Holcim, the Swiss cement maker, is planing to exchange assets and combine others with Cemex, its Mexican competitor in Europe. The purpose is to create cost savings in light of the difficult conditions in the construction market in the continent.

Holcim said it would increase its operating profit by EUR20 million or USD26.8 million should the deal push through between the two. It would pay Cemex EUR70 million in cash, which is nearly equivalent to the German business interests of Cemex, where it operates about a hundred readymix as well as other plants and factories.

The recent activities of Holcim have moved towards that direction. Holcim CEO Bernard Fontana had already started closing down plants, cut down on costs and slashed capacity to attempt at boosting profitability. The swap deal with Cemex is another move designed to address the current overcapacity and create more costs savings.

In a conference call, Fontana said, "I... believe we have more opportunities to go on this way and if other parties want to do it we will continue."