Aalborg Portland Holding strengthens position as world's largest exporter and manufacturer of white cement

Aalborg Portland White A/S, a wholly-owned subsidiary of Aalborg Portland Holding (APH), has today signed an agreement with Rock Chemical Industries Malaysia Berhad (RCI) to acquire 60 per cent of the company's white cement interests that are organised within the subsidiary RCI Cement (RCI-C). The parties to the agreement have decided not to announce the price paid for the shares.

RCI-C currently produces approximately 50,000 tonnes of white cement per year. This figure represents total utilisation of the plant which is situated near the city of Ipoh, some 200 km north of Malaysia's capital, Kuala Lumpur. 50 per cent of the production is for export, mainly to Singapore and other adjacent markets.

As an integral part of the agreement between RCI and APH it has been decided to build a new 150,000 tonnes per year white cement production line which represents a total investment for RCI and APH of close to 200m Danish kroner. F.L.Smidth & Co. A/S has been assigned overall responsibility for the project of constructing the new line which is due to come on stream in the spring of 2002. F.L.Smidth & Co.'s participation in the project will chiefly comprise engineering and project management. The contract will have little effect on the estimated results of F.L.Smidth & Co. for the years 2000, 2001 and 2002.

The expansion of the cement plant will boost its total production capacity to 200,000 tonnes per year based on state-of-the-art technology that will ensure low manufacturing costs. The project will make APH, represented via RCI-C, one of Asia's leading producers of white cement. The investment is not likely to have significant impact on APH's financial results until after the expansion project is completed. Once the plant expansion is fully in place by 2002, APH's total turnover is estimated to increase by some 140m Danish kroner.

The cement plant is to serve as APH's regional centre for production and sales of white cement. Asian white cement markets are probably now
in the final phase of a recession and the coming years are expected to see rapidly growing trade.

The investment in Malaysia is part of Aalborg Portland Holding's overall growth strategy for white cement. The company's plans foresee full utilisation of the present white production capacity in Aalborg, Denmark, investment in local production in selected major regions for white cement to maintain market leadership and a stronger sales effort towards overseas customers by forming sales companies in major markets.

The investment in RCI and the current construction of a new 410,000 tonnes per year facility in Egypt combined with APH's existing production of 700,000 tonnes per year at the Aalborg plant and the company's participating interest in Lehigh White Cement Company's two plants in the USA, with a total output of 200,000 tonnes per year, will position APH as the world's leading white cement producer, representing a total production capacity of around 1.5 million tonnes per year.

FLS Industries A/S
Corporate Public Relations