6 - Vicat

BUSINESS OVERVIEW6.3. DESCRIPTION OF THE BUSINESSES AND INTRODUCTION TO THE MARKETS66.3.2.3. Production equipment(a) Ready-mixed concreteAt December 31, 2009, the Group was operating,in all the countries where it is present, 241 concretebatching plants. These batching plants are locatednear the places where the concrete is used insofar as,given setting times, concrete prepared in a batchingplant must be delivered to the pouring site within oneand a half hours at the most. The operating rangeof a batching plant is generally between 20 km and30 km, depending also on traffic conditions in thearea.A ready-mixed concrete batching plant consists ofsilos (for cement, sands and fine gravels), storagetanks for the various additives (such as plasticizers)and a concrete preparation tank. The componentsof the concrete, which are cement, sand and the finegravels, are introduced into the preparation tank bygravity. The qualities and performances of a concretecan be guaranteed only if the formulation is very preciseand its production cycle rigorously respected.The proportioning of water, in particular, must beprecise and mixing must be continuous and homogeneous.To meet all these constraints, the Group’s concretebatching plants were extensively automated, inorder to ensure the precision of the process.Finally, the concrete prepared in the batching plantis loaded under gravity into a mixer truck, which deliversthe concrete to the building site. The Groupoperates a fleet of mixer trucks, while also having recourseto subcontractors, to whom it sub-contractsready-mixed concrete deliveries.(b) AggregatesThe production of aggregates requires heavy equipmentin a quarry, for handling both solid rock andalluvial rock. The quarrying and grinding of solid rockrequires the use of loaders, transport equipment andcrushers. Alluvial rocks are extracted using dredgers.In both cases, aggregates on the processing site aregenerally transported using conveyor belts.Extractions are made from sites owned by the Groupor over which it has long-term operating rights, andfor which it has obtained the necessary licenses. TheGroup maintains the level of its reserves by acquiring,obtaining and renewing extraction licenses.6.3.2.4. EstablishmentsThe Group has vertically integrated its operationsin France, Switzerland and Turkey and thus operatesin these countries its three core businesses,which are Cement, Ready-mixed concrete andAggregates.In the United States, the Group has developed anetwork of concrete batching plants in each of thetwo geographic areas where it is established. TheAmerican subsidiary is supplied with aggregatesfrom suppliers outside the Group.In Senegal, the Group has invested in an Aggregatesbusiness through two acquisitions in 2001 and 2004.Beyond the use of these materials for road building,the Group is positioned upstream of the ready-mixedconcrete market in order to anticipate its emergence.The Group invested in a cement milling plant and aprefabricated products plant in Mauritania in 2008, enablingit to strengthen its network in West Africa.6.3.2.5. Competitive positionIn 2009, the Group produced over 7.1 million m 3 ofconcrete, 39.9 % of which was in France, 20.2 % in theUnited States, 32.9 % in Turkey and 7 % in Switzerland.The Group’s 241 concrete batching plants are locatednear its principal cement production sites, forminga network over the territories in order to supply theregional building sites and the urban centers.The table below shows concrete sales over the pastthree years :(volumes soldin thousands of m 3 ) 2009 2008 2007France 2,838 3,673 3,728United States 1,439 2,148 2,609Turkey 2,341 2,030 1,897Switzerland 502 522 612Mauritania 1 - -Total 7,121 8,373 8,846Since barriers to entry are not high, the ready-mixedconcrete market is very fragmented, with a number oflarge players, from cement manufacturers and internationalindustrial groups, to independent operators.The Group’s Aggregates business operates 48 quarriesin France, 19 in Switzerland, 6 in Turkey and 2 inSenegal, with a production of 18.7 million tonnes ofaggregates in 2009. The aggregates produced by theGroup’s French sites represents approximately 53 %of its total aggregates production.2009 registration document - VICAT 49