Introduction to

Houston American Cement

October 15th 2008

Perry, Georgia
 PRESENTATION OVERVIEW

• Introduction to Houston American Cement (HAC)

– Project
j History
y
– History of Votorantim and Votorantim Cimentos
• Project Location
• Overview of Cement Manufacturing
– Examples of Similar Facility
• Environment
• Quality
– Focus on Environmental Impacts and Sustainability of
manufacturing of Cement by Votorantim
• Positive Economic Impacts on surrounding community
• Georgia cement consumption and logistical advantage
• Project Investment and Timeline
• Questions and Answers
2
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 was approached h d as a possible
ibl JJoint
i tVVenture
t P
Partner
t 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
the Facility.

4
VOTORANTIM AND VOTRANTIM CIMENTOS
CORPORATE PROFILE

5
 Overview of the Votorantim Group

1918 Textile Plant 1936 Cement 1937 Chemicals 1938 Steel

1955 Aluminum 1969 Zinc 1982 Nickel 1985 Polypropylene

1989 Orange Juice

1988 Banking
B ki 1988 Pulp
P l &P
Paper

85 y
years
1997 Energy 2000 VVC
6
 Overview of the Votorantim Group

CEMENT
VC REVENUE COMPOSITION FINANCIAL PERFORMANCE

FINANCE
CEMENT Total Net Revenues
2007
15.6 US$ billion
METALS

EBITDA
2007
4.3 US$ billion

Net Revenues
(US$ billion)
2007 EBITDA
$15.6 Billion (US$ Billion)
2007
$4.3 Billion

7
 Votorantim Cimentos

Charlevoix
Charlevoix St.Marys
St.Marys
Badger
g
Badger Bowmanville
Bowmanville
Dixon
Dixon Detroit
Detroit
Votorantim Cimentos (VC) began operations over 85 years ago in Brazil.
_______________________________________
Branford
Branford
Center
Center Hill
Hill Bowmanville Plant

• VC currently
tl operates
t Cement
C t Plants
Pl t ini North
N th and d South
S th America
A i andd is
i
th
approximately the 7 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
Cement Sales in 2007)
• 2 Grinding Plants in the United States
ITAÚ DE MINAS
• 60+ Concrete Plants in the United States and Canada
– Addition of Prairie with 80+ Concrete Plants
• VC imported 1,000,000 tons of cement into United States in 2006
BRAZIL
BRAZIL
• 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
Development
l t (WBCSD) which
hi h seeks
k to
t operate
t and
d expand
d the
th cementt
industry in a sustainable manner. São
São Paulo
Paulo
– VC is committed to ISO 14000 for its Environmental Management Systems
which is recognized around the world for managing and minimizing
environmental impacts.
p
– VC promotes the use of NOSA/OSHAS safety systems at all of it plants to
insure the safest work environment for its employees.

CIMESA 8
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
(CBM, Prairie, and Prestige)
Prestige).
– Approximately 2.5 million m3
ready mix in 2007 excluding
Prairie.
– Approximately
pp y 7.6 million
metric tones of Aggregate in
2007 excluding Prairie.
• VCNA has grown from an
original size of approximately
$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 g growingg from
approximately $96 million to
close to $272 million in 2007.

9
 VCNA LOCATIONS IN FLORIDA PRESTIGE LOCATIONS

1. ALTA DRIVE

2. BALDWIN

3. MAXVILLE

4. GREEN COVE

5. ST. AUGUSTINE

6. ST. AUGUSTINE - GUNITE

7 BUNNELL
7.

8. ORMOND BCH - GUNITE

Suwannee American Cement
9. DAYTONA BEACH

10. EDGEWATER

11. OCALA - GUNITE

12. BELLEVIEW

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 - GUNITE
23.

24. PORT CHARLOTTE - GUNITE

25. FT MYERS - GUNITE

26. DAVIE - Mobile Concrete

27. WEST PALM BCH - GUNITE

28. FT PIERCE

29. FT PIERCE - GUNITE

30. MELBOURNE

31. MELBOURNE - GUNITE

10
PROJECT LOCATION

11
 HAC PROJECT LOCATION

• Plant and
limestone mine
located on
approximately
2000 acres.
acres
Houston American
Cement
• Portions of the
site have been
previously
mined.

Suwannee American Cement

Sumter Cement
Company

Existing/Proposed Votorantim
Cement Plant New HAC Project
12
HAC PROJECT LOCATION

• Project is adjacent
t existing
to i ti
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 northern
its th point
i t att th
the site.
it Thi
This
formation is ideally suited for the
manufacture of Portland Cement.

SAC

Ocala Limestone Formation

Houston American Cement
14
 HAC PROJECT DRILLING CAMPAIGN

Drilling campaign at site, with

drilling rig and sample cores
off limestone.
li t

Previously mined sections of

the site. Limestone outcrops
were mined approximately
50 years ago.

15
 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 is
manufactured.
• Cement is made from raw materials like
limestone, sand and clay.
• The cement manufacturing process C
Cement
t vs. C
Concrete
t
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 facilities.
Block f ili i
Plant Layout

Suwannee American Cement (SAC)

Branford, FL
16
17
 SUWANNEE AMERICAN CEMENT
PROCESS AREAS

Preheater

Control
Room
Clinker
Cooler Kiln Raw Mill

Finish Fuel Main

Mill Cooler Grinding Baghouse
Vent ESP

Limestone Shed

Quarry
Operations

18
19
20
21
SUWANNEE AMERICAN CEMENT
QUALITY CONTROL

22
OPERATIONAL PERFORMANCE

Suwannee American Cement

23
Suwannee American Cement is an ISO / OHSAS certified
company
p y and also an Energy
gy Star Partner.

24
Environment

25
 Florida Department of Environmental Protection
has online real time access to Continuous Emission Monitoring Data and Records.

26
Environmental Information Available
Real-time on Website

www.SuwanneeCement.com

27
Quality

28
HAC VIRTUAL MODEL

29
HAC PLANT MODEL

30
HAC PLANT MODEL

31
 ECONOMIC IMPACTS TO HOUSTON COUNTY

• Fiscal benefits include:

• Real
R lE Estate
t t Tax
T • Sales
S l T Tax

• Personal • Fuel Tax

Property Tax

• Economic benefits include:

• Employment • Operating Expenditures

• Salary & Wages

Source: Real Estate Research Consultants, Inc.

32
 FISCAL IMPACTS

2012 2010 - 2059

HOUSTON COUNTY
Real Estate Tax $601,000 $28,917,000
Personal Property Tax $130,000 $4,184,000
Sales Taxes - Construction $0 $630 000
$630,000
Sales Taxes - Operating $7,000 $440,000
Total Direct Fiscal $738,000 $34,171,000
HOUSTON COUNTY BOARD OF EDUCATION
Real Estate Tax $806,000 $38,784,000
Personal Property Tax $175,000 $5,611,000
S l Taxes
Sales T - Construction
C t ti $0 $1 260 000
$1,260,000
Sales Taxes - Operating $171,000 $11,006,000
Total Direct Fiscal $1,152,000 $56,661,000

Source: Real Estate Research Consultants, Inc.

33
 SUMMARY OF ECONOMIC IMPACTS

2012 2010 - 2059

Permanent Jobs 100* --
A
Average S
Salary
l $43 227
$43,227 --
Total Salary & Wages $3,598,000 $199,235,000
Operating Expenditures $14,332,000 $438,308,000
Construction Jobs -- 500
Construction Expenditures** -- $88,000,000
* 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

Source: Real Estate Research Consultants, Inc.

34
 OTHER IMPACTS
O 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
Communityit Goodwill
G d ill

Source: Real Estate Research Consultants, Inc.

35
GEORGIA MARKET

36
 GEORGIA MARKET SUMMARY
GEORGIA CEMENT CONSUMPTION
• Georgia population growth was
the 3rd fastest in the nation from 5,000 25%
4,484
2000-2006 now having a total 4,500 4,109 4,395
4,014 20%
population
p p of almost 10 million. 4,000
3 446
3,446 19 2%
19.2% 3 388
3,388
15%
3 368
3,368
3,500 3,065 3,120 10%
• Growth projection until 2030 is to 3,000 11.6% 5%
add 2.6 million making it the 4th 2,500
7.0% 8.6%
0%
2.0%
largest projected growth State. 2,000 1.8% -5%
1,500 -10%
• The State consumed in 2007 4.0 1,000
1 000 -10 5%
-10.5% -9 0%
-9.0% -15%
15%
million tons of cement and 15.0 500 -16.1% -20%
million cubic yards of concrete 0 -25%

• From 2006 to 2007 Georgia 2003 2004 2005 2006 2007 2008 2009 2010 2011

cement consumption decreased '000 Metric Tonnes % change

b 10% iin. L
by Long tterm
10 YRS. COMPOUND ANNUAL POPULATION GROWTH RATE
consumption forecasts are
positive as represented by the WA
MT ND
NH
VT ME

latest PCA forecast. OR

ID
MN
NY MA
SD WI
– Assumed that Georgia cement WY MI
RI
CT
RI
IA
consumption will grow at NV
NE
IN OH
PA NJ
DE
UT
approximately 5% annually after CA
CO
KS
IL
WV
VA
MD
MO
2011. KY
NC
TN
• Only 18% of all cement AZ
NM
OK
AR SC
Below Average
consumed
co su ed in Georgia
Geo g a is
s LA
MS AL GA

TX A
Average G
Growth
th
manufactured within the State. AK
FL
Above Average
HI

US +1.0%
Source: PCA 2008 37
 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
Corporations
ti (EMC
(EMCs)) serveddb by O
Oglethorpe
l th P
Power, which
hi h provide
id
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
p the fastest g
growingg segment
g of the state’s utility
y
industry. 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 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 GEORGIA
Plant MW Investment $M Start-up
Vogle (Burke Co) - unit #3 nuclear Georgia Power consortium* 1,250 $ 2,500 2016
Vogle (Burke Co) - unit #4 nuclear Georgia Power consortium* 1,250 $ 2,500 2016
Washington Co.- 850 MW coal Power4Georgians (EMC consortium) 850 $ 2,100
Longleaf - Early Co - 1
1,200
200 MW coal
coal.- Dynergy 1200 $ 2 000
2,000
Washington Co.- Biomass (Oglethorpe) 100 $ 400 2014
Biomass - no county named (Oglethorpe) 100 $ 400 2015
Biomass - no county named (Oglethorpe) 100 $ 400 2015
*Estimated Investment based MW Size 4,850 10,300
38
HAC LOGISTICAL LOCATION

39
 GEORGIA APPARENT USE OF CEMENT BY
COUNTY

• HAC’s strategic location

will provide a logistical
advantage to supply
cement for the current and
future needs.
needs 5
• HAC has direct truck 1 2
access to Atlanta market. 3
More distant markets can
be served by Norfolk and Houston American Cement
Southern rail road.

Plant 7
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
100 Miles
4 Longleaf - Early Co - 1,200 MW coal.- Dynergy
5 Washington Co.- Biomass (Oglethorpe)
6 Biomass - no county named (Oglethorpe)
7 Biomass - no county named (Oglethorpe)
6

Source: PCA 2007

40
RAIL 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.

Houston American Cement

41
PROJECT INVESTMENT AND SCHEDULE

42
 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 County
regarding its ability for future growth.
• Sufficient Mineral Reserves for approximately 100 years of
operations.
operations

SCHEDULE
• Construction schedule of approximately 22 to 24 months
upon Project Start.

43
END

44