GREECE - LAVA · Milos Paros Syros Lesvos Chios Yali Kos Evoia Viotia Achaia Magnesia Fthiotida Igoumenitsa Thessaloniki Kilkis Preveza Arta Kavala Attiki 277.5 SALES2011 (INMILLIONEUROS)

GREECE

PlantTerminalReady-Mix PlantQuarry

Heraclion

Lassithi

Milos Paros

Syros

Lesvos

Chios

Yali

Kos

Evoia

Viotia

Achaia

Magnesia

Fthiotida

Igoumenitsa

Thessaloniki

Kilkis

Preveza

Arta

Kavala

Attiki

277.5SALES 2011

(IN MILLION EUROS)

OUR PRESENCE

4%

88.9%

Lafarge

5.5%

1.6%

Institutional GreeceInstitutional other countriesIndividual

As of 31 December 2011 Lafarge Groupowned 88.99 % of the shares in Heracles.

60.2%

8.5%

Central functionsCement plantsTerminalsLAVA quarriesRMX plantsAggregates quarries

16.8%5.1%

6.7%

2.6%

Ouractivities

Heracles General Cement Company, a member of Lafarge, is Greece’s largest cementproducer, bringing to the market differentiated, innovative products to meetcustomer and end-user needs. The company operates three cement productionplants, six cement distribution terminals, twenty three industrial minerals andaggregates quarries and twenty six ready-mix concrete plants, which sustain itscommercial presence throughout Greece.

SHAREHOLDERS EMPLOYEESDISTRIBUTION

2

Sustainability Report | 2010 | HERACLES

INTRODUCTION05 Message from the CEO

06 Values and Governance

08 Sustainability Management

10 Sustainability Ambitions 2012

12 Understanding our Business

REPORTING15 Health and Safety

18 People

22 Stakeholders and Communities

25 Climate Change

28 Emissions

30 Biodiversity

32 Water

34 Materials and Waste

36 Customers

38 Supply Chain and Logistics

HOW WE REPORT40 How we report

41 GRI statement

LAFARGE GROUP42 Progress against our

Sustainability Ambitions

44 The year at a glance

contents

If there is anything you wish to discuss in this report,please contact us at: [email protected]

4 Sustainability Report | 2011 | HERACLES

Coverage of this reportThis report covers the activities of Heracles General CementCompany during the 2011 calendar year.As of April 2012, the cement business (which includes LAVA)has been brought together with the aggregates and concretebusinesses of Lafarge in Greece to operate as one business.This is an organizational change that is taking place throughoutthe Lafarge Group globally; the legal structure is unchanged.In the light of this and to assist our stakeholders follow our pro-gress through the transition to one business, we have includedin this report where possible information about the activities andsustainability performance of the aggregates and concrete bu-siness during 2011. Graphs and tables, while continuing toshow the performance of the cement business (up to and in-cluding 2011 and including progress against targets), also in-clude where possible data for the aggregates and concretebusiness for 2011 (denoted by A&C). This assists us and ourstakeholders in establishing the baseline for consolidated re-porting in the future, encompassing what is now one businessin Greece.

5HERACLES | 2011 | Sustainability Report

Introductionfrom the CEO

Thank you for taking the time to look at our 2011 Sustainability Report. This is the fourth annualreport on sustainability that we have produced and is intended, like the previous ones, to helpour stakeholders consider and comment on our actions and progress.

Since the last report, there has been no change in our commitment to sustainability. But there hasbeen a further worsening in the economic circumstances in Greece and this naturally affects usall. Two things in particular concern me. Poor morale and worries about personal circumstancescan have an adverse affect on concentration at work increasing risks of accidents. Second, eco-nomic stress can put pressure on values and ethics. I am absolutely determined that, whateverthe circumstances, the values and principles that underpin this business shall be upheld.

This report is being published as “One Lafarge” reflecting our new organization. This new orga-nization will improve the offer we make to our customers, make better use of our expertise andreveal opportunities that we may have missed in the past. Specifically in Greece, with a marketof much reduced size, it is even more important that we reshape our business appropriately andrespond to the reality of circumstances, while continuing to manage our employees fairly andwith respect.

Looking more specifically at our sustainability program, in most areas we are on track but insome we face difficulties. Often this is where progress is not only dependent on our actions. Forinstance, we brought on stream the new cement grinding process at Halkis (see page 25) but havenot sustained earlier progress in reducing CO2 emissions overall. In large part this is a functionof market demand for different types of product but we would also make more progress if we wereable to make more beneficial use of alternative fuels, as happens in other EU countries. As for A&CI remain very positive about the scope for value-added products in the future; our aggregatesand concrete division have already made very good progress and I look forward to some flagshipprojects in 2012.

It was a small but nevertheless significant step to move to new headquarters in 2011. Their mo-dern and efficient style symbolizes the future of this business. And the opportunity to make ourart collection available to the public was an additional benefit which I hope stakeholders will ap-preciate.

We continue to welcome comments on these and other aspects of our sustainability program andI look forward to another year of progress in 2012.

Pierre DeleplanqueChief Executive Officer


Valuesand governance

Our values did not change in 2011 but our efforts to embed them ineverything we do continued.

VALUES AND GOVERNANCE

Values frameworkThere has been no change in the framework of va-lues that guide us, nor in our commitment to them.We have a Code of Business Conduct for Heraclesthat is consistent with the Lafarge global code butalso reflective of legal conditions in Greece. Andoverall, we remain guided by the Lafarge “Princi-ples of Action”.

Securing those valuesThe first level of training in our Code was completedin 2011. This is the program that was begun in2009 and includes a full-day session of briefing, di-scussion and scenario-testing, to ensure the Codeand its implications are understood. We are nowplanning the second level which will run for the nexttwo years and employ slightly different techniquesappropriate to the target audience.

Tackling speci@c issuesDuring the year we devoted additional resources tofraud prevention with special training for our Inter-nal Control Coordinators (see box to the right).Conflict of interest is an issue that requires carefulapplication of individuals’ judgment and so in 2012we plan to expose c. 500 employees, already trai-ned in the Code, to a questionnaire aiming to im-prove their awareness of potential conflicts.Training in the Code of Conduct has also been a ve-hicle for maintaining compliance with our competi-tion policy.

GovernanceCorporate governanceMarch 2011 was the date when our new Code ofCorporate Governance came formally into effect. Webelieve it to have been a success, not least becauseit was defined specifically for our company and isnot derived from a generic template.

internal

control INTERNAL CONTROL

AND FRAUD PREVENTION

One of the strengths of our in-ternal control mechanism is thepresence of 25 Internal ControlCoordinators (ICCs). These areindividuals who have operatio-nal roles but, additionally, aretrained and empowered to ad-dress internal control issues intheir areas of work.In April 2011 we gave this im-portant group a full day’s addi-tional training, in the companyof the Internal Audit and Con-trol Manager. The agenda inclu-ded:•the internal control systems in-tegrated framework and its im-plementation in Heracles•the new Greek legislation onCode of Corporate Governanceand internal control systems•fraud prevention techniques,the application of “ Red Flags”in fraud control and fraud riskassessment.This was an important meetingwhich generated substantial andconstructive feedback.


Oversight, executive responsibility and riskThroughout 2011, the company was subject to theoversight of the same eight-member board and su-pervised by the same Executive Committee as de-scribed in the 2010 Sustainability Report.

But since then, to accompany our transition to asingle country organization, we have sought and ob-tained shareholders’ approval for a new Boardstructure that gives substance to this transition. TheExecutive Committee has also been changed withthe new composition reflecting our enhanced en-trepreneurial focus. Our Corporate Internal Regula-tion has also been revised.

The Risk and Audit Committee continued to meetevery four months throughout 2011; the risk asses-sment process, led by the internal audit managerand involving the senior managers of the business,was especially focused on fraud and internal con-trol.

SustainabilityThere has been no change in leadership, in 2011 orsubsequently, and the Chief Executive continues toprovide overall direction with the backing of theBoard and the Lafarge Group. More detail is provi-ded on page 8.

Shareholders’ meetingThe 2011 meeting was the first held under the ar-rangements we introduced to improve transparencyincluding extensive use of the website to give sha-reholders easy access to material; the 2012 mee-ting has also been run on a similar basis. We believethat the response from investors has been positiveand that the arrangements are practical evidenceof our commitment to transparency.

principles

HERACLES CODE OF CORPORATEGOVERNANCE - PRINCIPLES

1. Equal treatment of shareholders2. Assiduity and fidelity3. Non-competition4. Disclosure any conflicts of interest5. Transparency of transactions6. Improvement of shareholder information7. Publication through the "Officially

Defined Mechanism for Central Storageof Regulated Information"

8. Facilitation of shareholder attendanceand voting at the General Meetings

9. Protection of minority rights10. Transparency of the information on

corporate governance

For a copy of our Code of Business Conductvisit http://www.lafarge.gr/Code_Business_Conduct_eng.pdf

For a copy of our Code of Corporate Governancevisit http://www.lafarge.gr/Corporate_Governance_Code_eng.pdf

For a copy of Lafarge Principles of Actionvisit http://www.lafarge.gr/Lafarge_Group_Principles_of_Action_eng.pdf

For a copy of our 2010 Sustainability Reportvisit http://www.lafarge.gr/Sustainability_Report_2010_eng.pdf

+web

managem

ent


Sustainabilitymanagement

We have made good progress with the 2012Ambitions and look forward to addressing thosethat will define our progress to 2020. We continueto manage our sustainability program with well-defined roles and responsibilities, action plans,performance indicators, environmentalmanagement systems and audits.

SUSTAINABILITY AMBITIONS AND MANAGEMENT

Sustainability Ambitions – ourguideThe direction and pace of our sustainability programis defined by our Sustainability Ambitions. Theseare the objectives and targets that we set at perio-dic intervals; they cover all aspects of sustainabilityand are aligned with the global Sustainability Ambi-tions of the Lafarge Group.

During 2011 we were addressing our SustainabilityAmbitions 2012; these were defined in 2009 forcompletion by the end of 2012. A summary of ourprogress appears on pages 10-11. The LafargeGroup has since announced the Sustainability Am-bitions that will guide us through to 2020, towardsa vision of the future where we make a net positivecontribution to society as a whole.

Business objectivesBusiness objectives for 2011 were health and sa-fety, sustainability, performance and people deve-lopment. A key focus was improvement andperformance excellence to ensure the viability andcontinuity of our business in the future.

Managing the programRoles and responsibilities, as they operated in2011, are described in the box to the right. Sincethen, the transition to a one country organizationhas enabled us to give the sustainability managerresponsibilities across all business lines, reporting tothe Chief Executive and supported by sustainabilityprofessionals in the cement, aggregates and con-crete businesses.

Sustainability Ambitions and business objectivescombine with our capital expenditure decision-ma-king process, three-year reviews, the setting andmonitoring of individual objectives and the monito-ring of Key Performance Indicators (KPIs) to makeup the Heracles management framework. Individualobjectives for each manager are defined annually;sustainability is included according to the indivi-dual’s role and responsibility and all objectives mustbe “SMART” (Specific, Measurable, Ambitious, Re-alistic, Time-bound).

ROLES ANDRESPONSIBILITIES

Lafarge Group – defines thegroup Sustainability Ambitions

Heracles Executive Committee(chaired by Chief Executive) –has overall responsibility for thesustainability program

Industrial General Manager –member of Executive Commit-tee and day-to-day lead on su-stainability matters

Sustainability Manager – deve-lops and oversees corporate ac-tion plan for progress

Senior managers – responsiblefor one or more SustainabilityAmbitions as appropriate

Plant managers – responsiblefor plant performance contribu-ting to relevant SustainabilityAmbitions

All employees – within the li-mits of their duties, contributeto the sustainability programand must abide by the environ-mental policy.

+web


external

input TAKING PART

By being members of sustaina-bility organizations and net-works, our own sustainabilityprogram is informed, inspiredand strengthened. As of end2011 we were:

•signatories to the Global Com-pact and founder members ofthe Hellenic United NationsGlobal Compact Network;•a founder member of the GreekBusiness Council for Sustaina-ble Development (Lafarge is amember of the World BusinessCouncil for Sustainable Deve-lopment);•members of the Hellenic Cor-porate Social ResponsibilityNetwork•a founder member of the Fede-ration of Hellenic Recycling andEnergy Recovery Industries•in a global partnership withWWF.

Environmental policy and managementOur environmental policy reinforces our sustaina-bility program and gives specific commitments con-cerning our operations, major modification projects,resources, training and research, procurement, pro-duct stewardship and stakeholder relations. Therewere no changes to this policy in 2011 and thesame system of environmental performance indica-tors defined by the Lafarge Group operated as inprevious years.The operations of all our facilities are subject tostrict environmental terms, imposed as part of theoperational permit. These describe proactive andcontrolling measures for avoiding and minimizingpotential environmental impact.

Environmental management systems consistentwith the Lafarge standard and complying with ISO14001 remain in use at Milaki (since 2004) andVolos (since 2010); during 2011 the Halkis plantimplemented such a system which will be certifiedin the second half of 2012.

Environmental auditsRegular environmental audits help raise and main-tain standards in areas including noise and dustsuppression, pollution control, and waste and watermanagement. In 2011 we continued our audit pro-gram including its extension to our remaining di-stribution centers and to LAVA quarries.

Environmental audit program

2005 2006 2007 2008 2009 2010 2011

Cement Plants Volos

Milaki

Halkis

Cement Terminals Drapetsona

Rio

Thessaloniki

Iraklio

Igoumenitsa

Kavala

LAVA quarries Altsi

Milos

Yali

The audit cycle has continued and is being extended. In 2012 Volos will be audi-ted again, along with one more LAVA quarry and the Aliveri aggregates and con-crete site.

Environmental investment Cement

(Thousands of Euros)2010 2011

Capex investments 6,275 4,971

Waste management 322 504

Cleaning and watering 435 912

Restoration-rehabilitation 553 474

Recycling 136 74

Total 7,721 6,935

Capex was not as high as in 2010, but investments continued dispite the marketconditions. Increased expenditure on cleaning and watering and waste manage-ment reflects the cleanliness and tidiness program we have been running.

For a copy of our Environment Policyvisit http://www.lafarge.gr/Enviroment_Policy_eng.pdf


Progress...

SUSTAINABILITY AMBITIONS 2012

On safety our target is to reducethe lost time injury frequency rate(LTIFR) to 1.3

Full compliance with the LafargeGroup Competition Policy

Training of all Heracles plant ma-nagement teams in applying theLafarge group stakeholder rela-tions management process

On customers, carry out an an-nual customer satisfaction surveyon both bagged and bulk cementbusiness.

Implement the OTIFIC (On Time,In Full, Invoiced Correctly) Stan-dards in operations.

Reach 20% of women in seniorand executive management (La-farge Hay Grades 18+)

By 2010, establish a comprehen-sive occupational health programincluding at a minimum regularmedical examination

Have 100% of our sites auditedenvironmentally at least every fouryears

By 2010 reach a rate of 100% ofquarries with a rehabilitation plancomplying with Lafarge standards.

By 2010 all our quarries will havebeen screened according to crite-ria validated by WWFInternational and those with reali-zable potential will have developeda biodiversity enhancement planby 2012.

By 2010 cut our net CO2 emis-sions per metric ton of cementproduced by 11% as compared to1990

Cut our dust emissions in our ce-ment plants by 40% over the pe-riod 2005-2012

The injury rate in 2011 corresponds to one Lost Time Incident amongst Heracles em-ployees. Our aim remains to achieve and sustain an incident rate, for employees andcontractors, of zero.

We remain in compliance.

All our plant management teams and key Group Managers are trained and develop an-nual action plans to manage stakeholder relationships.

A survey of ready-mix customers has generated information that is relevant to the ce-ment business.

Preparation actions are progressing and further actions (software, IT, weighing accu-racy and automatic invoices, applications for interactive communication with delive-ries) have been initiated.

We have a good record on women in management positions; we now focus on incre-asing the overall number of women in our operations.

Mapping of health risks has been done and a general protocol and Health Surveil-lance Plan was implemented at all sites. Special Surveillance protocols for critical jobsare also in place.

We have now covered all cement plants and terminals.

Volos (Agria and Anavra) quarries validation will be completed before end of 2012and action plans will follow

We are not able to meet our target due to continuing market difficulties and conse-quent reliance on the export market which requires cement with a higher clinker con-tent.

Out-performance of target for dust has continued.

2010

2010

2010

2010

2012

2010

Permanent

2010

2010

2012

2012

2012

Achieved (0.3)

Achieved

Achieved

Completedfor baggedcustomers

In progress

Achieved (30%)

Achieved

In progress

Achieved (100%)

Achieved

In progress

In progress(-8.34%)

Achieved(-95.04%)

Achieved (0.4)

Maintained

Maintained

Completed forready-mixcustomers

In progress

Maintained(32%)

Maintained

Achieved

Maintained

Maintained

In progress

In progress(-7.36%)

Maintained(-94.99%)

Target Deadline 2010 2011 Comment and Plansperformance performanceagainst target against target

MANAGEMENT

SOCIAL

ENVIRONMENT


Cut our NOx emissions in our ce-ment plants by 12% over the pe-riod 2005-2012

Cut our SOx emissions in our ce-ment plants by 20% over the pe-riod 2005-2012

By 2010 have a baseline for per-sistent pollutants in our cementpants for 100% of kilns and rein-force our Best ManufacturingPractices to limit emissions

We are well ahead of our target and have made further progress in 2011.

We are out-performing our target. Our performance in 2011 was affected by increa-sed use of a plant whose raw materials mix includes naturally-occurring sulfur.

Measurements continue to take place regularly in accordance with the productionplan.

2012

2012

2010

Achieved(-13.13%)

Achieved(-63.36%)

Achieved

Maintained(-20.66%)

Maintained(-47.41%)

Maintained

Target Deadline 2010 2011 Comment and Plansperformance performanceagainst target against target

ENVIRONMENT

Building communities•Health and Safety: reach zero fatalities and vir-tually eliminate lost-time incidents•Diversity: having 35% of senior management po-sitions held by women•Volunteer working: contribute 1 million volunteerhours per year to locally selected projects•Local job creation: having 75% of country opera-tions implementing a plan for local job creation

Building the circular economy•CO2 emissions: reduce CO2 emissions by 33% perton of cement (compared to 1990 levels)•Non-fossil fuels: use 50% of non-fossil fuels in ce-ment plants by 2020 (including 30% biomass)•Re-used and recycled materials: 20% of our con-crete containing reused or recycled materials

Building sustainably•Affordable and sustainable housing: enable 2 mil-lion people to have access to affordable and sustai-nable housing•Sustainable products and services: increase to €3billion per year sales of new sustainable solutions,products and services.

We are now developing our own Sustainability Am-bitions 2020 that are consistent with those of theGroup while being specific to Heracles and reflec-ting its role in Greek society. Details of the sustai-nability program including Sustainability Ambitions2020 will be in our 2012 Sustainability Report.

Lafarge Sustainability Ambitions 2020

The previous table summarizes our progress withour sustainability ambitions 2012 - the targets thatwe set ourselves in 2009. In June 2012 LafargeGroup announced the Sustainability Ambitions2020 that will shape the next stage of progress forall businesses in the Group – including Heracles.

With its Sustainability Ambitions 2020, Lafarge is ta-king a new step forward by committing to threeareas of sustainable development through 34 am-bitions, featuring specific and very demanding tar-gets. These 34 ambitions include nine major targetsby 2020, based around three main pillars: Buildingcommunities, building the circular economy andbuilding sustainably.

...and plans

+webFor a copy of Lafarge Sustainability Ambitions 2020visit http://www.lafarge.com/wps/portal/2_10-ambitions-2020


Understandingour business

UNDERSTANDING OUR BUSINESS

Business in 2011Construction activity in Greece in 2011 was 70% lowerthan it was four years ago. Activity in 2011 (by volume)was more than 36% lower than in the correspondingperiod in 2010. This decline has affected the cement in-dustry, including our business, and the activities of ouraggregates and concrete business.

In cement, the declining domestic market obliged us torely more on exporting cement to supply overseas mar-kets, such as those in North Africa. However, internatio-nal markets were also limited and our exports were 27%lower than in 2010. We continue to believe that Greecehas in the medium-term a stable domestic market forcement and that we can best thrive in that market by in-creasing productivity and efficiency, optimizing produc-tion costs, and produce cement products that are lowerin CO2 emissions than our competitors’.

The problem of illegal imports remains. We can and docompete successfully with legal cement imports. But welook to the authorities to prevent the Greek cement mar-ket being undermined by imports of products that havebeen produced without due regard for quality, the envi-ronment, health or safety.

Aggregates and concreteOur aggregates and concrete business was similarly af-fected by the state of the construction industry in Gre-ece. Nevertheless the business was successful inbringing some new value-added products to the mar-ket and is well-placed to offer to customers appropriatesustainable construction solutions and to address su-stainable construction challenges.

2011 was another difficult year with financial andpolitical uncertainty continuing to affect our mar-ket. But we are a long-term business and we conti-nued with our plans to be more integrated andmore entrepreneurial, producing more sustainableproducts for the future.

CEMENTCement is a hydraulic binder and akey ingredient in concretes andmortars.

AGGREGATESAggregates are obtained by quarryextraction and grinding into diffe-rent sizes. Aggregates can also beobtained from sand and gravel ex-traction but in Greece this is a verylimited activity.

CONCRETEReady-mix concrete is a mixture ofaggregates, cement, additives andwater which is used in situationsranging from road sub-bases thro-ugh to structural elements in verylarge and complex buildings.

LAVA’S PRODUCTS- INDUSTRIAL MINERALSLAVA S.A. extracts the industrialminerals pumice, gypsum, pozzo-lan and silicates. Pumice is used inconstruction (lightweight blocks, li-ghtweight concrete), geotechnicalprojects, agriculture, industry andcement production. Gypsum isused in cement production. Pozzo-lan and silicate are both used incement production and in industry.

LAVA exports

2009

0

248

2010

45

399

2011

167

280

0

100

200

300

400

Pumice

Gypsum

(Thousands of metric tons)

Grey cement market in Greece


11,640

2006 2007 2008 2009 2010 2011

11,05010,270

7,880

6,200

4,100

Grey cement constitutes the very large majo-rity of sales in Greece; white cement salesare minor.Demand continues to decline as a result ofthe recession and austerity measures. We be-lieve that long-term domestic demand will behigher than at present.2006-2009 data is from Greek Cement Association.Most recent years are our own estimates.

Lafarge Greece cement production


8,501

7,4837,316

4,960

4,190

2,817

2006 2007 2008 2009 2010 2011

Production has dropped in 2011 as a resultof the economic situation.

Lafarge Greece concrete production


1,523

1,3581,290

987

818

657

2006 2007 2008 2009 2010 2011

Use of cement in Greece

(Per cent of total cement sales, 2011)

40%

13%

Renovation

Infrastructure

19%

28%

Residential

Non residential

The construction of homes and infrastructureaccounts for nearly 70% of the market.

Concrete market in Greece

(Thousands of cubic meters)

26,300

24,200

21,900

16,600

12,500

7,950

2006 2007 2008 2009 2010 2011

Who benefits from our operations

(Cash value added, millions of euros)Revenues : Sales & financial interest received 277.5

Cost of good sold 240.1

Cash Value added 37.4

1 - Taxes to be paid to government -0.1

2 - Paid to investor for providing capital 0.0

3 - Paid to lenders as a return on their borrowings 3.0

4 - Retained for growth -55.9

5 - Paid to employee for their services 89.7

6 - Community investment 0.5

Our employees are the group that benefits the most from the value addedby Heracles.


Turnover

(Thousands of Euros, 2011)

708,142

530,234

401,996

277,515

2008 2009 2010 2011

Our turnover declined again as a result of theeconomic situation.

Net profit/loss after tax

(Thousands of Euros, 2011)

2008

59,959

2009

15,364

2010

-45,861

2011

-55,864

These results reflect the continuing very pooreconomic situation in Greece in 2011.

Shareholders by type

(Percentage by type, 2011)

4%

88.9%

Lafarge

5.5%

1.6%

Institutional GreeceInstitutional other countriesIndividual

The Lafarge Group is our largest shareholder.

15 Health and Safety18 People22 Stakeholders and

Communities25 Climate Change28 Emissions

30 Biodiversity32 Water

34 Materials and Waste36 Customers38 Supply Chain

and Logistics

40 How we report41 GRI statement

reporting

Howwereport


REPORTING AND PERFORMANCE

Action in 2011In 2011 we set out to address three areas: safety le-adership, risk assessment and control, and the pro-cesses and tools we employ for safety management.We carried out a wide range of projects and initiati-ves in these three areas, (some described on thesepages) while continuing to track our progress withboth leading and lagging indicators. The latter (thenumber, frequency and severity of incidents) arevery slightly worse than 2010 but still show impro-vement on the prior years. Leading indicators in-clude near-miss reporting, health and safetyinspections, “Visible Felt Leadership” safety di-scussions, housekeeping rating, good practice dis-semination, serious event reviews and health andsafety training.

Safety leadershipThis area of work has encompassed projects desi-gned to empower and involve line management inhealth and safety at each site, work on critical be-haviors (see box to the right), the promotion of riskassessment and near-miss reporting. Also, eachmember of the Executive Committee was chargedwith sponsoring and leading one specific health andsafety action.

safe

behavior CRITICAL BEHAVIORS

WORKSHOP

Behavior is key to safety, as wesee from the analysis of inci-dents. Changing our behaviorsand habits takes a lot of effort;it involves a personal asses-sment of risk and making safechoices.Several workshops were held atthe Halkis and Milaki plants todevelop the content and identifythe people who will lead a front-line campaign on critical beha-viors. The eight criticalbehaviors identified were: ha-ving the correct body position,checking tools and equipment,sustaining tidiness, staying fo-cused, respecting my personallimits, using the suitable equip-ment, standing at the correctspot, watching my step.These workshops continue thework that began in 2010; theyare designed to promote sharingof real-life examples and tobrainstorm ideas. There is acommitment to implement theideas from the workshops tocreate messages and tools thatare used in rolling out the cam-paign across the whole busi-ness.

excelle

nce HEALTH AND SAFETY

EXCELLENCE FORAGGREGATES ANDCONCRETE

Aggregates & Concrete havebeen re-confirmed as membersof Lafarge Health and SafetyExcellence Club which compri-ses the 30% of all Lafarge busi-ness units that are excellent insafety, with zero fatalities (La-farge, contractors or third party)over the past 2 years, low inci-dent frequency rate and astrong level of maturity.

Healthand safety

Health and safety is still our top priority. The journey to a safer working envi-ronment includes tackling specific processes and addressing culture, behaviorand management. Results for 2011 indicate that while the progress of recentyears is being maintained, there is no room for complacency. The safety ofthose who work with us is also our concern. We know we can set an example forhigher safety standards in the entire Greek industrial sector.

+webFor a copy of our Health & Safety Policyvisit http://www.lafarge.gr/Health_Safety_Policy_eng.pdf



Risk Assessment and ControlAdditional safety-related advisories and SOPs (Stan-dard Operating Procedures) have been finalizedand made operational in the following areas: LO-TOTO (see page 18 of the 2010 Sustainability Re-port), conveyor systems, customer site safety (seepage 37), safe loading of trucks and cargo securing.A training program to implement SOPs for quarrysafety, in preparation for the implementation of theGroup quarry safety management good practice,was conducted. Assessment and control of risks inports has been a major focus since 2008 and in2011 this project along with our Road Safety Pro-gram received the top award in Transport Safety inthe Lafarge Group Cement Awards Competition.

Safety managementWe have continued to invest in health and safetymanagement by implementing a self-assessmentcycle for continuous improvement, setting up a pro-cess for rewarding good performance and initiati-ves, establishing software platforms for datamanagement and running the 2011 health and sa-fety training plan. Our system for recording and pre-senting health and safety KPIs accords with theLafarge global standard and covers the full range ofleading and lagging indicators.

empoweringpeople HEPHAESTUS AT VOLOS

Hephaestus is the Greek ancientgod of technology, blacksmiths,craftsmen, artisans, metallurgyand fire. It is also the name ch-osen for the project, started atthe end of 2010, to empowerand mobilize middle manage-ment at the Volos plant inhealth and safety.A team was created for each ofa number of safety topics (e.g.LOTOTO, housekeeping, mobileequipment, conveyor systems,risk assessment and critical be-havior) and team members ap-pointed from throughout theplant’s organization, but princi-pally from middle management.Each team was charged - on aself-organizing basis – with lea-ding for its chosen topic usingwhatever mix of initiatives, com-munications materials, KPIs,action plans and team events itdeemed appropriate.Already, this project has seen amuch enhanced level of involve-ment of middle managers inhealth and safety at Volos, withmore and more supervisors ta-king responsibility for safety is-sues, improved teamcooperation and the generationof fresh ideas to stimulate fur-ther improvement. It has alsobeen effective in improvingteam spirit and the tendency tocollaborate, which in turns con-tributes to further safety enhan-cement.

Health and safety in cement

(Number of incidents – contractors and employees)

Fatalities LTIs Contractor

LTIs

2007 1 6 6

2008 - 8 2

2009 - 4 2

2010 - 1 1

2011 - 1 2

The data shows that continuing attention is essential.

Health and safety in aggregates and concrete

(Number of incidents – contractors and employees)

Fatalities LTIs Contractor

LTIs

2007 0 0 0

2008 0 0 1

2009 0 1 1

2010 0 0 1

2011 0 1 1


housekeeping

project YALI QUARRY AND

ELSEWHERE

The Yali pumice quarry was oneof 19 sites chosen for participa-tion in the 2011 housekeepingproject. It is the biggest pu-mice quarry in the world but lo-cated on an island which hasrestricted access, is hamperedby poor weather and lacks thecommunication systems foundin other locations in Greece.The project started with anaudit by members of the Execu-tive Committee, frequent visitsby LAVA management, healthand safety inspections and re-cord-keeping, and this in turngenerated an improvement plan.Project delivery was improvedby a more formal approach toCapEx investment and the insti-gation of annual shutdowns. Inthe first year, signage was im-proved, storage completely reor-ganized and categorized, and150 metric tons of scrap mate-rial moved to suitable disposaland recycling sites - all in ac-cordance with Contractor SafetyManagement standards. A wasterecycling area has been establi-shed.The project has increasedhealth and safety awareness, in-volvement and accountability atthe site, with the creation of anon-site health and safety super-visor and regular meetings withthe LAVA management. By theend of 2011, the site had ach-ieved a score of 77% on thehousekeeping project scale,compared with 44% at the ou-tset in 2010. The Yali site wasin the top three of those nomi-nated for the relevant Lafargeaward. Other sites in the house-keeping project have achievedimprovements on a similarscale, if not quite so dramatic,and it is now planned to extendthe project in 2012 to nine fur-ther sites, including those in ouraggregates and concrete busi-ness.

Lost time injury frequency rate

20062005 2007 2008 2009 2010 2011

0

1

2

3

Cement A&C

2.14

3.14

1.41

1.89

00

1.03

1.23

0.30 0.40

2.01

There has been a slight increase in 2011 but the level remains wellbelow that in the period prior to 2010.

Number of accidents leading to loss of time per million hoursworked

Lost time injury severity rate

20062005 2007 2008 2009 2010 2011

0.00

0.05

0.10

0.15

0.20

0.25

Cement A&C

0.21

0.18

0.12

0.04

0

0.09

0.01 0

0.01

0.02

0.02

There has been a slight increase in 2011 but the level remains belowthat in the period prior to 2010.

Number of calendar days lost as a result of accidents per thou-sand hours worked

Near-miss reporting

2009

15

2011

308

2010

196

0

100

200

300

We define a near miss as an incident which didn’t happen thanks only toluck. We encourage our employees to report these situations so that wecan take corrective measures and avoid potential incidents. As of 2012near-misses reported will include data from aggregates and concrete.

Number of near-miss reports submitted(Cement)


People Our strategy is focused on the careers that our people can enjoy whileworking with our company. Previous efforts are delivering results andspecific initiatives have earned group-wide recognition.


The strategyOur strategy is to ensure we provide our people witha career – not just a job. This is of benefit to both in-dividuals and the business, and helps us to developan organization which is fit for the future.Individual Development Plans (IDPs) remain cen-tral to that strategy and help ensure the best-possi-ble developmental ownership by the individualtargeting the skills and competencies required byour business.In difficult times, which affect every company in Gre-ece, maintaining morale is vitally important. Focu-sing on individuals’ development needs helps withthis challenge because it provides direction and sti-mulus when other circumstances appear uncertain.In 2011, in the face of difficult economic and mar-ket conditions, we aimed to minimize impact on ouremployees. We are especially pleased that 31 peo-ple obtained an internal promotion in 2011.

Progress with IDPsAs people development is an important element ofour business and a strong priority, it is essential tofocus even more on the IDPs of our people and taketime to give constructive feedback. A combinationof alternative actions has been developed, targetingthe qualitative improvement of IDPs from variousperspectives in the last four years. These actions,combined with management commitment, have ch-anged to a great extent the culture regarding IDPs.The population has understood that a well-built IDP,if thoroughly designed and effectively implemented,is a key development tool. This year the IDP hasbeen considered an essential prerequisite for ach-ieving progress and an integral part of the annualappraisal process. Consequently, performance ap-praisals and IDPs in particular have significantly im-proved and supported the development of ourpeople.

developm

ent PLANT TEAM ASSESSMENT

The primary objective of thePlant Team Assessment (PTA)process is to enable the plantteams to ensure the plant teamjoins and remains in the LafargeExcellence performance club;this is now even more challen-ging under the current socioeco-nomic and market context.Through a robust PTA processwe identify each plant team’sneeds for development, we setpriorities according to the busi-ness objectives and stakes, wedevelop a streamlined target or-ganization and we build the ac-tion plans to achieve this.The close cooperation of Indu-strial and Human Resources th-rough the PTA process provide asolid framework for mobilizingthe organization and leading toa constructive and dynamic PTAoutcome with successful imple-mentation and prepares theplants to anticipate the futurebusiness needs.

Use of IDPs in performance appraisal

(Percentage of IDPs in different quality categories, 2009-2011)

2009 2010 2011

Very Good 9.7% 59.9% 76.4%

Good 44.1% 21.9% 14.3%

Need Improvement 46.2% 18.3% 9.3%


InternshipsCooperating with educational establishments andproviding internships continues to bring benefits tothe business and opportunities for young people.We hosted 76 interns during the year and greatlyvalued the creativity and open-mindedness thatthey brought into our organization.

Training, road safety andfamilies2011 was the first full year of our road safety trai-ning program. The main objective is to eliminate dri-ving and road transport-related injuries andfatalities; it includes raising road safety awareness,mobilizing people and establishing a systematic ap-proach. Importantly, the target audience for the pro-gram extends to the families of our employees,especially those reaching driving age, because oftheir high risk exposure and their influence on thosearound them.The core of the program is a 3-hour workshop anda facilitated discussion which ensures participationby all attending. In 2011 we ran a pilot session, a“train the trainer” session and seven more sessionsat our major sites and our head office. The programcontinued also in 2012 and now eighty five per centof the employees is covered. Plans for this year in-clude completion plus extension to a wider popula-tion outside the company barriers. te

chnicalc

ompetencies CERTIFICATION PROGRAMS

FOR KEY TECHNICAL STAFF

The development and imple-mentation of a comprehensivecertification program for key te-chnical staff in our plants sup-ports the restructuring ofoperations and quickly improvesperformance.The focus of the program is thedevelopment, training, perfor-mance monitoring and eventualcertification of Kiln ControlRoom Operators (CROs) & Main-tenance Inspectors, who mustbe able to achieve the highstandards of kiln operation & in-spection performance that theGroup sets.The program defines a specificcertification path that providescustomized development trai-nings, based on individual gapanalysis, and a selection of ap-propriate performance measu-res. As a result, by 2012, themajority of the CROs and In-spectors in the plants will havebeen certified.The certification program is acollaborative project involvingHuman Resources, the plants’management and the IndustrialGM. But it was also achieved instrong partnership with the La-farge Technical Centre to meetthe latter’s requirements for cer-tification. Its success is suchthat it will now be rolled outacross the rest of the TechnicalCentre’s area of authority.For Lafarge in Greece, the pro-gram contributes to the achieve-ment of better performance,improved operating mindset, astructured and harmonized ap-proach to kiln control and main-tenance specific inspection,better process stability, and aclimate in which operators, in-spectors and supervisors canbetter exchange feedback ontheir performance as a team.

Investment by training area

(Percentage of total hours of training in different categories, 2011)Cement incl. LAVA A&C

H&S 37.48% 14.26%

Technical 29.17% 47.66%

IT Training 4.94% 1.91%

Language training 6.55% 2.61%

Management Training 3.34% 24.99%

Other types of training 18.52% 8.56%

Health and Safety is our number one training priority and is therefore thesubject of the most training hours overall.



assignments BOOST PROGRAM

BOOST is a Lafarge program inwhich teams of professionalswith the required skills and kno-wledge transfer expertise are as-sembled and mobilized to workat Lafarge plants which requireparticular attention to meet theGroup’s objectives. To become amember of a BOOST team, can-didates must volunteer, gaintheir business unit’s approvaland then be subject to an asses-sment process which takes ac-count of technical knowledge,managerial skills, coachingskills, ability to work in differentcultures, and safety awareness.This assessment is a shared re-sponsibility between the LafargeTechnical Centre, the businessunit management and the HRdepartment.In 2011, volunteering by La-farge employees in Greece hadgiven rise to eight BOOST po-tential team members; by theend of the year one had comple-ted a 3-month assignment in In-donesia and another has sincegone (also to Indonesia) for 6months.

The age structure of our workforce

(Number of people in each age category)

Age range 2008 2009 2010 2011 2011

Cement A&C

<30 165 143 128 95 23

31 - 50 930 820 734 675 153

>51 619 568 422 464 31

Total 1,714 1,531 1,284 1,234 207

The age profile of our workforce is still weighted towards the middle and upper segments. The data for cement excludes impatriates and seamen and there-

fore the total is not exactly the same as number of employees in the graph shown on page 21.

Reviewing performance

36.1%

80.3%

93.8% 95.2% 95.5% 95.7%

78%

2006 2007 2008 2009 2010 2011

CementA&C

The percentage in the cement business remains high; we aim for 100%.

(Percentage of managers receiving performance appraisals)

Investing in a skilled workforce

12.510

12.5

12.8

8.7

CementManagers

Cement Non managers

A&Cmanagers

A&C Nonmanagers

71.1

60.4

47.844.8 43.8

2008 2009 2010 2011

(Average hours training per person per year)


Job evolution

(Number of jobs created and lost)

2008 2009 2010 2011 2011

Cement A&C

Hirings 44 28 34 8 14

Acquisition 4

Total 44 28 34 8 18

Resignations 9 10 4 7 2

Retirements 27 7 10 1 5

Early retirements 255 191 272 48 65

Deaths 2 3 2 1 0

Total 293 211 288 57 72

Early retirement remains the main source of change in the workforce.

Women in the workforce

(Women in different categories of employment)

2008 2009 2010 2011 2011

Cement A&C

Number of women (Hay Grades 12 & above) 50 53 49 48 16

Number of women (Hay Grades 11 & below) 118 106 93 90 23

Total 168 159 142 138 39

Total headcount 1,759 1,573 1,318 1,268 207

% 9.55 10.11 10.77 10.88 18.84

There has been overall decrease in the absolute number of women employed in the cement business but as a proportion of the workforce women are better

represented than in previous years.

Women in management

(Percentage of female managers in Haygrades 18+)

2008

24%

2009

27%

2010

30%

2011

32%

Number of employees

2010

1,318

2011

1,268

207

Cement

2011

A&C

In 2011 there was a slight decline inheadcount


Stakeholdersand communities

Engaging with stakeholders and contributing to thecommunities where we operate is key to our corpo-rate citizenship. Local stakeholder consultationcommittees are now integrated into our operations.Focusing on the topics where we can be most effec-tive, we have continued local development projectswith the local community and initiated new ones.


StakeholdersThose who have an interest in our business andmay be affected by our decisions include indivi-duals, groups and organizations. They may be em-ployees or customers, suppliers or contractors; theymay be shareholders or regulators who have legal au-thority over our operations; the NGOs and civil societyorganizations that take an interest in our social and en-vironmental performance, as well as the media.One particularly important category of stakeholder isthe members of the communities around our produc-tion and distribution sites.

EBective engagementTo have effective and productive relationships with ourstakeholders, we try to follow a structured approach asillustrated by the diagram on page 23. There are threemain components: identifying the range and interestsof our stakeholders, providing the right materials andevents (including consultation committees, open daysand information) and ensuring that there is a suitableprocess for handling and responding to their com-ments or their complaints.

Local stakeholder consultationcommitteesWe believe our sites are best situated to understandlocal contexts and challenges and take the appropriateengagement actions. Therefore, local consultationcommittees remain the main pillar of our engagementat local level. Following the first meeting at Milaki in2010, we have held two more meetings there in 2011and also extended the process to the Volos plant withtwo meetings. These meetings give us the opportunityto listen to our stakeholders, learn from their feedback,respond to their expectations and proceed with actionsthat are based on common interest and understanding.Committees are run under the framework principlesagreed in 2010 covering such matters as number andtype of meetings, process for inclusion of different to-pics and choice of participants. (See 2010 Sustainabi-lity Report for details.)We are pleased at the continuing success of the com-mittees and hope that continuing practical experienceof them will improve the quality and the depth of the di-scussions that take place. Other means of exchanginginformation and views, e.g. publishing this report andinviting comments on it, hosting a website and holdingopen days, will also continue.

Local communities – our roleLocal communities are a very special category of sta-keholder, not least because they are where our em-ployees and many of our customers and supplier live,and because our operations tend to have a significantinfluence on the communities where they are based.This is especially when, as is often the case, our ope-ration is in a remote area where its contribution to thelocal community is particularly important.We maintain the view that to be a constructive in-fluence, we should be focused. So we continue to con-centrate our efforts on the three chosen topics: healthand safety, education and the environment, and localinfrastructure.Alongside these community contributions, employ-ment and secondary business activity generated by ouroperations and the payment of license fees also form asignificant part of our socio-economic footprint.


consultatio

n LOCAL CONSULTATIONCOMMITEES - MAIN TOPICSIN 2011

...cement manufacturing pro-cess and impacts during theproduction stage...how the monitoring of emis-sions and of compliance with li-mits is done...the socioeconomic impact ofthe plant...corporate social policy...the strategy and priorities ofthe plant...the management of quarriesand their impact on biodiversity...water management

The above were topics proposedby the communities for discus-sion and presented in detail bythe plant management teams.

STAKEHOLDER IDENTIFICATION - Frequency and Type

Empl

oyee

s

Pub

licat

ions

(A)

Ann

ounc

emen

ts(A

)Ev

ents

(B)

Indu

stria

lR

elat

ions

(B)

Inte

rnal

mee

tings

(B)

Cust

omer

sPu

blic

atio

ns(A

)

Regu

lar m

eetin

gs

with

cust

omer

s(A

)

Safe

ty&

othe

r joi

nt

prog

ram

s(A

)Cu

stom

er

serv

ice

line

(A)

Cust

omer

Satis

fact

ion

Surv

ey(D

)

Commun

ity

Publicatio

ns (A)

Sitevis

its(A)

Compan

y events (B)

Consu

ltatio

n

meetin

gs(C)

OpenDays

(D)

Suppliers

Publications (A)

Safety programs (A)

Meetings (B)

Shareholders

InvestorRelations (A)

AnnualGeneralMeeting (D)

Regulatory

authoritiesMeetings (E)

NGOs

Meetings

(B)

Feedback

onthe

Sustainability

Report (D)

Media

Announcem

ents(E)

Meetings

(B)

Press

office

operation(A

)

(A) throughout the year(B) regularly(C) 2-3 per year(D) annually(E) ad hoc

Community investment

(Source of support, in thousands ofEuros, 2011)

158 / 28.9%

42 / 7.8%

TOTAL 546 th. euros

346 / 63.3%

Corporate, LAVA A&CCement plants & terminalsPRAKSI fund

Socioeconomic impact of our business

(Contributions to the economy, in millions of Euros, 2011)

Halkis Milaki Volos LAVA

Salaries / household income 19.20 14.15 22.27 1.45

Local license fees & taxes 0.36 0.27 1.65 0.62

Suppliers & subcontractors 6.38 6.62 11.16 1.12

Materials supply (i.e. from quarries) 3.36 4.03 4.77 not applicable

Community contributions (monetary

& product) incl. PRAKSI 0.21 0.20 0.25 0.02

29.51 25.26 40.10 3.2


safetyaw

areness ENCOURAGING SAFER

DRIVING ON MILOS

In the autumn of 2011, 130students at the Milos High Sch-ool took part in a two-day roadsafety program organized byLAVA in cooperation with themunicipality of Milos and the“Panos Mylonas” Road SafetyInstitute. There was a professio-nal presentation, interactivegames to illustrate the effects ofdistraction on perception skills,questionnaires and discussion.The students also rode bicyclesin a special driver-training parkand drove a small remote-con-trolled car with low lighting toappreciate the importance of li-ghting as a road safety factor.


safe

access

toschools SAFETY INFRASTRUCTURE

FOR SCHOOLS NEARHALKIS

The 2010 Sustainability Reportdescribed the road safety pro-gram that we have been runningin Halkis, where our Halkis ce-ment plant is located, in con-junction with localorganizations. In 2011 we in-stalled the new safety infra-structure which has beenselected in the course of theprogram. This infrastructure in-cludes improved safety signage,guardrails, new sidewalks andpedestrian walkways, lighting,planting and sound reflectors. Ithas been installed in the vici-nity of seven different schoolsin the area, with the entire ex-penditure requirement (morethan €100,000) being met byour PRAKSI fund.The combined efforts of thetraffic police, local authoritiesand organizations such as ourown are delivering results. Localtraffic police estimate that therehas been a 30% reduction inroad accidents during the periodsince the program began, whichis a very encouraging indicationfor this area in particular, wherethe exceptionally high road acci-dent rate has been a very bigcommunity concern

cultu

rallegacy THE HERACLES COLLECTION

AT BENAKI MUSEUM

We were greatly pleased that, in2011, we developed a partner-ship with the Benaki museum,for the hosting of the Heraclescollection of works of art. Thecollection will remain for thenext 19 years in the Benaki Mu-seum, accessible to the generalpublic through permanent or pe-riodic exhibits. It comprises1,475 works of art by more than60 Greek artists, which illustra-ted the company’s annual calen-dars from 1956 to 2010. It istherefore a distinct element inthe cultural heritage of Greece.

The decision to grant the collec-tion to the museum marked100 years since the company’sfounding and 10 years with La-farge. It was the subject of aspecial exhibition which ranfrom October to December, andwas then extended to January2011. The museum will nowbe organizing further thematicexhibitions, on an annual basis.


Climatechange

CO2 emissions is a material issue for cement. We tackle climatechange by making our processes more energy efficient and developinglower-CO2 products. Alternative fuels offer potential but requiresupport from local authorities and communities.

Cement and climate changeTo understand our strategy it is important to notethat CO2 is emitted from limestone when it is ther-mally processed to make clinker (the raw materialfor cement) and from fossil fuels used to fuel thatprocess. Hence we can reduce emissions per unitof production by optimizing the process, by substi-tuting for fossil fuels with alternatives and by sub-stituting for clinker with lower-CO2 materials.

OptimizationThe Volos plant was the main focus in 2011. It wassubject to the “Plant Operating Model” program thathad been very successful at the Milaki plant previ-ously (see 2010 sustainability report). The programincluded the work with Control Room Operators de-scribed on page 19 and resulted in high reliabilityand low energy consumption per unit of production.The Milaki plant is rated as among the best-mana-ged plants in Lafarge worldwide.

Replacing fossil fuelsInitiatives in previous years to use agricultural bio-mass and paper waste in place of fossil fuels (at theVolos and Milaki plants respectively) have broughtour use of alternative fuels to a level of 2%. This isnot as high as it could or should be. The continuingfinancial crisis is affecting the availability of papersludge. But, more importantly, we are deeply con-cerned that our application to start using solid sh-redded waste (SSW) as a fuel source at the Milakiplant was delayed by administrative barriers. Buil-ding permission has since been granted (in June2012); we will continue with our efforts to build awa-reness and understanding amongst stakeholders ofthe merits of this type of development.

innovatio

n INNOVATION IN GRINDINGREDUCES ENVIRONMENTALFOOTPRINT

A large-scale pioneering work ofindustrial innovation was com-pleted in 2011 in Halkis; it wasa first for Lafarge and unique inGreece. Its purpose was theoptimization of the manufactu-ring process for cement typescommonly used in the Greekmarket, leading to a reducedenvironmental footprint. Thishas been achieved by grindingclinker and additives separately,and then mixing them with thebase cement in a second phaseduring which the final productis defined.All composite cements of Halkisare now produced by separategrinding. The initiative has beena very significant success interms of combating climate ch-ange. Average clinker contenthas been reduced by 7% whichmeans a reduction in CO2 emis-sions of over 10%. In addition,we are able to be very flexibleand competitive in our responseto customer’s requests for ce-ments of different types for dif-ferent purposes, which isespecially important in the cur-rent economic climate.


Total CO2 emissions reduced as a result of market conditions.GRI and other international reporting protocols prescribe that net emis-sions differ from gross in the exclusion of emissions from combustion ofwaste. Because our use of waste as fuel is currently at very low levels,there is no significant difference between our gross and our net emis-sions.


Alternative materialsAs of the end of 2011, the range of alternative ma-terials that we were using to reduce our and our cu-stomer’s carbon footprint included fly ash,metallurgical slag and natural pozollanic materials,plus other additives that reduce emissions in ce-ment manufacture. Usage was 14.5% (and aboutthree-quarters of this was recovered materials)compared to 10.2% in 2010; given the impact ofthe financial crisis on production levels in industry,this is a satisfactory outcome.

Results – CO2 emissionsTotal emissions in 2011 were lower than the previ-ous year but it is emissions relative to the volume ofproduction that are our main focus. Here, regretta-bly, we have again been unable to return to the lowlevel achieved in 2009 and our results for 2011, a7.4% reduction from 1990, represent underper-formance in relation to our target (an 11% reduc-tion).The explanation lies in the balance of domestic andexport sales. In 2011, as in 2010 but to an evengreater extent, domestic sales declined and the de-mand for lower-CO2 products declined within thatmarket. We were therefore obliged to rely more hea-vily on exports which are dominated by clinker andclinker-based, high CO2 products. This market-de-pendent effect has outweighed the benefits of im-proved operational performance, which hasreduced energy consumption per unit of cementproduced by 2% compared to 2010.

A&C and climate changeIn our aggregates and concrete business, the maincontributions to climate change are use of diesel on-site and off-site and, in the concrete business only,indirect energy consumption due to use of electri-city.

Total CO2 emissions (gross and net)

1990

5,285

2006

5,787

2007

5,607

2008

5,131

2009

3,382

2010

2,997

2011

2,129

(Thousands of metric tons per year)(Cement only)

Indirect energy consumption

(Consumption of electricity, thousands of kilowatt-hours)

2007 2008 2009 2010 2011 2011

Cement A&C

Electricity 858,575 877,108 579,652 488,222 347,214 5,489


Alternative raw materials

(Consumption of alternative materials as% of total raw materials consumed forcement and clinker production)(Cement only)

Usage has increased in 2011 despite theimpact of the recession on other industriesfrom which some such materials are sour-ced.

Clinker factor

1990

80%

2007

75%

2008

76%

2009

71%

2010

72%

2011

73%

The effect of improvements that have been achieved in recent years isnot visible due to changes in customer demand and the balance betweendomestic and export sales.

(Ratio between clinker consumption and cement production)(Cement only)

Alternative fuels

20070%

2008

0.50%

2009

0.97%

2010

0.90%

2011

1.90%

2008

7.30%

2009

10.30%

2010

8.90%

2011

14.49%

(Consumption of alternative fuels as %of thermal consumption)(Cement only)

Use of alternative fuels currently comprisesbiomass and paper sludge and is not at a si-gnificant level but it has increased in 2011,mostly at the Volos plant. We still aim to usesolid shredded waste (see text).

Emissions per unit of cement produced increased in 2011 due to ch-ange in customer demand and the balance between domestic and exportsales. Again, there is no significant difference between our gross and ournet emissions.

CO2 emissions per unit of product (gross and net)

1990 2006 2007 2008 2009 2010 2011 2010TARGET

629655648

616665667661

707

(Kilograms per metric ton of cement)(Cement only)


Emissions Meeting our emissions target is essential and has continuedin 2011. Further improvements have been driven by Lafargeglobal standards and by our own drive for improvement.


Air quality challengesIn addition to the challenge of reducing greenhousegas emissions (see page 25) the manufacture of ce-ment requires that we address the following emis-sions from the stack: dust, nitrogen oxides (NOx)and sulfur dioxide (SO2). The presence of the latterdepends on the raw materials used in manufacture.Another challenge to be addressed, given that stackdust emission reduction has been so successful, isfugitive dust emissions; these result from raw mate-rials storage, materials conveying and internal tran-sport.

Key resultsThere was a satisfactory result last year in respectof NOx emissions; these continued to decline andare now below our target level. These results reflectchanges to the Milaki plant described in last year’ssustainability report and, more recently, a newpractice piloted at the Halkis plant.

SO2 emissions remain well below legal limits andbelow our own reduction target; however there wasagain a small increase in 2011 due to increased de-mand from the Milaki plant whose natural raw ma-terial supply contains more sulfur.

Stack dust emissions remain well below our owntarget level and are very much lower than the levelsprescribed in our environmental permits. We regardimprovement in control of fugitive dust sources as ofgreater note and work completed at Volos for thispurpose is described on the right.A program of dust emission measurement began atthree of our distribution centers (encompassingsilos and bagging and palletizing facilities) andnoise measurements took place at all six of them.

Persistent pollutantsWe have continued to contribute to the 10-year pro-gram of work agreed between Lafarge and the WWFto understand and reduce emissions of persistentpollutants. A major step forward in 2011 was im-provement in the quality of data collected for thispurpose, following the measurement protocol intro-duced in Lafarge at the beginning of the year.

fugitiv

edust VOLOS - A PROJECT

COMPLETED

May 2011 marked the comple-tion of our major project to ad-dress the challenge of fugitivedust from the Volos plant. Con-ceived in 2009, and followingaction to address stack dustemissions, this was a major pro-ject to cover all stockpiles of thecement additives used at theplant and to reduce the need totransport these materials to thecement mills using trucks andloaders.The project has been very suc-cessful. Fugitive dust emissionsfrom the stockpiles are almostentirely eliminated; these emis-sions are estimated to be redu-ced by 100 metric tons peryear. Because trucks and loa-ders are no longer used, noisehas been reduced and our peo-ple no longer have to work ou-tside in all weathers.All these benefits are good forthe business. But as impor-tantly, there has been a markedreduction in the nuisance cau-sed, as reported by neighboringhomeowners and businesses.This investment amounted 11million euros in total.


Stack dust emissions

20062005

118.90

81.80

50.00

13.306.42 5.90 5.96

71.34

2007 2008 2009 2010 2011 2012TARGET

Total stack dust emissions were 15.0 metric tons in 2011 (20.7 in 2010).Stack dust emissions are significantly lower than the target level.

(Grams/metric ton clinker)(Cement)

SO2 Emissions

2006

248.00

2005

232.00

2007

237.00

2008

190.00

2009

39.00*

2010

85.00*

2011

122.00

2012TARGET

185.60

*data revised since publication of the 2010 reportEmissions of SO2 are below the target level although they have increasedsince 2009. This is largely due to greater use of the Milaki plant in 2011.Total emissions of SO2 were 308 metric tons in 2011 (298 in 2010).


NOx emissions

2006

2,476

2005

2,231

2007

2,438

2008

2,100

2009

2,232

2010

1,938

2011

1,770

2012TARGET

1,963

Total emissions of NOx were 4,453 metric tons in 2011 (6,799 in 2010).Emissions of NOx are now lower than the target level.



Biodiversity

Screening and rehabilitation work in accordance with theLafarge Group standard has continued. We are also be-ginning to see the benefits of our partnership with amajor Greek university, which will help us to enhancebiodiversity in the Volos area. Our aggregates businesshas also continued to operate its sites, some in highlysensitive locations, with appropriate attention to biodi-versity.


Meeting Lafarge groupstandardsThe Lafarge global partnership with the WorldwideFund for Nature (WWF) sets standards for the bio-diversity screening of all sites (to establish their bio-diversity potential) and defines a methodology forthe assessment of those sites that are in sensitiveareas. In 2011 all quarries in Greece were mappedand screened to confirm locations that are within orclose to internationally protected areas using IBAT(Integrated Biodiversity Assessment Tool). This is anew tool developed to support the screening pro-gram begun in previous years. We also continuedto implement the rehabilitation action plans thatwere devised in 2009 and 2010.

Biodiversity enhancementprogramOur partnership with the University of Thessaly,which is centered on two quarries in the vicinity ofthe Volos plant but informs our wider work on bio-diversity, began operating in 2011. Preliminary re-sults were available by the winter (see box on theright) and already provide many benefits to us, ourstakeholders and biodiversity in our surroundings.The scientific findings have been incorporated intothe existing rehabilitation plan of Anavra, an activequarry, and are informing us as we plan the rede-velopment of Agria, an inactive quarry. The aims ofthe program and preliminary findings have beenpresented at the 10th Volos Panorama, a majorlocal forum which attracted 45,000 visitors. Accessto evidence-based information about the biodiver-sity status of the sites is also improving the qualityof the dialogue we are having with stakeholders, in-cluding schools, interest groups and local commu-nities.

Biodiversity and aggregatesOur aggregates business has considerable exper-tise in biodiversity management and this expertisewill strengthen and enhance our other quarry ope-rations.In addition to the project centered on Araxos (seebox on page 31) the aggregates business operatesthe Polycastro hard rock quarry which is located wi-thin the European-designated Special ProtectionArea of the Axios-Loudias-Aliakmonas deltas. Astudy commissioned by the company in 2010 hadconfirmed that the impacts of its operations on birdpopulations were insignificant but nevertheless thebusiness remains alert to the sensitivity of its surro-undings and the need for careful site management.

Its limestone quarry on the island of Syros is notspecifically-designated at international level but wasnevertheless in 2011 the subject of a special studycommissioned by the company to the University ofPatras to revise and improve the existing rehabilita-tion plan. Now implemented, the site has been re-planted with more than one thousand plants ofendemic species.

stud

y FINDINGS FROM THEUNIVERSITY OF THESSALY

Animal diversity is higher atAgria quarry than at Anavra,which is consistent with the factthat the former has a longer hi-story of rehabilitation. For in-stance, the numbers of mammaland bird species recorded ateach site are 5 and 32 (Agria)and 2 and 20 (Anavra). The ma-jority of bird species are resi-dent and Agria has significantnumbers of breeding pairs ofsome species. The bird popula-tion at Agria also includes thefollowing birds of prey: Short-toed Snake Eagle, the Buzzard,the Sparrow hawk and the Les-ser Kestrel, the latter two asbreeding species.


protectio

n PROTECTING A RARITYAT ARAXOS

Centaurea neideri is a rareGreek endemic plant, subject tospecial protection under the ECHabitats Directive and the BernConvention. It is found in thearea where our aggregates busi-ness operates its Araxos aggre-gates quarry.Since 2010, our aggregates bu-siness has been engaged in apartnership with the NationalBotanical Conservatory Of Brestand the Botanical Institute ofthe University of Patras to safe-guard the future of this species.First, there was a program ofseed collection from the very li-mited areas where the plant isfound. Seed treatment, propa-gation and growing-on tookplace at the University; theyoung plants were then tran-

splanted to prepared sites at thequarry where they could be ac-climatized. In spring 2011,more than one thousand plantswere established in specially-lo-cated areas within the quarrywhere they will form dissemina-tion centers; they were irrigatedand tended throughout the gro-wing season. The success ratewas more than 70% which is hi-ghly satisfactory for a project ofthis nature.The planted areas remain sub-ject to special attention andmonitoring, which will continueunder the terms of the partner-ship, with a particular focus onthe effects of competing speciesand the capacity of the plant tocolonize additional areas.

awareness INSPIRING THE NEXT

GENERATION

The biodiversity of Nisiros andYali islands has special charac-teristics and LAVA, who opera-tes a pumice quarry on theisland, wanted local children tobe aware of this and to be inspi-red by the environmental valueof their surroundings. They orga-nized for a professional environ-mental biologist from theGoulandri Museum of NaturalHistory to take part in a specialeducation information event inwhich children were given a pre-sentation, taken on a tour ofexemplary habitats on Nisirosand took part in an educationalgame for “junior ecologists”.

Progress with rehabilitation

(Area affected and rehabilitated, in thousand m2)

Total Already Rehabilitated Mined

area Rehabilitated in 2011

Halkis 1,150 160 106 386

Milaki 1,940 340 30 930

Volos 2,906 1,270 30 795

Lava quarries* 1,656 240 0 1,214

A&C 2,402 42 0 2,053

Total 10,054 2,052 166 5,378

* Milos, Yali and Altsi

Progress with planting

(Number of trees and other plants planted per year)

2007 2008 2009 2010 2011

Halkis 750 3,400 2,500 1,000 2,145

Milaki 2,700 2,300 2,000 2,200 2,000

Volos 23,925 20,110 17,350 25,000 15,200

Lava quarries* 6,550 7,365 1,500 0 5,300

A&C 1,600**

TOTAL 27,375 25,810 21,850 28,200 26,245

* Milos, Yali and Altsi

** Trees planted at Syros and Araxos in already rehabilitated areas in ac-

cordance with the Biodiversity Action Plan and at Avileri in an area outside

the mined area.

Establishing trees and other plants is one part of our rehabilitation pro-

gram. The high number of plants used at Volos is due to the number of

quarries to rehabilitate and the different requirements of the rehabilita-

tion plan.

Rehabilitation

(Number of quarries, 2011)Cement and LAVA Aggregates

Quarries with a rehabilitation plan compliant with Lafarge standards 14 9

Quarries screened for biodiversity 14 9

Quarries with high biodiversity 3 4

Biodiversity Management Plan Programs for high biodiversity sensitive quarries 0 2

Data refers to active quarries only. The program of screening and rehabilitation planning is consistent with

the objectives agreed in Lafarge’s partnership with WWF.


WaterThe concern about water as a global resource has continued to grow. We areusing water footprinting and improving our infrastructure to enhance ourown water management. This in turn reduces our use of this precious, sha-red resource.


Global water issuesThe Rio+20 summit has confirmed how importantthe sustainable management of water is to us all.Cement manufacture is not a major water-using ac-tivity but careful operation of our facilities can stillhelp ensure water is best-managed at local and re-gional level.

Progress in 2011We have reduced our reliance on groundwater(from c. 90% to 75%) because the Milaki desalina-tion unit means we no longer import water abstrac-ted from the aquifers of other regions. Meanwhilethe latest results (autumn 2011) of the Helenic Ma-rine Institute’s study have confirmed that the unitcontinues to have no significant impacts on seawater properties or marine life. We have also com-pleted the installation of the new rainwater drainagesystem at our Halkis plant which is improving thequality of water returned back to the environment.Our consumption of water has decreased by nearly15%; this reflects lower production and our effortsto conserve water.

Water use in the aggregates andconcrete businessWater used in the aggregates business is limited tothat required for fugitive dust suppression and re-storation work. Concrete production, which is sup-plied by ground water and the public network, is amore significant user of water; the finished productis 15% water (by weight) and the process water ismostly treated and re-used (see bellow). Conse-quently, there is no water discharged.

recycling “PERPETUAL RECYCLING”

OF WATER IN READY-MIXPLANTS

In ready-mix plants, wastewateris produced when the mixer,mixer cabin, trucks and truckloading area are washed. It isnon-toxic and free of microbialand organic compounds, butcontains suspended solids.In our business, at severalplants, we use a three-stage se-dimentation treatment systemto capture water from truck wa-shing and loading, remove thesuspended solids and producean effluent of quality suitable tobe returned to the washingstage and used again. The solidresidue from the system is di-sposed of at appropriately licen-sed sites.

water

footprint UNDERSTANDING WATER

USE IN OUR BUSINESS

Ground water meets most of ourneeds – for instance, cooling ce-ment plants, suppressing dustand watering vegetation. Ourabstraction of groundwater isgoverned by permits.Treated water can come fromthe municipal supply or – in thecase of the Milaki plant – fromthe desalination unit we com-missioned in late 2010 (see2010 sustainability report).Our use of surface water, otherthan that via the municipal sup-ply and the seawater for desali-nation, is limited to potablewater and hygiene facilities atsome sites.“Water consumption” is the dif-ference between what is ab-stracted and what is dischargedback to the environment; it in-cludes water loss by evaporation(especially after stack dust sup-pression), fugitive dust suppres-sion and watering.Techniques that reduce ourneed for water in the first placeand maximize its return to theenvironment include closed sy-stems for cooling (in use at allour plants), use of settlingponds and oil traps to treatwater before discharge, replace-ment of electrostatic precipita-tors with hybrid filters withlower water requirements for gascooling, and use of treatedwater that would otherwise bedischarged, for dust suppressionand watering (Milaki).


symbiosis INDUSTRIAL SYMBIOSIS AT

VOLOS

In 2011 we and the operators ofa soft drinks factory devised,designed and got regulatory ap-proval for a scheme by whichtreated water from the factorycan be piped to the Volos plant(along a 700m dedicated pipe-line) and used as cooling water.The scheme is due to start du-ring 2012 at which point wewill be using 30,000 m3 peryear less groundwater. This ini-tiative is an example of indu-strial symbiosis; we save on ouruse of groundwater and the fac-tory ceases to discharge thesame amount to the sea.

training

WATER FOOTPRINT- WORKSHOP

For more than three years now,water footprint reduction hasbeen one of the priorities ensh-rined in the Lafarge partnershipwith WWF. The Milaki plant hasalready been one of the siteschosen to pilot the water foot-print methodology under theterms of that partnership; thenext stage was to get a widerunderstanding of the methodo-logy and to raise awareness ofintegrated water management.This was the objective of aworkshop held in the summer of2011 in cooperation with theGreek office of WWF.A select group of 15 managerswere bought together with theWWF’s Water Management Co-ordinator for Greece and the He-racles sustainability manager ina half-day session which cove-red:•Management of water resources•Lafarge Greece water footprint•Lafarge Greece water

management•Action plans and next stepsThis event has increased our ca-pacity in water-footprinting, andgives us a good basis for plan-ning and evaluating the nextsteps that will help us to reduceour water footprint.

Water withdrawn by source

(thousand m3 per year)2011 2011

From Cement A&C

Groundwater 2,494 198

Surface water 776 0

Other 54 42

Total 3,324 240

75% of the water we use is abstracted from groundwater sources under

licence. Surface water includes seawater and the amount withdrawn has

increased since the Milaki desalination plant began operation in late

2010.

Water discharged


From Cement A&C

Groundwater 0 0

Surface water 2,456 0

Total 2,456 0

The water discharged comes mainly from the brackish water well in Volos

plant, pumped for safety reasons and directly discharged. Water is pas-

sed through settling ponds and oil separation traps before discharge.

We no longer discharge to groundwater.

Water balance


From Cement A&C

Withdrawn 3,324 240

Discharged 2,456 0

Consumed 861 240

Minor discrepancies in this data arise because water withdrawn and con-

sumed are measured while water discharged is only estimated.


MaterialsandWaste

Careful use of mineral resources is key to the sustainability ofour industry. Our actions include resource recovery and mate-rial substitution, alongside careful waste management.


PrinciplesLike all industries, we must adhere to regulatorystandards governing waste management and di-sposal. We do this while following the principles ofthe waste hierarchy: waste should be minimized,that which arises should be reused, recycled orused to generate energy; remaining waste shouldbe safely disposed of to landfill. “Industrial ecology”is a broader principle which also underpins ourwork.

Understanding “Industrialecology”The sustainability of ecosystems comes from theirequilibrium: materials and resources are constantly re-cycled. Industrial ecology applies this principle tohuman activity, making the most efficient use possibleof by products and waste.

Progress in 2011We ran a “Clean and Tidy” campaign at all our ce-ment sites. This was targeted at employees, con-tractors and others; we aimed to raise awareness ofbest-practice in waste handling and demonstratehow a clean and tidy site benefits everyone.The campaign was in addition to our regular activi-ties: housekeeping audits of all sites including LAVAquarries, the auditing of contractors for “duty ofcare” and the use of waste segregation facilities eve-rywhere (including the head office).The recycling rate for all the waste we produce re-mained high (94%) and not significantly differentfrom 2010 (96%).

Alternative materials and fuelsUse of alternative materials and fuels in cement ma-nufacture is an example of industrial ecology. Exam-ples and progress are described in the climatechange section and we apply the concept whenworking with customers to develop new products(see pages 26 and 36 respectively). The synergisticuse of water at Volos (see page 33) is another exam-ple of industrial ecology.

Waste managementin aggregates and concreteWaste arisings in the aggregates business are mini-mal, consisting only of very small amounts of oil andspare parts resulting from maintenance. The prin-cipal source of waste in the concrete business isconcrete waste produced when concrete in excessof the customer’s requirements is returned andfrom the washing of delivery trucks and pumps. Theusual method of disposal is to a suitable-licensedsite but other options are now being explored. (Seeexample on the right).

demolition

waste RECYCLING UNIT AT HALKIS

A new waste recycling unitbegan operating in pilot modeat the Halkis plant in summer2011. The plant can handlewaste from the demolition, ex-cavation and construction acti-vities of private or publicbodies. It produces various gra-ded, recycled aggregate pro-ducts that can then be sold orused in cement production orquarry rehabilitation.The unit gives us another meansof conserving raw materials and,when the recycled material isreturned to the customer fromwhose project it came in thefirst place, we are really “closingthe loop”.The unit will be operating at fullcapacity by summer of 2012.

saving

resources FLY ASH SUBSTITUTES FOR

CLAY AT VOLOS

Dry fly ash is being used insteadof naturally-derived clay to ma-nufacture cement at the Volosplant. This follows a program ofevaluation, and permitting, logi-stic and infrastructure prepara-tions completed in 2011.The benefits are many. Clay re-sources will be conserved andthe working life of the quarry ex-tended. Energy consumption atthe plant will be reduced becausethe dry fly ash has its own calo-rific content and is easier togrind; this plus the reduction incalcination (a major source ofCO2) will reduce emissions ofgreenhouse gases. The currentrate of substitution represents a2% reduction in total CO2 emis-sions from the Volos plant. Thetransport of clay through Volosand the need to dispose of dryfly ash will both be reduced.Quality will be improved andthere will be financial benefitsas well.


concrete

recycling THESSALONIKA

-CONCRETE RECYCLING

Concrete waste contain concreteleft-overs, possibly includingsmall quantities of admixturesand additives such as metal-lic/plastic fibers, polystyrene,pigments, bentonite, cementiti-ous materials etc.The Neochorouda and Lakkiaconcrete sites in Thessalonikahad accumulated nearly 10,000metric tons of concrete wasteover a period of several yearsand the team there decided thatsomething better than disposalcould be done.Borrowing equipment from theneighboring Polycastro quarry,they crushed, screened and sie-ved the waste to produce an“all-in” aggregate (0-16mmsize) and gravel (16-32mm) inquantities of 6,750 and 3,010metric tons respectively. Thiswas a six week operation. Bothtypes of product are suitable foruse in the manufacture of fillconcrete, replacing the graveland (in part) fine gravel andsand fractions.The success of this exercise –both in providing a solution andconserving virgin resources – issuch that it could be replicatedelsewhere in the business.

optim

izing “THINK BEFORE YOU INK”

This is the Lafarge printing opti-mization policy and we havenow completed its implementa-tion; we covered the head officein 2010 and all plants in 2011.We have reduced the quantityand type of printers in use (from250 to 53 and from 59 to 3 re-spectively) and all printers arenow networked. The use of per-sonal printers is prohibited (ex-cept in the case of disability)and for all printers the defaultmode is “double-sided” and“economical/draft”.With this policy and the asso-ciated new equipment, therewill be no emissions of radiationor ozone and consumption ofelectricity will be reduced by80%. Paper and ink consum-ption will also be reduced by20% and 30% respectively.The business benefits are alsosignificant; costs will be greatlyreduced and time will be savedas a result of reduced admini-stration and improved integra-tion.

Waste recycling and disposal

(Waste by type and by disposal method, metric tons per year)

Age range 2009 2010 2011 2011

Cement Cement Cement A&C

Hazardous (oils, grease) - recycled 123 156 75 0

Hazardous (contaminated rags etc) - disposed 150 123 15 0

Non hazardous - recycled 3,359 2,692 3,059 0

Non hazardous - disposed 0 0 176 36,533*

Total 3,632 2,971 3,325 36,533

* Solid waste from settling basins.

Hazardous waste is recycled at specialized treatment facilities. No waste is incinerated. More non-hazardous waste was recycled and disposed of in 2011

because of the Clean and Tidy campaign (see page 17) and because temporary waste storage at sites is being better managed.


Customers

Our business is shaped by the needs of our customers. In2011 we enhanced the choices that we offer our customersto ensure we meet those needs in difficult economic cir-cumstances. These enhancements are also part of our tran-sition to a single country organization. We continued toengage with customers to improve safety for their and ourpeople in the course of our work.


DIYmarket HERACLESTM IV32.5R IN

SMALL BAGS

•practical and economical5kg bags

•“smart” opening and a carryinghandle

•Forest StewardshipCouncil-certified paper andfully recyclable packaging

•suitable for all applications•available from our distribution

centers, building materialretailers and hardware shops.

Products – for the futureWe know that to thrive in the future, in circumstan-ces which will be very different from those we haveinherited, we must be more focused on the end-user of our products; cement is no longer just acommodity business.To complete our bagged products range of grey(Athlos, Basis) and white cements, ‘’HERACLESTM

IV32.5R’’ grey in 25 and 50kg bags was launched in2011 as a cement for general applications. This waswelcomed and achieved high market penetration.

At the same time, householders in Greece face dif-ficult economic circumstances and the DIY market,though small at present, is set to grow. Adapting tothe needs of this market has been challenging forus, despite the small scale. Developing the rightproduct required us to address customers’ needssuch as size of bag, ease of handling, etc. and re-tailers’ requirements for bar-coding and in-storehandling. Our packaging is also a differentiatingfactor in this market; the paper packaging we havechosen is recyclable and sourced from sustainableforests.

Closer to our customersWe continued to host customer visits to our sites du-ring the year; such visits are an opportunity on bothsides to exchange views and they complement theinformation that we obtained through our 2011market survey of ready-mix customers.


custom

ersafety CUSTOMER SITE SAFETY

PROGRAM

An audit of customers’ sites in2010 had revealed safety risks.The customer site safety pro-gram was initiated in responseto this and included inspectionsof approximately 800 of our cu-stomers’ worksites and 1200bulk cement silos. Inspectionresults were augmented with ch-ecklists of site safety conditionscompleted by truck drivers.Sites presenting a high level ofrisk were isolated and subject tovisits by Lafarge safety teams toimplement corrective actions. Insuch cases there was close col-laboration with the relevant cu-stomers, not least to ensure thatthe legal risks they were takingwere eliminated.For all other sites, there wascommunication between oursales teams and our customers,both before and during the pro-gram; we also issued a specialbrochure about the program andfor some customers, we held anintroductory meeting at theVolos plant.As a result of this program, alre-ady, 40 sites have been subjectto corrective actions and safetyrisks are much reduced. Theprogram continues with ongoinguse of the unsafe site report sy-stem that we have created. Weare proud to have been able toengage our H&S staff with ourcustomers and believe we havemade a real difference as a re-sult.

securing

cargo CARGO SECURING SAFETY

PROGRAM

This program, which is part ofour Road Safety Roadmap, waslaunched because we were con-cerned about methods of secu-ring cargo on vehicles. Baggedcement represents nearly 30%of our sales and is almost al-ways picked-up by customers;we could see that poor practiceand lack of appropriate regula-tion posed risks to them, to ourown people, and to professionaland third party drivers. In late2010 we commissioned a studyto compare practice in Greecewith the relevant European re-gulation and best practice.Then, we announced basiccargo securing rules, sharedthem with all relevant partiesand put them into effect threemonths later. The rules specifyminimum standards for the loa-ding and securing of cargo fordifferent types of vehicle.A driver who fails to complywith the rules is not permittedto leave our facilities.

VALUE-ADDED PRODUCTSFROM LAFARGE IN GREECE

Agilia® vertical – a self-compac-ting concrete which does not re-quire vibration duringapplication and gives high qua-lity final surfaceAgilia® horizontal – a self-leve-ling concrete that saves timeand money. Agilia also allowsless arduous and more efficientmanpower deployment.

Α range of decorative concretefloors of high aesthetics anddurability. Artevia ensures lowconstruction and maintenancecost as well as long lastingcolor.

Specialized concrete mixes in-cluding Lightweight (for screedapplication with thermal & aco-ustic insulation properties),Aqua Proof, a waterproof con-crete with self healing proper-ties and Accelerated (rapid setconcrete for helicopter finishand better performance in lowtemperatures).

One of a range of LAVA pumicespecial products with applica-tion in hydroponic cultivationwhich was launched at the endof October 2011.


Supply chainand logistics

Our aim is to do business responsibly, so ourcontractors and suppliers thrive in partnershipwith us. This approach includes safety, contrac-tual matters, and environmental and social per-formance.


Our roleWe are part of a global company but we operateplants and sites in Greece which are part of the localeconomy. Those who provide us with services, e.g.truck drivers, suppliers of materials, ship operatorsand equipment manufacturers, include small andmedium-sized businesses. Our futures are mutuallydependent and at this time of financial crisis in par-ticular, it is important that we exercise our role inthe economy with particular care.

Safety in partnerships2011 was the first full year in which we operatedthe Lafarge Contractor Safety Management Stan-dard. The implementation program was describedin full in the 2010 Sustainability Report; this year itincluded, amongst other things, 4150 training hourscovering more than 2000 contractors’ employees.

Doing business togetherThe financial crisis obliged us to extend our pay-ment terms again but we did also continue to ope-rate the “reverse factoring” scheme described inthe 2010 Sustainability Report, which has been ofbenefit to our suppliers. In 2011 about 35% of ourpurchasing value was paid through this system.Further negotiations concerning prices we pay formaterials and services were necessary. We havebeen working to ensure our own business viabilityand that of our suppliers and contractors, especiallythose that depend heavily on Heracles.

Suppliers’ sustainabilityperformanceWe have continued to evaluate our suppliers’ envi-ronmental and social performance. For instance,and especially relevant at the current time, wecheck that our suppliers are employing their peo-ple legally with the right arrangements for insuranceand payment of tax.

Breakdown of suppliers by type

15.5% 26.5%

12%23.5%3.5%

8%

7%

4%

Raw materials and fuelUtilitiesTransport servicesGeneral supplies & servicesIndustrial servicesIndustrial products and consumablesPlant and equipmentOthers

Raw materials and fuel and transport are thebiggest categories of supply.

(Percentage of spend in Greece, 2011)(Cement)

39Sustainability Report | 2011 | HERACLES

defensivedriving CONTRACTORS

Accidents occurring on theroad, especially those involvingour sub-contracted truck dri-vers, are a serious concern. Wecontinued the program of defen-sive driving training for driversand owners of silo trucks begunin 2010 with a new round cove-ring all cement Distribution Ter-minals and Plants. Eachseminar included theory, risk as-sessment (e.g. fatigue, loadingand unloading, overtaking) anda practical one to one-on theroad exercise with a road safetyinstructor. Additionally, all oursilo trucks are fitted with GPSsystems; these are used to opti-mize trip planning but have theadditional benefit of discoura-ging excessive speed.

A remote control system toavoid overpressure in silotrucks, tested successfully in2010, has now been installed in125 vehicles.

transportfootprint REDUCING ENVIRONMENTAL

IMPACT IN LOGISTICS

Our cement plants need sup-plies of cementitious mate-rials, such as fly ash, asadditives. Cement, in turn,must be delivered to clientsand to our distribution centers.Combined delivery began onan experimental basis someyears ago with the same truckstaking cement to clients or di-stribution centers and collec-ting fly ash on the returnjourney. In 2011 50% of ce-ment deliveries by the Volosplant and 20% by the Halkisplant were combined with flyash transport. This has savedfuel and CO2 emissions, andhas also prompted improve-ments to the truck washing fa-cilities.

Spending in Greece

(Percentage of spend)(Cement)

2010 2009 2011

Suppliers in GREECE 73% 74% 64%

Outside suppliers 27% 26% 36%

The reduction in proportion of spend in Greece in 2011 is due to the higher price of fuel and of fuel logi-

stics, coupled with a reduction in the number and value of local contracts in order to reduce fixed costs.


ScopeWe continue to be guided by our Sustainability Am-bitions (please see pages 10 and 11), issues thatare important to our stakeholders and up-and-coming topics relevant to sustainability in general.

ReAecting business changesPrimarily, this is a report on the sustainability per-formance of the business managed by Heracles Ge-neral Cement Company in 2011 and it followsprevious reports covering 2009 and 2010. We havetherefore used, in every instance possible, the sameperformance measures and methods of presenta-tion as in previous years. This is intended to enablestakeholders view performance over a period of timeand form an opinion of our achievements, wea-knesses and issues to address.However, as explained on page 4, in April 2012, thecement business (which includes LAVA) was brou-ght together with the aggregates and concrete bu-sinesses of Lafarge in Greece to operate as onebusiness. In the light of this and to assist our sta-keholders follow our progress through the transitionto one business, we have also included in this reportwhere possible information about the activities andsustainability performance of the aggregates andconcrete business during 2011. This is intended toassist us and our stakeholders in establishing thebaseline for consolidated reporting in the future, en-compassing what is now one business in Greece.

Data collection, managementand assuranceData that is necessary for the preparation of theKPIs used throughout the Lafarge Group is collec-ted in accordance with Lafarge procedures andconsistent with the GRI G3.1 reporting standard.Data on total CO2 emissions is presented consistentwith the requirements of EU Directive 2007/589

while that on emissions per metric ton of cementproduced follows the methodology set out in the Ce-ment Sustainability Initiative (CSI) Protocol.Other environmental data is collected according tothe procedures of the Heracles environmental de-partment. Health and safety data and data on poli-cies towards our people are the responsibility of theHealth and Safety and Human Resources depar-tments respectively.Assurance is provided in a variety of ways. The He-racles Environmental, Health and Safety andHuman Resources departments each perform in-ternal, verification and consistency checks on thedata provided by plants, sites and other units of thebusiness. The Lafarge Group collects, consolidates,reviews and validates data that contributes to thepreparation of the Group KPIs and which forms partof the Group Sustainability Report. This is done bythe Lafarge Regional Technical Centers. Additio-nally, Ernst and Young (independent auditors) pro-vide external validation and assurance for thefollowing data items that we submit to LafargeGroup : lost time injury frequency rate, competitionpolicy, training on stakeholder relationship metho-dology, female senior managers, environmentalaudit, quarry rehabilitation, CO2, dust, NOx, SO2

and water withdrawal.

Compliancewith GRI GuidelinesWe have followed the latest Guidelines produced by theGlobal Reporting Institute (GRI) in the preparation ofthis report; the relevant Guidelines for a report on per-formance in calendar year 2011 were GRI 3.1. Com-pliance with the guidelines has been checked by GRIand found to be A. An index of contents according tothe GRI Guidelines is available on our website www.la-farge.gr.

Howwe report

Transparency is important to us and we believe that our stakeholders appreciateinformation that is comprehensive and clearly presented. These are not easy goalsto achieve but we strive to improve. The contents of this year’s report have beenadjusted to reflect the transition to one business.

HOW WE REPORT

+webFor the index of contents according to the GRI Guidelinesvisit http://www.lafarge.gr/GRI_Index_2011.pdf



LAFARGE GROUP SUSTAINABILITY AMBITIONS

On safety, reduce the employeeLost Time Injury Frequency Rate(LTIFR) for Lafarge employees to0.94 or below in 2010.

Continue to check the implemen-tation of our Competition com-pliance program in our businessunits. 100% of all significant busi-ness units tested for complianceby end of 2010.

Manage and improve our localstakeholder relationship manage-ment by:•training 100% of units in thelocal stakeholder relationship me-thodology;

• full reporting of the three new in-dicators.

Three additional targets (underta-king self-assessment on stakehol-der relationships, launching adedicated intranet site and provi-ding an internal audit screeningtool) were completed in 2009.

On customers, by 2012, theGroup will achieve €3bn annualsales in new products.

Reach 20% of women in seniorand executive management (La-farge Hay grades 18+) by 2012.

By end 2010, establish a compre-hensive Group-wide occupationalhealth program including, at a mi-nimum, regular medical examina-tions.

For HIV/AIDS and malaria, by end2010, Lafarge will have extendedto major emerging countrieswhere it operates, its best practiceimplemented in Africa.

We continue to make progress with both our own employees and with contractors.Our contractor’s LTIFR has also improved to the point where it also is better thanthe original target we set for our own employees.

In past years we have reported on the implementation of our competition complianceprogram in all countries where we operate, with a special emphasis on competitiontrainings and verification of proper implementation by our business units. We nowcontinue to follow-up this worldwide program with a self-assessment competition com-pliance questionnaire, which also includes Code of Business Conduct matters (suchas anti-corruption rules). 100% of our operations submitted this survey in 2011, allo-wing the Group to consolidate all results and monitor compliance with our high busi-ness ethics standards. Further tools will be established in 2012, including a worldwidee-learning program dedicated to Code of Business Conduct at large.

Training workshops focus on the key drivers for stakeholder engagement: CementPlant Managers and Aggregates & Concrete (A&C) Area/Regional Managers. In 2011,over 260 people participated in trainings dedicated to this topic. For A&C, there is animprovement from the 22% reported in 2009 (no figure was reported for 2010 due torealignment undertaken during that year). The slight decrease for trained CementPlant Managers likely reflects a change in personnel. The other objectives have beenpreviously completed.

Although all sales were affected by the recession, sales of new products showed moreresilience in the developed countries where they are primarly sold.

At end of 2011, 15.8% of positions in senior management were held by women, a16% improvement over 2010. Although it may be difficult for us to reach our target of20% by end-2012, our program of inclusion which is used to attract and maintainwomen in both senior management and throughout the organization is making greatprogress.

A protocol for Health Assessment (HASOP) has been developed and broadened in allbusiness units to provide a standardized approach to risk-based medicals. This pro-tocol will ensure that the relevant occupational and personal health risks are identifiedand managed.Assessments are now under implementation at business units level, and should be fi-nished by 2014.

Based on its experience in Africa, the Group has developed a manual and user guideto assess and manage relevant public health issues. Our public health methodologyhas been extended to Russia and Ukraine, where we have broadened our approachto reflect better the public health issues that are prevalent in these countries.

2010

2010

2012

2009

2012

2012

2010

2010

0.76

96%

Cement 81%

Done

€1.9bn

13.5%

Plan rolled-out

Completed

0.63

96%

Cement 76%A&C: 80%

Done

€2.3bn

15.8%

Completed

Completed

Target Deadline 2010 2011 Why is Lafarge pursuing this ambition? What will change?performance performance How are we progressing against this ambition?

MANAGEMENT

SOCIAL

Progress againstour sustainability ambitions

We are entering the last year ofour Ambitions 2007-2012 cycle.Many of these objectives havealready been achieved, but a fewrequire further progress.

NEW TARGETS WILL BE ANNOUNCED IN 2012


Have 100% of our sites auditedenvironmentally within the lastfour years.

By end 2010 reach a rate of 85%of quarries with a rehabilitationplan complying with Lafarge stan-dards.

By end of 2010, all our quarrieswill have been screened accordingto a criteria validated by WWF In-ternational.

Sites in sensitive areas(1) will havedeveloped a site biodiversity pro-gram by 2012.

By end 2010:•cut our worldwide net(2) CO2

emissions per ton of cementitiousby 20% compared to 1990. Du-ring 2011, a new objective of re-duction of 33% vs 1990 by 2020was set.

Cut our dust emissions in our ce-ment plants by 30% over the pe-riod 2005-2012.

Cut our NOx emissions in our ce-ment plants by 20% over the pe-riod 2005-2012.

Cut our S02 emissions in our ce-ment plants by 20% over the pe-riod 2005-2012.

By end 2010 have a baseline forpersistent pollutants in our ce-ment plants for 100% of kilns andreinforce our Best ManufacturingPractices to limit emissions.

We need to progress further to reach this objective.

We reached this objective in 2011.

Building on the screening program, in 2011 Lafarge mapped the location of all itsquarries and screened them to confirm locations that are inside internationally pro-tected areas or within 500m of them using IBAT (Integrated Biodiversity AssessmentTool).

Use of the IBAT tool resulted in a reassessment of the list sites in sensitive areas.

Our new CO2 emission reductions objective was made public in June 2011 after ha-ving widely consulted our stakeholders and our partner WWF.By end of 2011, we have made significant progress, in line with our new objective.

Although cement plants generate dust, we have continued to make significant pro-gress in lowering emissions through revamping or replacing less efficient air pollutioncontrol devices.

NOx is emitted from virtually every combustion, including cement manufacture.Since achieving our targeted reduction in 2009 we have continued to implement NOxabatement technologies such as SNCR (Selective non catalytic reduction) and manyof our newer kilns are designed with low-NOx precalciners.

SO2 can be another unwanted product of some cement kilns. After reducing emissionsby around 50% since 2007; in 2011 we started to install abatement systems whosereductions will be seen in future years.

Persistent pollutants are emitted by cement kilns. Lafarge is working with WWF toachieve significant reductions in emissions.The program has completed measurement of persistent pollutants in all operatingkilns. Plant specific action plans have been developed to reduce emissions from agroup of top-emitting plants.Progress with reducing emissions will be monitored and reported.

Permanent

2010

2010

2012

2010

2012

2012

2012

2010

89%

84.5%

91%(3)

-21.7%

-33.5%

-27.9%

-52.8%

100%

88%

86%

97%

49%

-23.3%

-38.9%

-33.4%

-51.3%

100%

Target Deadline 2010 2011 Why is Lafarge pursuing this ambition? What will change?performance performance How are we progressing against this ambition?

ENVIRONMENT

(1) Sensitive areas are defined as quarries within 0.5km of IUCN I-VI, Ramsar, IBA, Natura 2000.(2) Net CO2 emissions are the gross emissions less the emissions that come from burning waste.(3) The change from the figure reported in 2010 is due to a change in definition of active quarries.

Progress on our Sustainability Ambitions:Fully achievedPartially achievedIn progress


The year at a glanceValues and GovernanceThe Code of Business Conduct sets the standards of behavior for all em-ployees and executives of the Group as well as for suppliers of goods andservices. The Group also set up a Competition Compliance Program. Itincludes awareness building and training for employees and verificationat business unit level (96% of them were tested at the end of 2011). TheBoard of Directors is composed of 17 members, 10 of whom are inde-pendent including three women. Finally we recognize the UN Declarationon the Rights of Indigenous People, the OECD Principles of CorporateGovernance, and the UN Global Compact. See pages 8 to 11.

Public PositionsWe are committed to responsible lobbying based on transparency, sta-keholder dialogue and in coherence with the Group’s strategy and va-lues; to ensure that the Group’s long-term interests are taken into accountby public authorities. In 2011, our lobbying actions within the EuropeanUnion focused primarily on climate change, energy efficiency and re-sources efficiency issues. See pages 12 and 13.

People development and Social dialogueDiversity and Inclusion is a key enabler of the Group strategy and isbased on 3 mains levers: Behaviors and mindset, communication & awa-reness and business and HR processes. Another key element of our so-cial strategy is Employee ownership; our 2011 LEA share ownership planreached a subscription rate of 44%, versus 53% in 2009. Moreover, weendeavored to limit or postpone headcount reductions, and to assistevery affected employee as prescribed in our Employment Policy. Seepages 24 to 36.

Health and SafetyLafarge’s objective is to reach zero incidents over the long-term andacross all the units, for employees and for contractors. Even though La-farge has continued to make progress, we still had 34 fatalities in 2011which is deeply regrettable. To avoid future fatalities, the Group is pro-ducing “Key Learnings” for each fatal incident that are shared withinevery operation. See pages 27 to 43.

CommunitiesFor Lafarge’s 2012 Ambitions, the priority was placed on ensuring that thekey personnel responsible for stakeholder engagement were trained onthe Group’s methodology. A key area was to ensure that our sites en-gage in effective programs with their communities. Lafarge is also main-taining or creating many partnerships to help it evolve its approach andrethink the way it can interact with other organizations. See pages 44 to59.

Sustainable ConstructionIn order to offer solutions upstream in the value chain, the Group focu-ses on innovation and carries out research in collaboration with archi-tecture firms and engineering offices. Lafarge is present in numerousbodies and working groups on an international and local level, to contri-bute to progress towards more sustainable methods of construction, in itssector and beyond. See pages 62 to 67.

Climate ChangeLafarge is implementing a comprehensive strategy contributing to theoverall objective of limiting the Earth's temperature increase to a maxi-mum of 2°C. The Group has set three new targets for 2015 and 2020,within the framework of its partnership with WWF. They encapsulate theentire construction chain. See pages 68 to 77.

Industrial Ecology and RecyclingLafarge is adding value to waste by using it as an alternative fuel or ma-terial. In 2011 we recorded an increase in the substitution of fossil fuels,with 13% of our energy needs for cement production met by alternativesources, such as waste and biomass. We made progress on the Biomassstream which represented 36% of total alternative fuels in 2011. Regar-ding raw material substitution, we have increased use by 2.3 million tons,mainly due to finished product substitutes, such as slag and fly ash. Seepage 54 to 57.

Managing our EmissionsThe Group has exceeded its reduction target for NOx, SO2 and Dust.For persistent pollutants, Lafarge has continued its 10-year work withWWF to understand and reduce mercury and dioxin/furan emissions fromour kilns. One of the biggest improvements in 2011 is the quality of thedata we are collecting, particularly from emerging countries, after the re-lease of a new measurement protocol at the beginning of 2011. For allemissions, the calculation method has been modified for current andpast data to reflect the latest CSI protocols. See pages 86 to 93.

Biodiversity at our Sites2011 was the International Year of Forests, a campaign which cele-brated and raised awareness of the importance of forests in our societies.This past year we mapped all of our quarries and used IBAT to confirmthe identity of the high biodiversity locations. We worked in partnershipwith WWF International to develop a guidance document for our opera-tions and a leaflet for our visitors. See pages 94 to 100.

Water FootprintA quarter of our cement production takes place in areas where there ishigh water stress. In 2011 Lafarge progressed further in its understan-ding of the water footprint and has set best practices for water manage-ment. Several installations of rainwater harvesting have been promotedas a model to limit the use of fresh water. In 2011 the water program wasalso expanded to aggregate quarries. See pages 101 to 109.

Sustainability RatingsWe are recognized for inclusion in the Dow Jones Sustainability Indexwith an overall score of 76%. We have also been reconfirmed for inclu-sion in both the Ethibel PIONEER and Ethibel EXCELLENCE Inve-stment Register.For the Carbon Disclosure Project, Lafarge is ranked 10th across indu-stries worldwide and is a member of the Carbon Disclosure LeadershipIndex for the 6th year running. See page 115 to 117.

For the full Lafarge Group Sustainability Report please visit http//sustainabilitvreport.lafarge.com

LAFARGE GROUP PROGRESS


15,284REVENUES

(IN MILLION EUROS)

736NET INCOME

(IN MILLION EUROS)

World map of Lafarge’s presence as atDecember 31, 2011 (plants and sales offices).

GROUP REVENUESBY DIVISION

Cement65.3%

Aggregates& Concrete

34.2%

Other0.5%

GROUP EMPLOYESSBY DIVISION

Cement63.9%

Aggregates& Concrete

34.2%

Other1.9%

Lafarge’spresence in the world

World leader in building materials, Lafarge holds top-rankingpositions in each of its business lines. With a diversified andbalanced geographic portfolio and 68,000 employees in 64countries, Lafarge is at the heart of global growth, supportingdeveloping economies and responding to the tremendous need forhousing and infrastructure in emerging countries.

CementWorldwide market position:World Leader - Cement, hydraulicbinders and lime for construction,renovation and public worksEmployees: 43,392Revenues: 9,975 million eurosCountries: 58Number of plants: 166

OtherEmployees: 1,289Revenues: 82 million euros

Aggregates & ConcreteWorldwide market position:N°2 for Aggregates and N°4 for Concrete - Ready-mixand precast concrete products, asphalt and paving forengineering structures, roads and buildingsEmployees: 23,242Revenues: 5,227 million eurosCountries: 35Number of plants and quarries: 1,438

HHeerraacclleess GGeenneerraall CCeemmeenntt CCoommppaannyy19.3 klm Markopoulou Avenue

19002 Paiania - Athens - GreeceTel.: (+30) 210 2898 111

www.lafarge.gr

Documents

GREECE - LAVA · Milos Paros Syros Lesvos Chios Yali Kos Evoia Viotia Achaia Magnesia Fthiotida Igoumenitsa Thessaloniki Kilkis Preveza Arta Kavala Attiki 277.5 SALES2011 (INMILLIONEUROS)