#1PPC SUR BUILDING PPCI Darryll Castle - CEO Tryphosa Ramano - CFO Pepe Meijer - MD International Busi Legodi - CEO CIMERWA PPC PPC CIMERWA INVESTOR SITE VISIT 17 18 August 2015 PPC STREN ENGTH GUAR TEE CIMERWA#2Agenda CIMERWA Context About Rwanda About CIMERWA Cement Manufacturing Questions EAT 32.5 GENERAL PURPOSE CEMENT NS ZE W LAKES CIMERWA NET WEHT APC YEARS VALUE 42.5 PREMIUM CEMENT TESTED POR YEARS CIMERWA, New packaging Same quality strength CIMERWA 30 Coming Soon. Now that is Strength beyond the bag. RWAND > Find out more about CIMERWA's new products; (@) [email protected]/ [email protected] APARTNER OF PPC CIMERWA PPC 2 2#3NMM NXNINGS ABOUT RWANDA CIMERWA PPC PPC Gu WAN STRENCY#4About Rwanda CIMERWA PPC • Rwanda is a landlocked country situated in central Africa, known as 'the land of a thousand hills' • Rwanda has five volcanoes, twenty-three lakes and numerous rivers, some forming the source of the River Nile • The country lies 75 miles south of the equator in the Tropic of Capricorn, 880 miles 'as the crow flies' west of the Indian Ocean and 1 250 miles east of the Atlantic Ocean - literally in the heart of Africa • Rwanda is bordered by Uganda to the north, Tanzania to the east, Burundi to the south and the Democratic Republic of Congo to the west • The Volcanoes National park is world famous for mountain gorillas, while Lake Kivu to the west offers beautiful beaches, jutting peninsulas and an archipelago of islands 0 RWANDA National capital Lowa 23°37 3000 UGANDA Kafunzo Kaghumba 30307 Morama 3100- 1.00 RWANDA Lake Majan 1730 UNITED REPUBLIC OF TANZANIA Profecture capital Lake Mulands o Town, villago Like Baryonyl Awamhasha Airport, airstrip Rutshuru Koro International boundary Cyanika Lubirizi Kabalo Nyagatare Provincial boundary o BIRUNGA Kagera Muvumba Road NATL PARK Kidaho Katunso Track Barera Ruhangari ad 30 la Bugogo Raton Kirambo Oyamba Byumba NORTHERN Mulindi Gatunds wwwryding Gabiro Ngarama DEMOCRATIC REPUBLIC OF THE CONGO Mutura PROVINCE AKAGERA NATIONAL PARK Goma Kagalio okinia Namba Gisenyi Rushash Kinyami Nyundo Kabaya Ngaru GISHWAT NATURAL Ngororarg Nyaharon Mbogoo Murambi Shyorang 0 Rutare Muhura EASTERN PROVINCE Lac Muha Rukara 0 110 TOWN OF Bugarum RESERVE Kiyumba KIGALI WESTERN Kigali Rwamagana Gikoro o Wahu PROVINCE Funda Bulinga Kayoruza Lac Kicukiro 200 Κίνα Mabanza Gitarama Butamwa Bicumbi LAC Magenera Nuo Kigarama Kibuye o Gishyita Awamatamu Birambo 00 SOUTHERN Bugosora PROVINCE Bwakira Rilima Kibungo oofukira Lapanga Cyambwe Masango Ruhango Gashora Sako Rusumo Bara Gatagara Kaduhao Nyanza Nganda Namba о Kiraho Kagera Pwasaro Karabao Rusatira Kamombo Gakura Gikongoro Cyohoha Sad Lac Rwer Karama 230 Bukavu 6Cyangugu Cyimbogoo Piwumba Kitabi Carongora Nyakabu Bugumya NYUNGWE NATE PARK Butarg Ruramba Gisagara BURUNDI Busoro Bugarama Muninio Runyombyi The boundarie and nama ahown and the designation on that map do not imply offical andorsement of acceptance by the United Nationa 2900 Map No. 717 F 10 UNITED NATIONS Jan 2008 9000 Lake Bongo 200- 230- 40 50 km 30 m 3050 Department of Field Support Cartographic Section 4 Source: Rwanda Development Board#5About Rwanda CIMERWA Rwanda Gross Domestic Product • Rwanda's economy expanded by an average of 6.9% from 2010 - 2014 • The country is expected to grow at 7% 8% p.a. in the medium term 10.00% 8.00% Agriculture accounts for a third of Rwanda's GDP 6.00% 4.00% 2.00% 0.00% 2010 2011 2012 MERWA • It constitutes the main economic activity for rural households (especially women) and remains their main source of income • The sector meets 90% of the national food needs and contributes significantly to the country's export revenues • Rwanda came 32nd out of 189 countries in the 2014 Word Bank Doing Business Report • It takes 6 working hours to register a business • Rwanda is the most competitive place to do business in East Africa and 3rd in Africa (WEF-Global Competitiveness Index Report 2013- 2014) 2013 2014 2015f 2016f 2017f 2018f 2019f 2020f 27% 7% 4% .33% L2% 5% 1% 8% 14% Agriculture, Forestry & Fishing (33%) Manufacturing (5%) Construction (8%) Transport (4%) Services (27%) Mining & Quarrying (2%) Industry (1%) Wholesale & retail trade (14%) Real Estate (7%) Source: NKC Research, Rwanda Development Board, National Bank of Rwanda, IMF 5#6About Rwanda • Rwanda has seen an increasing share of mining exports such as coltan (tantalite) and tin • These have started surpassing traditional exports like coffee and tea • Despite this, Rwanda continues to record a trade deficit of over $1.3 billion • The country's balance of payments is driven largely by the merchandise trade account as well as transfers (predominantly donor) • In 2014, Rwanda recorded a current account deficit of ~10.5% of GDP • This is expected to stabilise to ~4% of GDP in the medium term ⚫ The deficit is expected to be comfortably financed by FDI, however the country's narrow export base and reliance on aid-flows does make it susceptible to external shocks ⚫ Fitch and S&P both have the country's credit rating at B+ with stable outlook 700 000 000 600 000 000 500 000 000 400 000 000 300 000 000 200 000 000 100 000 000 160 000 000 140 000 000 120 000 000 100 000 000 80 000 000 60 000 000 40 000 000 20 000 000 CIMERWA Imports (USD), 2013/2014 Food products Consumer Industrial Construction Goods Products Materials Fuel Capital Goods 2013 2014 Exports (USD), 2013/2014 Coffee Tea Cassiterite (Tin) Coltan Other 2013 2014 6 Source: NKC Research, Rwanda Development Board, National Bank of Rwanda#7About Rwanda Human Development Index CIMERWA Year Life expectancy at birth Expected years of schooling GNI per capita (2011 PPP$) HDI Value 1980 48.0 4.9 892 0.291 1985 49.4 5.5 899 0.312 1990 32.6 5.7 832 0.238 1995 31.3 6.3 682 0.230 2000 47.7 7.3 739 0.329 2005 55.2 8.3 959 0.391 2010 62.3 9.5 1 238 0.453 2013 64.1 13.2 1 403 0.506 PPC • The Human Development Index (HDI) is a summary measure for assessing long-term progress in three basic dimensions of human development: . a long and healthy life • access to knowledge • a decent standard of living • Rwanda's HDI value for 2013 is 0.506— which is in the low human development category-positioning the country at 151 out of 187 countries and territories • Between 1980 and 2013, Rwanda's HDI value increased from 0.291 to 0.506, an increase of 74% • Rwanda's 2013 HDI of 0.506 is above the average of 0.502 for countries in Sub-Saharan Africa • In 2013, the average life expectancy in sub-Saharan Africa was 56.8 years with 9.7 years of expected schooling Source: United Nations Development Programme, 2014 7#8About Rwanda CIMERWA Table 15: Distribution of young people by highest level of education attended by sex and area of residence (%) Level of education Male Urban Female Both sexes Male Rural Female Both sexes Male Total Female Both sexes No 4.3 4.6 4.5 12.9 14.8 13.9 11.4 13.2 12.4 education Preschool 0.3 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Primary 44.4 42.6 43.6 65.5 65.3 65.4 61.3 61.4 61.4 Post-primary 0.3 0.2 0.2 0.2 0.1 0.2 0.2 0.1 0.2 Secondary 36.1 37.8 36.9 18.5 17.8 18.1 22.0 21.3 21.7 University 13.6 13.5 13.5 1.8 0.9 1.3 3.9 2.7 3.3 Not stated Total 1.0 100.0 1.1 1.0 100.0 407,032 0.8 100.0 0.8 0.8 0.8 0.8 0.8 1,594,586 100.0 3,321,201 100.0 100.0 Count 438,544 100.0 845,576 100.0 1,726,615 100.0 2,033,130 2,133,647 4,166,777 Source: Fourth Rwanda Population and Housing Census. Notes: (1) Base population: resident youth population (ages 14-35). • Of the ~11 million population of Rwanda, 40% are youth (aged 14 - 35 years); 53% of the urban Kigali city population are youth (of which, 79% are migrants into Kigali) • A larger share of urban than rural young people attended secondary school and obtained a higher level of education • 84% of young people between 15 and 24 are literate • Youth unemployment is higher in urban areas (9%) than in rural areas (3%), and is at 4% country- wide Overall, the current percentage of the population living in urban settlements is about 15%, and this number is expected to increase to 35% by 2017 • More urban settlements will need to be developed as well as secondary cities in combination with Kigali • An estimated 450 000 dwellings are required in Kigali (at an average 10 tons of cement per dwelling) Source: Rwanda Development Board, National Institute of Statistics of Rwanda, 2014 8#9CATERPILLAR ABOUT CIMERWA PPC PC STRE GUP NG#10About CIMERWA CIMERWA was commissioned in 1984 by governments of Rwanda and China ⚫ In 2001, the plant's capacity was increased from 50 000 to 100 000 • The business was privatised in 2006 and PPC purchased it's 51% stake in 2013 • Construction on the new $170 million, 600 000 ton per annum plant commenced early in 2013 By June 2015, civil construction, mechanical erection and electrical installations were complete • Cold commissioning commenced in March 2015 • Hot commissioning of the limestone crusher was completed in April 2015 • Hot commissioning of the raw mill was completed in May 2015 • Kiln light-up was completed in mid-June 2015 with the first clinker produced at the end of June 2015 • The provisional acceptance certificate is expected by the end of August 2015 CIMERWA PPC RS EAS 18-1: 2004 COMPOSITE CEM 11/B-M 32.5N PORTLAND CEMENT LAKES 32.5 GENERAL PURPOSE CEMENT OVER 30 YEARS CIMERWA CIMENTERIE DE MARITZA PO BOX RWANDA NET WEIGHT 50 kg PPC 15 EAS 18-12004 POZZOLANA CIVETIME LI PORTLAND P R NA CEMENT OTH 42.5 OVER 30 YEARS CIMERWA СМИНТЕЛЕЕ МАЗИУСТА POMOCYANO RWANDA ETWEIGHT S PPC CIMERWA has successfully moved from running a 100 000 tpa, wet feed kiln system to a state-of-the-art, five stage preheater calciner that can produce 600 000 tpa of cement – Now, a regional player - 10#11About CIMERWA Anticipated input costs: steady state Key cost components Fixed Depreciation Overheads Staff costs Key cost components Variable Electricity Proportion of cost of sales 18% 7% 5% Proportion of cost of sales Gypsum Maintenance Paper bags Thermal energy* Other PPC . • Key differences between typical SA and Rwanda costs • Delivered product in SA (~25% of costs) Electricity over 2 times more expensive than typical SA plant Thermal energy about 6 times more expensive than typical SA plant - coal from Southern Africa via Mombasa (Kenya) to Rwanda Gypsum about 6 times more expensive than typical SA plant - brought in by road from Kenya, about 1500 km away Paper bags imported from North Africa Currently employing 215 permanent staff, set to rise to 220 permanent staff as new plant ramps up . 23% of staff involved in cement operations - kilns and mills 21% involved in administration, HR as well as Sales and Marketing 19% 9% 4% 9% 26% • 8% of staff working in the laboratory 4% • 18% other involved in various functions 20% of staff in the engineering department . 10% of staff involved in mining and quarrying * Thermal energy is a combination of coal (50%), peat (40%), charcoal (5%) and heavy fuel oil (5%) 11#12About CIMERWA Kiln heat consumption of 3.51 MJ/kg clinker Currently making use of generators provided by Rwanda Energy Group but will connect to national grid in the medium term • Retail prices of cement: $240 - $290 per ton • Retail price = Factory gate price • + VAT (18%) • + distribution costs (18%-22%) • + retailer margin (~3%) ⚫ EBITDA Margin guidance of 30% - 35% . $94 million project funding consisting of US dollar (63%) and Rwandan francs (37%) ⚫ The USD denominated debt bears interest at 650 basis points above LIBOR and is repayable over a ten year period (2+8) The RwF denominated debt is at a fixed interest rate of 16% p.a. and is repayable over a ten year period (2+8) • Taxation: . Capital allowances 50% allowance on first year of production, thereafter the balance over 20 years Import and customs duties - exemption of importation of plant and machinery; savings of ~5% Depreciation in line with PPC group policy CIMERWA KONKA Building Rwanda success story one partnership at a time Now that be CIMERWA PPC 12#13Route to market CIMERWA's main target market is Rwanda, with Kigali the main consumption node accounting for approximately 55 - 65% of local demand CIMERWA Cement consumption & GDP (forecasts) 900 000 9% 800 000 • Target export markets of Burundi as well as south Kivu and north Kivu in the eastern DRC 700 000 8% We expect exports to contribute ~30% of total sales volume in the long-term 600 000 500 000 7% • Our local cement will initially be sold at the factory gate whilst we evaluate the business case for deliveries, mainly to Kigali 400 000 300 000 6% 2015 2016 2017 2018 2019 2020 • For this purpose we will be implementing a management platform to control the planning and execution of logistics • This platform will enable CIMERWA to effectively penetrate its main target market, and to optimise its cost to serve as well as inbound logistics • A combination of contracted and ad-hoc vehicles will be used; this is an opportunity to capacitate the Rwanda transport industry • All exports are expected to remain on a collect basis • Whilst the current business model assumes bagged product sales only, we are excited about the near- future prospects of delivering a bulk solution to the industrial and construction segments in Kigali 13 000 000 12 500 000 12 000 000 11 500 000 11 000 000 10 500 000 Cement consumption (tpa) GDP growth % (rhs) Cement consumption per capita (forecasts) 13 500 000 70 65 60 55 55 50 45 40 2015 2016 2017 2018 2019 2020 Population •Cement consumption per capita (kg) - rhs Source: IMF, Cemnet and PPC calculations 13#14Competitive landscape Danang Kisangani Pene Tungu Ubundu 1 National Park N31 Kindu Réserve de Faune a Okapis N27 Réserve de faune à okapis N4 N31 Parc National de la Maiko Interlacs (Heidelberg) CIMERWA Uganda Moroto N4 Beni A109 Kampala Jinja Kai Butembo Kasese о Entebbe Parc National Des Viru ARM N2 Biega Nato Buceco Go Hima (Lafarge Holcim) Kisoro Rushenyi Ruhenner Nyagatare Rwanda 8182 Butare AN12 Burundi N31 Bujumbura N2 ANT Reserve de Faune NS Reserve Nationale d'itombwe Kwanga Lubao N2 Kitenge Kasongo Interlacs (Heidelberg) Kigoma ° Kazuramimba Kongolo Kabalo Kalemie NS Mbale Kilait ° Tororo 104 Kisumu 0 Migori Tarime Bukoba Musoma CIMERWA Sanghi Namunyak Wildlife Conservation Trust Nanyuki Nakuru Nyeri Olenguruone A 104 Bosta Makuyu Nairobi о Mwanza Serengeti National Park Ngorongoro Conservation Area Athi River Kenya Me National (Simba) Bamburi (LafargeHolcim) Mombasa Savannah EAPCC ARM Garissa PPC Liboi Dadaab A 104 Tsavo East National P Mtito Andei Bamburi (LafargeHolcim) Mombasa ARM Lamu beketoni Malindi atamu Uyovu Karatu Arusha Tsavo West National Park Marangu Voi Maswa Game Reserve Ushirombo A23 Shinyanga Usangi Samb Mombasa Kigosi Game Reserve Moyowosi Game Reserve Tabora Haidom Tanga (Afrisam) ARM A14 Iguguno Lushoto Singida Kondoa Tanga TPCC (Heidelberg) Lake Cement Nungwi Kilimanjaro Pa Sikonge Itigi Manyoni A14 Ugalla River Gan zibar Dodoma Mpanda Mbeya (LafargeHolcim) Mpw oogle+ Tanzania Kizige Game Reserve Mtwara (Dangote) Dar es A104 Killosa Morogoro Kirungu Katavi National Park Hos نجو 14#15CEMENT MANUFACTURING PPC PC GUP STRENGT#16Cement manufacturing process quarrying limestone crushing limestone secondary additives CIMERWA raw mill storage and prehomogenization of raw material ■mining iron ore sand. cement process-technology clinker storage pulverized coal cement mills filter preheating pulverized coal kiln calcination-burning raw meal to clinker cooling cement storage T raw meal homogenization cement dispatch bags bulk bulk bulk/bags PPC 16#17Cement manufacturing process Oxide Source % kiln feed CaO Limestone ~88% SiO2 Sand/shale ~6% Al2O3 Shale ~5% Fe2O3 Iron ore ~1% CALCINATION As limestone is heated to approximately 850°C, it begins to 'calcine' or decarbonate → CO2 gas is driven off CaCO3 → CaO (lime) + CO2(gas) In cement manufacture, CO₂ is formed during Calcination and Coal combustion (Ccoal + 02 → CO₂) We can reduce CO2 emissions per ton of cement through Improved efficiency (less coal burnt) Greater extension of cements (lower clinker content) CIMERWA PPC 17#18• Quarrying and crushing stage Primary raw material for cement manufacture is calcium carbonate (limestone) quarrying limestone crushing limestone CIMERWA • Obtained from the quarry first, removal of overburden then, rock is blasted loaded into trucks and transported to the crusher • A multistage crushing process reduces the rock to stone less than 25mm in diameter • About 1.5 tons of limestone is needed to produce one ton of cement cement storage and prehomogenization of raw material process-technology clinker storage pulverized coal kiln D secondary additives cement mills ■mining iron ore sand filter preheating pulverized coal calcination-burning raw meal to clinker cooling cement storage raw mill PPC raw meal homogenization cement dispatch bags bulk bulk bulk/bags 18#19Blending and storage stage • Crushed rock stored in stockpiles CIMERWA aw mill storage and prehomogenization of Taw material ■mining iron ore sand • Controlled process of stacking and reclaiming across the stockpile . Blending takes place and a uniform raw material is achieved Systematic sampling and laboratory testing monitor this process Shale, iron ore and sand also stored in stockpiles quarrying limestone cement crushing limestone process-technology secondary additives filter preheating pulverized coal clinker storage pulverized coal kiln cement mills calcination-burning raw meal to clinker cooling cement storage PPC raw meal homogenization cement dispatch bags bulk bulk bulk/bags 19#20Raw milling and homogenisation • Measured quantities of the various raw materials are fed via raw mill silos • Steel balls grind the material to fine powder called raw meal • Homogenising silos are used to store the meal where it's mixed thoroughly • Kiln feed is uniform, which is the prerequisite for efficient functioning of the kiln and good quality clinker quarrying limestone crushing limestone cement process-technology clinker storage secondary additives CIMERWA storage and prehomogenization of raw material ■mining iron ore sand filter preheating bulverized toal pulverized coal kiln cement mills calcination-burning raw meal to clinker cooling cement storage raw mill PPC raw meal homogenization cement dispatch bags bulk bulk bulk/bags 20#21Pre-heating & cooling stage CIMERWA storage and prehomogenization of raw material ■mining iron ore sand • Raw meal is fed into one end of the kiln, either directly or via a preheater system and pulverised coal is burnt at the other end • Raw meal slowly cascades down the rotating inclined kiln towards the heat and temperature reaches 1 450 °C where a process called clinkering occurs • Nodules of clinker drop into coolers and are taken away by conveyors to clinker storage silos • Gas leaving the kiln is cleaned by electrostatic precipitators prior to discharge into the atmosphere quarrying limestone cement crushing limestone process-technology clinker storage pulverized coal Why cool the clinker? To 'freeze' clinker minerals formed in the kiln Recover and return heat to the process → reduce overall energy consumption If very hot clinker enters finishing mills, gypsum overheating can occur → false setting of cement secondary additives cement mills raw mill filter preheating pulverized pal kiln calcination-burning raw meal to clinker cooling cement storage PPC raw meal homogenization cement dispatch bags bulk bulk bulk/bags 21 21#22Cement milling CIMERWA • Cement mills use steel balls of various sizes to grind clinker together with a small quantity of gypsum to a fine powder which is cement Gypsum is required to control setting times ⚫ Finished cement is stored in silos where further blending ensures consistency Thereafter, loading and dispatching occurs quarrying limestone cement crushing limestone storage and prehomogenization of raw material process-technology secondary additives clinker storage pulverized coal cement mills ■mining iron ore sand raw mill filter preheating pulverized coal kiln calcination-burning raw meal to clinker cooling cement storage PPC raw meal homogenization cement dispatch bags bulk bulk bulk/bags 22 22#23Questions? A 3222 CIMERWA 32.5 Nest C CIMERWA PPC ANTARCT CIMERWA KN3 Caning Soon. CIMERWA, New packaging Same quality strength Now the Strength beyond the bag PPC esthe CIMERV PPC 23#24Disclaimer CIMERWA PPC This document including, without limitation, those statements concerning the demand outlook, PPC's expansion projects and its capital resources and expenditure, contain certain forward-looking statements and views. By their nature, forward-looking statements involve risk and uncertainty and although PPC believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment, other government action and business and operational risk management. Whilst PPC takes reasonable care to ensure the accuracy of the information presented, PPC accepts no responsibility for any damages, be they consequential, indirect, special or incidental, whether foreseeable foreseeable or unforeseeable, based on claims arising out of misrepresentation or negligence arising in connection with a forward-looking statement. This document is not intended to contain any profit forecasts or profit estimates, and the information published in this document is unaudited. 24 14#25CIMERWA Board of Directors CIMERWA PPC Dr. Daniel Ufitikirezi Board Chairman Busisiwe Maria Legodi Chief Executive Officer Christian Rugeri Board Member Dr. Ivan Twagirashema Board Member Klaas Paulus Pieter Meijer Board Member Tryphosa Ramano Board Member Pieter Jacques Van Jaarsveld Board Member Everhardus Johannes (Hardie) De Beer Board Member 25#26CIMERWA Management Team CIMERWA Busisiwe Maria Legodi Chief Executive Officer Révocat Munyazikwiye Mbuguje Legal Manager Stephen Busieney Chief Financial Officer Juvenal Rutaganda Operations Manager Obert Mambwe Project Manager - New Plant Kalinganire Vivens Human Resources Manager Sam Kasule Commercial Manager PPC 26#27Investor Contacts Azola Lowan Vuyo Nombila Tel. +27 11 386 9000 www.ppc.co.za Investor Relations Investor Relations CIMERWA PPC 27 27