THE CHALLENGES TO INTRODUCE NEW CEMENT TECHNOLOGIES INTO THE MARKET PLACE

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1 THE CHALLENGES TO INTRODUCE NEW CEMENT TECHNOLOGIES INTO THE MARKET PLACE Ladies & Gentlemen, In discussing the challenges that are facing new cement technologies to enter the market, I can give no better example than providing you with the experiences that EMC has had since the technology was developed in As mentioned in the first presentation this morning the EMC Technology produces a cement based on a use of 50% or more waste materials but still has a performance equal or better than its parent OPC. The economic and environmental benefits are very clear. Despite that it has taken ten years for the technology to break through to the global market. Now the technology has broken through I can share with you our vision for the market potential and future of the EMC Technologies and the state of the EMC commercialisation process. Some of you might find our vision rather ambitious, but the value drivers of the EMC process are so compelling that the objective should be imminently achievable, even taking the challenge into account that this technology poses to the cement industry. EMC CEMENT A TREMENDOUS ENVIRONMENTAL OPPORTUNITY. EMC believes that it is only a matter or time and that the time is near when society will wake up to the incredible opportunity for reduction in CO2 emissions that changes to the way cement is specified represents. This belief is founded in the following: 1. Portland cement production represents or will shortly reach and exceed 10% of global CO2 emissions, especially when the emissions connected with limestone quarrying and transport are included. 2. About 40% of all cement goes to public works, and most civil specifications follow public works specifications. This means that public institutions can, by simply changing the way cement materials are specified in concrete, determine that cement materials with the lowest possible emissions in their production shall be used in preference as long as they are competitive with respect to cost and performance. Until the arrival of EMC, this opportunity has not been very much in focus, but with the twin events of increased focus on global warming and the arrival on the market of the EMC technology, this moment is coming upon us very quickly. Indeed, the European Community has committed itself to reducing CO2 emissions by 8% by 2012 while in fact the estimates are that it will increase by as much as 4% by I do not think that anybody seriously believe that without drastic measures the objective will be reached. So what is the opportunity represented by the EMC technology?

2 The opportunity includes: 1. The reduction of CO2 emissions from cement production by about 50%. This alone means that if the technology was adopted throughout the world, it would single handed assure that the global Kyoto Protocol goal is achieved. 2. Converting hundreds of millions of tons of fly ash and bottom ash from coal fired power plants from waste materials into environmentally friendly materials that will also offer better and longer lasting concrete products that will save society hundreds of billions of dollars in maintenance costs on concrete structures. 3. Eliminating the need for ash waste landfills whose increasing exhaustion are threatening the health of coal fired power generation. In this connection it is important to have in mind that more energy is produced from coal than from all other sources combined. Indeed, in the US, coal fired power represents about 1/3 of all CO2 emissions in the country. 4. In fact, EMC can also use ash materials already in landfills depending on what stabilizing agent has been used, if any. 5. But EMC s success is not dependent on the availability of fly ash or bottom ash. As demonstrated earlier today, we can also use fine quartz sand. Thus there is no shortage of low cost raw materials for EMC and thus no limit on the amount of EMC cement that can be used or where it can be used. 6. Reducing the environmental impact of quarrying due to the reduced need for limestone. In this connection it should be noted that the fine quartz sand that EMC would use is largely waste materials from aggregates quarries and thus its use will in fact have a positive effect also on the aggregates business. 7. Extending the life of limestone deposits. This is particularly important for China which only has remaining reserves for about 35 years of production at the present rate. The EMC process could extend the life of these deposits by more than 200% to about 80 years. 8. Reduced investment needs for cement production due to the low cost of EMC plants and their very fast roll out (about 6-9 months), which is especially value to emerging economies. In the above perspective, we trust that the audience will agree that these are rather compelling arguments for a broad, global adoption of the EMC process. Of course, and that is perhaps an issue that our company has underestimated, the EMC technology poses a huge challenge to the cement industry, as it reduces the need for clinker production by about 50%.

3 STATUS OF COMMERCIALISING THE EMC TECHNOLOGY 1) EUROPE For several years we tried, unsuccessfully, to encourage the leading European cement producers to work with us to commercialise the EMC technology. Perhaps this was a mistake, given a situation of a mature cement market with already an over production capacity of cement. The industry clearly was not waiting for a technology that would reduce capacity even further. The case was made impossible when the European Commission in 2001 introduced a new European standard that was prescriptive and designed to eliminate cements that would not qualify as traditional and well tried. This combined with the fact that up to 70% of the concrete and aggregates business in Europe is controlled by the leading cement producers and lax European competition rules made it impossible for us to penetrate the market in Europe, at least for the time being. 2) USA We, consequently, turned our attention to the US which offered significantly better opportunities, including: 1. Abundance of fly ash 2. A largely independent concrete industry 3. A more welcoming attitude towards the support of superior quality, cost competitive and environmentally friendly cement. 4. Competition laws that allows for a more free competition. We are therefore pleased to announce that the first EMC plant of industrial scale is presently under construction and will start production of EMC CemPozz in or about June of Some information details: The plant is located on land bought from the Limestone Power Station, located in Jewitt, TX, approximately half way between Houston and Dallas and is therefore strategically located to serve both of these markets as well as the capital Austin. The Limestone plant produces about 1 million tons of fly ash and about 500,000 tons of bottom ash per annum. The plant is owned by Centre Point Energy one of the largest operators of coal fired power plants in the US. The initial capacity of the EMC plant is about 150,000 tons CemPozz per annum. The location of the plant is such that we expect to absorb all of the fly ash and possibly all of the bottom ash produced at the plant within 2-3 years.

4 The brochure of the ground breaking ceremony of this plant is attached to this presentation. It is significant that in the US it is the ready mix industry that is taking the lead to adopt the EMC Technologies. EMC IS EXPERIENCING MAJOR PRIVATE AND PUBLIC SUPPORT IN THE US In addition to the Texas project, EMC is presently engaged in a number of other projects in the US at various stages of development and we expect to sign at least another half dozen agreements for plant construction this year in various parts of the country. The support includes: 1. State Departments of Transportation (DOT) offering to change their material specifications to accommodate EMC products and/or prescribing EMC products for a significant number of projects to help facilitate the market introduction of the EMC products. 2. Proposed legislation to require at least 30% fly ash content by weight of total binder in all public works, together with price bonuses for higher fly ash contents and tax incentives. Based on the public and private support EMC is experiencing in the US, we are confident of reaching a substantial market share in this nation. 3 ) CHINA A MAJOR OPPORTUNITY FOR EMC Thanks to an invitation from Intercem to attend and speak at the Intercem Asia Conference in Beijing in September, 2003, EMC has experienced significant interest for its technology in that market. In China it is the cement industry itself that is adopting the EMC Technologies. This is perfectly logic. The cement consumption in China is increasing fast. There is an abundancy of fly-ash and fine quartz sand. Limestone resources are limited. The restructuring and privatisation programme of the cement industry involves modernisation of the cement industry with over 700 million ton of new modern production capacity to be realised in the coming 15 years. The EMC technology is here beneficial to all parties. We are pleased to inform the audience that we are confident that we will be in production in China during the first half of ) OTHER DEVELOPING NATIONS Also for other nations that see an increase in cement consumption and have available sources of fly-ash, quartz sand or other pozzolanic materials the EMC Technology offers an opportunity beneficial to all parties concerned.

5 5) EUROPE - AGAIN In spite of the discouraging reception that this great technology has received in Europe, I wish to assure the audience that we have not given up on the European market and that we are ready to re-enter this market at any time when we determine that the governments, business and people of Europe are ready to support technologies that offer superior quality, competitive cost and environmentally friendly products. SUMMARY I hope that during my two presentations today, I have provided you with a good view of the opportunity and potential represented by the EMC technology. Our business model is based on joint ventures with local companies whether that be cement manufacturers, concrete manufacturers, power plants, aggregates producers, construction companies or other companies of strategic fit or purely financial investors that believe that investing in the expansion of the EMC technology is an exiting opportunity. That, perhaps, is the most important advice that can be given to those that want to introduce new technologies in the cement industry. Do not limit yourself to the cement producers but aim for all players in the market that can benefit. We invite any company genuinely interested in working with EMC to take contact with us. I thank you for your attention.

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