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Cement Consumption Downturn to be Worst in Post-WWII Era

The Portland Cement Association (PCA) forecasts the severe economic weakness of the U.S. economy will have a strong impact on cement consumption and the construction industry. An expected consumption drop of 11 percent is expected in 2008, with a 5.5-percent drop projected for 2009. PCA predicts the total cement consumption for this year will be 101.

June 16, 2008

The Portland Cement Association (PCA) forecasts the severe economic weakness of the U.S. economy will have a strong impact on cement consumption and the construction industry. An expected consumption drop of 11 percent is expected in 2008, with a 5.5-percent drop projected for 2009. PCA predicts the total cement consumption for this year will be 101.7 million metric tons.

A record consumption of 128 million metric tons was reached in 2005. Peak-to-trough declines in consumption will total nearly 30 million metric tons. This marks one of the worst industry downturns seen since the Great Depression.

PCA Chief Economist Edward Sullivan says this is part of a four-year trend with factors such as high fuel prices and slow job creation and tight lending standards all playing a part. Sullivan anticipates that harsh residential conditions will continue to act as a significant drag on cement consumption, and the nonresidential sector will also see large declines for the next two years.

"Although it grew nearly 11 percent in 2007, nonresidential construction spending is expected to fall almost 8 percent in 2008 and another 12 percent in 2009," Sullivan said. "Nonresidential construction is closely tied to economic activity. As the economy softens, the expected return on commercial investments decline, reducing the incentive to build and expand."

An additional slowdown in public construction, which accounts for nearly half of total cement consumption in the United States, is predicted for 2009 and will continue through 2010.

Lafarge Acquires Cement Terminal

Lafarge announced mid-May that it has completed the purchase of a cement terminal in Memphis, Tennessee, from Angelle Concrete Products Group LLC, based in Louisiana and known locally as Memphis Cement. The acquired President's Island Cement Terminal and its employees will be consolidated into Lafarge Cement's River Business Unit operations.

With its many distribution assets and strong, growing economy, Memphis serves as an important transportation hub and regional center for the tri-state area of Tennessee, Mississippi and Arkansas. The addition of the President's Island Terminal to Lafarge's current Memphis terminal on Henry Street will help ensure reliable logistics service for meeting increased demand of both pure Portland and Portland blends, such as MaxCem, a high performance blend of Portland and slag cement.

"This acquisition will significantly improve Lafarge's ability to expand its customer base and service our customers in this area by improving product availability and delivery times," said Olivier Merindol, president of Lafarge's River Business Unit Cement operations. "This is part of our long-term strategy in North America to build an efficient, flexible and low-cost distribution network. It will allow Lafarge to strengthen our competitive position in the Memphis market."

The acquisition of the terminal in Memphis complements Lafarge's previously announced launch of a project to modernize its Joppa, Illinois, cement plant in the United States. This 2-million-ton plant will start up at the end of 2010.

Lafarge is a leader in building materials including businesses in Cement, Aggregates & Concrete and Gypsum. Lafarge North America Inc., a Lafarge Group company, is the largest diversified supplier of residential, commercial, institutional, and public works construction materials in the United States and Canada.

Bay St. Louis Bridge Opening Re-celebrated at BridgeFest

The Mississippi Department of Transportation (MDOT) and the city of Bay St. Louis are hosting 2008 BridgeFest. The celebration will commemorate the one-year anniversary of the opening of the Bay of St. Louis Bridge.

In May 2007, the opening of the Bay of St. Louis Bridge on the Mississippi Gulf Coast marked a milestone in Katrina recovery. The Hancock County Chamber of Commerce spearheaded another event this year, working in concert with the Mississippi Department of Transportation to unveil a national public art project — the Bay Bridge ArtWalk.

The 2008 BridgeFest was held in May and featured an unveiling of new bronze plaques designed by local artists and sculpted by local artisan Greg Moran that will adorn the bridge's magnificent new pedestrian and biking walkway.

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