Outlook for 2007

In 2007 world GDP, even though it may slow down somewhat due to a likely slowdown of the Euro-zone, Japanese and, especially, US economies, is expected to continue to grow at a relatively good rate in historic terms, backed by strong growth in the emerging economies. Inflation should also be reasonable, benefiting from a predicted cooling of demand and more moderate evolution of oil prices.

The main risks in this scenario lie in the possibility of a more abrupt slowing of the North American economy than expected if the real estate crisis lasts longer than anticipated, which would affect private consumption through its impact on employment.

2007 should be a good year for the cement sector, in terms of both volume and price, except in the US. Although the expected increases in capacity may be a threat to prices, it is unlikely that they will be affected in the short run, at least while merchant shipping costs remain high and if the recent trend for Chinese exports to fall continues.

PORTUGAL

In 2007 Portugal’s economy should grow, this will be very much influenced by the need to balance the public accounts. Some investment projects that have been announced by the government may be undertaken, and this would help to improve the behaviour of this variable. In terms of households, no significant growth in private consumption is expected, if only because the rise in short term interest rates will be a strong disincentive to its expansion, in a context of high indebtedness.

The main sources of risk will continue to be a sudden cooling of external economies, with serious consequences for exports, and any postponement of the reforms essential to improving the public accounts, which would prejudice the recovery of confidence levels in investment in the private sector.

In the construction sector, after five consecutive years of decline, it is still unlikely that there will be much by way of recovery in 2007. In the public works sector, the number of public tenders awarded and put out is not expected to increase, while in the housing sector the downward adjustment of supply to demand will continue. Therefore, a further drop in cement consumption (of around 2%) is expected, and this, aggravated by the presence of a new operator on the domestic market, will force CIMPOR to try even harder to place the product in other markets.

SPAIN

There is some consensus on the forecast for 2007, that it will be a turning point in the strong expansion recently enjoyed by the Spanish economy. Its vulnerability to new increases in interest rates, despite being offset by announced tax cuts, and the rise in the price of raw materials will probably lead to a slowing in the rate of GDP growth, which should in any case remain above 3%.

slowing in this activity would not be surprising. In terms of cement consumption, the indications are that this will be much the same as 2006, with Galicia growing about 4% and Andalucia and Extremadura falling slightly.

In this business area, and given the periods of stoppage in the Córdoba and Niebla plants while important environmental investments were undertaken and clinker production capacity was increased (at a cost of around 45 million euros), CIMPOR's growth in 2007 will be mostly in the concrete and aggregate operations, because of increased demand and the Group’s enhanced ability to meet it, due to the various acquisitions and other investments made in the meantime.

NORTH AFRICA

The countries in North Africa where the Group operates should enjoy high levels of GDP growth and see inflation rates ease somewhat. Cement consumption is expected to rise by 1.5% in Tunisia, 3% in Egypt and 7% in Morocco.

Despite the expected increase in the Moroccan market, a lower domestic demand for clinker will mean that total sales from Asment de Témara will see little change. In terms of concrete, however, indications are that growth should rise about 40%, driven by the development of the market and by the opening of new plants.

In Tunisia, solving certain operations problems that have been affecting operations in the Ciments de Jbel Oust plant should obviate the need to import clinker and thereby lead to a substantial improvement in the respective EBITDA.

Continued growth is expected for the Egypt Business Area, albeit at a slower rate than in the last two years, especially since its three production lines will be stopped for quite a long period so that important rehabilitation work can be carried out.

TURKEY

The assets acquired in Turkey at the start of 2007 will enable the CIMPOR Group to increase turnover and EBITDA by around 10%. Sales should rise to about 2.6 million tonnes of cement, 1.2 million cubic metres of concrete and 2.8 million tonnes of aggregates.

BRAZIL

Benefiting from increases in investment, which is set to rise 8.5%, and the expected response of private consumption as inflation and interest rates fall, Brazil's GDP should grow about 4% in 2007.

In addition, the recently approved “Programme for Faster Growth” will, by encouraging investment in infrastructures as an essential condition for the pursuit of this goal, offer excellent prospects for the whole construction sector, and thus for the cement industry.

However, and despite the increases that have occurred in production costs, it is unlikely that, after the huge drop in the last few years, there will be any meaningful rise in the selling price of cement in 2007.

Even so, the foreseeable increase in demand and the Group’s growth in the concrete area will allow CIMPOR Brazil to at least keep the same levels of turnover and EBITDA recorded in 2006.

SOUTH AFRICA

In 2007 the Mozambican and South African economies should see GDP grow by around 7.3% and 4.5%, respectively, (driven in both cases by investment), with inflation rates (in Mozambique) tending to fall, and (in South Africa) stabilizing or rising slightly.

In South Africa, increased public investment in infrastructures and social areas will definitely help the construction sector and, by extension, cement consumption. With the conclusion of the new NPC-CIMPOR clinker production line at the end of the third quarter, this plant will be much better able to respond to increased demand, obviating the need to import clinker, so its profits should also rise. They will also benefit from a significant increase in concrete and aggregates’ sales in this business area, due to growth in the sector and thanks to the acquisitions made in the meantime.

In Mozambique, the strengthening of the workforce with expatriate technicians and the big investment the Group has been making should finally solve most of the operational problems that have been hampering CIMPOR's plants, making it possible to meet market needs. And in this case, there should be an appreciable improvement in the respective EBITDA.

CAPE VERDE

In macroeconomic terms, it is estimated that 2007 will see GDP rise, stimulated by the development of tourism and increased construction activity and a return to near zero inflation rates.

In these circumstances, cement consumption will see double-digit increases and lead to a substantial rise in income from this business area, which will also benefit from the investments in concrete and aggregates made at the end of 2006.

10. Post Balance Sheet Events

The following significant events took place after the end of the 2006 financial year:

• Launch by Cimpor Inversiones, S.A. of an unsuccessful takeover bid for all the share capital of the Egyptian cement company Misr Cement (Qena) S.A.E..

• Conclusion of the acquisition of direct and indirect shareholdings corresponding to 99.68% of the share capital of the Turkish company Yibitas Lafarge Orta Anadolu Çimento Sanayi ve Ticaret A.S. (YLOAÇ), for the sum of approximately 548 million euros.

• Filing of an administrative lawsuit against several cement companies in Brazil, including CIMPOR, to look into potential channels enabling offences of an economic nature in the cement and ready-mix concrete markets by examining documents seized in the course of a preliminary inquiry. To the best of CIMPOR’s knowledge, no offence has occurred.

• Signing of a contract to sell the CIMPOR Group’s holding (42.86%) in the share capital of Cimentos Madeira, Lda., to Secil – Companhia Geral de Cal e Cimento, S.A., and the acquisition from the former of its minority holdings in Betão Liz, S.A.

(33.37%) and Cimentaçor – Cimentos dos Açores, Lda. (25,0%).

• Increasing the CIMPOR Group’s holding in Cement Trading Activities, S.A., to 100% through Kandmad SGPS Lda's purchase of a block of shares corresponding to 11% of its capital.

• Reduction of the share capital of the Société Les Ciments de Jbel Oust (Tunísia) from TND 90 082 400 to TND 82 297 400 through the amortization of 77,850 shares held by Cimpor Inversiones, S.A..

• Start of restoration work on one of the production lines of Amreyah Cement Company, S.A.E., and the start of production of paper sacks for cement by Cimpor Sacs Manufacture Company, S.A.E. (Egypt).

• Sale, for EGP 3,990,000, of the minority holding owned by Amreyah Cement Company, S.A.E. in Asenpro (Egypt).

• Acquisition of three more ready-mix concrete plants in the São Paulo region (Brazil), with a production capacity of about 120 thousand cubic metres/year.

• Strengthening the Group’s holding in the share capital of Cimentos de Moçambique, S.A.R.L., from 71.7% to almost 82.5%.

• Sale of the entire holding of Cimentos de Moçambique in the capital of Premap – Prefabricados de Maputo, S.A.R.L..

• Start-up of NPC–CIMPOR (Pty) Limited – in which the CIMPOR Group has a 74%

shareholding, the company’s employee fund owns 5.5% and Siyaka Cement Investment Holdings (Pty) has a 20.5% holding – in the wake of the transfer of all the Group’s cement production and marketing assets and liabilities to this new company, under South Africa’s Black Economic Empowerment (BEE) laws.