Managing Sustainable Development in Cement Plant Operation

1. Managing Sustainable Development in Cement Plant Operation Building Together

2. Content • Company Profile • Performance and Awards • Environment Management and Energy Efficiency • Water and Biodiversity Conservation • Corporate Social Responsibility

3. Holcim – Global by Tradition

4. over 300 155 31 Konsumsi Semen Konsumsi semen per capita 1'190'000 to 5'360'000 (6) 450'000 to 1'190'000 (7) 200'000 to 450'000 (7) 0 to 200'000 (7) Holcim location in Indonesia Holcim (Narogong) and Ciwandan 5.5 Juta Ton Semen Holcim (Tuban) in progress Holcim (Cilacap) 2.8Juta Ton Semen Plant Source: ASI (past) and own estimate

5. Holcim Indonesia Company Profile Total Employee • 2,500 employees Cement & Clinker Manufacturing • Total Cement Capacity : 8.3 Mio T • Cilacap (CIL2) • Brand : Semen Holcim Serba Guna, Readyflow • Narogong (NAR1& NAR2) • Brand : Semen Holcim Serba Guna, Readyflow : Readflow + : Durable & ExtraDurable Oil Well cement • Grinding Plant at Ciwandan & Johor Baru, Malaysia Ready Mix Concrete – PT Holcim Beton • 1.7 Million M3 pa. - Operating 26 batching plants (Jakarta, West Java, Outer Jakarta & Surabaya) Aggregates • Crushed Stone production facility supplying the internal RMX & external demand (3.5 million tonnes p.a. capacity from Maloko, West Java & Jeladri, East Java) PT Holcim Indonesia Tbk (“HIL”) is Indonesia’s 3rd largest cement producer with related businesses in ready-mixconcrete (RMX), and aggregates production. HIL is the 2nd largest cement producer within Holcim in South East Asia. Holcim Cement Holcim Aggregates Vision : Provide Healthy Living condition for society’s future Mission : Holcim Indonesia will grow by delivering sustainable building solutions focused on distinctive customer segments, through development of people, innovative leadership and integrate networks, to create maximum value for stakeholders whilst caring for the environment and society. Holcim RMX

6. PT Holcim Indonesia Tbk. Cilacap Plant ProfileMore than 80% Employees are indigenous people Company Name : PT Holcim Indonesia Tbk. Cilacap Plant Business Scope : Cement Manufacturing Operation time : 1977 (a.k.a PT Semen Nusantara) Capacity : 2.6 million T-clk/year Employees : 620 people 340 Born in Cilacap 560 with Cilacap ID Area : 118.4 ha (City Forest 46 ha) Plant Location : Karang Talun village, North Cilacap sub disrict Cilacap – Central Java

7. Bio indicator inside plant with 46 Ha City Forest – one of best in Indonesia Butterfly Breeding Deer Breeding Botanical Garden Bird Breeding

8. SustainableEnvironmental Performance CorporateSocialResponsibility Holcim Strategy and the triple bottom line Creation of Value • Holcim is committed to Sustainable development (SD) • Hence its business strategy integrates economic, environmental and social elements (the "triple bottom line“) • Ambitious Group-wide SD targets. Goal Product Focus Geographic Diversification Local Management Global Standards Strategy SustainableEnvironmental Performance BetterCostManagement Permanent MarketingInnovation Human ResourcesExcellence CorporateSocialResponsibility Mindsets People Base

9. Mega City …to be solution provider in healthy living condition Cement Building Material Housing Healthy Living Condition Future Present Value Add Past Product Provider

10. Performance and Awards GOLD Proper from Environment Minister Ozon Award from Environment Minister Green Industry Award from Industrial Minister CSR Award from Governor 12 Desember 2010 CSR Award from National Foundation Damandiri

11. Environment Management System • Certified from SGS starting 1999, without any major finding since then, getting award “Total Dedication and Commitment in Environment”, • Quality and Environment policy launched, • Using ENVOY – as entropy system to document all policies, implementation, monitoring on environment management, • Dedicated team to handle environment management system, • Clear road map on environment performance target, reduction on emission, • Prepare sufficient budget, provide training and certification for officers,

12. Emission Performance • Air emission far below national threshold (<40% dari NAB) : • Dust 25 mg/Nm3 (Threshold : 80 mg/NM3), • SO2 46 mg/.Nm3 (Threshold : 800 mg/Nm3), • NOx 330 mg/Nm3 (Threshold : 1000 mg/Nm3). • While world average : Dust 51 mg/Nm3, SO2 112 mg/Nm3, dan NOx 697 mg/Nm3. • CO2 emission reduction 38 kg CO2/t-cementitious in 2011. • Emisi CO2 Holcim Cilacap 2011 is 674 kg CO2/t-cementitious, far below CO2 in Indonesia (787 kgCO2/t-cemt).

13. Energy Efficiency • Continuous energy reduction reflected in historical datas as well as future road map, • Electricity consumption : 89.8 kWh/t-cmt while Holcim group average 102.9 kWh/t, and Indonesia 103 kWh/t-cmt • Thermal consumption : 3,287 MJ/t-clk, while Holcim group average 3,540 MJ/t-clk, and Indonesia 3,639 Mj/t-cmt, • Capex and operational initiative arrange to increase efficiency and further energy reduction.

14. Used Oil ZERO WASTE 100% Utilized Used oil Accumulator scrap Waste Destruction and Utilization • Alternative fuel and raw material to reduce CO2 emission. • Reduce fossil fuel with biomass, • CDM project successfully grant credit in the last 3 years, • 100% internal waste recycled or utilized.

15. Water Conservation • Water consumption 127 liter per ton clinker, while Holcim Group 300 liter per ton clinker, • Recycling water 81% from total consumption, • 1 Million mangrove plantation to conserve Segara Anakan, • Clear policy and road map to conserve water, • Dedicated and qualified person on water management.

16. Biodiversity conservation – study and action plan • Biodiversity study entire Nusakambangan islands base on HCV (High Conservation Value) • Holcim Indonesia is one of companies in SRI KEHATI, who concern biodiversity in Indonesia. In cooperation with FFI, BKSDA, BLH, ESDM, DepKumHam, LSM, LIPI, UNSOED and UGM Create Biodiversity Action plan in mining area as part of environment management system: • Cave protection, key species protection, dedicate 60% zone as green belt, restore mangrove, community program High Conservation Value : Biodiversity(flora fauna), environment service and sociocultural

17. CSR Holcim Strategic Implementation Area Coverage Social Mapping Cilacap District Profile Holcim Vision CSR Policy Structured Program CSR Impact Monitoring Sustainability Initiatives CSR Approach • Holcim Vision and Mission • Holcim House Strategic • Holcim CSR Policy • 6 Pilars of CSR • Roadmap (Plant Master Plan) • Budget & Finplan • Cilacap Demography • Area Potencies • Issues and Concerns • Area Cover Demography • Area Potencies • Issue and Concern • CCC Channel & Posdaya • Collaboration program • Musrenbang • Pyramid CSR Program • 4 Levers CSR Sustainability Impact • Quarterly CAP • Annual CAP • Posdaya Assessment • Posdaya Fair

18. Structured CSR Program Development Implementation √ Health √ Cilacap Core Competencies Development Health Life Expectancy √ Education √ Education Literacy Study Duration √ Specific Program Development Economy √ Buying Power Economy √ Environmental Health Education IPM MDGs Social and environment Economic Community Empowerment “ Posdaya ECD Center (*) ”

19. POSDAYA (Family Empowerment Centre) as bottom up initiative to improve Human Development Index POSDAYA is a family based development program which has four pillars: health, education, economy and environment POSDAYA is a Posyandu (integrated empowerment pos) plus, strengthen existing Posyandu . Since 1 Marc 2010 22 POSDAYAs officially built in19 Villages 4 pillars of POSDAYA is supporting HDI development and achieve MDGs in Holcim 19 Target Villages Creating MOU with local government to support and establish 1000 POSDAYA in Cilacap. Early Childhood in Posdaya HDI=Human Development Index MDGs = Millenium Development Goals Posdaya= Pos Pemberdayaan Keluarga Posyandu= Pos pemberdayaan terpadu

20. Specific CSR program for Nusakambangan Inmates & prisoner officers • Inmates development program in term attitudes and empowerment : • De-radicalization with religious counseling • Integrated farming (fish, duck, cow, etc) • Entrepreneurship program • Automotive and other life skills • Production Forest industry • Green house establishment for reclamation quarry area • Capacity building for prisoner officers,

21. 4 Levers CSR Sustainability Impact – measuring indicator Social License for Operation Asset Protection Risk Management Perception / Reputation Minimizing Conflict Sustainability Program • Rate of participation • Asset Development • Degree of Dependency from HIL Tangible Benefit • Economical • Education • Health • Environment • IPM / MDG’s Community Empowering • Social cohesion • Life Skill improvement • Accessibility into development sources • Entrepreneurship Community Development

22. Tracking benefit, asset, participants and Posdaya dependency rate 1973 Society gets new positive activities BMT Asset has increased from 226 to 620 million Posdaya Assessment Includes: A. Management Posdaya B. Financing Posdaya C. Activity Posdaya - Entrepreneurship - Education - Health - Environment D. Quality Posdaya E. Coverage Area Posdaya F. Development Posdaya 46% of Posdaya been Mandiri Independent predicated.

23. Community perception is measured as feedback for improvement : 89% satisfied with Holcim operation. Public Perception Public Perception of Holcim loss of operation time because the Floating net trend of environmental complaints

24. Last Slide … One seed …One Earth …. We Care Environment … For our Future…