1 intercement RelatóRio anual 2010 perfil corporativo intercement annual report 2010 report annual intercement annual report 2010 CReDitS General Coordination executive Committee Coordination of Internal Communication Fernanda Guerra Editorial Production tV1 Conteúdo Photos arquivo intercement Futura Press (cover and pages 2, 10, 14, 33, 37, 48 and 56) Ricardo Correa (pages 6, 30, 46 and 59) Printing Burti InterCement INTERCEMENT PARTICIPAÇÕES S/A IS THE NEW HOLDING OF THE CAMARGO CORREA CEMENT BUSINESS GROUP InterCement Brasil S/A is the new company name of Camargo Corrêa Cimentos S/A. This change was followed by the creation of InterCement Participações S/A, the holding company for the cement business, which will bring together InterCement Brasil S/A, the Argentinean Loma Negra and other international stakeholders. The aim of the changes is to meet the strategy of making the Company one of the 20 largest cement producers in the world by 2012. ImPORTANT: Throughout this Report, information and results ascertained in 2010 by Camargo Corrêa Cimentos and its subsidiaries are presented, already under the new company name InterCement. 2 InterCement 2010 ANNuAL RePort COrPOrAte PrOfIle 3 InterCement 2010 ANNuAL RePoRT COntentS 4 ouR CoRPoRATe PRoFILe 10 MeSSAGe FRoM MANAGeMeNT 12 HoW THe CeMeNT MARKeT WoRKS 16 ouR BuSINeSS MANAGeMeNT PeRFoRMANCe 22 42 HoW We PRoDuCe HoW We STRuCTuRe ouR BuSINeSS 26 47 HoW We MARKeT HoW We MANAGe ouR RISKS 29 48 CIMPoR ouR SKILLS 30 51 ouR STRATeGY AND CoMPeTITIVe ADVANTAGeS ouR VISIoN oF SuSTAINABILITY 32 55 WHeRe We ARe INVeSTING HoW We eVALuATe THe BuSINeSS PRoSPeCTS 36 56 ouR FINANCIAL PeRFoRMANCe CoRPorate INFormatioN 4 InterCement 2010 ANNuAL RePort COrPOrAte PrOfIle 5 With growing results in the cement market over the tional practices and is a signatory of the Cement Sus- ouR CoRPoRATe PRoFILe years and in line with the expansion of InterCement tainability Initiative (CSI), the cement production arm domestically and internationally, the parent compa- of the World Business Council for Sustainable Devel- ny Camargo Corrêa S/A acquired in 2010 about 33% opment (WBCSD). As a Benchmark in Co2 emissions, stake in the Portuguese cement company named InterCement invests in renewable energy and also To meet the strategy of sustainable accelerated IN BRAZIL, Cimpor, which operates in 12 countries, including Bra- participates in the Climate Agenda prepared by the growth and become by 2012 one of the largest INTeRCeMeNT oWNS zil, whose transfer to the new holding InterCement Camargo Corrêa group, which lists nine commitments THe BRANDS CAuÊ & cement producers of the world, with strong inter- CIMeNTo BRASIL Participações is in progress, becoming its largest indi- to the reduction and mitigation of the Greenhouse ef- national participation in emerging countries, the vidual shareholder. fect Gases (GHGs). shareholders of Camargo Corrêa S/A and its parent The changes and results achieved in recent years company Camargo Corrêa S/A, promoted a partner- prove the success of the strategic sustainable proj- INTeRCeMeNT’S HoLDING ship restructuring in December 2010, which culmi- ect, which seeks to generate value for its stakehold- CoMPANY - CAMARGo CoRRÊA nated in the formation of a holding for the cement ers in the short, medium and long term. Repeating S/A - ACQuIReD IN 2010, NeARLY 33% oF THe SToCK SHAReS business, named InterCement Participações S/A. the performance of previous years, InterCement oF PoRTuGUESe CeMeNT Furthermore, in deliberation of April 30, 2011, its closed the year with the expansion of its market PRoDuCeR CIMPoR, WHICH company name was amended from Camargo Cor- Dedicated to mineral extraction and production share, volume and revenue. oPeRATeS IN 12 COUNTRIeS rêa Cimentos S/A to InterCement Brasil S/A. of cement, concrete and aggregates, InterCement Committed to the principles of sustainability, Inter- AND BeCAMe ITS LARGeST The new holding InterCement Participações S/A will currently controls one of the largest cement com- Cement guides its actions based on the best interna- INDIVIDuAL SHAReHoLDeR have under its umbrella InterCement Brasil S/A, the Ar- plexes of South America, with capacity to produce gentinean cement producer Loma Negra and strategic 16 million tons of cement per year. It has consoli- participations in other companies linked to the sector. dated business units in Brazil and Argentina, trade InterCement Brasil S/A, the new name of Camargo Cor- operations in Bolivia and in Paraguay, and holds a rea Cimentos S/A is a privately held domestic company, concession for a railroad in Argentina, known as based in São Paulo and established in 1967, which has Ferrosur, more than 3000 km long, which transports 99.9% of its shares owned by Camargo Corrêa S/A, the raw materials, finished products and other goods. group’s holding company. InterCement has seven manufacturing plants in Brazil, which directly employ more than 2000 IN BRAZIL, INTeRCeMeNT professionals, and nine other plants in Argentina, HAS SeVeN PLANTS, where they have more than 2,700 employees at WHICH eMPLoY MoRe work. The plants employ over 2,800 professionals in THAN 2 THOUSAND an outsourcing scheme. With the Cauê and Cimen- PROFESSIONALS, AND to Brasil brands, it ranks third in the Brazilian market NINe oTHeR PLANTS and is the fifth largest concrete producer in Brazil. In IN ARGeNTINA, WHeRe Argentina, the subsidiary Loma Negra is the market MORE THAN 2,700 leader. Among other businesses, InterCement also ASSOCIATES ARe participates in the Palanca Cimentos project, which IN ACTIVITY is constructing a plant in Angola. TRuCKS TAKe THe oRe eXTRACTeD FRoM THe MINeS uP To THe PRoDuCTIoN uNITS 6 InterCement 2010 ANNuAL RePort COrPOrAte PrOfIle 7 ouR BACKGRouND NeT ReVeNue (R$ millioN) 2,474 2,362 2,042 1,598 1,481 923 680 580 624 503 423 302 200 150 1968 1991 1993 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Foundation of Inauguration of Inauguration of Acquisition of CCI comes to All the plants of Shareholders Start-up of Inauguration Raises capital Acquisition of Joint venture Acquisition of Acquisition of entry into Shareholders In April 2011, Camargo Côrrea the 2nd line in the Bodoquena Cimento Cauê be known as the Company agreement to concrete of Ijaci Plant - with issue of Loma Negra, with equipav the totality of CIMeC mill in aggregates agreement to build the company Industrial (CCI) the Apiaí plant - plant - Capacity with plants in Camargo Corrêa receive create Yguazú operations Capacity of 2.0 debentures leading company Group for CBC’s shares Suape - Pe – market in plant in Angola name of Capacity grows of 0.8 MMt Pedro Leopoldo Cimentos certification ISo Cementos MMt in Argentina - operation from equipav Capacity of 0.3 Argentina with (Palanca Cimentos) Camargo Corrêa to 1.3 MMt and in Santana 9001 (Paraguay) Capacity of 7.0 of concrete Group, thus MMt acquisition of - Capacity of 1.6 Cimentos S/A 1974 do Paraíso, both MMt business holding 100% of La Preferida de MMt was amended Inauguration of in MG - Capacity estabilishing its equity olavarría S.A. to InterCement the 1st Plant in of 1.2 MMt the Companhia Acquisition of Brasil S/A, a Apiaí - Capacity Brasileira de Start of construc- approximately 33% deliberation of 0.8 MMt(*) Concreto (CBC) tion of a plant of Cimpor that marks the in Paraguay - beginning of a Capacity of 0.4 new phase of MMt the company’s expansion (*) MMt (millions of tons) 8 InterCement 2010 ANNuAL RePort COrPOrAte PrOfIle 9 mISSion Act in the cement industry’s value chain in a sustainable way, with innovation and excellence in management committed to customer needs and fulfillment of people, generating value for shareholder and respecting the environment and the communities that directly or indirectly have to do with our company. VISIOn Be one of the 20 largest cement companies in the world by 2012. VAlUeS respect for people responsible action transparency Quality and innovation and the environment Comply with established Provide clear and Assure customers of the Always act in a correct laws of the countries and comprehensive information best possible quality in and fair way towards its regions where it operates; about activities, the execution of services shareholders, professionals, match the values defined achievements, policies and or provide products VIEW OF THE CEMENT PRODUCTION PLANT IN IJACI/MG customers, vendors, herein; act uprightly and performance in a systematic and continually invest governments, communities according to the universal and accessible manner. in the enhancement and society in general. standards of human of their activities and Act responsibly toward coexistence, without focus on results their professionals. the environment. prejudice to race, sex, Always seek to maximize OUR CORPORATE STRUCTURE camargo corrêA S.A. (CCSA) creed, religion, position, performance in order The cement business is comprised of a holding, function or other . to ensure its survival, its investments, returns to named InterCement Participações S/A, created by intercement participações S.A. CIMPOR shareholders and appropriate the Camargo Corrêa Group, which owns 99.9% of 33% conditions for professionals. its preferred shares and common shares. InterCe- intercement BRASIL S.A. ment Participações controls InterCement Brasil S/A 99.90% OUr PerfOrmAnCe is a publicly held company that owns direct partici- loma NEGRA C.I.A.S.A. ReSuLT INDICAToRS 2004 2005(2) 2006 2007 2008 2009 2010 % 2009/2010 pation in three cement companies in Latin America, 94.53% Gross income (R$ million) 898 1,187 1,901 1,946 2,660 3,036 3,132 3.0% three Brazilian power dams and a holding company. COFESUR (Ferrosur)/ Net income (R$ million) 624 923 1,481 1,598 2,042 2,362 2,474 4.7% RECycomb/LA preferida DE eBITDA (%) 245 305 456 400 420 641 616 -3.8% WHERE WE WORK OlavarríA 80% Margin eBITDA (%) 39 33 31 25 21 27 25 -2 p.p.