years, there are probably two main trends that I would highlight. First of all, the number of relevant levers at reach to meet our sustainability related goals has dramatically increased, encompassing now not only carbon emission matters or carbon related matters, but also maybe circular resources. We're talking about recycling materials, water, and how to handle and how to manage water scarcity all over, and then new materials that are appearing every year. So that would be one trend that I would highlight or that I would point out. The second one directly related to quality.

Alfredo Carrato:

We've seen that the quality of the companies has also improved substantially over time, making it more difficult for us every year to select the most impactful solutions in its vertical.

David Bizley:

Good problem to have though, right?

Alfredo Carrato:

Yeah, I would say, yeah, but it's probably a good problem to have.

David Bizley:

Excellent. Moving back a bit then, how important in general terms do you think these investment opportunities and partnerships, as you say, are in terms of enabling the decarbonization of industries like cement?

Alfredo Carrato:

I think they're absolutely crucial. This investment or partnership opportunities, as you mentioned, David, because let's not forget that cement is accountable for about 8% of global emissions, right? Not only identification of these technologies, partnering with them enable the development and scalable of cutting edge solutions that can essentially transform traditional processes that are very high or relatively high in CO2 emissions and reduce the environmental footprints overall in the medium and long term. So we need to fund, research and development internal, but also these kinds of innovation efforts where through first of a kind projects, grants, early investments and strategic partnerships, We need to bridge that gap between innovation on paper. And also on the other hand, practical widespread adoption and application was spearheading this change that we want to be part of.

Alfredo Carrato:

Right. So at the end of the day, you need to be part of that change if you want to have that competitive advantage moving forward. But that change needs to include all of the elements that probably that I have been describing. Right? It's not only about putting together fancy PowerPoints, but you need to be more hands on and supporting these technologies that have promising pitches, promising claims, but need the support of industry players for them to reach so called technology readiness level nine, which is the highest, and be able to hit the market with compelling solutions at competitive prices.

David Bizley:

Okay. And looking at right at the other end of the chain, consumers in the past have sometimes been a bit reluctant to select greener products often due to increased prices and so on. However, there are now forecasts showing that the green cement market, for example, is expected to double in value over the coming years. What do you think has spurred this growth? Is it changing consumer attitudes or something else?

David Bizley:

Well, I think

Alfredo Carrato:

it's a combination of several key factors. Right? So first and probably foremost, I think that the advancements in technology have allowed for this to at least be discussed today. Many advances as we have already been speaking of in many fields on many fronts, reaching already high technology readiness levels. So this change has been the first step in all of this context.

Alfredo Carrato:

But then second, and not less important, I think that regulation be through regulatory pressure, or on the other hand, incentives has also played a substantial role in driving this adoption of green or greener cement or building products. And many countries at different, let's say levels of intensity are implementing already stricter environmental regulations and also offering subsidies, tax breaks, or grants, or more sustainable practices, right? Which at the end of the day encourages us manufacturers to winnovate. And not only that, but also to invest or partner with other, let's say, eco friendly solutions out there. Then at the same time, I would argue that there could be a shift also in consumer attitudes towards these kinds of products.

Alfredo Carrato:

Maybe some years ago, this shift was not that relevant, but nowadays you can also reckon that there is a growing recognition of these long term benefits of being associated with more sustainable choices when you buy at the supermarket or when you buy construction products that we experienced as stakeholders. Right? And that probably combined with the industry as a whole and the commitment for the whole, let's say sector towards achieving a global decarbonization goals, be it a 1.5 degree scenario or net zero by 02/1950. All of those combined, I believe that make it probably, I wouldn't say easier, but at least they are pointing towards a direction that speaks of greener cement that will necessarily be more costly, at least to start with, that they will have a better impact for us and for the people coming behind us.

David Bizley:

Okay. Excellent. And as we've already covered, you're investing and supporting a range of approaches and technologies. But from your perspective, what are, what would you say, the most exciting avenues at the moment? Where do you think we're likely to see the most headlines coming up?

Alfredo Carrato:

Certainly advances across the CCUS value chain, carbon capture, utilization, and storage value chain are going to be very much welcome considering the difference and the impact that they can make. Not only probably on the carbon capture side of things where everything starts, but also further downstream on the transportation, the utilization, be it building materials or fuels, chemicals among others, and also storage, both offshore and onshore front. CCUS is definitely something to be looking for. And then I'm also very excited about other, let's say levers such as maybe new cementitious alternatives. And with these solutions that probably reduce CO2 before it is emitted.

Alfredo Carrato:

So you don't need to capture that much CO2 at the end of the day. Sure.

David Bizley:

Eliminating the problem at the root. Yeah.

Alfredo Carrato:

Yeah, absolutely. And yeah, in all alternatives to OPC to the ordinary Portland cement that we all know with lower carbon footprints with circular economy measures linked to them. And also I would say on the fueling part of things, something that I would be excited about is alternatives that minimize the fossil fuels that we need to use to deliver the 1,500 degrees or so that we need for our processes occur. Be it electrification, clean hydrogen, all those relevant vectors, I think would come into play sooner than later, similar to what's happening with the automotive industry. Now, when you go out and buy a car, yeah, there are hydrogen fueled cars, electrical powered cars, and all of that competition, I believe, is for the benefit of the whole industry.

Alfredo Carrato:

And that is something that we will see probably in the heavy industry not that far from today.

David Bizley:

Fascinating. And, and Alfredo, before we wrap things up for this episode, do you have any final thoughts for our audience?

Alfredo Carrato:

First of all, I would like to thank you, David, for the good conversation. And with regards to the topics that we touched on today, I would say that let's all make sure that we don't let the tree lose sight of the forest so that, nowadays that recent headwinds and noise are interfering with these longer term objectives. We make sure that the priority is to leave a better planet for our children when we're gone. And that is something that probably I would like to stress today and yeah, make sure that the message reaches the magnificent audience that will be listening to this.

David Bizley:

Excellent. Well, Alfredo, thank you so much for joining us today and sharing your insights on those topics.

Alfredo Carrato:

It was my pleasure, David.

David Bizley:

As always, if you enjoyed this episode of the World Cement Podcast, please do make sure to subscribe, rate and review. And don't forget to check out some of our other episodes as well, featuring guests from Ecocem, FLSmidth Cement, the GCCA, Votorantim and Cimentos, and more. Thanks everyone, and goodbye for now.

David Bizley:

I just wanted to take a moment to remind you to register for World Cement. It's free of charge and gives you access to the latest issues of World Cement, both in print and online. Every issue comes packed full of regional analysis, technical articles, project case studies, and the latest industry news. Simply head over to worldcement.com, click the Magazine tab, and register today. It's as simple as that!