Introduction toIntroduction toIntroduction toIntroduction toIntroduction to Introduction to Houston American CementHouston American CementIntroduction to Introduction to Houston American CementHouston American Cement

October 15October 15thth 20082008Perry, GeorgiaPerry, GeorgiaOctober 15October 15thth 20082008Perry, GeorgiaPerry, Georgia

PRESENTATION OVERVIEW

• Introduction to Houston American Cement (HAC)– Project Historyj y– History of Votorantim and Votorantim Cimentos

• Project Location• Overview of Cement Manufacturing• Overview of Cement Manufacturing

– Examples of Similar Facility • Environment• Quality• Quality

– Focus on Environmental Impacts and Sustainability of manufacturing of Cement by Votorantim

• Positive Economic Impacts on surrounding community• Positive Economic Impacts on surrounding community• Georgia cement consumption and logistical advantage• Project Investment and Timeline

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• Questions and Answers

PROJECT INTRODUCTION AND HISTORY

3

HAC PROFILE AND HISTORY• Houston American Cement is Joint Venture Partnership with Mr.

Charlie McGlamry and Votorantim Cimentos North America (VCNA).

– Starting in 2004 Mr. McGlamry secured several large parcels of property for with potential for limestone reserves and feasibility for a Portland cement plant.VCNA h d ibl J i t V t P t VCNA– VCNA was approached as a possible Joint Venture Partner were VCNA would be the Technical Partner.

– Due diligence for the property included:• Mineral Reserve Quantifications• Preliminary Market Analysis• Permitting and Zoning Studies

– Feasibility Study conclusion showed viable project.

• September of 2006, Memorandum of Understanding signed and project launched.

• HAC has all necessary major Permits and Zoning for Construction of

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• HAC has all necessary major Permits and Zoning for Construction of the Facility.

VOTORANTIM AND VOTRANTIM CIMENTOS CORPORATE PROFILE

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Overview of the Votorantim GroupOverview of the Votorantim Group

1937 Chemicals1937 Chemicals1937 Chemicals1937 Chemicals1936 Cement1936 Cement1936 Cement1936 Cement1918 Textile Plant1918 Textile Plant1918 Textile Plant1918 Textile Plant 1938 Steel1938 Steel1938 Steel1938 Steel1937 Chemicals1937 Chemicals1937 Chemicals1937 Chemicals1936 Cement1936 Cement1936 Cement1936 Cement1918 Textile Plant1918 Textile Plant1918 Textile Plant1918 Textile Plant 1938 Steel1938 Steel1938 Steel1938 Steel

1955 Aluminum1955 Aluminum1955 Aluminum1955 Aluminum 1969 Zinc1969 Zinc1969 Zinc1969 Zinc 1985 Polypropylene1985 Polypropylene1985 Polypropylene1985 Polypropylene1982 Nickel1982 Nickel1982 Nickel1982 Nickel

1988 B ki1988 B ki1988 B ki1988 B ki 1988 P l & P1988 P l & P1988 P l & P1988 P l & P

1989 Orange Juice1989 Orange Juice1989 Orange Juice1989 Orange Juice

85 years85 years85 years85 years1988 Banking1988 Banking1988 Banking1988 Banking 1988 Pulp & Paper1988 Pulp & Paper1988 Pulp & Paper1988 Pulp & Paper

6

yyyy1997 Energy1997 Energy1997 Energy1997 Energy 2000 VVC2000 VVC2000 VVC2000 VVC

Overview of the Votorantim GroupOverview of the Votorantim Group

CEMENT

FINANCIAL PERFORMANCEFINANCIAL PERFORMANCE

Total Net RevenuesTotal Net Revenues2 0 0 72 0 0 7

VC REVENUE COMPOSITIONVC REVENUE COMPOSITIONCEMENT

CEMENTFINANCE

EBITDAEBITDA2 0 0 72 0 0 7

2 0 0 72 0 0 715.6 US$ billion15.6 US$ billion

METALS

Net RevenuesNet Revenues

2 0 0 72 0 0 74.3 US$ billion4.3 US$ billion

EBITDAEBITDA(US$ Billion)

Net RevenuesNet Revenues(US$ billion)

2007$15.6 Billion

2007$4.3 Billion

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BowmanvilleBowmanvilleSt.MarysSt.Marys

BadgerBadgerCharlevoixCharlevoix

Votorantim CimentosVotorantim CimentosVotorantim CimentosVotorantim Cimentos

BranfordBranford

BowmanvilleDetroitDetroit

Badgerg

DixonDixon

Center HillCenter HillBowmanville PlantBowmanville Plant

Votorantim Cimentos (VC) began operations over 85 years ago in Brazil._______________________________________

VC tl t C t Pl t i N th d S th A i d i• VC currently operates Cement Plants in North and South America and is approximately the 7th largest cement producer in the World with:

• 20+ Cement Plants in Brazil (17 million metric tons of Cement Sales in 2007)

• 5 Cement Plants in United States and Canada (5 million metric tons of

ITAÚ DE MINAS

5 Cement Plants in United States and Canada (5 million metric tons of Cement Sales in 2007)

• 2 Grinding Plants in the United States• 60+ Concrete Plants in the United States and Canada

– Addition of Prairie with 80+ Concrete Plants

BRAZILBRAZIL• VC imported 1,000,000 tons of cement into United States in 2006• VC is committed to operating the safest and most environmentally friendly

plants in the world– VC is a founding member of the World Business Council for Sustainable

D l t (WBCSD) hi h k t t d d th tSão PauloSão Paulo

Development (WBCSD) which seeks to operate and expand the cement industry in a sustainable manner.

– VC is committed to ISO 14000 for its Environmental Management Systems which is recognized around the world for managing and minimizing environmental impacts.

8CIMESA

p– VC promotes the use of NOSA/OSHAS safety systems at all of it plants to

insure the safest work environment for its employees.

VOTORANTIM CIMENTOS NORTH AMERICA (VCNA)( )

• VCNA operates 5 cement plants and 2 grinding plants across North America producing over 5 million metric tons in 2007. VCNA includes the Ready Mix and Aggregate Business Units (CBM Prairie and Prestige)(CBM, Prairie, and Prestige).

– Approximately 2.5 million m3

ready mix in 2007 excluding Prairie.

– Approximately 7.6 million pp ymetric tones of Aggregate in 2007 excluding Prairie.

• VCNA has grown from an original size of approximately $311 million in sales in 2002$311 million in sales in 2002 when acquired by VC to more than $1.3 billion on a pro-forma basis in 2007,with EBITDA growing from

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g gapproximately $96 million to close to $272 million in 2007.

VCNA LOCATIONS IN FLORIDAPRESTIGE LOCATIONS

1. ALTA DRIVE

2. BALDWIN

3. MAXVILLE

4. GREEN COVE

5. ST. AUGUSTINE

6. ST. AUGUSTINE - GUNITE

7 BUNNELL7. BUNNELL

8. ORMOND BCH - GUNITE

9. DAYTONA BEACH

10. EDGEWATER

11. OCALA - GUNITE

12. BELLEVIEW

Suwannee American CementSuwannee American Cement

13. HERNANDO

14. COLEMAN

15. OKAHUMPKA

16. GROVELAND - BLOCK

17. O'BRIEN ROAD

18. ORLANDO - GUNITE

19. ORLANDO

20. KISSIMMEE

21. DAVENPORT - GUNITE

22. DAVENPORT

23 TAMPA GUNITE23. TAMPA - GUNITE

24. PORT CHARLOTTE - GUNITE

25. FT MYERS - GUNITE

26. DAVIE - Mobile Concrete

27. WEST PALM BCH - GUNITE

28. FT PIERCE

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29. FT PIERCE - GUNITE

30. MELBOURNE

31. MELBOURNE - GUNITE

PROJECT LOCATIONPROJECT LOCATION

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HAC PROJECT LOCATIONHAC PROJECT LOCATION

• Plant and• Plant and limestone mine located on approximately 2000 acres

Houston American Cement

2000 acres.

• Portions of the site have been

Suwannee American Cement

previously mined.

Sumter Cement Company

12

Existing/Proposed Votorantim Cement Plant New HAC Project

HAC PROJECT LOCATION

• Project is adjacent t i ti

HAC PROJECT LOCATION

to existing Industrial Facilities and compatible to surrounding use.

13

HAC PROJECT LOCATION AND GEOLOGY

A formation of Limestone similar to that found in sections of Florida extends to it th i t t th it Thi

HAC PROJECT LOCATION AND GEOLOGY

its northern point at the site. This formation is ideally suited for the manufacture of Portland Cement.

SAC

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Houston American CementOcala Limestone Formation

HAC PROJECT DRILLING CAMPAIGNHAC PROJECT DRILLING CAMPAIGN

Drilling campaign at site, with drilling rig and sample cores f li tof limestone.

Previously mined sections of the site. Limestone outcrops were mined approximately

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were mined approximately 50 years ago.

GENERAL DESCRIPTION OF A CEMENT PLANT

• Cement is the “glue” in concrete which gives concrete it’s characteristic properties.

• At a cement plant only the cement isAt a cement plant only the cement is manufactured.

• Cement is made from raw materials like limestone, sand and clay.

• The cement manufacturing process C t C tThe cement manufacturing process requires the careful blending then heating of these materials before being grounded into a fine powder which is used in the Concrete at Ready Mix and Bl k f ili i

Cement vs. Concrete

Block facilities.

Plant Layout

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Suwannee American Cement (SAC)Branford, FL

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SUWANNEE AMERICAN CEMENTPROCESS AREAS

Preheater

Raw MillKiln

Control Room

CoolerFinish

MillFuel Main

Baghouse

Clinker Cooler

Limestone Shed

Cooler Vent ESP

Mill Grinding Baghouse

Quarry Operations

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19

20

21

SUWANNEE AMERICAN CEMENTQUALITY CONTROL

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OPERATIONAL PERFORMANCE

Suwannee American Cement

23

Suwannee American Cement is an ISO / OHSAS certified company and also an Energy Star Partner.p y gy

24

EnvironmentEnvironmentEnvironmentEnvironment

25

Florida Department of Environmental Protection has online real time access to Continuous Emission Monitoring Data and Records.

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Environmental Information Available Real-time on Website

www.SuwanneeCement.comwww.SuwanneeCement.com

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QualityQualityQualityQuality

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HAC VIRTUAL MODELHAC VIRTUAL MODEL

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HAC PLANT MODELHAC PLANT MODEL

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HAC PLANT MODELHAC PLANT MODEL

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ECONOMIC IMPACTS TO HOUSTON COUNTYECONOMIC IMPACTS TO HOUSTON COUNTY

• Fiscal benefits include:R l E t t T S l T• Real Estate Tax • Sales Tax

• Personal Property Tax

• Fuel Tax

• Economic benefits include:• Employment • Operating Expenditures

• Salary & Wages

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Source: Real Estate Research Consultants, Inc.

FISCAL IMPACTS

HOUSTON COUNTY2010 - 2059

HOUSTON COUNTY-2012

$630 000$0Sales Taxes Construction$4,184,000 $130,000 Personal Property Tax

$28,917,000 $601,000 Real Estate TaxHOUSTON COUNTY

$630 000$0Sales Taxes Construction$4,184,000 $130,000 Personal Property Tax

$28,917,000 $601,000 Real Estate TaxHOUSTON COUNTY

HOUSTON COUNTY BOARD OF EDUCATION$34,171,000 $738,000Total Direct Fiscal

$440,000 $7,000 Sales Taxes - Operating$630,000 $0 Sales Taxes - Construction

HOUSTON COUNTY BOARD OF EDUCATION$34,171,000 $738,000Total Direct Fiscal

$440,000 $7,000 Sales Taxes - Operating$630,000 $0 Sales Taxes - Construction

$1 260 000$0S l T C t ti$5,611,000 $175,000 Personal Property Tax

$38,784,000 $806,000 Real Estate TaxHOUSTON COUNTY BOARD OF EDUCATION

$1 260 000$0S l T C t ti$5,611,000 $175,000 Personal Property Tax

$38,784,000 $806,000 Real Estate TaxHOUSTON COUNTY BOARD OF EDUCATION

$56,661,000 $1,152,000Total Direct Fiscal$11,006,000 $171,000 Sales Taxes - Operating$1,260,000 $0 Sales Taxes - Construction

$56,661,000 $1,152,000Total Direct Fiscal$11,006,000 $171,000 Sales Taxes - Operating$1,260,000 $0 Sales Taxes - Construction

33Source: Real Estate Research Consultants, Inc.

SUMMARY OF ECONOMIC IMPACTS

$43 227A S l--100* Permanent Jobs

2010 - 20592012

$43 227A S l--100* Permanent Jobs

-2012

$438,308,000$14,332,000Operating Expenditures$199,235,000 $3,598,000 Total Salary & Wages

--$43,227 Average Salary

$438,308,000$14,332,000Operating Expenditures$199,235,000 $3,598,000 Total Salary & Wages

--$43,227 Average Salary

$438,308,000 $14,332,000 Operating Expenditures

$88,000,000 --Construction Expenditures**500 --Construction Jobs

$438,308,000 $14,332,000 Operating Expenditures

$88,000,000 --Construction Expenditures**500 --Construction Jobs

* 80 employees located directly on-site. Analysis ignored any impacts associated with the remainingg 20 employees as they are not located on-site

** Construction expenditures do NOT include wages and salaries of construction employees

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Source: Real Estate Research Consultants, Inc.

OTHER IMPACTSO C S

Second Level Impacts• Plant Investment Value: $200,000,000• Employee Spending Per Year (2012): $2,950,253• Housing Demand: 8 units (10% of employment)

Third Level Impacts• Additional Business Opportunities Generated from HAC

– Trucking Company– Gasoline– Restaurants

C it G d ill– Community Goodwill

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Source: Real Estate Research Consultants, Inc.

GEORGIA MARKETGEORGIA MARKET

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GEORGIA MARKET SUMMARY

• Georgia population growth was the 3rd fastest in the nation from 2000-2006 now having a total population of almost 10 million.

GEORGIA CEMENT CONSUMPTION

3 446

4,395 4,4844,014

3 368 3 388

4,109

19 2%4,0004,5005,000

15%20%25%

p p• Growth projection until 2030 is to

add 2.6 million making it the 4th

largest projected growth State.• The State consumed in 2007 4.0

3,446 3,3683,065 3,120

3,38811.6%

19.2%

7.0%2.0%

-10 5% -9 0%

1.8%

8.6%

1 0001,5002,0002,5003,0003,500

15%-10%-5%0%5%10%

million tons of cement and 15.0 million cubic yards of concrete

• From 2006 to 2007 Georgia cement consumption decreased b 10% i L t

-10.5%-16.1%

-9.0%

0500

1,000

2003 2004 2005 2006 2007 2008 2009 2010 2011-25%-20%-15%

'000 Metric Tonnes % changeby 10% in. Long term consumption forecasts are positive as represented by the latest PCA forecast.

– Assumed that Georgia cement

ME

RIMA

VTNH

MN

WY

ND

SD

WA

ID

MTOR

WIMI

NY

CT

10 YRS. COMPOUND ANNUAL POPULATION GROWTH RATE

Assumed that Georgia cement consumption will grow at approximately 5% annually after 2011.

• Only 18% of all cement consumed in Georgia is AL GA

SCTN

MSLA

OKNM

KS

IA

MO

AR

WY

CO

NENV UT

AZ

CAIL IN

MI

OH

KYWV

VA

NC

MDDE

PACT

NJ

Below AverageA G th

RI

37

co su ed Geo g a smanufactured within the State.

FL

LATX

AK

HI

Average GrowthAbove Average

US +1.0%Source: PCA 2008

GROWTH IN POWER DEMAND IN GEORGIA

• With the increased population growth power demand for Georgia will increase as well.

• This is especially true for many of the 38 Electric Membership C ti (EMC ) d b O l th P hi h idCorporations (EMCs) served by Oglethorpe Power, which provide retail electric service in fast-growing suburban or exurban areas where much of the fastest growth is taking place.

• In terms of customer demand for power, the Member Systems comprise the fastest growing segment of the state’s utility p g g g yindustry. This demand is projected to grow at 4.30 percent annually between 2008 and 2017. That is about double Georgia Power Company, at 2.05 percent, and MEAG, at 2.18 percent.

• Oglethorpe Power Corporation (OPC announced plans to build as many as three 100 megawatt (MW) biomass electric generatingmany as three 100 megawatt (MW) biomass electric generating facilities in Georgia. Designed as carbon-neutral and to utilize woody biomass the power plants will provide power to OPC’s 38 member cooperatives, which supply electricity to nearly half of Georgia’s population.

NEW POWER PROJECTS IN GEORGIAPlant MW Investment $M Start-up

Vogle (Burke Co) - unit #3 nuclear Georgia Power consortium* 1,250 2,500$ 2016Vogle (Burke Co) - unit #4 nuclear Georgia Power consortium* 1,250 2,500$ 2016Washington Co.- 850 MW coal Power4Georgians (EMC consortium) 850 2,100$ Longleaf Early Co 1 200 MW coal Dynergy 1200 2 000$

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Longleaf - Early Co - 1,200 MW coal.- Dynergy 1200 2,000$ Washington Co.- Biomass (Oglethorpe) 100 400$ 2014Biomass - no county named (Oglethorpe) 100 400$ 2015Biomass - no county named (Oglethorpe) 100 400$ 2015*Estimated Investment based MW Size 4,850 10,300

HAC LOGISTICAL LOCATIONHAC LOGISTICAL LOCATION

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GEORGIA APPARENT USE OF CEMENT BY COUNTY

• HAC’s strategic location will provide a logistical advantage to supply cement for the current and future needsfuture needs.

• HAC has direct truck access to Atlanta market. More distant markets can

1

5

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be served by Norfolk and Southern rail road.

Houston American Cement

100 Miles

7

4

1 Vogle (Burke Co) - unit #3 nuclear Georgia Power consortium*2 Vogle (Burke Co) - unit #4 nuclear Georgia Power consortium*3 Washington Co.- 850 MW coal Power4Georgians (EMC consortium)4 Longleaf - Early Co - 1,200 MW coal.- Dynergy5 Washington Co.- Biomass (Oglethorpe)

Plant

40Source: PCA 2007

6

6 Biomass - no county named (Oglethorpe)7 Biomass - no county named (Oglethorpe)

RAIL DISTRIBUTIONRAIL DISTRIBUTION

• Plant has direct access to the Norfolk and Southern.

– The site is located approximately 20 miles from the Macon Switching yard for quick distribution to any of the systems routes.

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Houston American Cement

PROJECT INVESTMENT AND SCHEDULEPROJECT INVESTMENT AND SCHEDULE

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HOUSTON AMERICAN CEMENT PROJECT

PROJECT INVESTMENT$• Project consists of $200 million dollar plus investment to

construct a state-of-the-art cement plant.– The Project will not have any Air Impacts to Houston CountyThe Project will not have any Air Impacts to Houston County

regarding its ability for future growth. • Sufficient Mineral Reserves for approximately 100 years of

operationsoperations.

SCHEDULE• Construction schedule of approximately 22 to 24 months

upon Project Start.

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ENDEND

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