AGENDA

1. Georgia Construction Aggregate Association Management WorkshopFebruary 17, 2009Daniel M Harrington

2. AGENDA • Global Cement Industry • North American Cement Industry • North American / Georgia Key Statistics • Challenges and Solutions

3. Global Cement Industry

4. World Cement Consumption Source: US Geological Survey

5. World Production, 2006

6. World Cement Consumption Source: U.S.G.S., U.S. Census Bureau, International Cement Review, Statistics Canada.

7. World Cement Consumption Source: US Geological Survey

8. 2009 Scenario-Lower cement consumption across the globe

9. 2009 Scenario – Major Export & Import Regions

10. China is slowing down more than expected Exportable surplus acc. To BNP is 60 Million tons Global market has become a “Buyers’ market” again, after four years FOB prices are declining around the world More cement will hit mature markets with low freight costs and overcapacity Africa and NAM will be threatened by low-cost cement imports Surplus management will become a major issue Major Trends in International Cement 2009

11. North American Cement Industry

12. EstimatedClinkerCapacity (2002 – 2010)

13. North American Clinker Capacity (2008 Estimate) Units: 000 Metric Tons Source: 2007 PCA Labor Energy Input Survey

14. Capacity Expansion Share of U.S. Expansions 2008: 0.0% 2009: 0.0% 2010: 42.9% 2011: 61.7% Thousand Metric Tons Stated U.S. Capacity Expansions Stated Southeast Capacity Expansions Source: PCA

15. Portland Cement Consumption (MMT) Source: PCA

16. CementConsumption Source: PCA

17. Cement and Clinker Imports (MMT) Source: PCA

18. Cement & Clinker Imports by Census District Source: PCA

19. Cement Intensity Ratio (000 Tons per $ Billion Constructing Source: PCA

20. North American / Georgia Key Statistics

21. U.S.A. Total Construction (Billions 000$)

22. Single Family Permits WA NH ME MT VT ND OR MN ID NY MA SD WI RI WY MI CT IA PA NJ NE OH NV IN DE UT IL CO MD WV CA VA KS MO KY NC TN AZ OK NM AR SC GA AL MS LA TX FL HI Single Family Permits Projected Peak-to-Trough Decline Projected Peak-to-Trough Decline 0% to -51% -52%% to -61% -62% to -75% -76% > Source: PCA

23. State Fiscal Health WA NH ME MT VT ND OR MN ID NY MA SD WI RI WY MI CT IA PA NJ NE OH NV IN DE UT IL CO MD WV CA VA KS MO KY NC TN AZ OK NM AR SC GA AL MS LA TX AK FL HI State Fiscal Health Deficit Share of Total Expenditures Deficit Share of Total Expenditures 1.1% to 3.6% 0% to 1% 3.7% + No Shortfall Source: PCA Source: PCA

24. States in Recession WA NH ME MT VT ND OR MN ID NY MA SD WI RI WY MI CT IA PA NJ NE OH NV IN DE UT IL CO MD WV CA VA KS MO KY NC TN AZ OK NM AR SC GA AL MS LA TX AK FL HI States in Recession As of October, 2008 Recession At Risk Growing Source PCA Source: PCA

25. WA NH ME MT VT ND OR MN ID NY MA SD WI RI WY MI CT IA PA NJ NE OH NV IN DE UT IL CO MD WV CA VA KS MO KY NC TN AZ OK NM AR SC GA AL MS LA TX FL HI 2009 Fiscal Deficits Deficit % Share of Total Expenditures 0-10% No Deficit 11%-15% 16% + Source: PCA/Census

26. FISCAL HEALTH - GEORGIA Surplus/Deficit Index, 2005=100 Surplus Deficit Source: PCA

27. Georgia Construction Permits Units Source: PCA

28. Georgia Housing Permits Units Source: PCA

29. Cement 2005 Cement Composition - Southeast 2010 2005 Nonresidential Public Residential Source: PCA

30. Cement Consumption Source: PCA

31. Challenges and Solutions

32. Challenges and Solutions • We’re in a recession and the local governments have no money • Economy recovery plan

34. Portland Cement Consumption Declines Continue Through 2010. Peak (2005)-to-Trough (2009) Decline: 40 MMT (Worst in History) (On a Percentage Basis: -32%) Source: PCA

35. Construction Turning Points – U.S. 1996 = 100 Source: PCA

36. Portland Cement Consumption Declines Continue Through 2010. Peak (2005)-to-Trough (2009) Decline: 40 MMT (Worst in History) (On a Percentage Basis: -32%)

37. Cement Consumption: U.S. Long Term Million Metric Tons Source: PCA

38. Stimulus Impacts Source: PCA

39. Cement Consumption – Georgia 1998 - 2012 (000) Metric Tons Source: PCA

40. Challenges and Solutions • Industry has downsized, consolidated and globalization will continue to occur • Federations of associations • Regulatory concerns will intensify (whether water, air, or solid) • Manufacturing and engineering solutions to environmental needs

41. Labor Resources Employee Hours per 000 Tons Produced (US & Canada Source: PCA

42. Energy ResourcesMillion BTUs per 000 Tons Produced Source: PCA US & Canadian Labor –Energy input survey

43. Challenges and Solutions • The Greening of America • Sustainability / Environmentally friendly issues will rise • Promotion • New products into old markets and Old products into new markets

44. Competitive Opportunity? Producer Price Index, 2003 =100

45. More Solutions • Political Action – Grass roots • Embrace the “Green Opportunities” • Stakeholders • Employees • “Pull through” marketing • Cost Leadership

46. New Cement Based (Aggregate) Products Gaining Popularity in Southeast

47. Roller Compacted Concrete - RCC

48. Cement Treated Agg Base Construction - 2008

49. Inverted Base Construction NEW Asphaltic Concrete Paving For Protection of GAB Layer Graded Aggregate Base Cement Treated Agg Base 2008 Georgia Subgrade

50. Pervious Concrete Pavement“Green Movement” Pervious Concrete holds up and cools runoff When used as a Stormwater system in GA, needs an Aggregate recharge bed 6-12” Typically 6” pervious in parking areas High density ABG pavers/Pug mill opportunity