CFE Cuts Electricity Supply of Cemento Cruz Azul in Tula

CFE withdrew the electricity supply to the cement plant of Cemento Cruz Azul in Tula, Hidalgo. The power cut has provoked protests against the state-owned company and has intensified tensions within the leading cement company, as CFE points toward an internal conflict as the cause.

In the early morning of Wednesday, August 17, CFE personnel suspended the electricity service to the plant. In response to these actions, workers of Cruz Azul mobilized on Friday, August 20, blocking the Mexico-Pachuca highway, where they remained for approximately four hours. In addition, other members traveled to Mexico City to demonstrate outside CFE offices Reforma Avenue.

CFE stated that "the legal representative registered at CFE requested a service suspension to provide maintenance.” The state electric utility stressed that the situation concerns “an internal conflict within the cooperative" and that the company merely "complied with a legitimate request."

The workers of the Tula cooperative, part of the group La Resistencia blame the power outage on a maneuver by its opponents, a group identified as Los Disidentes, which it alleges is trying to take control of the plant.

The Cruz Azul cement plant is one of the most important in Latin America. Its operational control is disputed by the two groups. La Resistencia, or The Resistance, is led by Guillermo "Billy" Álvarez Cuevas, former president of the Cruz Azul Cooperative from 1988 to 2018, who is accused of acts of corruption.

The second group, The Dissidents, are led by José Antonio Marín and Víctor Velázquez, opponents of Álvarez Cuevas.

Both groups have had several legal and physical confrontations over the years.

Since their appointments as Presidents of Administration and Surveillance, Marín and Velázquez have gradually recovered control each of the cement company’s facilities, including the corporate offices located in Mexico City. The only site that remains under the control of former President Álvarez’s group is the Tula plant.

The dispute over the Tula plant, the company’s most emblematic location, has led to violent confrontations between the opposing groups. The most recent occurred in May at the plant's facilities, where eight people were killed and 12 injured. Three months later, on July 26, the state police managed to prevent another confrontation.

After the protests in Pachuca and Mexico City on Friday, August 19, CFE received a delegation on Monday, August 22 at its headquarters. The Cruz Azul employees were received by José Martín Mendoza, General Director, CFE Basic Supply.

Among the agreements reached during the meeting, CFE confirmed that it will resume supplying electricity to the Cruz Azul Cooperative plant in Tula until it receives notification from a judge.

La Resistencia argues that it has legal measures in place, assuring the group the right to recover the electricity supply. Rodolfo Sergio Garcia Trujillo, the legal representative of the cooperative, stated on August 21 that a federal judge granted an injunction that obliges CFE to reestablish the flow of electricity. So far, the cement plant has remained without any power.

Cruz Azul has a 23 percent share of Mexico’s cement market. According to employees of the cement plant in Tula, the power outage has generated losses of close to 5,000 tons of cement production per day, equivalent to more than MX$10 million (US$501,660), affecting the income of more than 2,000 families.