Mexico’s Cruz Azul Cement Cooperative Bets US$381 Million on an Idle Plant

Mexico · Business

A ten-year civil war inside Mexico’s most famous worker-owned company left ten people dead and its founding factory silent.

Illustrative photo: the Cruz Azul cement works at Tepezala, Aguascalientes, one of the cooperative’s four plants. The idle Hidalgo plant is meant to reach 3 million tonnes a year. (Photo: Luis Alvaz, CC BY-SA 4.0, Wikimedia Commons.)

Mexico’s Cruz Azul cement cooperative will spend 6.5 billion pesos, roughly US$381 million, to revive its founding factory. The plant sits at Tula de Allende in Hidalgo state, and it has produced nothing for years.

President Claudia Sheinbaum put the announcement on stage at her morning press conference on August 19.

What Was Announced, and by Whom

Victor Manuel Velazquez, who chairs the cooperative’s board, laid out the plan at the presidential palace on Wednesday morning. Sheinbaum and Hidalgo governor Julio Menchaca stood alongside him while he spoke.

The headline number is 6.5 billion pesos. That is about US$381 million, because the Bank of Mexico reference rate stood at 17.06 pesos to the dollar that day.

One point matters for anyone reading this from abroad. The federal government is not writing the cheque; it is hosting the news.

The cash comes from the cooperative’s own balance sheet.

Where the 6.5 Billion Pesos Goes

The cooperative broke the sum into parts. For example, more than 1.8 billion pesos, close to US$106 million, has already gone on cleaning up and refitting the existing plant.

Another 3.7 billion pesos, about US$217 million, is buying a new cement production line. That line is roughly 85 percent finished, so the spending is not a wish list.

A further billion pesos, near US$59 million, goes to the cooperative’s hospital in Tula. In addition, surgical theatres, an intensive care unit and a blood bank are on the list.

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The Cruz Azul Cement Company Owns the Football Club

Outside Mexico the name means one thing: a blue-shirted football team from Mexico City. Inside Mexico, however, Cruz Azul cement is the business that pays for it.

Cooperativa La Cruz Azul is the employer, the asset and the legal person. The club is a subsidiary of the cement maker, not the other way round.

So when Sheinbaum talked about Cruz Azul on Wednesday, she was talking about kilns and clinker. As a result, the football side was not the subject at all.

A Worker-Owned Firm With a Long Memory

The story starts in 1881, after an English businessman opened a lime works at Jasso in Hidalgo. Workers took the plant over in November 1931 once the owners walked away.

In January 1934 they formally constituted a cooperative with 192 worker-owners. Nearly a century later the roll of full members sits at around 400.

Today the group runs four cement plants, in Hidalgo, Oaxaca, Aguascalientes and Puebla, while new capacity is going up in Campeche. El Economista counts about 9,500 direct jobs across the business.

Why the Hidalgo Plant Went Quiet

The Tula site was the original works and, before the trouble, supplied 35 to 40 percent of the cooperative’s cement. Then the internal war reached it.

A rival faction physically occupied the plant from 2020. Production stopped for good in August 2022, because the state power utility cut the electricity supply during the dispute.

Because the site was blocked, the cooperative suspended pay for 2,812 workers from February 2025. Local reporting says more than 5,000 people, direct and indirect, eventually lost work.

Ten Years and Ten Deaths

This was not a boardroom argument. In March the Spanish daily El Pais summed the fight up in a headline: ten years and ten dead.

The worst day came in April 2022. An attempt to retake the plant ended with eight people killed and eleven injured.

Meanwhile another clash in September 2024 brought roughly 120 arrests. The old boss, Guillermo ‘Billy’ Alvarez, resigned in August 2020 amid federal money-laundering and organised-crime investigations.

Warrants against former directors were still live into 2025.

How the Cooperative Got the Plant Back

On February 12, 2026, prosecutors acting on a judge’s order handed the site to the Velazquez faction. Since then, police have guarded the perimeter.

Velazquez was re-elected board president in May for another five years. Therefore the August announcement is both his victory lap and his bill.

Even so, nobody has published a firm restart date. The new line is nearly built, and local coverage speaks of months rather than weeks.

Hidalgo’s Wider Investment Day

The cement plan came inside a bigger package for the state worth more than 16.6 billion pesos, close to US$973 million. Cruz Azul is the smaller half of it.

The larger piece is 10.1 billion pesos, about US$592 million, from industrial developer Dewa Capital. That money builds a 910-hectare logistics and industrial park at Zapotlan de Juarez, in five phases.

For a state that usually watches investment land in Nuevo Leon or the Bajio, a single morning delivering both projects is unusual. In short, Hidalgo had a good Wednesday.

A Rough July for Mexican Retirement Savings

The same week brought less cheerful economic news. Mexico’s Afore pension managers booked paper losses of 92.763 billion pesos in July, or roughly US$5.44 billion, according to regulator Consar.

That reversed a small June gain of 7.66 billion pesos. However, El Economista blamed a slide in global markets rather than anything domestic.

Savers should keep the scale in mind, however. The funds are still up 391.3 billion pesos, about US$22.9 billion, over the first seven months of the year.

Washington Sends Mexicans to Central America

A separate row opened on August 18. CBS News reported that the United States has been deporting Mexican citizens to Guatemala and Honduras.

Two Homeland Security officials described the flights. Hundreds of people have been moved this way, although no exact tally is public.

Independent monitors put the Guatemala figure above 1,500 by mid-July. Mexico’s foreign ministry pushed back in writing.

It accepts the return of all its nationals, yet it rejects their removal to third countries and says no such agreement exists.

What to Watch From Here

The test is simple: does smoke come out of the Tula stacks, and when. After all, a finished kiln line is not the same as a running one.

Cement demand in Mexico tracks housing and public works, so the timing suits the government’s building plans. Meanwhile the cooperative still has to rehire and retrain a scattered workforce.

Watch also whether the 14,200 jobs figure survives contact with reality. Because it counts indirect work across the whole region, such numbers rarely arrive whole.

Frequently Asked Questions

Is this the football club or a company?

It is the company. Cooperativa La Cruz Azul makes Cruz Azul cement and owns the football club as a subsidiary.

Is the Mexican government paying for it?

No. The money comes from the cooperative. President Sheinbaum announced it at her daily press conference, and Hidalgo’s governor backed it.

How much is 6.5 billion pesos in dollars?

About US$381 million, using the Bank of Mexico reference rate of 17.06 pesos per dollar on August 19, 2026. The wider Hidalgo package tops US$970 million.

Why was the plant closed for so long?

A leadership fight split the cooperative. A rival faction held the site from 2020, and the power supply was cut in August 2022.

Sources: El Economista; La Jornada; El Pais; Expansion; CBS News.