1. OCT 2012 UPDATE Cement Sales for the Second Quarter of 2012 Dr Johan Snyman STELLENBOSCH 3 October 2012

2. Preamble As you probably know, the Competition Commission has ruled that the Cement & Concrete Institute (C&CI) may no longer publish monthly cement sales data. Henceforth, the C&CI will provide the data only on a quarterly basis, with a three-month lag. Thus, the data for Apr, May and June only become available in early Oct 2012. Today, C&CI provided data for the second quarter of 2012. The next data release is scheduled for 3 January 2013. We have interpolated the data to yield monthly values. It is known that the Competition Commission is there to encourage competition in the South African economy. The embargo on cement sales data will have precisely the opposite effect and lead to greater economic inefficiencies because all participants will be faced with greater uncertainties in production and marketing. MFA strongly opposes this short-sighted decision of the Competition Commission and has raised the issue with the Cement and Concrete Institute, as well as the SA Reserve Bank that uses cement sales data to calculate Gross Domestic Capital Formation (Investment), one of the most important components of Gross Domestic Product.

3. Cement sales data for the second quarter of 2012 Cement sales in the second quarter of 2012 grew by 7% relative to the second quarter of 2011 (First graph) On a year-on-year basis, the (smoothed) Annual Percentage Change was 7%, down from 10% in Dec 2011. Thus, the growth rate in cement sales is slowing down, in accordance with several other economic indicators(Second graph) The third graph shows the cyclical movement, still below the long- term trend. Sales grew by 3.2% overall during 2011. In our fourth graph we compare the annual percentage change in cement sales with the annual percentage change in the average of the time series Total Building Plans Passed and Total Buildings Completed. The fit looks pretty good, keeping in mind that cement is also sold into the construction works market (not reflected in either BPP or BC)

6. Observe that the average during the first half of 2012 is still 32% higher than the average in 1998/2000, but -21% below peak sales recorded in 2007

8. Thanks for your attention … any questions? Please contact … Johan Snyman mfa@iafrica.com