ANNUAL REPORT ITALIAN TECHNICAL AND ECONOMIC CEMENT ASSOCIATION. YEARLY MEMBERS MEETING Rome, July 16 th 2009

Transcription

1 ANNUAL REPORT ITALIAN TECHNICAL AND ECONOMIC CEMENT ASSOCIATION YEARLY MEMBERS MEETING Rome, July 16 th 2009

2 TABLE OF CONTENTS THE REFERENCE ECONOMIC PICTURE The international context The Italian economy Investments in construction PRODUCTION AND THE MARKET Cement consumption and production in Europe Cement consumption and production in Italy The cement s imports and exports The distribution of production by technical characteristics and composition The destination of cement The sector s structure Energy consumption Cement transport ENVIRONMENTAL CODES AND LEGISLATION Emissions trading After Kyoto REACH (Registration, Evaluation, Authorization of Chemicals) IPPC (Integrated Pollution Prevention Control) and BAT (Best Available Techniques: the revision of the cement BRef and of Directive 91/61/EC The new Framework Directive on Waste The recovery of materials and energy from civil and industrial waste Waste: the AITEC Communication Plan PROMOTIONAL AND POPULARIZING ACTIVITIES The MICA Master s: AITEC and Roma Tre University for concrete training opportunities International Concrete Design Competition International Concrete Design Master s Class The forms of cement Plasticity FEDERBETON and FEDERCOSTRUZIONI ANNEXES - STATISTICAL TABLES 53

3 THE REFERENCE ECONOMIC PICTURE The international context In the world economy entered into recession owing to the propagation of the financial crisis into the real economy. This was principally at the expense of the great industrialized countries, which were the hardest hit by the crisis, while the growth of some of the large emerging economies, while showing a slowdown, remained positive. During the year just ended the United States displayed an increase in the Gross National Product of 1.1%, less by more than one percentage point than that achieved in. During that same period the Euro Area countries showed an increase in their GNPs of 0.8%, as against s 2.6%. These negative data are the fruit of the sensible worsening of the outside economic picture that took place during the second half of, which also saw the worsening of the financial crisis and its transmission to the real economy through the credit channel. These factors, together with the fall in stock market indices and the increase in uncertainty as to future prospects, brought about in the Euro Area too a heavy slowdown in the growth of demand, a fall in production and an increase in unemployment (8.1% as of last December). Principal raw materials prices also underwent the effects of the crisis, displaying an up and down trend, in the first and second halves of the year, with the last half evidently betraying the effects of the ongoing crisis. During the first half of, in fact, raw materials prices grew considerably, pushing inflation on consumer goods up to 4.0%. During the second half of the year, with the drop in demand prices were strongly reduced and, with them, the inflation measured, which settled at 1.6% in December. One illuminating example of these dynamics comes from the behaviour of oil price quotations: the oil quotation at half year was, in fact, around 97 dollars per barrel, but had had a value of 40 dollars in December as against the 147 dollars quotation reached just five months earlier. The effect of these price dynamics was a considerable attenuation of the fears of inflationary pressures by such organs as the European Central Bank (BCE), which adopted a substantially restrictive approach to monetary policy. During, which could at this point be pictured as a two-faced Janus, the BCE at first countered the inflation process by raising the reference interest rate to 4.25% to then reduce it to 2.5% at year s end (and to 1.0 % during the last meeting held in May 2009). Despite the relaxation of monetary policies by the principal Central Banks and the support operations performed on the economy by the governments of the principal industrialized countries through strongly expansionary tax policies, in 2009 the world s GNP is expected to be reduced to 1.6%, and international trade is estimated to contract by a good 13.2%. In the industrialized countries in particular a contraction of the GNP of 3.9% is expected. Specifically, the most marked reduction in the GNP (down 6.0%) is foreseen in Japan, while for the United States economy a contraction of 3.6% is estimated and for the Euro Area one of 3.7%. In the emerging economies, however, the GNP should grow by 1.5%. For 2009 the risks for the world s economy come first of all from the difficulties in which the international financial system finds itself, which seem not to be entirely resolved. This is borne witness to by the behaviour of the stock markets, which are still weak, even if after the first ten days of March 2009 stock market indices have shown a few timid signals of recovery. In particular, there remains, strongly, the primary need to reactivate the normal mechanisms of granting bank credit to the private sector, and in particular to small and medium-sized companies, in order to counter the impact of the financial crisis on the real economy. Forecasts locate the recovery as starting in 2010, a year in which world growth is expected to reach 2.0%, while for 2011 a world growth of a little more than 4.0% is expected. Regarding forecasts for the Euro Area countries, the growth of the GNP should be 0.3% in 2010 and 1.7% in In that same period international trade is expected to go back to a growth of 1.5% and to 5.3% during the following year, while as regards energy commodities oil quotations are projected at an average of around fifty dollars a barrel during the two-year period

4 THE REFERENCE ECONOMIC PICTURE Italy s economy In Italy s GNP dropped by 1.0%, undergoing a contraction slightly more intense than that recorded in long-ago 1993, the last year in which the dynamics of her GNP had exhibited a negative sign. In reality some signals of weakness in the Italian economy had already emerged during the first part of, tied both to economic situation factors, such as the increase in oil prices and the strong appreciation of the euro over the dollar, and to structural factors. Right from the third quarter and more pronouncedly in the fourth, the financial crisis had produced its effects on the real economy through the channel of foreign demand, which involved a strong dip in exports. Domestic demand too was quite weak during the second half of the year: fixed investments were reduced, in particular those in machinery and means of transport, as was family consumption. After the slight recovery shown during the third quarter, there was a new contraction. In the fourth quarter, then, all typologies of consumer goods displayed a marked reduction, in particular durable and semi-durable goods. The importance of the slowdown in Italy s economy during the last quarter of is borne witness to by the industrial production index, which, corrected for the number of working days and for the season, showed a fall of 8.1% below the fourth quarter of, the worst result since after the war, with the sole exception of Autumn On the whole in industrial production dropped by 3.1%. Such a slowdown in production could not but be reflected in the labour market too, with the number of the employed that, measured according to standard work units (net of unemployment benefits payments) recorded in a contraction of -0.1%, interrupting a growth that had gone on for thirteen years. On the consumption front family buying decisions in were negatively conditioned by high inflation in the first part of the year and by the unfavourable behaviour of the labour market during the second part. On the average, family consumption contracted by 0.9% during the year, this too because of the effect of the strong slowdown in the growth of credit granted to families that, in, had been 0.8% relative to the 7.8% measured in. This as a consequence of the contraction in loans granted for the purchase of dwellings (-0.9%) which was not adequately balanced by the increase in the consumer credit component (4.3%) or by that of other loans (2.8%). As regards fixed investments, these dropped by 3.0%: by 5.3% for those in machinery, and by 2.1% for those in means of transport. Also the degree of plant use appeared in progressive reduction and, therefore, also the production of instrumental goods displayed an unfavourable trend (down 2.7%). On the whole, to be underscored is how companies investments were penalized by the effects of the credit crunch that has involved the Italian banking system. Regarding trade balances, in exports dropped by 3.7% owing to the effect of the strong slowdown in demand of the principal trade partners. However, prices of the exports increased by 5.0%, confirming the peculiar nature of the nation s production, which permits Italian companies to practice higher prices than the competition s. Imports underwent a volume contraction of 4.5%. Despite the strong drop in prices of raw materials seen during the second part of the year, the imports deflator increased by 6.9%. On the whole there was a worsening in the exchange rates, with a trade deficit measured in terms of cif/fob that marginally increased (-0.7% of the GNP as against -0.6% in ). On the whole the Italian economy turned out to be relatively less exposed, compared with the other western countries, to the specific risks of the crisis, even if it heavily felt its indirect impact. Thus, despite the contraction recorded in the construction sectors, the growth of house prices only moderated during the first three quarters of (up 2.7%). For purposes of comparison, in home prices had dropped by 2.6% in the United States and by 09.9% in the United Kingdom. The Italian banking system too appears comparatively less vulnerable to the financial crisis, and the impact on bank balance sheets remains limited relative to that of other countries owing to the effect of the lower internationalization of the country s major credit institutions. If the analysis is transferred to Italian families, one cannot but note that they are less indebted than is the average for the Euro area and this, probably, has limited the flywheel effect in the propagation of the crisis from the financial world to the real economy. Taking account of the persistent weakness of the international economic situation and of the negative drag inherited from the previous year, estimates of the Italian GNP envisage for 2009 a reduction of 4.2%. In this scenario investments in construction are expected to feel the effects of the crisis in the real estate sector and of the end of the long cycle of expansion that characterized them, while net exports would furnish a negative contribution to the growth of the GNP owing to the reduction in world trade; stocks on hand would bring a slightly negative contribution too. On the productivity front, finally, the forecasts of the principal international bodies on the behaviour of value-added of industry in its strictest sense, for the year to come, envisage an overall contraction of 9.7%, with the construction sector having to go through a 6.5% contraction. Investments in construction After the long cycle of expansions that characterized investments in construction, in, according to ISTAT, there was a drop of 1.8% as a consequence of the crisis in the real estate market. In particular, there was a decided slowdown in public-works and non-residential building construction that brought about, as a whole, a drop of 2.9% relative to the preceding year, while residential building construction displayed a 0.9% slowdown. Value-added in the construction sector underwent during the year a contraction (down 1.2%) which is anyway less intense than that for industry in the strict sense (down 3.2%), while production in the sector was reduced by 2.1% on the whole during the year, with a drop of 5.9% concentrated in the fourth quarter. Overall, the construction-investment deflators anyway grew by 3.6%, bringing out a behaviour substantially in line with the increases recorded in the preceding two-year period. ANCE too confirms the drop in construction investments, with a slowdown, however, that is more decided, estimated at -2.3%. This estimate is the result of a special investigation conducted by ANCE, at the end of November, to verify the balance-sheet estimates for for its associated companies and to take account of the change in the ongoing economic and financial situation. The results of the study brought out a darker picture than that delineated by the earlier investigations conducted by the same association. Analysis of investments by sector of activity shows that public works is the one having the greatest difficulty, with a reduction in investments made in of 5.1%. This result worsens the negative trend ongoing since 2005: -2.9% in 2005, -3.0% in 2006, -2.9% in. An inversion of trend was, instead, unfortunately, recorded in the sectors of new residential building construction, which recorded a decrease of 3.8% as against a growth of 1.6% in and in non-residential building construction with a -2.4% relative to the up 0.3% in. For 2009 the ANCE forecasts do not allow a glimpse of improvement, they rather expressing strong dips in all sectors of activity: down 9.2% for new residential building construction, and down 4.0% for maintenance operations in dwellings, with a total drop in the sector of -6.8%. 6 7

5 THE REFERENCE ECONOMIC PICTURE INVESTIMENTI NELLE COSTRUZIONI DAL 1999 AL INVESTMENTS IN CONSTRUCTIONS FROM 1999 THROUGH Milioni di Euro / Millions of Euro abitazioni residential buildings fabbricati non residenziali e lavori del genio civile non residential buildings and public works ANDAMENTO DEGLI INVESTIMENTI NELLE COSTRUZIONI EVOLUTION OF CONSTRUCTION INVESTMENTS Milioni di Euro correnti - aggiustati per i giorni lavorativi Millions of current Euro - working days adjusted data Variazioni % sull anno precedente % Change over previous year 2006 Costruzioni / Constructions (a) (b) (a) (b) 0,8 4,3-1,8 1,7 - abitazioni / residential ,1 4,7-0,9 2,5 - fabbricati non residenziali e opere pubbliche non residential buildings and public works ,6 3,9-2,7 1,0 (a) in Euro concatenati; (b) in Euro correnti. / (a) in chained Euro; (b) in current Euro Fonte: ISTAT, Conti Nazionali. / Source: ISTAT, National Accounts 8 9

6 PRODUCTION AND THE MARKET Gli investimenti nelle costrucement consumption and production zioni in Europe The construction sector in Europe displays sensible slowdown the perdita rate of growth in Unaadelle principali causeindella di dinami over, which, according to pre-balance sheet data disseminated by Euroconstruct, smo dell attività economica è stata la sensibile fresettles at down 2.5% relative to the up 2.5% of del theciclo previous year. nata di accumulazione. La modesta crescita degli investimenti fissi lordi sintetizza, però, dinamiche This reversal was brought about to a large extent by the sharp of componenti. the countries that had readifferenziate traslowdown le principali ched high production levels (Spain and Ireland L industria in particular), as locomotives forinthe entire sector delleacting costruzioni ha assunto corso d anno un at the continental level. importante ruolo di sostegno dell attività economica, contrastando gli impulsi recessivi provenienti dalle attività The sector s negative behaviour translates into a dip in cement demand in Europe that, according to data dismanifatturiere. at 241 million tons with a decrease of 7.8%, which seminated by Cembureau, finished in the EU-27 area Complessivamente, gli investimenti in costruzioni hannobecoconcountries. seized theinvestimenti world economy mes 7.1% if consideration is taken only of the Cembureau tribuito per oltre il The 60%crisis alla that crescita degli fissi starting from the last quarter of made its effects the behaviour per-capita cement consumption lordifelt ed on hanno registrato, of per il terzo anno consecutivo, un in Europe. progresso anche se l andamento appare orientato da un ridimensionamento. Spain, in fact, which had acted as locomotive for consumption duringstime the past years, recorded in a signifisulla base delle di contabilità divulgate dall Istituto cant -26.2%. But the negative sign is to be seen in Nazionale rather broadcast fashiongli throughout Europe, striking insono pardi Statistica, investimenti in costruzioni ticular Ireland (down 21.4%), the United Kingdom (down 14.9%), Luxembourg 13.0%) and crescita even countries con una assoluammontati a milioni(down di euro, like Turkey (down 5.5%), which over the past fewta years had chalked up interesting in consumption. di milioni rispetto al 2000,increases pari al 6,3% che, in presweden (upincremento 6.9%), Holland (up 5.4%), Belgium (upeviden2.8%) The sole exceptions to this contraction scene are senza di un dei prezzi impliciti del 2,6%, and Austria (up 2,.7%), all countries having a per-capita level of consumption not particularly high and not zia un tasso di crescita reale del 3,7%. Per apprezzare appieable, then, to pick back up the continental consumption picture by their own increases. no i dati sopracitati bisogna tenere conto delle rettifiche apportate dall ISTAT agli investimenti dell anno Under the thrust of these negative consumption the level of the individual country, per-capidegli investimenti, precedentela trends crescitaatquantitativa ta consumption recorded in the EU area brings out stimata a decrease ofmisura 496 kgdel in 539 mente nella 3,6% as peragainst l interothe settokg of. In light of the strong slowdown in world economy in general, and le in Europe in parre,the risulta ora pari al 5,6%. Secondo nuove valutaticular, cement production in the Europe ofzioni the 27 in in an 8.7% contraction comgliunderwent investimenti edilizia abitativa e nelle altre pared with, finishing up at an overall value of 253 million tons. The comprehensive costruzioni risultano accresciuti rispettivamente del analysis of the Cembureau countries brings a decrease, overall, of 6.4% with a pro5,2%out e del 6,0% anziché del 2,5% e del 5,1%. duction level of some 317 million tons. L Associazione Nazionale dei Costruttori Edili as for consumption, the At the level of the individual countries, forha production (ANCE) stimato che l andamento delle rather widespread negative sign is confirmed particular in Spain, origi(+6,0%) sarebbe nuove costruzioni(in United Kingdom and the Netherlands), with a few isolated excepnato da tassi di crescita pari all 8,1% tions that do not succeed in compensating for the drop degli investimenti nei fabbricati seen in the other continental countries. non residenziali destinati ad attività economiche e al 3,0% 11

7 PRODUCTION AND THE MARKET PRODUZIONE DI CEMENTO IN EUROPA CEMENT PRODUCTION IN EUROPE 000 t / 000 tonnes In the extra EU Area the only significant country able to keep up a positive sign, despite the drop in consumption, is Turkey (up 5.0%), whose production exceeds 53 million tons. Produzione / Production Variazioni % / Change % / Spagna / Spain Italia / Italy Germania / Germany Francia / France Regno Unito / UK Belgio, NL, L / Belgium, NL, L Austria / Austria Altri UE / Others EU ,2-9,5 0,8-2,5-15,4-5,8 2,9-4,6 Totale Paesi UE 27 / Total EU countries ,7 Turchia / Turkey Svizzera / Switzerland Altri / Others ,0 1,0-1,3 CONSUMI DI CEMENTO PRO-CAPITE IN EUROPA PER CAPITA CEMENT CONSUMPTIONS IN EUROPE Totale Paesi / Total Countries ,4 kg Fonte: Cembureau / Source: Cembureau Variazioni % / Change % / RIPARTIZIONE GEOGRAFICA DELLA PRODUZIONE EUROPEA DAL 2001 FINO AL GEOGRAPHIC DISTRIBUTION OF EUROPEAN PRODUCTION FROM 2001 THROUGH Paesi UE 27 EU Countries 27 di cui Italia of which Italy Altri Paesi Cembureau Other Cembureau countries t / 000 tonnes Lussemburgo / Luxembourg Spagna / Spain Irlanda / Ireland Grecia / Greece Italia / Italy Portogallo / Portugal Austria / Austria Svizzera / Switzerland Turchia / Turkey Belgio / Belgium Norvegia / Norway Francia / France Finlandia / Finland Paesi Bassi / The Netherlands Danimarca / Denmark Germania / Germany Svezia / Sweden Regno Unito / Uk ,0-26,2-21,4-7,5-10,6-6,6 2,7-0,8-5,5 2,8-2,9-3,7-8,5 5,4-1,0 0,5 6,9-14,9 Totale Paesi / Total Countries Totale Europa / Total for Europe ,0 Fonte: Cembureau / Source: Cembureau Fonte: Cembureau / Source: Cembureau 12 13

8 PRODUCTION AND THE MARKET Cement production and consumption in Italy After the record year of 2006 and the slight dip of, cement production in Italy showed a sustained decrease, of 9.5%, bringing it back to the level recorded in 2003 with a value of 43.0 million tons. The overall dip recorded in European cement production does not modify the positions in the EU area, which once again assigns to Italy second position after Spain, which is anyway discounting a drop that is decidedly more substantial: 23.2%. PRODUZIONE DI CEMENTO DAL 1999 AL CEMENT PRODUCTION FROM 1999 THROUGH Milioni di tonnellate / Millions of tonnes Italy s result is thus consistent with the general European picture, which reversed trend in, the total drop being 6.4%. The production level was evidently struck by the economic recession in which the country fell and that was manifested with particular vigour, in the last months of, influencing consumer, investment and production choices. After three consecutive negative quarters, the fourth quarter marked the biggest drop with a decrease of 14.9%, sharpened furthermore by the strong negative impact of the weather,. On analyzing the distribution of production by geographic area it cannot escape us that the production decrease makes no distinctions of locale, being evident throughout the nation s territory with percentages running from down 12.0% in the Centre to down 6.1% in the South. The only regions with increases in production over are Calabria (up 7.4%) and Basilicata (up 2.4%), while the most significant decreases are found in Friuli and Latium (both down 15.3%), in Sardinia (down 14.3%) and in Umbria (down 13.2%). Just as production did, cement consumption too contracted, displaying a decrease under of -9.8%. PRODUZIONE MENSILE DI CEMENTO DAL AL MONTHLY CEMENT PRODUCTION FROM THROUGH Milioni di tonnellate / Millions of tonnes In clinker production in Italy was 31.1 million tons (down 7.8% under ), relative to a domestic consumption of 32.6 million tons. In too the trend toward a decrease in the ratio between clinker consumption and cement production continued, its value reaching 76%. This behaviour is further confirmation of the efforts poured forth by the firms to produce cement types that, for equal yield, require a lower use of clinker, making it possible to significantly progress toward compliance with the burdensome commitments on CO 2 emissions assigned the sector. During hydraulic binders production for construction (LIC) was 900 thousand tons, a dip under the previous year. anno / year anno / year 14 15

9 PRODUCTION AND THE MARKET PRODUZIONE DI CEMENTO E PER REGIONI E PER GRANDI AREE TERRITORIALI CEMENT PRODUCTION IN AND BY REGION AND BY LARGE TERRITORIAL AREAS Piemonte Liguria Lombardia Veneto Friuli-Venezia Giulia Trentino-Alto Adige Emilia-Romagna t / tonnes Variazioni % / change % / ,0 200,1-9,6-9,8-15,3-13,5-10,1 Expectations for the home market for 2009 do not yet delineate a well-defined picture. If on the one hand, in fact, the crisis continues to weigh upon Italy for the entire year, being attenuated only during 2010, on the other it is to be underscored that the tragedy of the earthquake in the Abruzzo region strongly emphasizes the need to go ahead with a reconstruction as fast as it must be imposing,. In light of this fact it will therefore be necessary to identify what the guidelines for government action in this regard will be, the attempt being made to interpret the schedules and the dimensions of the resources that will be made available for reconstruction. Settentrione / North ,9 Toscana Marche Umbria Lazio Centro / Centre ,2-7,3-13,2-15,3-12,0 GIACENZE, CONSUMI E CONSEGNE INTERNE DOMESTIC STOCKS, CONSUMPTIONS AND DELIVERIES Abruzzo Molise Campania Puglia Calabria Basilicata Meridione / South ,7-10,2-15,2-5,8 7,4 2,4-6,1 Giacenze / Stocks cemento cement clinker clinker cemento cement Variazioni % Change % / clinker clinker Consumi interni Domestic consumptions cemento cement Variazioni % Change % / Consegne interne Domestic deliveries cemento cement t / tonnes Variazioni % Change % / Sardegna Sicilia Isole / Islands ,3-9,0-10, ,4 19, , ,7 Totale / Total , Fonte: Elaborazioni AITEC su dati Ministero Sviluppo Economico e ISTAT AITEC Processing of Ministry for Economical Development and ISTAT data 16 17

10 PRODUCTION AND THE MARKET PRODUZIONE MENSILE / MONTHLY PRODUCTION Gennaio / January Febbraio / February Marzo / March Aprile / April Maggio / May Giugno / June Luglio / July Agosto / August Settembre / September Ottobre / October Novembre / November Dicembre / December Totale / Total PRODUZIONE DI CEMENTO PER ABITANTE (*) CEMENT PRODUCTION PER INHABITANT (*) Settentrione / North Centro / Centre Meridione / South Isole / Islands Media / Average (*) Rapporto produzione-popolazione / Production-resident popolation ratio ,1 1,8-13,1-1,9-7,5-9,6-6,9-12,3-8,7-3,8-12,5-32,8-9,5 t / tonnes Variazioni % / Change % / Variazioni % / Change % / -11,3-13,5-6,4-10,7-10,5 kg The cement s imports and exports Analysis of the balances involved in interchange with abroad brings out the persistence of the condition of Italy s being a net importer, and also brings out the sensible improvement of her trade balances as regards volumes exchanged (up 47.7%) with an exports under imports deficit halved relative to (-0.7 million tons). The interchange of cement brings out an improvement (up 7.2%) in the balance with abroad that amounted to 1.3 million tons, as the result of an entering flow of 1.3 million tons and an outflow of 2.5 million tons. With regard to clinker, however, the interchange balance with abroad was strongly negative (-2.1 million tons), worsening (down -23.3%) relative to. In particular, there was a decrease in imports to 2.1 million tons and at the same time a decrease in exports, which more or less cancelled one another (only 38 thousand tons). The principal exporter of clinker to Italy in was Turkey, which, with a volume of 634 thousand tons and a market share of 30.3%, took over from China (604 thousand tons and 28.8%). Cement exports during contracted slightly to 2.5 million tons, recording however a slight increase in their incidence on the volume of national production (5.9%). Territorial analysis brings out the decreases for the islands (down 8.8%) and for the South (down 2.0%), as well as for the Centre (down 64.3% but on insignificant volumes), with the North that succeeds in compensating only in part for these decreases (up 7.5%). The principal foreign market for Italian cement is still the countries of the Mediterranean basin, with Spain in first place for the third year in succession. This country, even if having experienced a building-construction collapse relative to the previous year, still has to resort to imports to meet its home needs, taking 32.6% of total Italian exports. The other principal export markets for Italy are confirmed as Albania and Malta, which, together with Spain, are the addressees of 63.4% of Italian export flows. Total cement and clinker imports displayed, during the course of, a sensible decrease in volumes that reached 3.4 million tons, a drop of 21.5% under. The presence of important port infrastructures, able to receive merchantmen of considerable tonnage, is confirmed to be determining in attracting cement import flows. As in the past, in fact, they are concentrated in the regions of Sicily, Puglia, Veneto and Liguria, which receive 62.0% of import flows. The principal countries from which Italy imports are those of the Mediterranean area, with Turkey, Greece, France, Slovenia, Croatia and Tunisia together furnishing 80.1% of Italian imports. Among them the principal exporter to Italy is confirmed as Turkey, which, anyway, covered in 19.4% of Italian imports as against 25.8% in. Exports to Italy were already sensibly declining under 2006 (down 4.5%) as a consequence of increasing Turkish home demand. To be remarked, furthermore, is the significant increase in imports from Tunisia, which furnishes Italy 6.5% of her clinker in, over the 3.6% in. With regard to clinker imports, confirmed is the Chinese leadership, which however presents sensibly lower values under. To be brought out is the entrance of Thailand, which, with 630 thousand tons, furnishes 22.3% of the clinker imported by Italy, absorbing, in fact, almost entirely the shares released by China. The impact of the environmental constraints on clinker production is the more evident to the extent in which it is observed that a good 92.5% of clinker imports come from extra-eu countries, not subject to the emissions limits imposed by the Kyoto protocol. In too, though confirmed as the principal exporter at the world level with 26.1 million tons, China has seen the volume of its exports decrease (down 21.1%) owing to growing home demand and to the world crisis. The crisis also struck Indonesian exports (down 36.7%), and those of Thailand (down 14.6%), while exports from Turkey grew (up 52.8%) to 12.5 million tons and of Japan (up 14.0%) to 10.9 million tons

11 PRODUCTION AND THE MARKET ESPORTAZIONI E IMPORTAZIONI DI CEMENTO E CLINKER CEMENT AND CLINKER EXPORTS AND IMPORTS RELATIVE TO ITALY 000 t / 000 tonnes cemento cement Esportazioni / Exports clinker clinker Totale Total % di produzione esportata % of production exported cemento cement Importazioni / Imports clinker clinker Totale Total % della produzione % of production ANDAMENTO DELLE IMPORTAZIONI NAZIONALI DI CEMENTO E CLINKER DAL 1999 AL NATIONAL CEMENT AND CLINKER IMPORTS FROM 1999 THROUGH Milioni di tonnellate / Millions of tonnes ,9 6,6 6,5 5,7 5,1 4,6 5,2 5,6 5,9 6, ,5 6,0 8,1 9,4 10,4 10,8 10,8 9,7 9,0 7,8 ANDAMENTO DEL SALDO COMMERCIALE CON L ESTERO DI CEMENTO E CLINKER DAL 1999 AL EXTERNAL TRADE PERFORMANCE FOR CEMENT AND CLINKER FROM 1999 THROUGH Migliaia di tonnellate / Thousands of tonnes ANDAMENTO DELLE ESPORTAZIONI NAZIONALI DI CEMENTO E CLINKER DAL 1999 AL NATIONAL CEMENT AND CLINKER EXPORTS FROM 1999 THROUGH Milioni di tonnellate / Millions of tonnes 20 21

12 PRODUCTION AND THE MARKET IMPORTAZIONI DI CEMENTO PER REGIONI NEL CEMENT IMPORT IN BY REGION ESPORTAZIONI DI CEMENTO E CLINKER DI ALCUNI PAESI DELL EUROPA CEMENT AND CLINKER EXPORTS FROM EUROPEAN COUNTRIES t / tonnes 000 t / 000 tonnes Piemonte Liguria Lombardia Veneto Friuli-Venezia Giulia Trentino-Alto Adige Emilia-Romagna Settentrione / North Toscana Marche Umbria Lazio Importazioni / Imports Produzione / Production % della produzione % of production ,2 110,4 1,0 6,1 5,6 11,7 1,1 4,0 1,2 3,9 0,2 0,8 Turchia / Turkey Germania / Germany Grecia / Greece Belgio, NL, L / Belgium, NL, L Italia / Italy Spagna / Spain Francia / France Regno Unito / UK Austria / Austria % della produzione % of production ,5 24,0 28,2 36,9 6,0 5,2 5,4 3,2 12,2 % della produzione % of production ,7 23,3 26,9 35,3 5,9 1,9 4,9 4,6 10,5 Variazioni % Change % / 53,2 3,8-0,7-1,8-7,5 109,7 7,5-41,8 19,0 Centro / Centre ,9 Abruzzo Molise Campania Puglia Calabria Basilicata ,0 3,5 8,1 1,3 0,0 0,0 MAGGIORI ESPORTATORI MONDIALI DI CEMENTO MAJOR WORLD CEMENT EXPORTERS Milioni di t / Millions of tonnes Meridione / South ,6 Sardegna Sicilia Isole / Islands Totale / Total ,0 3,1 2,6 2,9 Cina / China Thailandia / Thailand Giappone / Japan Germania / Germany Turchia / Turkey Indonesia / Indonesia Taiwan / Taiwan India / India Corea / Korea Canada / Canada Grecia / Greece Malesia / Malaysia Italia / Italy Filippine / Philippines Francia / France Spagna / Spain 26,1 15,6 10,9 8,3 12,5 4,9 7,7 5,6 6,5 4,2 3,7 3,9 2,5 1,6 1,2 2,2 33,0 18,2 9,6 8,0 8,2 7,8 7,4 6,7 6,3 5,5 3,8 3,8 2,7 2,0 1,1 1,

13 PRODUCTION AND THE MARKET Production distribution by technical characteristics and composition ANDAMENTO DELLA RIPARTIZIONE PER TIPI DAL 1999 AL DISTRIBUTION BY TYPE FROM 1999 THROUGH % In the analysis of the qualitative distribution of cement production by typology saw no change in the balances that are by now consolidated for some years here. In particular, the cement most produced in Italy is still Portland (CEM II), which accounts for 75.0% of the nation s production. Within this category Portland limestone composite constitutes 65% of production. Pozzolana cement (CEM IV) is confirmed as the second-most-produced cement in Italy, the share being 11.5% of the nation s production in line with what was found in. Portland CEM I is continuing its slow climb back up, accounting for 7.8% of Italian production, while stable relative to are both slag cement (CEM III), accounting for 4.6%,and composite cement (CEM V), for 1.1%. Analysis of the distribution of cement production by strength classes brings out the growing trend towards high- and very-high-strength cements (classes 42.5 and 52.5) whose percentage weight (48.7%) is by now equal to almost one-half the nation s production. On analyzing the uses at the territorial level it is noted that in the North the use of class 32.5 (60.1%) cement still prevails, while in the rest of the nation cements having high strength are preferred owing to the excellent performance they offer in mechanical terms and in terms of speed of construction of the works on the job site CEM I 10,08 9,61 8,93 8,98 8,51 8,54 7,03 6,53 6,91 7,81 CEM II 72,83 74,41 76,01 76,83 76,98 76,95 76,75 75,50 76,11 74,99 RIPARTIZIONE PER TIPI DI CEMENTO DISTRIBUTION BY CEMENT TYPE CEM III 3,06 2,67 2,87 3,11 3,26 3,49 3,42 5,32 4,28 4,62 CEM IV 13,52 12,42 11,44 10,45 10,58 10,17 12,18 11,83 11,72 11,50 CEM V 0,51 0,89 0,75 0,63 0,67 0,85 0,62 0,82 0,98 1,08 tipo / type t / tonnes % I II/A-S II/B-S II/A-P II/B-P II/A-L; II/A-LL II/B-L; II/B-LL II/A-M II/B-M III/A III/B IV/A IV/B V/A Totale / Total ,81 1,28 1,75 1,05 0,68 46,65 18,42 0,17 4,99 4,58 0,04 4,17 7,33 1,08 100,

14 PRODUCTION AND THE MARKET RIPARTIZIONE PER GRANDI CLASSI NELLE AREE GEOGRAFICHE DISTRIBUTION BY BROAD CLASSES The destination of cement Settentrione / North Centro / Centre Meridione / South Isole / Islands Totale / Total t / tonnes % t / tonnes % , ,1 41,7 45,7 42,0 51, ,5 e 52, and ,9 58,3 54,3 58,0 48,7 The channels of destination of cement works production (the intermediate destinations) displayed a substantial stability in relative to preceding years, there being consolidated the trends that were determined over the course of a decade. In particular the premixed-concrete sector is confirmed as being of major importance among the various product destinations, taking up, with the concrete mixing stations, 48.5% of the nation s production (21 million tons). The resale channel displayed, however, a slight slowdown going from 21.6% in to the 21.4% of, with a loss, in absolute terms, of a million tons. The dynamics that emerges from the flow of intermediate destinations is a shift from the channel of construction companies to that of precasting, which grew by more than a percentage point. This dynamics seems to indicate that precasting has felt the effects of the construction market slowdown, with some slight delay relative to the other sectors, by virtue of its backlog of orders. Cement distribution channels represent anyway, in most cases, an intermediate destination between cement works and the construction world. DISTRIBUZIONE DELLA PRODUZIONE PER CLASSI DI RESISTENZA DISTRIBUTION OF CEMENT PRODUCTION BY STRENGTH CLASSES % To cover this information gap, AITEC has been carrying on for some years a statistical analysis on cement end destinations, by sector, which may be expressed as follows: Residential building construction 36.1% Public works 33.5% Instrumental building construction 30.4%. For more details on cement end destinations see Cemento e Costruzioni, AITEC Survey ,5 / ,9 59,1 58,2 55,3 53,9 52,8 52,4 52,0 51,0 51,3 42,5 e 52,5 / 42.5 and ,1 40,9 41,8 44,7 46,1 47,2 47,6 48,0 49,0 48,

15 PRODUCTION AND THE MARKET DESTINAZIONI INTERMEDIE DEL CEMENTO CEMENT INTERMEDIATE DESTINATIONS Centrali di betonaggio / Ready-mixed Rivenditori / Retail sales Prefabbricatori / Pre-cast Imprese di costruzione / Construction firms Esportazione / Export Premiscelatori / Premixing Altre destinazioni / Other destinations t / tonnes % ,5 21,4 12,2 6,9 5,9 4,4 0,7 The cement sector s structure The drop of almost 10% in production volume during did not substantially modify L industria italiana del Cemento - iic s production picture. In in fact the number of production plants active remained the same. Distribution by production classes brings out furthermore a gradual and progressive matching of production levels to meet a downsized demand, while not losing its peculiar characteristics: capillary distribution of production plants over the nation s territory; a high number of companies active in the sector; a very high technological level of the plants. ANDAMENTO DELLE DESTINAZIONI INTERMEDIE DEL CEMENTO DAL 1999 AL BEHAVIOUR OF INTERMEDIATE CEMENT DESTINATIONS FROM 1999 THROUGH % Centrali di betonaggio Ready-mixed ,2 46,0 44,5 47,0 48, , , ,3 48,5 48,5 The number of companies operating in the cement sector in Italy reached in twenty-seven, two companies fewer than for the preceding year. This number is still quite high and confirms Italy s differentness from other European countries, in which merger and acquisition processes have brought about a lower number of companies on the market. The Italian cement sector is characterized furthermore by the considerable non-uniformity of its operators, it being able to count on the simultaneous presence of trans-national giants and of small-to-medium-sized companies, working at the national level or even only locally. Rivenditori Retail sales 25,7 24,5 23,0 21,4 20,3 22,8 23,2 23,0 21,6 21,4 Prefabbricatori Pre-cast 13,4 13,2 12,6 13,1 12,5 11,9 11,2 11,0 11,0 12,2 RIPARTIZIONE DELLA PRODUZIONE TRA LE MAGGIORI AZIENDE NEL PRODUCTION PERCENTAGE OF THE MAJOR COMPANIES IN Imprese di costruzione Construction firms Esportazione Export Premiscelatori Premixing Altre destinazioni Other destinations 7,5 6,6 n.d./ n.a. 2,6 7,3 6,3 n.d./ n.a. 2,7 9,5 6,2 3,2 1,0 8,7 5,5 3,1 1,2 8,8 5,0 3,9 0,8 7,1 4,5 3,9 1,0 7,0 5,2 3,7 1,1 7,3 5,6 3,7 1,1 8,1 5,6 4,1 1,1 6,9 5,9 4,4 0,7 Gruppi e aziende associate AITEC / Groups and AITEC members companies Italcementi Buzzi Unicem Colacem Cementir Holcim Cementi Rossi Sacci Cementizillo Adriasebina Cal.me Monselice Cementi Moccia Cementi della Lucania (1 azienda e 28 unità / 1 company and 28 plants) (1 azienda e 12 unità / 1 company and 12 plants) (1 azienda e 8 unità / 1 company and 8 plants) (1 azienda e 4 unità / 1 company and 4 plants) (1 azienda e 3 unità / 1 company and 3 plants) (1 azienda e 4 unità / 1 company and 4 plants) (1 azienda e 4 unità / 1 company and 4 plants) (1 azienda e 2 unità / 1 company and 2 plants) (1 azienda e 2 unità / 1 company and 2 plants) (1 azienda e 3 unità / 1 company and 3 plants) (1 azienda e 1 unità / 1 company and 1 plant) (1 azienda e 1 unità / 1 company and 1 plant) (1 azienda e 1 unità / 1 company and 1 plant) % 27,3 16,3 14,1 7,0 5,9 5,5 3,5 2,5 2,3 2,1 1,5 1,1 0,5 Altre aziende / Other firms Totale / Total (13 aziende e 17 unità / 13 companies and 17 plants) (27 aziende e 90 unità / 27 companies and 90 plants) 10,4 100,

16 PRODUCTION AND THE MARKET Regarding the dissemination of the plants over the nation s territory, it is confirmed that 47% of them are located in the North, 18% in the Centre, and 35% in the South and the Islands, they anyway guaranteeing the constant presence of plants not far from the places of the product s consumption. The production shares accounted for by large-size plants (with production capacities exceeding one million tons per year) diminished relative to last year, a little more than ten percent having been lost. The production levels of five plants in fact went below the million-ton threshold. Concerning the typology of the active kilns (eighty as in ) the dry or semi-dry technologies are used exclusively, which means greater energy efficiency. DISTRIBUZIONE TERRITORIALE DELLE UNITÀ PRODUTTIVE NEL TERRITORIAL DISTRIBUTION OF PLANTS IN Ciclo completo Full cycle Sola macinazione Grinding only Totale Total RIPARTIZIONE DELLE CEMENTERIE PER CLASSI PRODUTTIVE NEL CEMENT PLANTS DISTRIBUTION BY PRODUCTION OUTPUT IN Fino a tonn. / Up to 100,000 tons da a tonn. / from 100,001 to 300,000 tons da a tonn. / from 300,001 to 600,000 tons da a tonn. / from 600,001 to 1,000,000 tons oltre di tonn. / over 1,000,000 tons Totale / Total n t / tonnes % 1,4 11,3 27,4 35,1 24,8 100,0 Piemonte Liguria Lombardia Veneto Friuli-Venezia Giulia Trentino-Alto Adige Emilia-Romagna Settentrione / North Toscana Marche Umbria Lazio Centro / Centre Abruzzo Molise Campania Puglia Calabria Basilicata FORNI DI COTTURA SINTERING KILNS Meridione / South Sardegna Sicilia Forni attivi / Active kilns RS Rotanti a via secca e semisecca / RS-Rotary, dry and semidry type RH Rotanti a via umida / RH-Rotary, wet type Isole / Islands Totale / Total

17 PRODUCTION AND THE MARKET AZIENDE E UNITÀ PRODUTTIVE COMPANIES AND PLANTS Aziende / Companies Unità produttive / Plants di cui a ciclo completo of which, full-cycle di cui officine di macinazione of which, grinding plants Energy consumption will perhaps be remembered as the year of peak oil prices, with the scenario typical of a global speculative bubble. The price of crude rose from 90 dollars a barrel in February to its historic high of dollars, reached on July 11 th. After the summer the speculative bubble rapidly shrivelled, owing to the global economic and financial crisis and to the recession, destined to exert an effect on energy consumption throughout the world. The price of crude dropped suddenly by a hundred dollars in a few weeks, to below fifty dollars. The effects this produced on the cost of the principal energy sources had significant impact on cement industry costs, which, as we know, has a sizeable share of its industrial costs tied to coverage of its energy needs. RIPARTIZIONE DELLA PRODUZIONE PER CLASSI AZIENDALI PRODUCTION BY CLASSES OF COMPANIES Inferiori a tonn. Less than 500,000 tonnes n. % 14 6,1 In this regard to be noted is the engagement that, over past years, was put forth by the cement sector companies to achieve a high level of energy efficiency. To this purpose important investments were made in a technology that today enables Italian firms to have a level of thermal-unit consumption competitive with the European level and to put itself forward as high ranking in the recovery of energy contained in wastes. Energy recovery, in fact, means saving non-renewable natural resources and recovering wastes under extremely controlled conditions. The cement industry has one of the best solutions for the integrated handling of wastes as a sure solution for the community, the environment and industry. Da a tonn. From 500,000 to 3,000,000 tonnes Oltre di tonn. Over 3,000,000 tonnes ,1 64,8 Heat energy needs in the baking process of the raw materials was met in principally by the use of solid fuels such as carbon (whether coal or pet-coke) that meets almost 90% of the entire industry s energy needs, with a 4.8% decrease in consumption owing to diminished production levels. Totale / Total ,0 In electrical power consumption had dropped by 7.7% relative to, and amounted to 4.8 GWh. The efficiency of the Italian production plants indicates an average need of 111 kw per ton of cement produced

18 PRODUCTION AND THE MARKET CONSUMI ENERGETICI NEL ENERGY CONSUMPTIONS IN Cement transport Energia elettrica / Electrical power Metano / Natural Gas Carbone / Coal Olio combustibile denso Heavy fuel oil Combustibili non convenzionali Non-conventional fuels ANDAMENTO CONSUMI COMBUSTIBILI DAL 1999 AL FUEL CONSUMPTIONS FROM 1999 THROUGH kwh mc / m 3 t / tonnes t / tonnes t / tonnes Analysis of delivery modes for cement transport brings out no great changes over, the force relations between bulk cement and sacked cement deliveries being consolidated. In particular, bulk cement deliveries declined a little, reaching 78.4%. Bagged, having grown slightly, therefore arrived at 21.6%. Specifically, bulk cement deliveries in amounted to 33.7 million tons, relative to bag cement deliveries of 9.3 million tons. The product transport by sea, quantified through a survey commissioned by AITEC, amounted in to 370 thousand tons (net of import flows) the direction being principally from the South and Islands to the Centre and North of Italy. It is to be noted that, it being the year when oil prices reached their peak, was also and consequently a peak year for diesel fuel costs. This fact threw the truck transport sector into crisis, making it hard to completely carry out the truck transport reform and the liberalization of freight rates, in force for a couple of years now Carbone Coal 84,2 90,9 91,4 91,1 87,3 87,7 88,9 91,0 91,5 88,8 O.c.d. HFO 10,5 5,1 4,9 4,6 5,2 4,9 4,8 4,0 3,5 3,9 Metano Natural gas 3,5 1,8 1,6 1,3 2,2 1,7 1,4 1,1 1,4 1,3 % Altri Other 1,8 2,2 2,1 3,0 5,3 5,7 4,9 3,9 3,6 6,0 During bargaining between the government and truck transport associations had as a result the production of a set of standards and regulations aimed at substantially anchoring truck transport rates to the price of diesel fuel. The sudden descent of oil prices, which came after the summer, in fact slackened the tension between all those concerned as regards measures concerning expensive diesel fuel, but at that point the economic crisis intervened, which brought out an excess of supply in the truck transport sector. For the cement sector truck transport is something of fundamental importance, whose cost, at times, reaches a substantial percentage of the price of the product delivered. Expensive diesel fuel and the truck transport reform will be an incentive for the AITEC associated firms to seek out true logistics partners that offer a service of higher quality and greater safety. RIPARTIZIONE CONSEGNE NEL DELIVERY DISTRIBUTION IN ANDAMENTO RIPARTIZIONE CONSEGNE DELIVERY DISTRIBUTION t / tonnes % % Insaccato / Sacked , Insaccato / Sacked 26,2 23,2 22,2 21,7 21,0 22,1 21,9 20,5 20,9 21,6 Sfuso / Bulk ,4 Sfuso / Bulk 73,8 76,8 77,8 78,3 79,0 77,9 78,1 79,5 79,1 78,

19 ENVIRONMENTAL CODES AND LEGISLATION ENVIRONMENTAL REGULATIONS Emissions trading: after Kyoto The experimental three-year period has been filed away. During it the cement sector could become accustomed to handling the emission quotas assigned and to the monitoring and communication rules, and could make the first verification of the actual fall-out of the code for the individual firms. The five-year period opened up without however the sector s having at disposal the new rules of the game as announced. In fact, owing to delay both in the approval of the Assignment Plan (PNA2) and in the incorporation into Italian law of the provisions of the new European decision for monitoring, cement firms were authorized by the ETS Committee to fulfil code obligations on the basis of the provisions that had regulated the three-year period just concluded. The only new feature introduced, which the firms immediately adopted, was the resort to SINAL laboratories for the analyses of raw materials samples (for the fuels the sector had already had resort to the Experimental Fuels Station) in order to keep from once again suffering the 2% penalty in the counting of the emissions, as had happened in. At the European level, during the year attention had been almost entirely concentrated on the package of European Commission proposals on climate changes and energy as regards the after Kyoto, called : 20% reduction of European CO2 emissions in 2020, with 20% of energy coming from renewable sources. As is well known, the proposals concern: the revision of the Emissions Trading directive to include the new CO 2 -quotas assignment criteria; Burden Sharing regarding the distribution of the EU objective for green-house effect gases reduction in the non- ETS sectors; the directive for the promotion of renewable sources. One of the aspects of greatest interest in the package is the study conducted on the impact of the measures proposed on the competitiveness of the sectors concerned. This is of absolute importance for the cement sector, which has always been one of the market sectors most exposed and vulnerable. In relation to this the Association followed with the greatest participation the debate going on in Europe, its aim to ensure that the cement sector s special features emerge and that its firms be protected against the dangers of distortion of their competitiveness consequent on application of the code. Some of the European initiative s strategic aspects, in this case, were in fact not reviewed, and thus the danger exists of its imposing on the member states highly stringent unilateral rules with respect to the rest of the world where instead it is possible to operate with greater flexibility. 37

20 ENVIRONMENTAL CODES AND LEGISLATION During the negotiations carried on and in particular for some specific topics (such as carbon leakage), determining was the study conducted by the Boston Consulting Group (BCG), commissioned by Cembureau. This reconstructed investment, production and transport costs in the principal European countries and in the countries that are potential exporters of clinker and cement to Europe, comparing them one against the other. The study results showed the cement industry s high vulnerability to, and exposition to risk of, carbon leakage. In particular it emerged that for most Italian companies the shutdown of their kilns and the import of extra-eu clinker would be competitive. The BCG study, set forth too in the various national ministries owing to the significance of the conclusions reached, found visibility in the daily business newspaper Il Sole 24 Ore, which gave it a long review. The cement sector has thus had a means of identifying and bringing out what dangers could arise from the European bill, whether at the world level whether within the Union itself, should suitable corrections not be made to the manoeuvre proposed: first among everything, the impossibility of supporting the cut in emissions of 21% of the volumes recorded in 2005, greatly superior to its own technological reduction potentials. The studies conducted have in fact shown that the sector s technological reduction potential in Europe is no more than 5-7%. These indications were put together through the data gathering promoted by Cembureau, which concerned all the European plants within the area of the GNR-Getting the Numbers Right project. The data base created, managed by a group of Price Waterhouse Coopers consultants, together with WBCSD-CSI forms a significant source of information. Also the assignment of the quotas using the auctions system for all sectors starting from 2020 and for all industrial sectors declared to be at lower risk of loss of international competitiveness constitutes, starting from 2013, a serious critical point in the system, exposing the cement sector to the risk of loss of competitiveness (carbon leakage). The policy hypothesized would also involve a further increase in electrical power costs, owing to the assignment at 100%, with the auctions system, to the thermoelectric sector starting from In order to achieve significant efficiencies in the reduction of emission factors tied to combustion, the sector has more than once expressed, in contacts with the competent ministries involved in the European negotiations, the need to sustain effective policies granting incentives for the substitution of non-conventional fuels containing biomass, something that has been done for years in other European countries. The most critical and sensitive phase of the negotiations, which demanded the Association s constant attention and participation, was the definition of the criteria for recognizing the Sector s vulnerability to the international competition of products coming from countries not adhering to the climate change agreements. This question is much felt in Italy, since her cement industry is objectively the one most exposed among European cement companies, both because it has higher electrical power prices to pay, and because it has few possibilities of improving its fuels mix (there existing as yet enormous conditionings of regulations and of popular consensus on the use of non-conventional fuels), and finally owing to her geographic position, which makes the industry more exposed to import risks