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2006 H1. Economic Indicators Stabilization of financial markets No major impact in 2006 of May – June adjustments.

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Presentation on theme: "2006 H1. Economic Indicators Stabilization of financial markets No major impact in 2006 of May – June adjustments."— Presentation transcript:

1 2006 H1

2 Economic Indicators Stabilization of financial markets No major impact in 2006 of May – June adjustments

3 GNP Growth & Construction Sector Construction has not suffered from financial turbulance Lower growth in housing will be more than offset by infrastructural projects

4 Construction Expenditures 1987-2005 (at constant prices 1987=100)

5 Construction Expenditures 2005-2006

6 GNP per capita vs. Cement Consumption per capita Increase in consumption from 385 kg/head in 2002 to 487 kg/head in 2005 GNP/capita increased from 2,584 $/head in 2002 to 5,008 $/head in 2005

7 Cement Sector

8 Company Structure  Akçansa is a Joint Venture between HC and Sabancı  Created in October 1996 by the merger of:  Akçimento (Sabancı)  Çanakkale Çimento  Quoted in the stock market

9 IZMİR ANKARA KILN+GRINDING CEMENT TERMINAL CEMENT GRINDING ALİAĞA ÇANAKKALE BÜYÜKÇEKMECE AMBARLI KARÇİMSA* KARAMÜRSEL Capacity (mt/year) 1,850,000 clinker 2,800,000 cement Capacity (mt/year) 200,000 cement Capacity (mt/year) 1,900,000 clinker 3,500,000 cement + 20 RMC plants (*) Partnership between Akçansa (51%) and Kardemir Steel works (49%) Capacity (mt/year) 577,500 clinker 1,160,000 cement LADİK Locations

10 2006 H1 Small financial crisis Strong domestic sales growth Price increase by 10% compared to Dec 2005 Clinker imports ÇNK Investment Ground Breaking Ceremony H2 Expectations Continued domestic growth Reduced exports Alternative fuel projects

11 Domestic Market Performance 1.827 H1/06 1.426 H1/05

12 Export Performance Low exports due to kiln stop and higher domestic demand 383 H1/06 H1/05 363

13 RMC Sales Performance H1/06 1.314 1.104 H1/05

14 Production Performance (PÇ 42.5)

15 Fixed Costs Decrease in fixed costs by 48% (1999 to 2006)

16 Akçansa Financial Statements Akçansa Financial Statements (2006H1 vs 2005H1)

17 Variance Analysis 2006H1 vs 2005H1 (rest K USD @ 2005Q4 pp)

18 Financial Position (2006H1)

19 Akçansa and the Community Akçansa has been selected as the biggest and the most profitable cement producer in Turkey and has been upgraded to the 71st rank in 2005. The construction of the Akçansa-Fatih Sultan Mehmet Primary School is completed, the school will be inaugurated on the 18th of September in the context of the 10th year celebrations of Akçansa after the merger. (43 classes and 1500 students)

20 Contacts Christian LeclercqCFO - AKÇ Neşe SoybaşManager - Banu ÜçerCommunication Officer - AKÇ Websites

21 Appendix


23 Akçansa Italcementi Cementir Batı Denizli NUH Bursa Italcementi Göltaş ADO LF Italcementi OYAK YİB-LF Çimsa OYSA ASKALE LIMAK Orascom Türkerler Vicat Cement Plant Grinding Mill Karçimsa OYSA ADO LFAytek YİB-LF Batı

24 Major investment in ÇNK plant Major contracts have been signed Equipment mainly will come from China, Germany and other European countries Erection and construction with local contractor Ground breaking ceremony on June 19 The clinker capacity of ÇNK plant will increase by 100 %: +1.9 mio tons Cost of investment is 135 Mio USD State-of the-art & environmentally friendly production technologies will be used

25 Total Cement Consumption

26 Ladik Acquisition 140.25 Mio USD, best bid given by AKÇANSA: –Refused by Competition Board –According to the Tender Process, has been granted to the second best bidder, i.e. Turkerler –Akçansa appealed to the decision and as of March 7, the Council of State approved the suspension order Capacity: –577 k tons Clinker –1,162 k tons - Cement Market share: 10.7% in Black Sea Region/1.5% in Turkey Technology: –Dry kiln with 4 stages preheater –Includes a Paper-bag Plant Financing: Mixed (available cash and debt)

27 GNP & Cement Consumption ’83 Nov Elections 83-87 ANAP Period Avr.GNP : 6.4 % : 15.1 % ’87 Nov Elections 88-91 ANAP Period Avr.GNP : 3.2 % : 1.2 % ’91 Oct Elections 92-95Period Avr.GNP : 4.1 % : 6.0 % ’95 Dec Elections 96-98 Period Avr.GNP : 6.4 % : 4.2 % ’99 Apr Elections 99-03 Period Avr.GNP : -0.4 % : -5.2 % ’02 Nov Elections 03-05 AKP Period Avr.GNP : 7.8 % : 9.3 %

28 * The chart on the right shows the new picture after the sale of formerly seized Uzan Plants in October AFTERBEFORE Capacity Breakdown (9.6%) (3.6%)

29 Pre-calciner investment in ÇNK plant Investment amounting to USD 4.6 mio Allowing to burn 100 % petcoke (full flexibility in fuel mix) Expected cost saving : decrease of fuel cost by 24 % per ton of clinker produced Due to the pre-calciner investment, our ÇNK plant stopped for 8 weeks, and became operational by the beginning of May 2005.

30 Environmental investments USD 18 million allocated to environmental investments between 1997-2004. Both our plants certified by BSI with ISO 14001 Envrionmental Management System. Our BÇM and ÇNK cement plants are the first plants in Turkey to receive Ministry of Environment & Forestry R134- 001 and R117-001 certificates authorizing the use of alternative fuel. –Currently tyres are burnt –Waste oil : in both plants –Expected cost saving is 3 % per ton clinker produced. (2005)

31 We started burning tyres in our BÇM plant...

32 Emission values in different countries Emission values in different countries

33 Latvia Romania Estonia Czech Rep. TURKEYHungary Slovenia Ireland Portugal Spain Greece Italy Belgium Austria Iceland Germany Finland UK Sweden France Norway Denmark Netherlands Switzerland Luxemburg 2003 Cement per capita in other countries PER CAPITA CEMENT CONSUMPTION (kg / per person) GNP PER CAPITA

34 Shift to higher strength rmc classes % Source : THBB

35 Akçansa Extended Executive Committee Cem MAY Doğan ÖZKUL Plant Manager – BÇM İlkfer AKMAN

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