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2011: Sector Leader of Building Materials & Fixtures 2011-2008: Ranked Gold Class 2004: member since Ranking by SAM Thailand Focus 2012 Hosted by Phatra and SET Aug 30, 2012

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Page 1: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

2011: Sector Leader of Building Materials & Fixtur es2011-2008: Ranked Gold Class2004: member since

Ranking by SAM

Thailand Focus 2012Hosted by Phatra and SET

Aug 30, 2012

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Slide 2Agenda

� Strategy

� Sustainability

� Business Updates

� Financials

� Appendix

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Slide 3Business segments today

H1/11186,354 MB

H1/12203,425 MB (+9% y-o-y)

Revenue from Sales

H1/1116,703 MB

H1/1210,252 MB (-39% y-o-y)

SCG Investment1) dividend income (stake of <20%)

2) equity income (stake of 20% - 50%)

Recurring Profit for the Period

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Slide 4Strategy

GROWTH

1) Expansion in ASEAN

2) High Value Added products & services (HVA)

DISCIPLINED

“Cash return on investment” hurdle of 15%

“Dividend payout” policy of 40-50%

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Slide 5CAPEX cyclesInvestments, and M&A

Past Phase2006 - 2010

Current Phase2011 - 2015

...ASEAN expansion of core businesses

� CAPEX of +150,000 MB

� Cash-flow financed

� Cash on hand of 40,102 MB

� Mostly M&A

� Mostly ASEAN� CAPEX of 146,026 MB ($4.7Bill)

� Cash-flow financed

� Mostly green field

� Mostly Thailand

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Slide 6ASEAN assets

Note: as of Jul/12

ASEAN

ASEAN assets = 53,800 MB($1.7 Billion or 14% of total assets )

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Slide 7SCG’s capacity ranking

Thailand ASEAN

Downstream Chemicals 1 17.2 million tons

Packaging Paper 1 11.9 million tons

Cement 1 224 million tons

Building Products 1 1149 million sqm of ceramics

ASEAN

Note: as of July/12

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Slide 8Regional growth opportunitiesLow Consumption per Capita in ASEAN

ASEAN

Note: figures for 2011

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Slide 9

4%

ASEAN39%

Export destinations in H1/12ASEAN accounted for 39% of all of SCG’s exports.

ASEAN

Revenue from Sales Export Destinations

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Slide 10

Cambodia 9%

Myanmar 16%

Vietnam 15%

Malaysia 9%

Indonesia 31%

Laos7% Singapore

7%Philippines

6%

0

5,000

10,000

15,000

20,000

25,000

2006 2007 2008 2009 2010 2011 Q1/12 Q2/12

MB

7,700

Sales from ASEAN Operations Export to ASEAN (from Thailand)

Percentage of total sales from ASEAN Operations

3% 5% 5% 5% 7% 7% 6% 9%

13,40014,600

20,200

16,700

23,700

8,8186,367

ASEAN Drivers in H1/12Indonesia, Myanmar, and Vietnam accounted for 62% of SCG’s ASEAN export sales. ASEAN

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Slide 11

Karawang

Cilegon Banten

Jakarta

ASEAN Expansion: Indonesia

Recent investments since Q1/11:

Assets: 29,700 MB ($970 Mill)Total Sales: 5,497 MB Total Export from Thailand: 6,459 MB

Operations: (staffs-5,924)� Chemicals: PVC, chemicals complex (30%)� Cement: RMC� Building Materials: ceramics, roofing � Distribution� Trading & Investment offices

Chemicals Complex: Chandra Asri – Sep/11 (13,500 MB)

M&A / 30% stake / 13,500 MBEthylene 600 KTA, downstream operations, port and pipe facilities.

Ready-mixed concrete (RMC) – Feb/12 (4,300 MB)

M&A / 100% stake / 4,300 MB2.2 mill cubic metre of RMCconcrete pipes, precast concrete, quarries, limestone

Future plans:

Greenfield - cement plant (first phase)Debottleneck - Chandra Asri chemicals complexM&A opportunities – all existing businesses

Current: (as of H1/12)

Lightweight Concrete Block - May/12 (1,250 MB)

Greenfield / 100% stake / 1,250 MB6 mill sqm / Q1/14 start

Note: as of H1/12

Distribution: KokohM&A / 99% stake22 distribution centre, +10,000 point of sales.Ceramic tiles: KIA M&A / 94% stake / 27 mill sqm.

Jun/11 (3,100 MB)

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Slide 12ASEAN Expansion: Vietnam

Note: as of H1/12

Recent investments since Q1/11:

Hai Duong

Ho Chi Minh City

Chemicals: Integrated Complex� Greenfield / $4.5 Bn� JV with QPI (Qatar) and Vietnamese partners� Flex-feed crackerM&A opportunities – all existing businesses

Future plans:

Operations: (staffs-2,172)� Chemicals: PVC, PP compound� Cement: RMC� Building Materials: roofing� Paper: packaging paper, box plant� Distribution� Trading & Investment offices, and product

showroom

Binh Duong

White cement grinding plant (Buu Long) - Jan/12 (200 MB)

M&A / 99% stake 200 MB / 200,000 tons Chemicals (PVC pipe) - Mar/12 (1,200 MB)

M&A / 20-30% stake in local pipe makers1,200 MB / 150,000 tonsBox plant (Alcamax) – Jan/11 (750 MB)

M&A / 69% stake 750 MB / 53,000 tons

Current : (as of H1/12)

Assets: 11,700 MB ($380 Mill)Total Sales: 5,153 MBTotal Export from Thailand: 3,089 MB (H1/12)

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Slide 13ASEAN Expansion: Myanmar

Yangon

Nay Pyi Taw

Mandalay

Pending Requirement:Foreign investment law has been approved by the cabinet and will be further submitted to the parliament for final approval.

SCG’s export from Thailand

Note: as of H1/12

Current: (as of H1/12)Assets: 150 MB ($5 Mill)Total Export from Thailand: 3,260 MB (H1/12)

Operations: � Cement: RMC� Distribution: bagged cement, building products� Trading office

Green field - cement plant (first phase)

Future plan:

Key success factors:� Branding� Marketing expertise� Established clients base

Investment opportunities – logistics and others

Page 14: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 14Thailand – recent investments since Q1/11

Cement� Increased mortar capacity by 50% to 3.1 million tons. (HVA) July/12 (1,000 MB)

Building Materials� Increased modular home capacity (JV with Sekisui Heim) May/11 (2,900 MB)

to 1,000 homes. (HVA)

Distribution� Entering into retail business with a 30%-33.4% stake (approx.10,000 MB) pending for EGM

in the SET listed “Siam Global House PLC.” (Oct 1, 2012)

� Pending for the approval of its shareholders on Oct 1, 2012

Chemicals� Greenfield LLDPE cast film (15,000 tons), 45% JV with Mar/12 (1,400 MB)

Mitsui Chemicals Tohcello. (HVA)� Increased stake in Thai Plastic and Chemicals to 90% (from 46%). Mar/12 (11,500 MB)

Paper � Green field Machine Glazed Paper (43,000 tons), Jun/12 (2,200 MB)

45% JV with Nippon Paper Group. (HVA)� Upgrade existing pulp facilities to produce dissolving grade pulp. (HVA) July/12 (400 MB)

� M&A of Tawana Container (box capacity of 61,000 tons). Mar/12 (410 MB)

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Slide 15SCG Cement’s expansion:

Vietnam (2011)0.2 MT white cement grinder

Cambodia (2008)1.0 MT plant

Indonesia (future)1.5-3.0 MT plant

Myanmar (future)1.5-3.0 MT plant

Thailand since 1913

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Slide 16SCG Building Materials’ expansion:

Philippines (1993)Ceramic tiles: 12 mill sqm.

Indonesia (2011)Ceramic tiles: 27 mill sqm.

Product types:

Thailand RoofingCeramic tiles

OthersIndonesia Roofing

Ceramic tiles OthersPhilippines Roofing Ceramic tilesCambodia RoofingVietnam Roofing

Capacity: Ceramic Tiles 149 mill sqm.Roofing Tiles 87 mill sqm.Ceiling & Wall Products 65 mill sqm.Lightweight Concrete 15 mill sqm.

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Slide 17

IndonesiaChandra Asri (2011) 30% stake

Thailand:ROC (1999) / MOC (2010) complexes

SCG Chemicals’ expansion:

Existing StakeOlefins Capacity ('000 tons)

Ethylene Propylene Total

ROC SCG 64% 800 400 1,200

MOC SCG 67% 900 800 1,700

Chandra SCG 30% 600 320 920

Existing total 3,820

Existing:

Vietnam Complex (JV Agreement)• SCG 28%, TPC 18%• Flex-feed cracker• Olefins capacity of 1.4 MT

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Slide 18

Existing:

Packaging Chain:Packaging Paper 1,880,000 tonsBox Plants 855,000 tonsP&W Chain:P&W Paper 565,000 tonsShort-fiber pulp 425,000 tons

Existing:

Packaging Chain:Packaging Paper 1,880,000 tonsBox Plants 855,000 tonsP&W Chain:P&W Paper 565,000 tonsShort-fiber pulp 425,000 tons

SCG Paper’s expansion:

Thailand (recent investments)� Machine glazed paper plant (start-up

in mid-2014)� Upgrade existing pulp facilities to

produce dissolving grade pulp� M&A of Tawana Container (61,000

tons).

Philippines (2003)Packaging paper: UPPC

(245,000 tons)

Vietnam (2009)� Box plants

� Alcamax (53,000 tons)� Others (47,000 tons)

� Packaging paper (220,000 tons)

Singapore & Malaysia(2007)Box plants (55,000 tons)

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Slide 19

Asia:� Philippines Manila� Malaysia Kuala Lumpur� Singapore Singapore� Indonesia Jakarta � Vietnam Ho Chi Minh City,

Hanoi, Danang

� Cambodia Phnom Penh� Myanmar Yangon� Laos Vientiane� China Shanghai,

Foshan, Kunming, Guangzhou, Nanning

� Hong Kong Hong Kong� Taiwan Taipei� India Chennai,

Mumbai, � Bangladesh Dhaka

Chittagong� U.A.E. Dubai� Jordan Amman� Russia Moscow

SCG’s distribution network coverage:Overseas network coverage with 34 offices in 22 cou ntries, in addition to ASEAN base in distribution, logistics and retail sales.

North America:� U.S.A. L.A. , Philadelphia

Dallas� Canada Vancouver

Europe:� Hungary Budapest� France Paris

Africa:� South Africa Johannesburg� Tanzania Dares Salaam

*Excluded Thailand

South America:� Brazil Rio de Janeiro

Australia:� Australia Sydney

KOKOH: 22 distribution centre in Indonesia

Page 20: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 20HVA = High Value Added Products & ServicesHVA on Sales target of 50% by 2015, from subsidiaries.

HVA

40370

720880 921

1,111735

0

400

800

1,200

2004 2007 2008 2009 2010 2011 H1/123/ R&D and Product Design Team

2/ R&D Spending

HVA as a % of 4% 17% 19% 25% 29% 32% 34%Revenue from Sales

1/ HVA’s Revenue from Sales

7,78338,837

54,865 59,16185,768

117,992

68,232

0

35,000

70,000

105,000

140,000

2004 2007 2008 2009 2010 2011 H1/12

(MB)

(MB)

$200m

$3,800m

$36m

$1m

$2,200m

$23m

364 (Ph.D. 9) 941 (Ph.D. 67)

(staffs / Jul/12)

Page 21: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 21Systematic training roadmapCompetent staffs are key...

.

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Slide 22SCG’s external training programs

Programs Current Since Years Staffs

Harvard 1982 31 65

Wharton 2007 6 11

EDP - Executive Development Program Columbia 2007 6 172

Wharton 1981 32 1,307

Duke 2011 2 111

Marketing Excellence Program Kellogg 2006 7 406

MDP - Management Development Program

AMP - Advanced Management Program

Note: as of July/12

Page 23: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 23Corporate scholarship program Began in 1973, with 412 scholarships granted. .

Note: Note: Note: Note: 301 scholarships are active, others have mostly retired

Current 47 students (41 overseas): MBA 13, Engineering 31, Specialist 3

MBA Engineering and Specialist

Page 24: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 24Agenda

� Strategy

� Sustainability

� Business Updates

� Financials

� Appendix

Page 25: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 25

� DJSI was established in 1999 as the first truly glo bal index to monitor sustainability initiatives of listed companies.

� +60 global funds in 16 countries follow the DJSI..

� For further details: www.sustainability-index.com

� : Global Sector Leader (Building Materials & Fixtures) by SAM

� : ranked “Gold Class” which is top group for each s ector.

� : initial year of DJSI membership.

2011

2011-2008

2004

Page 26: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 26DJSI sector overview Building Materials & Fixtures

SUSTAINABILITY LEADERSAs of September 8, 2011

Universe Member Universe Member Universe Member Universe M ember

Number of Companies 45 8 10 3 5 1 10 3

ASAHI GLASS CO LTD Japan

BORAL LTD Australia

CRH PLC Ireland

HOLCIM LTD Switzerland

LAFARGE SA France

OWENS CORNINGUnited States of America

SCG Thailand

TOTO LTD Japan

WEYERHAEUSER COUnited States of America

CompanyDJSI World DJSI Europe DJSI North America DJSI Asia/Pa cificIndustry

LeaderCountry

Page 27: 2011: Sector Leader of Building Materials & Fixtures 2011 ...scc.listedcompany.com/misc/PRESN/20120831-SCC-Thailand...2012/08/31  · 2011: Sector Leader of Building Materials & Fixtures

Slide 27Agenda

� Strategy

� Sustainability

� Business Updates

� Financials

� Appendix

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Slide 28

+50% of PE/PP are exported to +110 countries

SCG ChemicalsIntegrated and competitive operations.

Cracker #1 (1999)1.2 MT C2 & C3

Crackers

SubsidiariesPEPP

PVCOthers

AssociatesDow

MitsuiMitsubishi Rayon

Others

Regional PlayerThailand - Fully Integrated

Chemicals

Cracker #2 (2010)1.7 MT C2 & C3

Downstream

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Slide 29

Typical crackersGas-based Naphtha-based

0

300

600

900

1200

'000 tons

‘000 tons

SCG Chemicals Investment in the propylene-rich cracker

Chemicals

0

300

600

900

1200

'000 tons

ethylenepropylene

‘000 tons

SCG’s 1 st

cracker(1999)1.2 MT

Propylene-rich crackerNaphtha-based

SCG’s 2nd

cracker(2010)1.7 MT

0

300

600

900

1200

'000 tons

‘000 tons

by-products

ethylene

propyleneby-products

ethylene

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Slide 30Historical margin: HDPE – NaphthaChemical margins are currently at trough levels.

0

100

200

300

400

500

600

700

800

900

1,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Price Gap

Avg global conversioncash cost of $300/ton ,

ex-feedstock

Avg global conversioncash cost of $400/ton

ex-feedstock

$/ton

Chemicals

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Slide 31Global ethylene incremental supply growthExcess supply and soft demand…

0

2

4

6

8

10

12

2009 2010 2011 2012 2013 2014 2015

MT

10.5

Incremental supply growth

3% 8% 5% 2% 3% 3% 3%

6.9

3.4

Ramp-up Capacity

Effective Nameplate Capacity

Chemicals

~2.5

~5.0 ~5.0 ~5.0

Note: as of Jun/12, estimated by ground breaking ba sis

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Slide 32

HDPEEthylene

Naphtha

$/ton

HD-Naphtha 456 396 443 441 375 481 435 356Spread ($/T) 434

Q2/120

250

500

750

1,000

1,250

1,500

1,750

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 This weekQ3/12To date

Chemicals

HDPE – Naphtha Price GapPE margins are at trough levels

Note: SEA regional pricesConversion rate: 1 PE = 1 Ethylene

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Slide 33

Chemicals

PP – Naphtha Price GapPP margins carries a premium over PE margins.

Note: SEA regional pricesConversion rate: 1 PP = 1 Propylene

PP-Naphtha 717 691 650 535 408 539 539 456 Spread ($/ton) 649

0

250

500

750

1,000

1,250

1,500

1,750

2,000

PP

Propylene

Naphtha

Q2/12Q1/11

$/ton

Q2/11 Q3/11 Q4/11 Q1/12 This weekQ3/12To date

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Slide 34

PVC-EDC/C2 323 437 444 406 424 487 508 525

Spread ($/ton) 403

0

250

500

750

1,000

1,250

1,500

1,750

PVC

EDC

Ethylene

VCM

Q2/12

$/ton

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 This weekQ3/12To date

Conversion rate: 1 PVC = 1 VCM = 0.8 EDC + 0.2 Ethy lene

Chemicals

PVCContinued healthy margins.

Note: FE regional prices

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Slide 35

BZ-Naphtha 224 137 148 84 155 211 280 207TL-Naphtha 111 116 208 239 214 249 260 204BZ Spread ($/ton) 148TL Spread ($/ton) 169

BenzeneTolueneNaphtha

0

200

400

600

800

1,000

1,200

1,400

1,600$/ton

Q2/12Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 This weekQ3/12To date

Chemicals

Benzene & TolueneMargins recovery

Note: SEA regional prices

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Slide 36

Chemicals

Price Gaps of AssociatesMMA-Naphtha: Continued weak demand of electronic industry.BD-Naphtha: Surged from picked up BD price in U S.PTA-PX: Still slow demand in textile mar ket..

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Slide 37SCG CementSCG is the only producer with nationwide production facilities, and the leading domestic market share of 40%. Cement

SCG’s ASEAN capacity23 MT Thailand

1 MT Cambodia0.2 MT Vietnam

NorthSCG 2 MT

CentralSCG 14 MTOther players 33 MT

SouthSCG 7 MT

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Slide 38

051015202530354045505560

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Million Ton

Industry Production80-85% utilization

Industry Capacity 56MT

Total Domestic

Total Export

Total Domestic Growth Rate (% y-o-y)- 10% -45% 15% -8% -1% 23% 6% 11% 9% -2% -6% -6% 1% 10% 3% ++5%

Domestic cement industryForecasted domestic demand growth of ++5% for 2012.

Cement

2012FThai cement market

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Slide 39Domestic cement pricesEx-factory price was $60/ton in Q2/12, with domestic demand growth of 10% y-o-y. CementCement

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Slide 40Cement exportsExport prices are at FOB basis.

4.76.0

7.1 7.66.2 6.1 6.8 7.0

8.1 8.2 7.6 7.36.4

1.9 1.4

2224

22 2124

27

34 35 34

40 3841

4549 51

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0.0

5.0

10.0

15.0

20.0

25.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/12 Q2/12

Million Ton $/ton

Export Volume (MT)

Export Prices (FOB)

Cement

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Slide 41SCG CementWaste-heat power generators

Phase 1 2,000 MB Thailand -started in Q1/08

Phase 2 350 MB Cambodia -started in Q2/09

Phase 3 3,400 MB Thailand -started in Q4/09

total 5,750 MB

� Utilize heat from the production process to generate electricity.

Cement

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Slide 42

Others11%

Board & Wood sub14%

Ceramic Tile46%

Roof29%

� Insulation� Landscape� Lightweight concrete� Others

SCG Building materialsProduct Segmentation - Sales proportion

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Slide 43SCG Building materials - Ceramic Tile:SCG’s sales volume & price for all subsidiaries in the ASEAN region.

25 2528 27

33 35

0

20

40

60

80

100

120

140

160

0

10

20

30

40

50

60

70

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Baht/sqm.Million SQM.

Average Price

Sale Volume

+40% y-o-y+5% q-o-q

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Slide 44SCG PaperOperations within ASEAN

P&WShort-fiber pulp: 425,000 tonsP&W paper: 565,000 tons

PackagingPackaging paper: 1,880,000 tonsBox plants: 855,000 tons

Box plant

Packaging plant

Pulp mill

P&W plant

Paper

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Slide 45

Packaging

P&W

Internal Sales-Corrugated Box

100%integration

46%integration

54%External Sales-Containerboard-Paperboard

Internal Eucalyptus Pulp P&W Paper

SCG PaperIntegrated operations

Paper

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Slide 46P&W paperLong-fiber pulp prices weakened by demand softness and oversupply from EU and Scandinavian countries, while short-fi ber prices picked up slightly. Paper

Note: regional prices

740 770

680

570605

650

870920

840

735690

690

915970 945

870 855885

300

600

900

1,200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Jul

Short FiberShort Fiber

P&W Paper

Long Fiber

$/Ton

2010 20112009 2012

875 - 895

650 - 670

635 – 655

Q2 Jul’12

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Slide 47

Paper

Note: regional prices

Packaging Paper:Packaging Paper prices stayed in the range of $500- $520/ton, while AOCC prices were flat due to weakness in Chinese de mand.

270 270 275

225 235 230

515 520 530 515 505 510

0

150

300

450

600

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Jul

$/Ton

2010

Packaging Paper

2009

Q2

2011 2012

Wastepaper (AOCC)

Jul’12

500 - 520

220- 240

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Slide 48Business outlook

Chemicals� PE/PP margins remain under pressure from soft global demand.� ASEAN’s PVC demand remains resilient.

Cement� Domestic demand growth of ++5% in 2012.� Demand growth in the residential and commercial sectors, while demand from the

government sector will benefit from budget allocations.� Domestic prices are expected to remain under pressure from competition.

Building Materials � Continued positive demand outlook , especially in the provincial areas. � The government’s economic stimulus budgets are expected to help drive domestic sales

volume.

Paper� Steady margins, but with low demand growth for P&W.

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Slide 49Agenda

� Strategy

� Sustainability

� Business Updates

� Financials

� Appendix

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Slide 50

28,584 33,704

50,359 46,936 49,38043,246

34,20644,046 41,943 40,838

9,835 9,542

1,8343,484

4,267 6,5717,771

6,762

4,577

3,070 4,006 5,415

2,686

0

10,000

20,000

30,000

40,000

50,000

60,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/12 Q2/12

MB

Note: EBITDA includes dividend received

- Dividend from associated companies- EBITDA from Operations

EBITDA

30,41837,188

54,626 53,50757,151

50,008

38,783

47,116 45,949($1.5 Bn)

46,253

10,301

-14% y-o-y+18% q-o-q

12,178

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Slide 51Profit for the period

11,14217,806

33,707 30,71325,841

16,479

27,2813,462

2,148

2,7761,523

4,511

292

9,963

05,000

10,00015,00020,00025,00030,00035,00040,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/12 Q2/12

MB

14,604

19,954

36,48332,236

EPS 12.2 16.6 30.4 26.9 24.5 25.3 14.0 20.3 31.2 22.7 5.0 3.6(Bt/sh)

29,451 30,352

16,771

4,280

24,346

- Divestment gain

37,382

27,281

-43% y-o-y-28% q-o-q

5,972

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Slide 52

2,537 2,7854,214

3,1231,880 2,263 1,706 1,966 2,049 1,289

-131 611

3,1403,962

5,5946,811

7,216 5,980

2,963

5,2346,341

5,485

475-920-500

5001,5002,5003,5004,5005,5006,5007,5008,5009,500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1/12 Q2/12

MB

5,677

6,747

9,808 9,9349,096

8,243

4,669

6,7747,200

8,390

-118% y-o-y-190% q-o-q

-309

- Chemicals- Non-Chemicals

Equity IncomeInventory adjustment for the associates of SCG Chem icals, while the associates of SCG Investment have recovered somewha t from the flood of Q4/11.

344

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Slide 53Net debtIncludes cash of 40,102 MB ($1.3 Billion)

246.7

189.5179.9 175.8

148.4126.3

114.9100.6 100.5 103.1 99.9

120.5 122.0

83.6

112.1132.4

0

50

100

150

200

250

300

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1/12

Billion Baht Debt Profile

• Net Debt / EBITDA = 2.9x• Net Debt / Equity = 0.9x• 91% are Thai Baht• 76% are fixed • Interest cost of 4.4%

CAPEX = 146 Bn Baht

CAPEX = 203 Bn Baht

Net Debt 9.2 7.7 6.4 5.8 5.1 4.1 3.1 1.8 1.9 1.8 2.0 3.1 2.6 1.8 2.4 2.9on EBITDA

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Slide 54

61.3

10.0

3.5

10.3 8.55.7

11.9 14.0

19.123.6

27.2

42.4

34.5

18.4

32.0

24.8

0

10

20

30

40

50

60

70

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1/12

CAPEX & investments

Billion Baht

- CAPEX includes debottlenecking, expansion projects, and major turnaround.- Investments are acquisitions and purchase of shares.

2006-2010 = 146 Bn Baht

Past Phase2011-H1/12

= 56.8 Bn Baht

Current Phase

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Slide 55Incremental capacity:Previous investment phase (2006 – 2010)

(Capacity at year end = '000 tons)

2007 2008 2009 2010 2011 SCG Stake CAPEX (MB)

Chemicals Upstream (Cracker) Cap Times

Ethylene (subsidary) 800 800 800 1,700 1,700 900 2.1 x 45,600 MB

Propylene (subsidary) 400 400 400 1,200 1,200 800 3.0 x ($1.2 Bill)

Chemicals Downstream HDPE (subsidiary) 780 780 780 1,180 1,180 400 1.5 x 17,100 MB

PP (subsidiary) 320 320 320 720 720 400 2.3 x ($450 mill)

PVC (90% stake in TPC) 858 828 766 886 886 28 1.2 x 45% 2,200 MB

LLDPE (Dow JV) 300 300 300 650 650 350 2.2 x 50% 2,100 MB

Specialty Elastomers (Dow JV) - - - - 220 220 - 50% 3,000 MB

Propylene Oxide (Dow JV) - - - - 390 390 - 50% 2,400 MB

MMA (Mitsubishi Rayon JV) 85 85 85 175 175 90 2.1 x

Cast Sheets (Mitsubishi Rayon JV) - - 20 20 20 20 -

Paper Printing & Writing Paper 365 565 565 565 565 200 1.5 x 100% 7,300 MB

Packaging Paper 1,660 1,660 1,880 1,880 1,880 220 1.1 x 70% 5,200 MB

Box 550 637 692 741 795 245 1.4 x 70% 3,200 MB

Cement Cambodia Grey Cement (MT) 23 24 24 24 24 1 1.04x 90% 3,000 MB

Building Products Ceramic Tiles (M sqm) 95 122 122 122 149 54 1.6 x 54% to 100% 6,800 MB

Ceiling & Wall product (M sqm) 34 50 57 57 65 31 1.9 x 100% 3,200 MB

Lightweight concrete (M sqm) 3 3 3 15 15 12 4.0 x 68% 1,600 MB

47% 2,500 MB

Total Cap

2007 - 2011

67%

100%

Increase Project Cost

HVA from Assc. Apr startOct start

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Slide 56Uses of cash

(MB) 2006 2007 2008 2009 2010 2006 - 2010 2011 Q1/12 2011 - 2015

EBITDA 57,151 50,008 38,783 47,116 45,949 239,007 46,253 10,301

Profit for the Period 29,451 30,352 16,771 24,346 37,382 138,302 27,281 5,972

CAPEX & Investment 23,574 27,160 42,379 34,535 18,378 146,026 32,053 20,025

Dividend Paid 18,000 18,000 9,000 10,200 15,000 70,200 15,000 -

Tax 4,036 5,898 4,562 5,168 13,959 33,623 7,504 1,264

Finance Costs 5,169 5,273 6,089 5,649 4,670 26,850 6,048 1,242

Past Phase Current Phase

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Slide 57

� Retail investors only.� Unsecured, unsubordinated. � No debt covenant.� Thai Baht, fixed rate, and

4 year maturity.� Current “A” rating by Fitch (local).

16,000

25,000 25,000

15,000

25,000

40,000

30,000

15,000

25,000 25,000

0

10,000

20,000

30,000

40,000

50,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Debenture Maturity TableMB

NOTE: Debentures amount to 115,000 MB, as of Q2/12.

Debenture profile

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Slide 58

0.00.00.00.0

1.01.01.01.0

3.03.03.03.0

6.06.06.06.0

15.015.015.015.0 15.015.015.015.0 15.015.015.015.0 15.015.015.015.0

7.57.57.57.5

8.58.58.58.5

12.512.512.512.5 12.512.512.512.5

4.54.54.54.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 H1/12

Baht / Share

% of Net Profit 0% 16% 25% 36% 49% 56% 61% 59% 54% 42% 40% 55% 53%

Dividend Payout Summary

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Slide 59Agenda

� Strategy

� Sustainability

� Business Updates

� Financials

� Appendix

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Slide 60Background

� Founded in 1913.

� Listed in 1975 on the SET.

� Market cap of $13.2 Billion (340 Bt/sh)

� Free float of 70%.

� Approximately 38,613 staffs.

� Asset of 384.3 Billion Baht ($12.4 Billion)

� Key figures (FY2011):

� Net Sales 368.6 Billion Baht ($11.9 Billion)

� EBITDA 46.3 Billion Baht ($ 1.5 Billion)

� Net Profit 27.3 Billion Baht ($ 0.9 Billion)

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Slide 61Organization chart

Board of Directors

Management Committee

CFO & Investment

SCG Cement

SCG Paper

SCG Chemicals

SCG Distribution

President & CEO

Audit Committee

Internal Audit Office

SCG Building Materials

Corporate Administration

SCG Investment

Governance and Nomination Committee

Remuneration Committee

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Slide 62Shareholders

LocalCrown Property

Bureau 30%

Foreign + NVDR 36%

LocalRetail / Inst

34%

(NVDR 11%)

Local 64%– Institution / Retail 34%– Crown Property Bureau 30%

Foreign 36%– Foreign Board 25%– NVDR 11%

Jun 30 , 2012

(Foreign Board 25%)

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Slide 63Operational history

Crisisof

1997Organic growth

TakeoverNew

industries

1913 – 1970’s 1970’s - 1980’s 1980’s - 1990’s

“Historic roots” “Opportunistic” “Partner of choice”

� Cement� Construction Materials� Steel

� Ceramics� Paper & Packaging

� Chemicals � Automotive� Electrical

1998 - 2003

Restructure

2004 - onwards

ASEAN&

HVA

Today� Chemicals� Cement� Building Materials� Paper � Distribution� Investment

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Slide 64ASEAN segmentsASEAN is an increasing part of SCG.

ASEAN

Note: as of Jul/12

* Including SCG's international staff (Thai)

ASEAN as a % of SCG consolidated

2006 2007 2008 2009 2010 2011 H1/12

Sales from ASEAN Operations

% 3% 5% 5% 7% 7% 7% 7%

MB 7,700 13,400 14,600 16,700 20,200 23,700 15,185

Assets % 3% 5% 5% 7% 7% 13% 14%

MB 6,800 13,000 14,500 22,500 26,700 47,000 53,785

HR* % 5% 10% 11% 11% 12% 19% 26%

Staffs 1,180 2,628 2,974 3,225 3,777 6,519 10,161

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Slide 65Capacity at the end of 2012

Chemicals - Naphtha Cracker (consolidated) Chemicals - Associates (equity accounting) Ethylene 1,700,000 tons Dow Chemicals JV (50%) Propylene 1,200,000 tons - LLDPE 650,000 tonsChemicals - Downstream (consolidated) - Propylene Oxide 390,000 tons HDPE 1,180,000 tons - Specialty Elastomer 220,000 tons LDPE + LLDPE 200,000 tons - PS 120,000 tons PP 720,000 tons - SM 300,000 tons PVC (Thai, Indo, Viet) 886,000 tons - Synthetic Latex 18,000 tons

Mitsui Chemicals JV (20% - 50%)Cement (consolidated) - PTA (50%) 1,440,000 tons Grey Cement (Thai, Camb) 24 million tons - PET (20%) 100,000 tons Ready-Mixed Concrete 22 million metre3 - PP Compound (46%) 86,000 tons (Thai, Camb, Myan, Indo, Laos, Viet) - LLDPE Cast Film (45%) 15,000 tons White Cement (Thai, Viet) 0.4 million tons Mitsubishi Rayon JV (47%)

- MMA 175,000 tonsBuilding Products (consolidated) - Cast Sheets 20,000 tons Ceramic Tiles (Thai, Indo, Phil) 149 M sqm Chandra Asri JV(30%) Roofing Tiles (Thai, Camb, Phil, Viet) 87 M sqm - Ethylene 600,000 tons Ceiling & Wall Products 65 M sqm - Propylene 320,000 tons Autoclaved Lightweight Concrete 15 M sqm - HDPE / LLDPE 320,000 tons

- PP 480,000 tonsPaper (consolidated) - SM 340,000 tons Packaging Paper (Thai, Phil, Viet) 1.88 million tons Bangkok Synthetic (26%) Box (Thai, Malay, Sing, Viet) 795,000 tons - Butadiene 140,000 tons Printing & Writing Paper 565,000 tons - BR 50,000 tons Short Fibre Pulp 425,000 tons - SBR 70,000 tons

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Slide 66SCG CementRMC expansion into ASEAN.

Cement

Myanmar Laos

Cambodia

Vietnam

Indonesia

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Slide 67

Broad range of product offeringRoofing products Ceramic tiles Fiber cement products Sanitary ware / fittingsAutoclaved lightweight concrete blocks

HVA accounts for >40% of existing sales.

Integrated solutions provider� Home Solution Center� Roofing Center� Cotto tile studio� Cotto speed bathroom� Modular house (Sekisui Heim jv)

SCG Building MaterialsWorld’s top 2 largest ceramics producer, with diversified offerings of products and services.

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Slide 68

� Leading supply chain solution provider, whereby non-SCG clients accounts for approx 40% of total sales.

� Global international trading coverage is provided by the 35 global offices in 24 countries.

� Domestic logistics service provider to +200 clients, with +30 MT hauled in FY2011.

� Network of more than 450 exclusive domestic distributors nationwide.

SCG DistributionPrimarily logistics, global trading, and domestic distribution.

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Slide 69SCG DistributionKokoh’s 22 distribution centre in Indonesia

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Slide 70SCG InvestmentContribution in FY2011 was approx 1,009 MB in equity income, and another 2,346 MB from dividend income.

SCG Investment

Siam Kubota Leasing

Siam Kubota Metal Tech

Aisin Takaoka Group (30%)

Musashi Auto Parts (21%)

Siam Lemmerz (30%)

Michelin Siam Group (10%)

Siam Toyota Manufacturing (4%)

Automotive business

Toyota Motor Thailand (10%)

SiamYamato Steel (10%)

OthersAgricultural business

Siam Kubota Corp (40%)

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Slide 71SCG eco valueThailand’s first eco label, accounting for 13% of SCG’s 2011 sales, or approx 47,000 MB.

Cool Roofing System40% Energy Reduction

Cerafino Solar Roof TilesSolar Power

Heat Insulation STAYCOOLRecycled Contents > 80%

COTTO Sanitary Ware and FittingsReduces Water Usage by 25%

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Slide 72

2,7733,441 3,722 4,228

2,038 1,703 1,560428 330

527

727 567698

2,752

971445

466

2,538

0

2,000

4,000

6,000

8,000

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Chemicals EBITDA

EBITDA Margin

10% 9% 9% 7% 9% 4% 3% 3% 1% 1%

Note : EBITDA = EBITDA from operations + dividend from associated companies

MB

4,429

- 40% y-o-y+221%q-o-q

Dividend fromassociates

EBITDA fromsubsidiaries

EBITDA 3,300

4,168 4,289 4,2674,926 4,789

2,6742,005

1,636

2,631894

2,868

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Slide 73Chemicals profitability

1,371 1,689 1,982 1,263 2,193 1,064 1,765

672 764 -84

1,674 1,3891,863

1,415

2,595

1,4351,465

476

-921

9,963

(1,000)

1,000

3,000

5,000

7,000

9,000

11,000

13,000

15,000

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Divestment GainEquity Income from Assc.Subsidiaries Profit

-140% y-o-y-181% q-o-q

3,045 3,0783,845

12,640

MB

4,788

2,4993,329

6721,240

-1,005

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Slide 74Cement financials

EBITDA 26% 22% 21% 20% 26% 25% 23% 19% 24% 21% margin 22% 24%

MB

EBITDA+3% y-o-y

-11% q-o-q

Net Profit+4% y-o-y

-18% q-o-q

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Slide 75

8,690 8,554 8,9138,014

10,315 10,665

0

5,000

10,000

15,000

20,000

25,000

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Export Ratio: 10% 10% 9% 9% 9% 9%

9%10%

15%11%

19%

25%

H1/11 H1/12

17,244

20,980

MB

Revenue from Sales

10% 9%

Growth of Revenue from Sales (y-o-y)

+25% y-o-y+3% q-o-q

Revenue from SalesImproved 25% y-o-y, mainly from consolidation.

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Slide 76EBITDA & Profit for the periodDropped q-o-q, due to seasonal factors and the effects from the new labor cost.

1,415 1,432 1,404

809

1,917 1,743

524 527 507

-82

893

678

-200

200

600

1,000

1,400

1,800

Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

EBITDA

Profit for the period

EBITDA Margin:16% 17% 16% 10% 19% 16%

H1/11 H1/12

2,8473,660

H1/11 H1/12

1,0511,571

Profit for the Period

MBEBITDA

17% 17%

1,0511,571

+22% y-o-y+9% q-o-q

+28% y-o-y-24% q-o-q

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Slide 77Paper financials

MB

EBITDA Margin All 19% 21% 18% 13% 19% 18% 16% 12% 16% 16% Packaging 16% 17% 14% 11% 17% 15% 14% 11% 15% 16%P&W 25% 28% 26% 16% 22% 22% 21% 14% 17% 16%

EBITDA+1% y-o-y+7% q-o-q

Net Profit+9% y-o-y+9% q-o-q

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Slide 78Segmented financials

Sales (MB) 2008 2009 2010 2011 H1/12 Assets (MB) 2008 2009 2010 2011 H1/12

Consolidated 293,230 238,664 301,323 368,579 203,425 Cons olidated 285,776 315,986 359,219 374,653 384,118

Chemicals 136,527 101,115 144,317 192,929 102,239 Chemicals 138,504 165,947 165,087 176,614 178,998

Paper 47,110 42,729 51,714 54,839 28,441 Paper 51,089 48,271 50,127 52,542 56,881

Cement 49,999 46,661 48,954 54,249 32,701 Cement 60,770 60,680 61,018 60,180 66,088

Building Materials 23,351 26,873 30,719 34,171 20,980 Building Materials 22,654 22,992 24,796 35,804 40,580

EBITDA (MB) 2008 2009 2010 2011 H1/12 Profit for the Period (MB) 2008 2009 2010 2011 H1/12

Consolidated 38,783 47,116 45,949 46,253 22,479 Consolida ted 16,771 24,346 37,382 27,281 10,252

Chemicals 12,598 19,482 16,024 14,394 3,762 Chemicals 6,136 12,556 22,609 11,190 235

Paper 6,660 7,901 9,129 8,811 4,585 Paper 1,658 2,286 3,490 3,331 2,111

Cement 11,272 11,616 10,810 12,781 7,391 Cement 6,006 6,214 6,014 7,288 4,591

Building Materials 4,085 4,907 5,489 5,060 3,660 Building Materials 778 1,617 1,872 1,476 1,571

EBITDA Margin (%) 2008 2009 2010 2011 H1/12 EBITDA / Assets (%) 2008 2009 2010 2011 H1/12

Consolidated 12% 18% 14% 11% 10% Consolidated 14% 15% 13% 12% 11%

Chemicals 7% 17% 9% 5% 1% Chemicals 9% 12% 12% 8% 9%

Paper 14% 18% 18% 16% 16% Paper 13% 16% 16% 17% 17%

Cement 23% 25% 22% 24% 23% Cement 19% 19% 19% 21% 22%

Building Materials 16% 18% 17% 14% 17% Building Materials 18% 21% 20% 14% 14%