The positive outcome late last year of the Extraordinary General Meeting of PT Semen Cibinong Tbk. opens the door for Holcim to increase its present minority shareholding of 12.5 percent in Indonesia's third-largest cement manufacturer to approximately 75 percent. The contract is due to be completed once final regulatory approval has been granted. Given its existing network of shareholdings in the region, Holcim with this latest investment stands to consolidate its leading position in the cement sector in the ASEAN countries.

The Extraordinary General Meeting was preceded by long and complex negotiations with Cibinong's principal creditors to restructure a total of US$1.2 billion debt. Holcim has provided the company with considerable support in this area since June 2000.

Cibinong shares will continue to be listed on the Jakarta stock exchange. Holcim's fellow shareholders include major creditors and other minority shareholders. The restructured company will have equity of around US$500 million and debt of approximately US$ 300 million. Holcim is investing around US$90 for every tonne of annual cement capacity. Now that its debt has been restructured, Cibinong is well placed to fully benefit from an economic recovery in Indonesia.

Construction activity collapsed as a result of the 1997/1998 Asia crisis, with demand for cement falling by more than 30 percent. Since then, the construction sector has begun to recover. Cement consumption is continued to rise — by an unexpected 15 percent — in 2001 and should reach pre-crisis volumes again in 2002 or 2003. At current capacity utilization of around 60 percent, Cibinong has the necessary room to maneuver and grow within the market.

Cibinong has two highly efficient cement plants on the main island of Java. The plants have a combined annual capacity of just under 10 million tonnes, making it a major cement manufacturer in the country's key central market. Cibinong estimates its total domestic deliveries at around 3.5 million tonnes in 2001. This year the company will also export some 2 million tonnes to other markets, especially in Asia.