Cementos Argos Cartagena May 2013 1 Mural arquitectnico This - - PowerPoint PPT Presentation

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Cementos Argos

Cartagena – May 2013

Mural in architectural concrete, Bogotá, Colombia

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DISC DISCLAIMER LAIMER

This document contains forward-looking statements and information regarding CEMENTOS ARGOS S.A. and its subsidiaries (together referred to as “Argos”) that are based on the knowledge of current facts, expectations and projections, circumstances and assumptions of future events. Various factors may cause Argos’ actual future results, performance or accomplishments to differ from those expressed or assumed herein. If any unexpected situation presents itself or if the aforementioned premises or estimations turn

• ut to be incorrect, the future results may differ significantly from the ones that are mentioned
• herein. The forward-looking statements are made to date and Argos does not assume any
• bligation to update said statements in the future as a result of new information, future events or

any other factors.

Mural arquitectónico

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Based on a growth strategy

Logistical interconnection

• f our
• perations to

generate synergies

Operational and financial flexibility to maximize growth

• pportunities

Leadership in the markets in which we are present More focused on cement and concrete

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2013 2014

May May

Roadshow

Use of the funds: prepayment of debt and growth… Amount: USD 880 m Organic:

Inorganic:

Strategic projects

Strategic area of

• perations

Creation of synergies

Attractive markets

Window of

• pportunity

The dispatching center is operating, increasing our competitiveness in the Colombian North coast Expansion in the interior of Colombia and the mill in South Carolina are on schedule Acquisition in Honduras, announced in September 2013 Acquisition in Florida, announced in January 2014 Acquisition in French Guiana, announced in April 2014

100%

• f the funds earmarked for

strategic growth

Realizing the profitable growth that was envisaged at the time of the issuance

5 7.7 6.6 4.1 2.2 1.9 1.1 1.0 0.8 0.8 Cemex Argos Holcim Titan Vicat

• Am. Cement /…

Valderrivas / Giant Votorantim Lehigh

17.1 15.1 9.0 8.1 7.5 7.1 6.6 5.4 5.0 4.2 3.7 3.6 3.5 2.8 2.7 2.4 Cemex Holcim Buzzi Heidelberg / Lehigh Ash Grove Lafarge Argos TXI Italcementi / Essroc Votorantim / St. Marys Eagle Vicat Titan Taiheiyo / CalPortland Valderrivas / Giant GCC

225 218 124 96 70 59 52 50 47 41 38 33 30 24 24 23 22 20 19 17 16 15 15 14 12 12 9 8 8 8 7

Lafarge Holcim Heidelberg Cemex Italcementi Votorantim Ultratech Taiheiyo Buzzi Eurocement Camargo Correa Jaiprakash Vicat Titan Siam Cement Group Semen Gresik Dangole Argos CPV Dalmia Cement India Cemets Cementir Siam City Cement Shree Cement Madras Cement Saudi Cement Southern Province… Colacem PPC YTL Yanbu Cement

Our growth consolidates us as a global player, leader in the United States

The player that best managed to take advantage of the global financial crisis to grow in a profitable way

18th IN THE

GLOBAL RANKING* (Previously 21st)

7th IN THE US

RANKING, OF A TOTAL OF 30 COMPANIES (Previously 13th)

Source: Company reports 2012 - PCA. (*) Does not include China

Global ranking based on installed capacity (m MT) US ranking based on installed capacity (m MT)

2nd PLAYER in the

Southeastern states

• f the USA

Ranking in the Southeastern USA * (m MT)

* NC, SC, GA, FL, AL, MS, Large Multinationals Latam India Other mature markers Other companies

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In order to keep top positions and to continue to take advantage of the opportunities of a changing industry

Net Debt EBITDA

3.36x

• Unnormalized EBITDA

due to the American recovery

• EBITDA does not

include 100% of the impact of Honduras and French Guyana

USD 809 m

Indebtedness Investment portfolio

• Capacity to increase indebtedness through bank loans or securities market
• Excellent relations with possible agents
• Know-how developed through M&A and integration of new operations

Net Debt EBITDA

2.8x

Net Debt EBITDA

1.6x

• Ordinary shares of

Bancolombia and Grupo Sura

• Existing portfolio of

Cementos Argos that was not spun off in 2012

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With a multifaceted focus on operational excellence

Strategic projects Integration of new operations Optimization of logistics and processes Energy structure Deepening of the Argos Model Development of the concrete channel

• Cartagena Dispatching Center
• Expansion in the interior of Colombia
• Harleyville mill
• Potential of the assets in Florida as an
• perational pivot
• Synergies with the operations in French Guyana
• Search for greater efficiency in supply from the

network of plants in Colombia

• Better cluster transport coverage in the

Caribbean

• Importance of our port in Houston to supply

concrete operations

• Alternative fuels
• Optimization and visibility in terms of energy
• Vertical integration for energy supply
• Relation with consortiums that take part in the

4G process

• Promotion of the benefits of building roads in

concrete

• Deepening in the distribution chain
• Technological platforms to share best practices
• Creation of concrete operations in Honduras
• Support of the model through mobile plants
• Portfolio of value-added concretes

1 2 6 4 5 3

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Recognized for our good practices in terms of sustainability in its three dimensions and of good corporate governance, Argos continues to be committed to:

Staying committed to sustainability

% Reduction

• f emissions

Company kg CO2 / ton cement material

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Seeing innovation as the capacity to reinvent ourselves to stay competitive

Innovation culture Adapting to the best global practices New Businesses

• Capturing of CO2 and neutral

cement

• Alternative fuels
• Optimization of thermal cycle

GOAL 2015

10% of revenues coming from innovation

• Link with cement and

concrete business

• Businesses based on our

core competences

Ideas

Action

Collaborative work to put ideas into practice

Lime Business: Generation and execution of ideas: Alliances with universities and Argos Entrepreneurial Center: Green Cement Business: Materials Processes Applications in concrete

• Recycled aggregates
• Cement with low clinker

content

• Permeable concrete
• Ultra high performance

concrete

CALTEK

USA Regional Division

Cartagena - May 30, 2014

Dallas, USA

Concrete mixer trucks – Atlanta, Georgia

Survival mode Reorientation and repositioning

• Reindustrialization
• Fiscal stability
• Employment + Salaries
• Residential sector

2008 2009 2010 2011

2014 - 2018

Market in

transition

General overview of the US market

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USA YOY variation in cement consumption

Source: PCA Spring 2014 Forecast

2012

• 17.1%
• 26.8%
• 4.2%

3.4% 8.9% 4.4% 7.7% 7.7% 10.1% 8.3% 4.5%

2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

2013

1.9% 2.8% 3.2% 3.3% 3.1% 2.9%

12.0% 15.2% 19.8% 17.3% 11.8% 4.8%

3.6% 8.7% 9.3% 9.9% 8.0% 5.7%

• 6.5%

1.0% 2.9% 3.9% 4.3% 4.0%

2013 2014E 2015E 2016E 2017E 2018E

PIB Real Construcción Residencial Construcción NO residencial Construcción Pública

Construction boosts economic growth

GDP vs. construction GDP by sector

YOY variation

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Stake per sector of the total value of construction

Source: PCA Spring 2014 Forecast

246 281

314 596

200 400 600 800 1,000 1,200 1,400 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Construcción residencial Construcción No residencial Construcción pública

USD billion *

47.1% 47% 45.5% 43% 39.8% 37.5% 34% 31.8%

Residential construction at the head of the sector’s development

15.2% 2014E

Stake of residential sector will increase

37% 47%

2013 2018E

+90%

Real GDP Residential Construction Commercial Construction Public construction Residential Construction Commercial Construction Public construction

* 1 billion = 1,000,000,000 and 1 trillion = 1,000,000,000,000

• 1.23%
• 1.23%
• 0.73%

2.23%

• 2.00%
• 1.00%

0.00% 1.00% 2.00% 3.00%

World (Exc China) Latam Europe USA

0.30% 4.05% 3.75% 4.40% 8.85%

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USA market stands out at a global level

2011 2013 CAGR 2013 2015 CAGR

Global cement consumption pulled by USA USA cement prices confirm dynamic of recovery

+8.7%

increase between 2012 - 2016E

9.2%

Actual increase of cement prices per metric ton between 2013 – 2015E

Actual price increase in the USA ratifies economic strength

Source: PCA Spring forecast 2014 – CemNet, Global Cement 2014 Outlook

CAGR: 2012 - 2016E

• 7.17%

3.43% 4.33% 4.60% 5.20%

Europe World (Exc China) Latam EM (exc-China) USA

128 128 117 97 71 68.0 70.3 76.5 79.8 30.4 32.1 21.5 10.7 6.2 6.0 6.5 7.0 7.2 97.6 95.9 95.5 86.3 64.8 62.0 63.8 69.5 72.6 24% 25% 18% 11% 9% 9% 9% 9% 9% 0% 5% 10% 15% 20% 25% 30% 35% 40% 20 40 60 80 100 120 140 2005 2006 2007 2008 2009 2010 2011 2012 2013

Local production Imports Import/total consumption

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Higher future consumption will lead to increase in import

Million metric tons

Within the total consumption, there is a minimum level of import (9%) as a regular market component. Of these imports, over the last 3 years, 45% came from Canada, 15% from Korea,12% from China, 7% from Mexico and 21% from other countries.

Local production + import = total consumption

Source: USGS, Calculations of Argos

123.1% 126.7% 114.7% 89.8% 62.3% 61.3% 66% 72.9% 77.5% 83.5% 91.9% 101.1% 110% 114% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E

Total consumption / installed capacity

ZONE OF + IMPORTS For 2015, a gradual increase of cement imports is expected, as consumption reaches 87% of the country’s installed capacity.

Operational efficiencies and interconnectivity

Colleague of the USA Regional Division

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Operational efficiencies in the US Regional Division

Logistics

Initiative Description

Dispatching of cement by train from the Roberta plant to the Little Rock terminal. Renewal of machinery Optimization and renewal of assets - heavy machinery. Expansion of the mixer fleet Additional mixers to meet growing demand in Texas. Natural gas- fueled mixers Use of mixers that work

• n natural gas, resulting

in savings in the cost of fuel.

Initiative

Purchase of raw materials and

• ther

materials Savings coming from the negotiation for the supply of raw materials and other materials. Alternative fuels Use of alternative fuels at the Roberta and Harleyville plants. Savings stemming from the replacement of the mill at the Harleyville plant.

• Additional grinding capacity of

500k t

• Efficiencies from the new mill

Description

Harleyville mill

Total USD 2.9 m USD 7.8 m 2013 2014 (E)

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initiatives

savings

~USD 8 m ~50%

EBITDA 2013 or 104 bps

more

169%

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USA Regional Division: getting ready to maximize on value added

+ 0.5 m MT

additional cement

Increase of the capacity of the Harleyville mill Integration of assets in Florida and Georgia

Benefits Benefits

• Production of cement with additions
• Savings from the use of active additions
• Replacement of imported cement by local

production

• Increase of the installed capacity without

investment

• Potential for future expansions
• Fast and efficient transition to the Argos model
• Creation of synergies by optimizing logistics of

supply network in the USA and the Caribbean

• Maximize on the value being generated as a

result of the recovery of the market Houston port We will import cement for the Texan market once again, through our port in Houston

Benefits

• 0.8%
• 9.9%
• 6.7%
• 0.9%
• 6.8%

12.0% 15.3% 23.7% 10.2% 6.4% North Carl Virginia Alabama Arkasas South Carl Texas Georgia Florida Argos states Total USA

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Argos states

Source: PCA – For the calculations of the variation per state where Argos is present, the weighted average method was used according to the stake of each state in the total cement consumption of 2014

States where Argos is present show greater potential in terms of consumption than country average

2013 2018E

9.9%

CAGR

9.6% 9.8% 6.2% 7.7% 5.8% 14.1% 16.1%

9.3% 8.1%

Variation as of April 2014

Have shown higher YTD results and better long-term forecasts 118 m MT 41 m MT 80 m MT 26 m MT

Size of the market

States affected by a harsh winter during the first quarter of the year

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Caribbean and Central American Regional Division (CCARD)

Cartagena - May 30, 2014

Puerto Haití

Vessel in Haiti’s port

Concrete mixer trucks in Panama

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Market overview of the CCARD

Panama

More than the canal

Honduras

Infrastructure, driver

• f economic growth

Caribbean

Upturn in the USA market will strengthen the region

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10.0% 3.9% 2.9% 3.3% 4.5% 0.7% 4.2% 8.4% 4.1% 4.8% 2.6% 4.4% 2.4% 4.5% 7.2% 4.5% 6.3% 3.0% 4.5% 2% 4.6%

Panama Dominican Republic Haiti Honduras Suriname French Guiana Average 2012 2013 2014E

The region shows economic strength

GDP – Annual growth rate GDP per capita – 2013

Source: IMF, values in PPP – Calculations of Argos (*) Calculation of weighted average per inhabitant, includes other smaller Caribbean islands

The countries

• f

Argos’ CCARD have a GDP per

capita of USD 7,313

which puts us in the 98th place on the global ranking and on the 50th place in the total GDP ranking, with a total of USD 196 bn, which is similar to the GDP

• f Peru.

+8.8 m MT

are consumed in the countries

• f the CCARD

252 kg/inhab.

is the cement consumption per capita in the countries of the CCARD – in line with the Latin American average

Sustained economic growth of this regional division of Argos

4.6% 2014E

Representative cement consumption Significant position in the global economy

Ranking USD 1 Catar 105,091 2 Luxembourg 79,593 3 Singapure 61,567 4 Norway 56,663 5 Hong Kong 53,432 6 USA 51,248 7 United Arab Emirates 49,883 49 Chile 19,474 53 Antigua and Barbuda 18,625 63 Panama 16,993 65 Dominica 14,579 81 Colombia 11,284 85 Suriname 9,954 87 Dominin Republic 9,655 97 Guyana 7,830 122 Honduras 4,461 162 Haití 1,328 98 Argos CCA region 7,313 Contry

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13.1 14.0 15.2 17.2 18.8 19.5 21.0 23.3 25.8 27.9 29.9 31.9 34.0 36.1 38.2 7.5% 7.2% 8.5% 13.1% 9.1% 4.0% 5.9% 10.8% 10.2% 8.4% 7.2% 6.7% 6.4% 6.2% 6.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E2015E2016E2017E2018E

GDP - USD Variation Y/Y

Panama continues to lead growth in the region

Total GDP (annual variation, %)

12.2 13.1 14.0 15.2 17.2 18.8 19.5 21.0 23.3 25.8 27.9 0.52 0.59 0.59 0.70 0.86 1.12 1.17 1.25 1.48 1.80 2.20 4.2% 4.5% 4.2% 4.6% 5.0% 6.0% 6.0% 6.0% 6.4% 7.0% 7.9% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 5 10 15 20 25 30 35 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GDP Construction GDP Const GDP/ GDP USD billion

Stake construction GDP / total GDP

Source: IMF – General National Audit Office of Panama

USD billion 1.03 1.23 1.42 1.69 1.70 1.60 1.81 2.40 2.53 2.66 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E

Growth 2013: +6% (2014E: 5.1%)

Indisputable economic solidity Construction, a clear driver of growth Continuous industrialization of the sector Growing dynamic in cement market

Million MT

56% Bagged Bulk Bulk Bagged

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Panama, much more than the expansion of the canal

This is a mining project with one of the biggest copper reserves in the world and it could become the second biggest producer worldwide.

Investment in a range of medium-term projects surpasses the investment in the expansion of the canal

• 23 km and 17 stations
• Connection San Miguelito – December 24
• Currently in bidding process
• Will be awarded between July and August

2014 are being structured

Source: CAPAC –General National Audit Office

(USD 5.2 bn)

1 Cobre Panamá (USD 6.18 bn) 2 Construction of Line 2 of the

Metro (USD 2 bn)

3 20 high-impact projects

+USD 11 bn

No. Proyect Stage Initiation

1 Nuevo centro de Observación del Pacifico Granting process 2013 2 4to puente sobre el Canal de Panamá Feasibility 2014 3 Puerto de Corozal -Pacífico Feasibility 2014 4 Nuevo Vertedero del Lago Gatún Final Desing 2015 5 Futura red del Metro de Panamá Desing - Feasibility 2014 6 Expansión de Planta de tratamiento AR Conceptual 2013 7 Construcción de redes colectoras de AR Conceptual 2013 8 Ciudad Gubernamental Desing - Feasibility 2013 9 Interseccion Vía Brasal y vía España Linked to line 1 - Metro 2014 10 Interseccion en calle 42, Bella Vista Linked to line 1 - Metro 2015 11 Corredor 12 de Octubre Linked to line 1 - Metro 2015 12 Cruce de San Miguelito Conceptual 2015 13 Ampliación via Transísmica Conceptual 2015 14 Ampliación de la Avenida Omar Torrijos Conceptual 2015 15 Cinta costera 4ta Etapa Conceptual 2015 16 Carretera Coclesito Conceptual 2015 17 Carretera Santa Fé - Colovébora Conceptual 2015 18 Ampliación vía Pedregal - Villalobos Conceptual 2015 19 Ampliación Vía Pedregral - Rana de Oro Conceptual 2015 20 Carretera Costera del Caribe Conceptual 2018

Location Provincia de Colón Total area 13,000 ha Production initiation 1Q2016 CAPEX US$ 6.18B Current stage Construction Enviromental licence Study approved

Cobre Panama Proyect

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Honduras: potential for development in the medium term

14,040 km of roads 78.8% of the road

network is not paved PPP are looking at investments worth more than USD 1.2 bn for 2014,

• r more than 6% of the

GDP

• Project western highway (USD 270 m)
• Project highway Colón and Atlántida (USD 237 m)
• 5 road construction and maintenance projects (USD196 m)
• Electricity generation projects (USD 300 m)
• Improvement of airport (USD 12 m)

Public Private Partnerships (PPP)– Engine for the development of the country

Annual GDP growth (%)

Economy in the process of consolidating Road infrastructure with high potential

8.2 8.8 9.7 10.9 12.3 13.8 14.5 15.8 17.6 18.4 19.0 19.7 4.5 6.2 6.1 6.6 6.2 4.2

• 2.4

3.7 3.7 3.3 2.6 3.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E GDP Variation Y/Y

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3.9 4.4 4.3 4.7 5.3 5.7 6.2 3.0% 4.1% 4.7% 4.5% 4.5% 4.5% 4.8% 0.0% 2.0% 4.0% 6.0% 8.0% 0.0 2.0 4.0 6.0 8.0 2009 2010 2011 2012 2013 2014E 2015E Variation Y/Y GDP

USD billion

4.0% 4.2% 7.8% 3.8% 3.8% 4.2% 4.5% 0.3% 1.6% 2.90% 4.10%

5.50%

• 0.20%

1.50% 1.40%

• 0.30%
• 0.40%
• 0.40%

1.40%

• 2.90%
• 4.30%

0.40% 7.30%

14.60%

2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

GDP Construction GDP

Other markets of the CCARD also show an increasing dynamic

Source: IMF – Central Bank of Honduras – Global Insight

• Expected real GDP growth for 2014 of 4.5%,

where it was 3.6% previously.

• Investment in infrastructure and energy for

2014 surpass USD 1.6 bn or 2.5% of the GDP of the DR.

• More than USD 200 m earmarked for

housing and community service projects in the DR in 2014.

Quarterly variation total GDP vs. construction GDP

DR: Recovery of construction drives growth

4.5%

2014E

Suriname: Constant growth

Actual GDP – annual variation

• Inauguration of the second concrete line
• Supply contract for 1st stage of the USA embassy (6,000 m3)

14.6% 1Q2014

French Guyana: economic stability

• Estimated GDP growth: 1.8% CAGR (2010 and 2020), supported by:
• Investment in infrastructure
• Growth of the local industry: space center, recent discoveries of
• il reserves

Source: Global Insight

GDP growth inflation

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Operational efficiencies

Colleagues in Argos Honduras

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With the intention of increasing profitability, work has begun on various fronts

Clinker factor in general purpose cement

Example of line of work Description

Reduction of 4% in the clinker to cement ratio Productivity in cement grinding Increase in productivity of 2%, complying with quality standards and reducing production costs

Total

USD 8.8 m

2014 (E)

Connection to the national electrical grid at the plant in the DR Improved stability and reliability of electric current Decrease in the price of energy of 46%: Total energy consumption at Honduras plant Reduction of total electricity consumption of 5%:

2013

USD 0.37/kWh

USD 0.20/kWh

Example of line

• f work

Description

%

106 kWh/t

101 kWh/t

2013 2014 2014

Total savings USD 8.8 m 9% EBITDA 2013 or 196 bps more

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Implement the Argos model in the CCARD

Improved vertical integration between cement and concrete

• Lead the process of industrialization in the

markets in which we have operations

• Develop the concrete business in markets

where we currently don’t have any and incentivize growth in existing markets

• Optimize our logistical network for the supply
• f raw materials in the Eastern Caribbean
• Standardize the processes to fit into the

Argos model Integration of the newly acquired

• perations into the

current network

Concrete plant, Panama Concrete plant, DR

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Colombian Regional Division

Cartagena - May 30, 2014

Cartagena, Colombian Regional Division

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Concrete steps in the development of the sector 2012

2014

2013

2021

Institutional strengthening and boost by housing sector Allotment of 4G projects and development of housing sector

2015

Consolidation and massive development of projects Start of 4G projects

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290 297 308 325 340 388 402 408 425 453 471 491 513 537 562 1.7% 2.5% 3.9% 5.3% 4.7% 6.9% 3.5% 1.7% 4.0% 6.6% 4.0% 4.3% 4.5% 4.6% 4.8%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E GDP Variation Y/Y

GDP – COP trillion *

Construction sector, important driver of the economy

Construction GDP – COP trillion

Economy will continue to grow significantly

4.5% 2014E

Performance of construction better than average of economy

8.4% 2014E

Source: BanRep, Business Monitor forecasts March 2014 Source: BanRep, Bloomberg forecasts – market survey March 2013

13 14.8 16 17.7 18.9 23 25 26.3 26.3 28.5 30 33.1 35.9 38.2 40.3 5.5% 12.3% 8.3% 10.7% 6.9% 8.3% 8.8% 5.3%

• 0.1%

10% 6.0% 9.8% 8.40% 6.50% 5.40%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

Construction GDP Variation Y/Y

* 1 billion = 1,000,000,000 and 1 trillion = 1,000,000,000,000

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Progress in 4G concessions = COP 39 trillion * (USD 20.5 bn)

11 projects in feasibility stage

First wave:

COP 10.18 trillion

(USD 5.3 bn)

Second wave:

COP 17.3 trillion

(USD 9.1 bn)

Private initiatives

COP 11.5 trillion

(USD 6.1 bn)

COP 10.1 trillion

5 projects in pre- feasibility stage

COP 1.4 trillion

Source: ANI.

No. First stage Capex KMs Apr May Jun Jul

1 Conexión Pacifico 2 0.9 95 2 Honda - Girardot - Puerto Salgar 0.9 84 3 Conexión Pacífico 1 1.7 46 4 Autopistas Conexión Norte 1.0 146 5 Conexión Pacifico 3 1.26 231 6 Perimetral del Oriente de Cundinamarca 1.08 153 7 Cartagena - Barranquilla y Circ Prosperidad 0.96 147 8 Mulaló - Loboguerrero 1.13 84 9 Autopista Rio Magdalena 2 1.33 150 Total - trillion COP 10.18 1,136

Proposals Granting Process Awarded

No. First stage Capex KMs

1 Neiva - Girardot 1.33 191 2 Pasto - Rumichaca 1.61 80 3 Villavicencio - Yopal 1.84 260 4 Puerta de Hierro - Palmar de Varela 0.44 173 5 Santana - Mocoa - Neiva 1.59 422 6 Santander de Quilichao - Popayan 1.21 76 7 Bogotá - Villavicencio (Bogotá - El Tablón) 2.04 34 8 Autopista al Mar 2 1.59 139 9 Autopista al Rio Magdalena 2.14 156 10 Autopista al Mar 1 1.5 176 11 Bucaramanga - Barrancabermeja - Yondó 1.61 166.7 12 Transversal del Sisga 0.43 137 Total - trillion COP 17.33 2,011

* 1 billion = 1,000,000,000 and 1 trillion = 1,000,000,000,000

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100,000 free homes

A total of 103,096 homes has been commissioned; 94,900 have been started on and 51,000 have been finished

86,000 homes for savers (VIPA)

This program has been started in 13 departments, with 41,465 units under construction as of May 2014 (13,069 launched)

Housing programs boost the sector

Subsidized interest rate

0.4% of GDP

Past investment, before 2012, did never exceed

+1%

Current investment in housing surpasses COP 6 trillion, or more than

• f GDP

More than COP 3.6 trillion has been disbursed and home purchases totaled COP 5.7 trillion

Increasing trend in sale of new homes will continue in 2014

189.671 (+31%)

154.772 (+7%)

Effect of housing programs

Units sold

131.226 129.161 144.971 81.200

Growth without programs

Programs are expected to make sales increase by 31%

2013 2014E

Others Office Commerce Warehouse Hotels

New surface in non-residential construction – m2

0.94 4.8M M2

19%

Commercial construction doesn‘t lag behind

All the branches of the sector would increase in 2014 1.58 1.40 1.15 0.87 0.91 0.99 0.72 4.1M M2

Source: Housing Ministry, Camacol

Operational efficiencies and interconnectivity

Colleagues of the Colombian Regional Division

35

Permanent efforts towards operational efficiency…

Cement additions

Initiative Description

Optimization of the clinker to cement ratio in the different types of cement Caloric consumption and consumption of electrical energy Decrease in the caloric consumption in kcal/t Energy efficiency: Maintenance costs Minimization of stoppage due to unexpected events Improvement in run factor and yield of kilns Reach a run factor of 94% Improve the mechanical conditions of the equipment through the execution of Capex Optimization of maintenance management

Production

USD 19 m

Savings

Initiatives

Production Purchases Logistics

c

+140 bps

more

EBITDA margin

Self-generation Decrease in consumption

• f electrical energy

Initiative Description

36

... focused on the entire production chain

Double shift cement and aggregates

Initiative Description

24-hour transport and distribution, optimizing the use of the fleet Optimization of dispatching centers and plats Change in tariff scheme

• f cement

The shipping cost is paid through productivity or the rotation of fleets

Logistics Purchases

Supplies, spare parts and raw materials Productive and administrative services Decrease in purchase price thanks to bidding process Optimization of purchase processes Improvement of relations with suppliers

$

Total

USD 19 m

2014 (E)

Initiatives

Initiative Description

37

Colombian Regional Division: initiatives to become more competitive

Keep current position for industrialization of the market

Energy efficiency

• Supply:
• Alternative fuels
• Flexibility in terms of energy to face

volatility of the cost

• Efficiency in consumption:
• Optimization of operational network
• Infrastructure
• Industrialization of housing construction
• Strategies based on TOMA in order to

improve market penetration

• Investments in mobile concrete plants
• Deepening of the Argos model

Market supply logistics

Value-added products and services

Infrastructure, a long-term driver for the sector

28 30 33 36 38 40 42 45 47 50 53 56 8% 6.0% 9.8% 6.5% 5.4% 4.9% 5.4% 5.5% 5.7% 5.9% 6.1% 12.9% 6.0% 7.8% 7.3% 7.1% 6.6% 6.9% 6.8% 7.2% 7.6% 7.8% 8.9% 5.9% 4.0% 3.4% 4.0% 4.4% 4.3% 4.3% 4.4% 10 20 30 40 50 60 0% 5% 10% 15% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E Construction GDP - COP Bn Construction GDP Y/Y Infrastructure Y/Y Residential and commercial construction Y/Y

Construction GDP – long-term estimates

Source: BanRep, Dane, Business Monitor, Bloomberg - – Values at constant prices

Sustained growth boosted by infrastructure

+7.3% CAGR: 2013 - 2022E

Composition of construction GDP

Stake of infrastructure will continue go increase

45.8% 51.4%

2011 2022E

15.4 16.3 17.9 19.3 20.5 21.3 22.0 22.9 23.9 24.9 25.9 27.1 13.0 13.8 15.2

16.5

17.7 19.0 20.3 21.7 23.1 24.8 26.7

28.7

2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E

Residential and construction GDP Infrastructure

COP trillion

45.8% 51.4% 46.1% 48.6%

+73%

COP trillion *

* 1 billion = 1,000,000,000 and 1 trillion = 1,000,000,000,000

Strategic projects

Cartagena - May 30, 2014

40

Cartagena Dispatching Center

investment: Launch:

USD 35.2 m April 2014 98%

Progress

Design and construction of a dispatching center with a capacity of 1,295,000 MTPA of bagged cement and 1,000,000 MTPA of cement in bulk

1

1 1 2 2 3 4

Automatic loading of trucks Ventomatic packaging machine Ventomatic palletizing machine Finished goods warehouse Bulk silos 5 and 6

Characteristics

• 1. Caricamat, automatic loading of trucks straight from the packaging machine: 1,800 bags/hour
• 2. Packaging and palletizing machine: capacity of 4,200 bags/hour
• 3. Warehouse for cement in bags: capacity of 6,900 MT
• 4. 2 silos for dispatching in bulk: 2,500 MT each

41

Cartagena Dispatching Center

1

Benefits:

Commercial Operational Financial

• More cost-efficient operation

to meet the needs of the market of the North coast

• Operational flexibility for the

three regional divisions

• Maximized use of the

plant’s installed capacity

• Increased production

efficiency in the North of Colombia

• Automation of the cement

distribution process, both of cement in bags and in bulk

• Internal return rate

estimated at 77%

• Additional EBITDA of ~USD

30 m per year, once optimal

• perational volumes are

reached

42

Expansion in the interior of the country

Cairo plant: Increase of the cement grinding capacity from 36 to 48 TPH

Investment: Launch:

USD 4.8 m Aug 2014

69%

progress

2

Increase of the capacity of the kiln from 1k to 1.6k-2k TPD

Installation of a vertical mill Increase of the packaging and dispatching capacity from 4k to 6.2k bags/hr Rioclaro plant:

Investment: Launch :

USD 39.5 m Dec 2014

45%

progress

Investment: Launch :

USD 59.9 m Dec 2014

56%

progress

Investment: Launch :

USD 6.9 m May 2014

98%

progress

43

Expansion in the interior of the country

2

Benefits:

Commercial Operational Financial

• Increase of the capacity in a

demanding market with high growth expectations

• Reduction in clinker and

cement transport in the interior of the country

• Elimination of the bottle

neck at the Rioclaro plant

• Investment of USD 100/ton
• f installed capacity
• Internal return rate

estimated at 34%

• Additional EBITDA of

~USD 35 m per year, once

• ptimal operational levels

are reached

44

Harleyville mill

Installation of a vertical mill of 250 TPH at the plant in Harleyville, South Carolina Investment: Launch:

USD 48 m Sep 2014 78%

Progress

3

Characteristics:

• Mill with a nominal production of 245 TPH of cement
• The cement can be transported to 9 existing silos (total capacity of 35,000 MT)
• System for loading in bulk of 500 TPH

General view General view Building for the feeding hoppers and electrical room of the area

45

Harleyville mill

3

Benefits:

Commercial Operational Financial

• Capacity to meet excess

demand of the market as of 2016

• Opportunity to increase

market share as of 2016

• Production of cement with

additions

• Permit granted by the

regulator for future expansion is still in force

• Internal return rate

estimated at 34%

• Additional EBITDA of ~USD

20 m per year, once optimal

• perational levels are

reached

46

Cementos Argos

Cartagena – May 2013

Mural in architectural concrete, Bogotá, Colombia