PPC AND IDC JOINTLY ACQUIRE A US$21 MILLION STAKE IN ETHIOPIA’S HABESHA CEMENT COMPANY Pretoria Portland Cement Company Limited (Incorporated in the Republic of South Africa) (Company registration number: 1892/000667/06) JSE Code: PPC ISIN: ZAE000125886 ("PPC" or the “Company") PPC AND IDC JOINTLY ACQUIRE A US$21 MILLION STAKE IN ETHIOPIA’S HABESHA CEMENT COMPANY PPC and South Africa’s Industrial Development Corporation (IDC) have jointly secured a 47% equity stake in the Habesha Cement Share Company (HCSCo) of Ethiopia. PPC’s US$12 million cash investment secures a 27% equity stake in HCSCo and is a significant step in PPC’s African expansion strategy. This is PPC’s first investment into the east African cement market. The IDC will simultaneously invest US$9 million for a 20% equity stake in HCSCo. HCSCo has raised an initial 53% equity through the investment of more than 16 000 local shareholders. This fulfils one of PPC’s key requirements which is to partner with local shareholders when investing in a new country. The founders and management of HCSCo have considerable experience in the cement industry in Ethiopia. HCSCo’s initial project is to build a $130 million cement plant with an annual capacity of about 1.4 million tons. The project is being funded by a combination of the above mentioned equity and US$86 million debt financing from the Development Bank of Ethiopia. “We are on record that our strategy is to grow our revenue earned outside of South Africa to 40-50% during the next few years and that we have been working on various opportunities on the African continent. This is one of those opportunities which meets our criteria. We look forward to a rewarding partnership with Habesha in the years ahead.” said Paul Stuiver, PPC CEO. The plant, which is currently in the early stages of construction, is located 35km north-west of Addis Ababa and cement production is expected to commence during the first half of 2014. The plant will be supplied and built by China’s Northern Heavy Industries Group which, apart from building more than 100 cement plants in China, has recently supplied and erected a plant for Ethiopia’s National Cement in Dire Dawa. HCSCo’s plant will consist of a 3000 ton per day kiln and future development plans include an option to double the capacity by adding an adjacent production line. Ethiopia, with a population of almost 85 million, is the second most populous country in Africa and has one of the fastest growing economies on the continent. Infrastructure development is high on Ethiopia’s agenda and the government has embarked on a significant housing reform programme. Cement demand has experienced strong growth in Ethiopia in recent years and latest research indicates that local capacity has struggled to meet the estimated 10 million tons per year demand. During the past year cement had to be imported in order to meet demand. “The HCSCo plant will be the closest integrated cement plant to the key demand hub of Addis Ababa where cement selling prices are about US$140 per ton. The competitive cost of constructing the plant and its favourable location are further reasons that attracted us to this project” concludes Stuiver. During the initial construction phases PPC will assist HCSCo by providing operational and technical expertise and with the training of plant personnel at the PPC Academy in South Africa. 25 July 2012 Sponsor: Merrill Lynch South Africa (Pty) Limited PPC: Kevin Odendaal Tel: +27 (0) 11 386 9024 KOdendaal@ppc.co.za Financial Communications Advisor: College Hill Jacques de Bie Mobile: +27 (82) 691 5384 Jacques.deBie@collegehill.co.za Background notes on Ethiopia: • Ethiopia, with a population of approximately 85 million, is the second-most populous country in sub-Saharan Africa (SSA). • One of the world’s oldest civilizations, but also one of the world’s poorest countries. • 2011 GDP per capita of US$354, which is lower than the average of sub-Saharan Africa. • In recent years, Ethiopia has been one of the fastest growing economies in Africa. The Ethiopian economy has navigated the global economic crisis better than most developing countries. The current account deficit was 8.7% of GDP in 2011 and GDP growth was 8.8% in 2011. Inflation was recorded as 25% in 2011. • The current democratically elected ruling party (the Ethiopian People’s Revolutionary Democratic Front (EPRDF) has governed Ethiopia since 1991. • Over the past two decades, there has been significant progress in key human development indicators: o Primary school enrolments have quadrupled, child mortality has almost halved; o The poverty headcount, which stood at 46 % in 1999/2000, fell to 39% in 2004/5. • The Government has launched a 5-year (2010/15), Growth and Transformation Plan (GTP), which is geared towards fostering broad-based development in a sustainable manner. The plan seeks to double the GDP and the agricultural production and to increase electricity coverage from 41% to 100% and access to safe water from 68.5% to 98.5%. • Since 2003, the government has embarked on a housing reform programme. 11 000 apartments were completed to date providing individual ownership of affordable quality housing. Source: PPC Research, HCSCo Research, IMF, Business Monitor International Date: 25/07/2012 11:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.