6 - Vicat

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6BUSINESS OVERVIEW6.2. GROUP STRENGTHS AND STRATEGYend of 2010, and is building a plant in the State ofKarnataka, India, where start-up is scheduled for2012.6.2.2.2. Ready-mixed concreteThe Group is developing its Ready-mixed concretebusiness to reinforce its cement manufacturing business.This development strategy is in line with thematurity of the relevant markets and their integrationin the Group’s concrete production.The Group’s objective is to create a network ofReady-mixed concrete batching plants around cementfactories and close to its consumption markets,whether by constructing new plants or acquiringexisting producers.The Group’s objective in investing in this businessis vertical integration while prioritizing the flexibilityand mobility of its industrial equipment and ensuringthe profitability of the business.The Group’s development in France, Switzerland,Turkey and the United States illustrates this strategy.In other markets such as Egypt or Senegal, theGroup’s strategy is to follow the evolution of thesemarkets so as to develop its activities once demandfor Ready-mixed concrete is sufficiently high.6.2.2.3. AggregatesThe Group’s presence in the Aggregates business isintended to provide a total response to its clients’demand for construction materials and to securethe aggregates resources necessary to developthe Ready-mixed concrete activity. Developmentin this business relies on industrial acquisitions andinvestments intended to increase the capacity ofexisting installations and to open new quarries andinstallations.6.2.3. Geographical development strategyThe Group is established in eleven countries and currentlyoperates in nine countries. It records 44.5 % ofits sales in France, 15.7% in Europe (excluding France),9.8 % in the United States and 30 % in emerging markets(mainly Egypt, Mali, Mauritania, Senegal andTurkey).The Group’s strategy is to combine investments indeveloped countries, which generate more regularcash flows, with investments in emerging marketsoffering significant growth opportunities in the longerterm, but which remain subject to more significantmarket fluctuations, and thereby contribute toa diversification of its geographical exposure. In thiscontext, the Group has a particular interest in developmentprojects in emerging market countries. 2009was marked by further progress in establishing theGroup in India, in accordance with the geographicdevelopment strategy in place.In the markets where it operates, the Group aims todevelop strong regional positions around its industrialCement production facilities, while also consolidatingits position through its Ready-mixed concreteand Aggregates businesses. Where the Group hasentered a market through acquisition of a local producer,it lends its financial strength and its industrialand commercial expertise to optimize the economicperformance of the acquired entity while capitalizingon the local identity of the acquired brands.Investments in this business takes into account thefollowing criteria :• proximity to the final markets and the Group’sconcrete batching plants ;• management of significant geological reserves (objectiveof more than 30 years) ;• profitability specific to this business.This development plan has been implemented successfullyin France, Switzerland, Turkey and Senegal.32 VICAT - 2009 registration document
BUSINESS OVERVIEW66.3. DESCRIPTION OF THE BUSINESSES AND INTRODUCTION TO THE MARKETS6.3. DESCRIPTION OF THE BUSINESSES AND INTRODUCTION TO THE MARKETSGenerally, the dynamism of the construction materials industry in a given market depends primarily on the demographicdevelopment of the population, economic growth and evolution of its urban development rate. In addition, thearchitectural culture and local construction practices have a great influence on the choice of construction materials,which mainly include concrete, wood and steel. This choice is also guided by the availability and the price of eachof these materials locally.Annual cement consumption per capita in 2008 in kg8007006005004003002001000World (1) France (2) Egypt (1)Western Europe (1) United States (1) Italy (2)North America (1) Switzerland (2) Mali (4)Middel East (1) Africa (1) Turkey (1) Senegal (4) Mauritania (4)Kazakhstan (4) India (1)The selling price of cement, which is the Group’s principal product, is determined primarily by availability and easeof extraction of its component raw materials, by the cost of thermal and electrical energy, and by the availabilityof qualified personnel to maintain the production facilities. The existence of surplus production capacity increasescompetitive intensity and influences prices.The distributions of the Group’s consolidated sales and EBITDA (5) by business in 2009 were as follows :Consolidated sales by businessin 200913 %Other Products& Services50 %CementEBITDA by businessin 20095 %Other Products& Services77 %Cement37 %Concrete &Aggregates18 %Concrete &Aggregates(1)Sources : “Building Materials” J.P. Morgan, September 2009 ; CIA, The World Factbook.(2)Source : Cembureau, 2009.(3)Source : USGS, 2009.(4)Internal source.(5)Earnings Before Interest, Taxes, Depreciation and Amortization is calculated by adding the gross operating margin and other operatingexpenses and income. EBITDA is not an aggregate defined by accounting principles. Since EBITDA is calculated differently from one companyto another, the data provided in this Registration Document relating to the Group’s EBITDA might not be comparable to EBITDA datafrom other companies.2009 registration document - VICAT 33
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11RESEARCH ANDDEVELOPMENT,PATENTS A
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12INFORMATIONON TRENDS12.1. Recent
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13PROFITFORECASTSOR ESTIMATESThe Co
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16OPERATION OF THE ADMINISTRATION A
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1717.1.EMPLOYEESOVERVIEW17.1.2. Bre
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17 CONDUCTEDEMPLOYEES17.4. SHAREHOL
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19OPERATIONSWITH RELATEDPARTIES19.1
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21ADDITIONAL INFORMATION21.1. SHARE
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ADDITIONAL INFORMATION2121.2. CONST
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22SIGNIFICANTCONTRACTSGiven its act
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24DOCUMENTSAVAILABLE TOTHE PUBLICOf
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appendix1Report by the president on
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1appendixReport by the president on
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appendix2Statutoryauditors'reportpr
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appendix3ANNUALINFORMATION(ARTICLE
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3appendixANNUAL INFORMATION5. Decla
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4appendixELEMENTS CONSTITUTING THE
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GLOSSARYAdditiveAggregateAuto-level
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GLOSSARYClinkerisationCoalCoatingCo
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GLOSSARYGranulometryGrindingGrindin
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GLOSSARYPrecalcinatorCombustion cha
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GLOSSARYType of cementVibrationWork
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