Votorantim Cimentos invests R$ 1.6 billion on plant expansion throughout Brazil

By the end of 2010, investments in 11 cement plants and 5 mortar plants will increase production capacity by 30%

São Paulo, August 8, 2007 Over the next three years, Votorantim Cimentos will invest a record R$ 1.660 billion on premises for new plants, mills, production expansion and reactivation at cement and mortar plants throughout Brazil. The company will increase production capacity by approximately 30% rising from 25 to 33 million tons of cement per year on the Brazilian market, in order to maintain Brazilian market leadership.

This investment will have an impact on several Brazilian regions, especially the Mid-West, North and Northeast of the country. By the end of 2010, all plants will be operating, The expansion plan includes construction of thee new integrated plants in (TO), Baraúna (RN) and Vidal Ramos (SC); five new mills located in Barcarena (PA), Pecém (CE), Aratu (BA), Sepetiba (RJ) and on the Santa Catarina coast (at a city yet to be defined). The plant at Cocalzinho (GO) will be reactivated and the capacity of Salto/Santa Helena milling units, located in Votorantim (SP) and NObres (MT) will be expanded. Five new mortar plants will also be inaugurated: in Pecém (CE), Aratu (BA), Goiânia (GO), Esteio (RS) and São Paulo (SP). The first cement unit will start operating in Barcarena (Pará) in September this year.

"The Votorantim Cimentos production expansion project, which includes new integrated plants and mills, in addition to modernizing existing plants in our portfolio is also aligned with the strategy of maintaining the group?s historic growth patterns and accompanying a new cycle of growth in Brazil?s civil construction industry", said Walter Schalka, president of Votorantim Cimentos. The expansion will also allow the company to maintain a strategic spare capacity level at the units of around 30%, an important factor in meeting seasonal demand which is characteristic of the regional diversity of the country.

The project will generate around 3,300 new direct and indirect jobs i the production chain, as well as approximately 10,000 jobs during the construction or modernization period for the 16 units. The location of new plants and mills was researched by Votorantim Cimentos to meet the growing demand in major regional markets and to be closer to end consumers. The location of limestone deposits was a determining factor in locating integrated plants (which include mining activities).

"This expansion plan also takes into account the trend towards regionalization and decentralization of consumption in Brazil, with production migrating toward the interior of the country on a more aggressive basis in coming years", said Schalka. On the international markets, increased production capacity will sustain the company?s strong export growth to the North America, African and Caribbean markets, In 2008, Votorantim expects to export 2 million tons ? tripling the 2006 export volumes (700 thousand tons). This Votorantim Cimentos investment plan will sustain manufacturing excellence, offering high quality products; aid logistics to cover the entire country with greater efficiency; and create more competitive pricing for resellers and more attractive prices for end consumers.

 

New Units at Votorantim Cimentos

Construction of new integrated plants (3)

Xambioá (Tocantins)
Raw Material: locally mined limestone
Target Market: Tocantins, Southeast Pará, Western Maranhão and Southern Piauí
Value of investment: R$ 300 million
Production capacity: 1.000 million tons/year
Direct and indirect jobs: 598
Operational start-up: 2009

Baraúna (Rio Grande do Norte)
Raw Material: locally mined limestone
Target Market: Rio Grande do Norte, Western Paraíba and Eastern Ceará
Value of investment: R$ 300 million
Production capacity: 1.5 million tons/year
Direct and indirect jobs: 600
Operational start-up: 2009

Vidal Ramos (Santa Catarina)
Raw Material: locally mined limestone
Target Market: Santa Catarina and Northeast Rio Grande do Sul
Value of investment: R$ 360 million
Production capacity: 1.3 million tons/year
Direct and indirect jobs: 600
Operational start-up: 2010

New Mills (5)

Barcarena (Pará)
Raw Material: Clinker and slag
Target Market: Northern Pará and Amapá
Value of investment: R$ 40 million
Production capacity: 460 thousand tons/year
Direct and indirect jobs: 180
Operational start-up: September/2007

Pecém (Ceará)
Raw Material: Clinker
Target Market: Metropolitan Region of Fortaleza
Value of investment: R$ 45 million
Production capacity: 220 thousand tons/year
Direct and indirect jobs: 305
Operational start-up: 2008

Aratu (Bahia)
Raw Material: Clinker
Target Market: Metropolitan Region of Salvador
Value of investment: R$ 50 million
Production capacity: 320 thousand tons/year
Direct and indirect jobs: 310
Operational start-up: 2008

Sepetiba (Rio de Janeiro)
Raw Material: Clinker and slag
Target Market: Metropolitan region of Rio de Janeiro
Value of investment: 150 million
Production capacity: 1.5 million tons/year
Direct and indirect jobs: 240
Operational start-up: 2009

SC Coast (Santa Catarina)
Raw Material: Clinker
Value of investment: R$ 40 million
Production capacity: 300 thousand tons/year
Direct and indirect jobs: 180
Operational start-up: 2010

Plant reactivation (1)

Cocalzinho (Goiás)
Raw Material: Clinker and pozzolana
Target Market: Goiás
Value of investment: R$ 50 million
Production capacity: 300 thousand tons/year
Direct and indirect jobs: 180
Operational restart: 2008

Capacity expansion and elimination of production bottlenecks (2)

Salto/Santa Helena, in Votorantim (São Paulo)
Raw Material: Clinker
Target Market: Metropolitan Region of São Paulo and Vale do Paraiba
Value of investment: R$ 155 million
Production capacity: 700 thousand tons/year
Direct and indirect jobs: 120
Works conclusion: 2008

Nobres (Mato Grosso)
Raw Material: Pozzolana
Target Market: Mid-West
Value of investment: R$ 70 million
Production capacity: 330 thousand tons/year
Direct and indirect jobs: 60
Works conclusion: 2008

Mortar - New Units (5)

Value of investment: R$ 100 million
Operational start-up: 2008
Units:
              Pecém (Ceará)
              Aratu (Bahia)
              Goiânia (GO)
              Esteio (Rio Grande do Sul)
              São Paulo (São Paulo)

Further Information:

FSB Comunicações
Carolina Stefanini - carolina.stefanini@fsb.com.br
Erica Benute - erica.benute@fsb.com.br
Ana Florence - ana.florence@fsb.com.br

Votorantim Cimentos
Flávio Chantre - 55 11 2162-0712 - flavio.chantre@votorantim-cimentos.com.br
Carolina Simonetti - 55 11 2162-0732 - carolina.simonetti@votorantim-cimentos.com.br