Sustainable Development of Lafarge Shui On Cement

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Sustainable Development of Lafarge Shui On Cement

• Sang Kang
• CEO of Lafarge Shui On Cement
• April 2009

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Overview of Lafarge Group
Lafarge The world leader in building materials
industry.

• Leadership positions in all our businesses
• N1 worldwide in Cement
• N2 N3 worldwide in Aggregates Concrete
• N3 worldwide in Gypsum
• Operates in 79 countries
• Employs 84,000 people
• Over 2,100 industrial sites worldwide
• 19 billion in Sales (2008)
• Listed 333 on Fortune 500

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Sustainability Ambitions 2012 A Clear Strategy
for becoming a Sustainable Leader

• For many years, Lafarge has implemented an
  approach to sustainable development which aims to
  make the Group with an exemplary record for
  environmental protection, social responsibility
  and corporate governance.
• Lafarge renewed its commitment in May 2007 with
  the launch of its Sustainability Ambitions 2012,
  covering objectives in three areas, Management,
  Environment and Social Responsibility with three
  major priorities including fighting against
  global warming, biodiversity, health and safety
  of workforce.
• This approach has given rise to clear, measurable
  and ambitious objectives that the Group is
  committed to achieving by 2012.

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Sustainability Ambitions 2012

• Management
• Safety By 2008 On Track-
• achieve the target zero fatality and to join the
  best in class industrial companies.
• reduce the lost time injury frequency rate for
  Lafarge employees.
• achieve a group-wide LTI frequency rate by 50
  and having contractors working with the same
  standard .
• Customer satisfaction By 2008 On Track-
• carry out annual customer satisfaction survey by
  all significant business units .
• implement OTFIC by all significant business
  units.
• achieve 1 billion euros annual sales in new
  products. (Done)

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Sustainability Ambitions 2012

• Environment
• Reduction of CO2 Emission By 2010,
• Cut our worldwide net CO2 emissions per ton of
  cement by 20 as compared to 1990. We are at -16
  in 2007
• Cut our absolute gross emissions in the cement
  business in industrialized countries by 10 as
  compared to 1990. We are -5 in 2007
• Reduction of Dust Emission By 2012, On Track-
• Cut our dust emissions in our cement plants by
  30 over 2005-2012.
• Reduction of NOx Emission By 2012, On Track-
• Cut our NOx emission in our cement plants by 20
  over the period between 2005-2012.
• Reduction of SO2 Emission By 2012, On Track-
• Cut our SO2 emissions in our cement plants by 20
  over the period 2005-2012.

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Sustainability Ambitions 2012

• Social Responsibility
• By 2008, double the percentage of female senior
  managers as compared to 2003.
• By 2010, establish a comprehensive group wide
  occupational health program including, at a
  minimum, regular medical check.
• By 2010, extend our initiatives on HIV/Aids and
  Malaria to major developing countries where it
  operates, its best practice currently implemented
  in Africa.

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Lafarge in China

• Entered China in 1994
• Has built presence in cement, gypsum, aggregates
  concrete
• Lafarge Shui On Cement
• Lafarge Gypsum China
• Lafarge AC China
• With Over 16,000 employees in China

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Lafarge Shui On Cement

• Founded in November 2005, Lafarge Shui On is a
  joint venture between Lafarge Group and HK based
  Shui On Construction Materials Co. Ltd.
• A leader in China cement industry, especially
  southwest China with 24 million tons annual
  capacity
• Headquartered in Beijing
• 21 cement plants located across Beijing, Sichuan,
  Chongqing, Guizhou Yunnan
• Around 12,000 employees

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Sustainable Development of Lafarge Shui On
5 Priorities taken from the Group
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Developing Employees
2
Dedicating to Energy Saving Environmental
Protection
3
Growing with Customers
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5
Building Good Relations with our Communities
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Safety in Lafarge Shui OnCore Value First
Priority
1
We Aim To Be Among The Best In Class Companies In
The Industry!

• Commitment to provide a safe and healthy work
  environment
• Health and safety objectives integrated into
  management performance and systems
• Built a strong safety culture integral part of
  everyones responsibility and daily lives
• Tangibly demonstrated thru visible commitment,
  active engagement and behavior change

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Safety in Lafarge Shui On74 reduction in
accidents in 3 year time
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Five plants, Chinefarge, Shunfa, Nanshan, BFS,
Dingxiao Plant, reached a record of over 1,000
days of No Lost Time Incident.

• excluding Yunnan

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Safety in Lafarge Shui On Example Zero LTI
Incidents in Nanshan Plant for over 3 years
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• Provided systematic safety training (15.0
  hour/employee, 14.3 hour/contractor by the end of
  2008)
• Complete Management commitment - Management team
  engaged in site observation, leading safety
  training, recognizing success stories
• Strict implementation of safety roadmap
• Regular safety inspection audit
• Administration of safety hazards
• Comprehensive incident management system

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Safety in Lafarge Shui On Safety Training at All
Sites
1
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Safety in Lafarge Shui On Example of Safety
Improvement
1
Mobile Equipment management
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Safety in Lafarge Shui On Example Safety Month
2008 Program
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June 2008, Safety Month for the Lafarge group.
Lafarge Shui On organized different activities
and programs in the plants, the BUs and the head
office with the theme I care for our safety.

• Target audience
• About 10,000 Employees involved
• Including families, contractors, partners,
  officials, and stakeholders
• Locations
• Held across a total of 16 sites 1 HQ office, 4
  BU offices and 11 plants

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Employees in Lafarge Shui OnGrowing Our Most
Valued Asset
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Our Value and Principles

• People our key to business success therefore,
  our most valued asset
• We select the best talent for the right job, in
  the right place
• We are improving the competencies of our
  employees through training and coaching
• We motivate them through performance-oriented
  reward and development systems
• We are committed to building a local team and
  talent pool

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Employees in Lafarge Shui OnExample Transfer of
Know-how
2

• Localized induction training in Chinese for newly
  integrated employees
• Professional Engineer Development Plan for young
  fresh graduates
• School Plant to transfer and share knowledge and
  technology, and for people development
• Cement Master for newly appointed plant managers
• Every employee is entitled to training for
  further development
• 165,000 training hours in total in 2008
• Investment for training programs
• 7.8 million RMB in 2008

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Employees in Lafarge Shui On Example Local
Talent Development
2
Local talents provides us the added business
advantage effectiveness in local markets,
harnessing local context and culture

• 44 12000
• Expatriates Chinese Local Staff

• 90
• of Key Management in all BUs
• Are Chinese Local Staff

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Energy Saving and Environmental Protection in
Lafarge Shui On Major Initiatives in Emission
Reduction
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• Reduction of Dust Emission
• cut our dust emissions in our cement plants by
  45 over the period of 2005-2012.
• Between 2005-2008, 76 dust emission have been
  cut.
• 38 obsolete production lines have been closed
  including all vertical and some wet lines.
• Reduction of NOx Emission
• cut our NOx emission in our cement plants by 35
  over the period of 2005-2012.
• Between 2005-2008, 39 NOx emission have been
  cut.
• Reduction of SO2 Emission
• cut our SO2 emissions in our cement plants by 20
  over the period of 2005-2012.
• Between 2005-2008, 60 SO2 emission have been
  cut.

Lafarge Shui Ons priorities are perfectly
aligned with Lafarge ambitions and the Chinese
governments objectives.
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Energy Saving and Environmental in Lafarge Shui
On Example Waste Heat Recovery
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Significant heat generated during cement
production. Lafarge embarked on an initiative to
recover and utilize generated heat as an
alternate source of energy

• 4 plants are operating with Waste Heat Recovery
• Nanshan Plant (Chongqing), Gongxian Plant
  (Sichuan), Kaiyuan Plant (Yunnan) Dujiangyan
  Plant (Sichuan)
• 1 further plants to start within a year
• Dujiangya Plant (Sichuan) Special Plant
  (Chongqing)
• Invested an average of 60-90 Million RMB per
  plant
• Each WHR reduces CO2 emission 70,000t-90,000t per
  year

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Energy Saving and Environmental in Lafarge Shui
On Example Use FGD Instead of Natural Gypsum
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To preserve natural resources, Lafarge Shui On
has adopted many new technologies to use
alternative raw materials. Among of them, FGD,
the bi-product of power plant has been used in
all plants as the substitute for natural gypsum

• All the plants have adopted FGD as the additives
  to clinker
• To save 260 Kt per year of natural gypsum

FGD Storage
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Energy Saving and Environmental Protection in
Lafarge Shui On Example Operation optimization
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Reliability and Utilization Factor of dry kilns
have been improved progressively because of the
implementation of Lafarge Advance Program and
Quick Win Integration of Shui On new plants.

• On Reliability and Utilization, from 2006 to
  2008, the dry kilns
• Utilization Factor has improved from 69.1 to
  73.6, representing 19 more days operation
• On energy saving, from 2006 to 2008
• 8845 tons of Standard Coal savings or 22 000 tons
  of CO2 saved
• 20 Gwh savings on electricity

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Energy Saving Environmental Protection in
Lafarge Shui On Example Dujiangyan Quarry
Rehabilitation
3

• Investment achievements ( 2002-2008)
• Vegetation restoration
• About 167,791 m2 vegetation has been restored
• About 852,900 RMB investment
• More than 99,504 plants in over 10 species
• Soil and water conservation
• About 6 Million RMB investment on the related
  facilities, such as drainage system, side-slope
  protection net, etc.
• Assessment made by independent 3rd party on a
  regular basis

Lafarge Shui On is aligned with Lafarge standard
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Customers in Lafarge Shui OnBuilding
Relationships, Meeting Needs
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• We aim to be the preferred supplier for our
  customers. Working with them to convey and
  fulfill our sustainability vision.

• Our commitment to customers
• Our mission is to provide the construction
  industry with products, systems and solutions
  that are the most reliable, innovative and cost
  effective
• We understand customers expectations
• Durability
• Safety
• Effect on the environment
• Ease of application minimization of waste
• Value-added service
• We set sustainability ambitions for customer
  relationships
• Carry out customer satisfaction survey every
  year

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Customers in Lafarge Shui OnMemorable Projects
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New CCTV Building
National Stadium
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Customers in Lafarge Shui OnMemorable Projects
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Chaotianmen Bridge (Chongqing)
Chengdu Shangri-La Hotel
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Relationships with our communities in Lafarge
Shui OnA Multi-faceted Partnership
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• With local communities
• More than 1 million RMB on donation/sponsorship
  programs since 2007
• 15 million donation for 5.12 Earthquake
• 1 million RMB invested on providing training to
  enhance employability
• With media officials
• Various programs to enhance the mutual
  communication such as plant visit
• Experience/expertise sharing
• With partners, 3rd party suppliers, employees
  their families
• Various programs to enhance the understanding of
  Lafarge culture such as Open Day
• With NGOs
• Actively working with WWF, CBSCD, GBC and Marie
  Stope for environmental protection programs and
  fighting against HIV/Aids

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Relationships with our communities In Lafarge
Shui OnExample Relief Operation for 5.12
Earthquake
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• On May 12th, a serious 8-magnitude earthquake
  hit Sichuan Province. Lafarge Shui On started
  professional crisis management immediately and
  made significant contribution on the relief
  operation.

• Donation
• 10 million RMB to Dujiangyan City 5 million RMB
  to Mianyang City
• Internal donation for earthquake-affected
  employees exceeds 600,000RMB
• Support local communities
• Support over 4000 people in Jiangyou of Mianyang
  and in Dujiangyan with food, water and temporary
  shelters
• 100 employees working with the local rescue team
• Provide production equipment to the local rescue
  team
• Post-disaster reconstruction
• Resume production within one month
• Build up a Lafarge Home Campus of 321 new
  temporary houses for affected employees

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Relationships with our communities in Lafarge
Shui OnExample Relief Operation for 5.12
Earthquake
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Relationships with our communities in Lafarge
Shui OnCreating Sustainable Employment
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• Purpose
• Assist in providing training for the unemployed
• In collaboration with (2008)
• Labor and Security Bureau of Jiangjin District in
  Chongqing
• Chongqing Industrial and Commercial School
• Paid RMB1 million
• Total number of sponsored trainees 500
• Total number of trainees graduated thus far 236
• Rate of employment post-training 86

Lafarge Shui On will expand the program in more
locations in 2009, and dedicate the budget of 1
million RMB in 2009.
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Relationships with our communities in Lafarge
Shui OnExample Lafarge Shui On Jinfeng Kiln
Museum
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• In 1998, a series of historic kilns dating back
  from the Song Dynasty, 800 years ago, were
  discovered during the construction of Lafarge
  Dujiangyan Plant, in Sichuan Province. To protect
  the valued historic heritage, Lafarge stopped
  construction, restored the relics, and built a
  museum. The historic treasure is now available to
  the public in the dedicated museum named Lafarge
  Shui On Jinfeng Kiln Museum.

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Thank You