GLOBAL TRADE OF CLINKER, CEMENT & CEMENTITIOUS MATERIALS

ASBA ANNUAL CARGO CONFERENCE OCTOBER 3, 2013 MIAMI FLORIDA

ZAG INTERNATIONAL TODAY

“Stand Alone” Privately Owned Company

o Materials Sourcing & Sales, Strategic Services & Project Execution o Focused on Global Cement & Construction Industry o Committed to Environmental Improvements & Benefits

12 Years Of Steady Expansion & Financial Success

o Emerged Healthy & Growing From Global Financial Crisis

o Dynamic & Competent Leadership Team With Techno Commercial Skills

o Global Presence & Perspective With Offices in USA, Europe, Japan, Australia and Singapore

o Up-To-Date Global and Regional Market Insights & Information

o Established In–House Freight Brokering & Operations Capability

o Global Fly Ash Marketing & Sourcing Alliance With STEAG POWER MINERALS GmbH -- Major German Power Group & Fly Ash Producer

o Extended Long Term RM & GBFS Contracts (NA, Japan, China & Europe)

o Strategic “Partnering” Concept With Customers And Suppliers

o Established Strong Base For USA Recovery

ZAG INTERNATIONAL PORTFOLIO

PRODUCTS

Cement & Clinker

Limestone & Lime

GBFS (Slag Granules)

GGBFS (Slag Powder)

Fly Ash (Bottom, Conditioned & Dry)

Natural & Synthetic Gypsum

Pozzolans & Silica Fume

Pumice

Mill Scale

Iron Silicate Granules & Powder

Abrasives & Garnet

Bauxite & Alumina Powders

Clays

Coal, Pet Coke & Fuels

SERVICES & PROJECTS

Market Information & Data

Strategic Planning

Feasibility Studies

Market Surveys

Purchasing & Sourcing

Supply Chain Management

Contract Negotiations

Freight Management & Brokering

Ocean & Land Logistics

Storage & Distribution Terminals

Grinding Plants

Co-Product/Waste Stream Analysis &

Optimization

Coal Regeneration

WHAT WE KNOW

WE DON’T KNOW

WHAT WE

DON’T KNOW

WHAT WE

KNOW

INDUSTRY TRENDS & FORECASTS

• GBFS

• FLY ASH

• HANDLING & LOGISTICS

• REGULATIONS

• SUPPLY & DEMAND

• SHIPBUILDING & DESIGN

• ECO SHIPS

• CARGOS TYPES

• RATES & ROUTES

• OIL & BUNKER COSTS

• GLOBAL & REGIONAL GROWTH

• SUPPLY & DEMAND SHIFTS

• TRADE FLOWS/PATTERNS\

• “GAME OF THRONES

MULTINATIONALS VS

EMERGING PLAYERS

• COAL & PETCOKE

• ALTERNATIVES

• BIOMASS

• SHALE GAS

•Global Cement Usage = 3.7 Billion Growing 5% per year

•Emerging Countries Continued Growth

•US Recovery Underway

•Basic Technology Unchanged – Emissions Increasing

•Shifting Global Supply & Demand and Trade Patterns

•Key Strategic Drivers – Cost, Freight & RM Availability

•Benefits of SCM’s

•Increasing Government & Social Pressures

•Supply will Shift - Dictated by External Factors

•Strategic Issue - Short Term View is Dangerous

•Freight Rates Will Rise & Bunker Prices Will Fluctuate

• Exactly What/How/When This Will Happen

• To What Degree & What Are the Implications

• What Are Possible Competitive Actions & Reactions

7

GLOBAL CEMENT DEMAND 1982-2012

8

GLOBAL CEMENT DEMAND THROUGH 2025 (Billion MT)

COUNTRY 2006 2008 2010 2012

EST CAPACITY

CHINA 1200 1372 1850 2165 2200

INDIA 152 174 221 225 301

USA 130 93 71 77 114

BRAZIL 41 52 60 70 70

RUSSIA 52 61 50 63 80

IRAN 36 45 55 59 71

TURKEY 42 43 50 58 82

INDONESIA 32 38 41 55 51

SAUDI ARABIA 25 30 41 53 55

EGYPT 30 38 50 51 48

VIETNAM 32 40 51 45 73

SOUTH KOREA 48 54 46 45 50

JAPAN 59 51 42 44 65

TOTAL WORLD 3700

(YEAR TO YEAR % CHANGE)

GLOBAL CEMENT DEMAND 2012

Region 2006 2007 2008 2009 2010 2011 2012 2013E

N. America - 0.8% - 7% -15% - 25% - 0.9% +2.5% +7% +9%

S. America +8.9% + 7.5% + 6% - 3.0 +4.4% +5.6% +5% +5%

W. Europe + 4.0% + 0.7% - 1.4% -18.5% - 6.2% +1.0% +2% -5%

E. Europe + 12% + 13.% + 11% - 23.7% +5.4% +8.5% +4.5% +2%

Africa + 9% + 9.5% + 10% +7.7% +5.3% +5.2% +4.5% +6%

Middle East + 10% + 11% + 8% +3.5% +7.4% +5.1% +6% +5%

N Asia (Excl. China)

+ 1.8% + 4% + 2% - 2.4% +1.1% +3.4% +2.4% +2%

China + 18% +12% + 10% +17.4% +15.6% +10.5% +8% +6%

SE Asia + 2% + 4% + 5% +2.1% +5.5% +7.5% +6% +6%

Oceania +1.3% + 1.6% + 4.3% -1.5% +1.2% +4% +2% +1%

+ 11% + 8.4% + 7.3% +5.8% +9.1% +7.1% +5.2% +4.1%

o 2006 global cement consumption reached 2.2 billion metric tonnes

o Seaborne trading =120 million mt = 5% of total cement volumes

o Housing bubble led to higher US imports which reached 38 million MT

o The high oil price led to surging middle east demand

o China emerged as the world’s leading exporter

GLOBAL CEMENT TRADE CIRCA 2006

36

6

5

11

9 7

7

12

23 3 3

5

3

8

35

26

5

4

10

Imports

Exports

1

o 2011 global cement consumption reached 3.3 billion tonnes;

o Seaborne trading = 90 million MT = 2.7% of total cement volumes

o Chinese less keen to export due to very strong domestic demand and high prices

o US market down nearly 50% in five years imports are sharply down to 5 million MT

GLOBAL CEMENT TRADE CIRCA 2011

6

4

4 15 12

19 10 4

8 5

2

12

10

13

4

5

9

Imports

Exports

2

1

5 3

USA INHERENT DEMAND GROWTH

Economic Factors

o Large, Resilient Economy oHigh Productivity & Public/Private Centers of Research & Innovation o Educational Institutions Foster Entrepreneurial & Leadership Skills

Population & Demographic Factors o Steady Immigration & Desire To Improve Life o Population Will Grow Another 60 Million By 2030 To 370 Million o 60 Million = More Drivers, Roads, Schools, Homes, Offices, Hospitals

Energy Independence & Renewable Energy Factors oDiscovery of Shale Gas – More Domestic Investments & Infrastructure oMore Wind, Hydro & Nuclear Facilities

Legislation & Regulation Factors oMore and More Stringent CO2 & Emissions Reductions o Incentives for Residential & Nonresidential “Green” Buildings

14

USA CEMENT CONSUMPTION (PCA FORECAST)

RECOVERY HAS BEGUN – INHERENT DEMAND IS IN PLACE

USA CEMENT DEMAND GROWTH

PCA USA Cement Consumption

PCA USA Cement Production

v.s.

Worst Case Scenario

Supply Gap

112 MMT

IMPLICATIONS RE FACILITIES, TERMINALS, CEMENT IMPORTS & SCMS

16

GENERATION OF CO2 IN CLINKER & CEMENT PRODUCTION

17

BENEFITS OF SCM’s

o BETTER ECONOMICS o IMPROVED PROPERTIES, PERFORMANCE & ESTHETICS o LOWER CO² EMISSIONS o LESS ENERGY CONSUMED o REDUCED RAW MATERIAL USAGE o EXTENDED QUARRY LIFE o BENEFICIAL RECYCLING OF WASTES & BY PRODUCTS

TRENDS o DEVELOPED MARKETS WILL “RE-EMBRACE” USE OF SCM’s o KNOWLEDGE/USE WILL GROW IN EMERGING MARKETS

18

GRANULATED BLAST FURNACE SLAG (GBFS) SUPPLY

SOURCE: WORLD STEEL ASSOCIATION

2007 2011 2012 Δ

2007 - 2012 BF Steel

CHINA 494.9 683.3 711.7 + 43.8% 630

E.U. 209.7 177.4 139 - 33.7% 94

JAPAN 120.2 107.6 106.5 - 11.4% 81

USA 98.1 86.2 91.1 - 7.1% 30

RUSSIA 72.4 68.7 71.2 - 1.6% 48

INDIA 53.1 72.2 75.7 + 42.5% 39

S. KOREA 51.5 68.5 69.3 + 34.5% 42

R.O.W. 251.4 245 257.5 + 2.4% 118

WORLD 1,351.3 1,508 1,522 +12.6% 1,082

19

GBFS SUPPLY = 6% OF TOTAL CEMENT CAPACITY

20

SCM SUPPLY & DEMAND – SOME KEY DISTINCTIONS

• GBFS oGlobally Traded oRecognized As “Products” Under REACH and Basel Conventions oSafe & Easy To Handle – Can Be Stored Openly oMoved in Bulk

• GGBFS & CCP’S oTypically Supplied Locally & Regionally oConsidered To Be “Waste Materials” oRestrictive Permitting & Environmental Regulations oChallenging To Handle oRequire Silos, Special Loading/Unloading Equipment or Pneumatic Carriers

21

COAL FIRED POWER PLANTS - “THE PERFECT STORM”

22

COAL FIRED POWER PLANTS -- “ THE PERFECT STORM”

High Cost Of Compliance – New EPA & State Laws

De-Regulated Markets (NE, Midwest, California, Texas)

Require Low Cost Plants

Shale Gas “Revolution”

oAbundant Supply

o50% Less GHG Emissions

oLower Cost

2008 $8/MMBTU 2013 $3.75/MMBTU

Cost Prohibitive 1960’s Vintage Coal-Fired Plants

23

COAL FIRED POWER PLANTS ANNOUNCED CLOSURES

• 204 Generating Units in over 25 States

• >11% Reduction in Total Coal-Fired Generating Capacity

• >40% of Capacity Reduction in Midwest, Mid Atlantic and Southeastern States

• >7 Million Ton Reduction in Fly Ash Generation

SCM

FLY ASH SUPPLY

COAL VS GAS VS

NUCLEAR EUROPE RECOVERY

USA GROWTH

& EMERGING REGIONS

LIMITED GBFS

SUPPLY

SUPPLY SECURITY

& QUALITY

SCM DEMAND

IN EMERGING REGIONS

HANDLING ISSUES & FREIGHT

RATES

MAJOR TRENDS

CONCLUSIONS

Overall Global Cement Industry Is Growing Steadily Strong Emerging Markets With Sustained Growth North America Cement Demand Will Rise Steadily Western Europe Could Be In A Prolonged Slump Supply/Demand Challenges – The China Capacity

“Overhang” Drive For Sustained Profitability & Long Term Investment

Returns Environmental Pressures & Regulations Will Increase SCM Needs & Usage Will Be Key Strategic Considerations Raw Material Availability Will Become More Critical Logistics, Freight & Handling Issues Are Of Paramount

Importance

ASBA ANNUAL CARGO CONFERENCE

THANK YOU FOR YOUR ATTENTION