Lafarge Roofing: Clay tile production capacity acquisition in Thailand

3 February 2003

Lafarge Siam Roofing was established in December 2002 as a joint venture between Lafarge Roofing and Cementhai Building Products, a wholly owned subsidiary of The Siam Cement Group.

With production facilities in the province of Rayong, this joint venture will produce clay roof tiles and have an annual production capacity of one million square metres of tiles. Production and sales are scheduled to begin in late 2003. The registered capital of this joint venture will be 176 million Baht, and Lafarge Roofing will hold a 75% stake, while Cementhai Building Products will hold the remaining 25% stake.

The joint venture will profit from the knowledge and experience of both partners. The Siam Cement Group has an extensive distribution network in Thailand, through which Lafarge Siam Roofing's tiles will be marketed. As the world's largest roofing materials manufacturer and one the world's leading clay tile producers, Lafarge Roofing will contribute to this partnership with its vast experience in production and marketing.

In addition, Lafarge Roofing has also entered into an agreement to acquire a 25% stake in Thai Ceramics Roof Tile (TCT), a ceramic roof tile manufacturer in which the Siam Cement Group currently holds a 75% stake. TCT is market leader in glazed clay roof tiles in Thailand and operates a plant in Saraburi. The domestic roof tile market in Thailand has significant future growth potential. The current total pitched roof market demand is estimated at 130 million square metres, the same demand level as that of the pre-Asian crisis. Clay roof tiles comprise a modest but growing share of the total pitched roof market, thanks to the growth of income per capita. Thailand's demographics, with the trend for growing home ownership, as well as the low domestic interest rates, are all positive factors that will contribute to growth in the building products industry. In addition, various changes to the Thai regulations since 2000 have further simplified foreign trade, while trade barriers between ASEAN countries have been lowered since 1 January 2000. As a result, Thailand has great potential in becoming an important export base for Lafarge Roofing to the entire South-East Asian region.

Moreover, Lafarge Roofing currently holds a 24.9% stake in CPAC Monier, a joint venture in concrete roof tiles, in which the Siam Cement Group holds the remaining 75.1%. CPAC Monier is Thailand's leading manufacturer of concrete roof tiles.

In Asia, Lafarge Roofing is represented in Thailand, Cambodia, China, India, Indonesia, Malaysia, Japan, and the Philippines. Lafarge Roofing is the roofing systems division of the Lafarge Group. With more than 200 production sites in 38 countries on 4 continents, Lafarge Roofing is the leading global supplier of pitched-roofing products, roof system components and chimney systems. In 2001, Lafarge Roofing employed more than 12,600 people, generating sales of EUR 1.6bn.

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