UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549
                                    FORM 10-K
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO  SECTION 13 OR  15(d)  OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED] for fiscal year ended December 31, 1998

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR 15(d)  OF  THE SECURITIES
     EXCHANGE ACT OF 1934
     [NO FEE REQUIRED]
                For the transition period from ______ to _______

                         Commission File Number 0-24850

                           GIANT CEMENT HOLDING, INC.

             (Exact name of registrant as specified in its charter)

               Delaware                               57-0997411
     (State or other jurisdiction           (I.R.S.Employer  Identification No.)
      of incorporation)
            320-D Midland Parkway, Summerville, South Carolina 29485
            (Address of principal executive offices         Zip Code)

       Registrant's telephone number, including area code: (843) 851-9898

                                                           Name of Each Exchange
Securities registered pursuant to   Title of Each Class     on Which Registered
   Section 12(b) of the Act:        Common Stock, $.01          Nasdaq -- NMS
                                    Par Value

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.
                                    Yes X No

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]


     As of March 15, 1999,  9,081,167 shares of the  Registrant's  Common Stock,
par value $.01 per share,  were  outstanding.  The aggregate market value of the
Registrant's Common Stock held by non-affiliates  (based on the closing price on
the Nasdaq Stock Market on March 15, 1999) was approximately $168.0 million.

                       DOCUMENTS INCORPORATED BY REFERENCE
     Specified  portions of the Company's 1998 Annual Report to Stockholders are
     incorporated by reference into Part II hereof.
     Specified portions of the Company's  definitive Proxy Statement for the May
     11, 1999 Annual Meeting of Stockholders  are incorporated by reference into
     Part III hereof.
     Exhibit Index located at Page 13 herein.
<PAGE>


                                TABLE OF CONTENTS




PART I

Item 1.           Business

Item 2.           Properties

Item 3.           Legal Proceedings

Item 4.           Submission of Matters to a Vote of Security Holders


PART II

Item 5.   Market for the  Registrant's  Common  Equity  and  Related Stockholder
          Matters

Item 6.   Selected Financial Data

Item 7.   Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations

Item 8.   Financial Statements and Supplementary Data

Item 9.   Changes  In  and  Disagreements  with  Accountants  on  Accounting and
          Financial Disclosures

PART III

Item 10. Directors and Executive Officers of the Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions


PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on 8-K


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                                     PART I


ITEM 1.  BUSINESS

General Development of Business

         Giant Cement Holding,  Inc.  (herein  referred to as "the Company" on a
consolidated basis or "GCHI" on a separate company basis) was incorporated under
the laws of the state of Delaware in April 1994. In September  1994,  10,000,000
shares of common  stock of GCHI were  sold to the  public in an  initial  public
offering. The offering resulted in GCHI and its subsidiaries being spun-off from
its predecessor parent. GCHI's primary subsidiaries have been in operation since
1883, 1928 and 1947.

         The  Company,   through  its  subsidiaries,   Keystone  Cement  Company
("Keystone")  in  Pennsylvania  and  Giant  Cement  Company  ("Giant")  in South
Carolina, manufactures and sells a complete line of portland and masonry cements
used in residential,  commercial and infrastructure  construction  applications.
The Company is the 15th largest producer of cement in the United States. Its two
cement  manufacturing  facilities are fully  integrated,  from limestone  mining
through   cement   production,   and  serve  the  growing   South-Atlantic   and
Middle-Atlantic  regions of the United States.  Its  subsidiary,  Giant Resource
Recovery ("Grr") is a pioneer in the development of innovative,  environmentally
sound methods for the reuse of waste materials in the  manufacturing  of cement.
Today,  Giant Cement Holding is one of the largest users of waste-derived  fuels
in the cement industry.

         The Company acquired Solite Corporation and certain of its subsidiaries
("Solite") on April 30, 1998.  Solite, a vertically  integrated company based in
Richmond,  Virginia,  expands  Giant  Cement  Holding's  product  lines  in both
construction  products and resource  recovery.  The Company  acquired  Solite in
exchange  for  325,000  shares  of  the  Company's   common  stock.  The  Solite
transaction included three lightweight aggregate  manufacturing  facilities with
their associated resource recovery operations, five concrete block plants, and a
waste treatment and blending facility. The terms of the transaction included the
assumption  of  approximately  $19.9  million of  Solite's  long-term  debt,  in
addition  to other  liabilities.  As a result of the Solite  acquisition,  Giant
Cement  Holding is now the largest  lightweight  aggregate  supplier on the East
Coast and the largest  provider  of  resource  recovery  fuel  burning  services
nationwide,  as well as the fourth  largest  cement  producer  in its East Coast
markets.

Financial Information About Industry Segments

         The Company is  involved  in two  business  segments  comprised  of the
domestic  manufacture  and sale of  portland  and  masonry  cements  and related
aggregates (cement) and the domestic  manufacture and sale of other construction
products,  lightweight aggregate and lightweight block (construction  products),
in the  South-Atlantic  and  Middle-Atlantic  regions of the United States.  The
Company is also  involved in waste  recycling and resource  recovery,  utilizing
industrial waste as supplemental  fuels in its cement and lightweight  aggregate
kilns.

         Information  concerning the Company's net sales,  operating  income and
assets,  by segment,  is included in Note 15 of Notes to Consolidated  Financial
Statements  in the 1998 Annual  Report To  Shareholders,  which is  incorporated
herein by reference.

Narrative Description of Business

         The  Company  owns and  operates  two  limestone  quarries  and  cement
manufacturing  facilities  through  its  wholly-owned   subsidiaries  Giant  and
Keystone,  and  three  lightweight  aggregate  manufacturing  facilities,   five
concrete block plants,  and a waste treatment and blending  facility through its
wholly-owned  subsidiary Solite. Giant, located in Harleyville,  South Carolina,
serves the  South-Atlantic  region of the United  States;  Keystone,  located in
Bath,  Pennsylvania,  serves the Middle-Atlantic  region; and Solite, located in
Virginia,  North  Carolina  and  Alabama,  serves  both the  South-Atlantic  and
Middle-Atlantic  regions. The Company pioneered resource recovery techniques for
use in the  manufacturing of cement in the late 1970's and is one of the largest
users of waste-derived fuels in the cement industry.

Operations

Cement.  Cement is made in a multi-stage  process that begins with the crushing,
grinding,  and mixing of calcium  (usually in the form of quarried  limestone or
"cement rock"),  silica,  alumina,  iron oxide,  and other  materials.  This raw
material is then  processed  in a rotary kiln at  extremely  high  temperatures,
causing  it  to  undergo  a  chemical  reaction.  The  resulting   marble-sized,

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pellet-like material (known as "clinker") is then cooled and ground with a small
quantity of gypsum to produce cement.

         Giant was  founded in 1883 and  commenced  operations  in  Harleyville,
South  Carolina  in  1947.  Giant  owns  approximately  2,100  acres  of land in
Harleyville,  where its cement  production  facilities  and  230-acre  limestone
quarry are located.  The Company  presently  estimates  that  Giant's  limestone
reserves are adequate to meet its plant  requirements for in excess of 50 years.
Giant has four wet process kilns with a combined rated annual  clinker  capacity
of  approximately  840,000 tons and a manufacturing  plant with an annual finish
grinding capacity of approximately 950,000 tons.

         Keystone,  founded in 1928, owns  approximately  1,000 acres of land in
Bath, Pennsylvania,  in the Lehigh Valley region approximately 60 miles north of
Philadelphia.  Keystone  obtains the cement rock used in its production from its
200-acre  limestone quarry located adjacent to its plant. The Company  presently
estimates  that  Keystone's  limestone  reserves  are adequate to meet its plant
requirements  for in excess  of 50  years.  The two wet  process  kilns  used in
Keystone's   operations  have  a  combined  rated  annual  clinker  capacity  of
approximately  600,000  tons and its  manufacturing  plant has an annual  finish
grinding capacity of approximately 750,000 tons.

         Rated   annual   clinker   capacity  is  based  upon  the  cement  kiln
manufacturer's   specifications.   The  Company's   historical   annual  clinker
production has not exceeded 1.3 million tons.

         The principal raw materials used in the manufacturing of cement,  other
than limestone, are silica, alumina, iron oxide, and gypsum, which are purchased
from  various  suppliers.  Management  believes  that the  supply  of these  raw
materials  will be adequate to permit  production at planned  capacities for the
foreseeable future.

Construction  Products.  Solite,  founded  in 1947,  has  lightweight  aggregate
("LWA") manufacturing facilities in North Carolina and Virginia,  concrete block
plants in North  Carolina  and  Virginia,  and a waste  treatment  and  blending
facility in Alabama. Solite mines shale or slate and processes this raw material
in rotary  kilns to produce LWA.  The LWA  facilities  are located on 500 to 750
acre  sites  and  each  has  over a 50  year  supply  of raw  material.  The LWA
facilities  have a combined  production  capacity of 600,000 tons.  The concrete
block plants manufacture and sell concrete masonry blocks,  including those made
with LWA. The concrete block facilities have a combined  production  capacity of
18 million  blocks.  The waste  facilities  provide  (acquire,  blend and store)
waste-derived fuels for the production of LWA and cement.

Products

Cement.  The Company  principally  manufactures a full line of portland  cement,
which  is the  fundamental  binding  agent in  concrete.  Giant's  cement  has a
low-alkali  content,  a  characteristic  favored  for use by  federal  and state
governments on certain  projects due to its minimal reaction with soil and other
aggregates.  Keystone also produces limited quantities of low-alkali cement. The
Company  believes  that  Keystone  is the  only  cement  manufacturer  currently
producing a low-alkali cement within a 100 mile radius of the Keystone plant. In
addition to portland cement, the Company  manufactures  masonry cement, which is
used in the  preparation of mortar used in block and brick masonry.  The Company
also mines,  crushes,  screens,  and sells various sizes of stone and gravel, to
the construction  industry for use in paving,  road base material,  and assorted
small volume  applications.  Additionally,  the Company markets cement kiln dust
("CKD")  and,  occasionally,  a  customized  blend of CKD and  cement  under the
registered  trade name  "StableSorb."  StableSorb  is utilized by  construction,
remediation,  and other contractors for the purpose of solidifying soil, wastes,
and other materials.

Construction  Products. The Company produces LWA under the trade name Solite(R).
Solite(R) is primarily used in concrete and masonry blocks.  The Company's block
facilities manufacture and sell various concrete masonry blocks, including those
made with Solite(R),  along with  merchandise  such as coatings,  mortar mix and
reinforcing wire.

         Marketing  and  Distribution.  The  Company  markets  its  products  to
ready-mix concrete plants,  concrete product and block  manufacturers,  building
material  dealers,  construction  contractors,  and state  and local  government
agencies through its experienced sales force.

         Cement.  Approximately  85% of the  Company's  cement  is sold in bulk,
primarily to ready-mix and concrete products  manufacturers,  with the remainder
sold in individually packed bags, primarily to building materials dealers.

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<PAGE>

         South-Atlantic   Region.   Giant's  market  area  covers  most  of  the
South-Atlantic  region of the United States,  from southern Virginia to southern
Georgia.  The South-Atlantic  region is one of the largest cement markets in the
United  States in terms of cement  consumption.  Giant's  sales are most heavily
concentrated  in North and South  Carolina,  with the  remainder of its sales in
Georgia and southern Virginia.

         Middle-Atlantic  Region.  Keystone's  market area, which covers most of
the Middle-Atlantic region of the United States,  includes eastern Pennsylvania,
southeastern New York, New Jersey, western Connecticut, and portions of Delaware
and  Maryland.  Keystone's  sales  are  most  heavily  concentrated  in  eastern
Pennsylvania,  southeastern New York, and New Jersey,  with the remainder of its
sales in Connecticut, Delaware, and Maryland.

         Construction  Products.  LWA  is  sold  in  bulk,  primarily  to  block
manufacturers and ready-mix  concrete  companies.  The Company's LWA market area
covers most the South-Atlantic and Middle-Atlantic  regions of the United States
from Pennsylvania to Florida. Lightweight block is marketed primarily to masonry
and  construction  contractors,  predominantly  within a 100 mile  radius of the
Company's five block plants located in North Carolina and Virginia.

         Sales  Practices  and  Distribution.  The  Company  has more than 1,000
customers,  the majority of which have been doing  business with the Company for
more  than  five  years.  No single  customer  accounted  for 10% or more of the
Company's  sales  during  1998,  and the Company  believes  that the loss of any
single  customer  would not have a  material  adverse  effect  on the  Company's
financial condition or results of operations.

         The  Company,  following  the  sales  practices  characteristic  of its
industries,  does not provide the right to return nonfaulty  product or extended
payment terms to customers in the ordinary  course of business.  As is customary
in the  industries,  the Company does not typically  enter into long-term  sales
contracts, except with respect to major construction projects. Because the needs
of its  customers  are generally  short term in nature,  backlog  orders are not
significant in the cement or construction products industries.

         The production  facilities of both Keystone and Giant are located near,
and served by, major rail  transportation  lines, which provide ready access for
transporting  cement to the Company's  customers or terminals.  Giant delivers a
substantial  portion of its product by rail either  directly to its customers or
to its  terminals  where the  product is picked up by  customers.  At  Keystone,
almost all product is shipped via truck, with a substantial  amount being picked
up by  customer-owned  trucks.  Both Giant and Keystone have good relations with
contract  carriers which operate fleets of trucks to provide quick delivery,  on
demand, to the Company's customers requesting truck deliveries.

         To meet the needs of its customers in the  South-Atlantic  market area,
Giant and its wholly-owned subsidiary, Giant Cement NC, operate one terminal and
three distribution warehouses,  with annual throughput capacity of approximately
165,000  finished  tons,  and 25,000 square feet of storage  capacity for bagged
product.  Giant Cement NC upgraded its Durham, N. C. terminal  facilities during
1998 to improve efficiency and distribution capabilities.

         The  Company's  LWA  facilities  are readily  accessible by highway and
railway, and have the capability to ship via navigable waterway.  The ability to
serve  the  Company's  LWA  markets  is  made  possible   through  a  system  of
strategically  located  distribution  terminals.  The  terminals can be supplied
either by rail,  truck or water vessel.  As a general  rule,  plants ship LWA to
customers  within  an  approximately  500  mile  radius.  Due  to  the  cost  of
transporting  block,  which is all hauled by truck,  plants are located within a
one hundred mile radius of the market being served.

         General and  Regional  Economic  Conditions.  Demand for the  Company's
products  is  directly  related to activity  in the  construction  industry  and
general  economic  conditions.  Various  economic  factors  beyond the Company's
control affect cement and construction products consumption, including the level
of new residential,  commercial and infrastructure  construction activity, which
are in turn affected by movements in interest rates,  the  availability of short
and long-term  financing and the availability of public funds for infrastructure
projects. Accordingly, adverse economic conditions in the Company's markets or a
worsening of general or local economic  conditions  could  adversely  affect the
Company's operating results.  Cement demand reached a cyclical low in 1991, and,
as a consequence, the Company experienced a decline in sales in 1991. Demand was
flat to slightly higher in most regions of the country during 1992 and increased
in 1993 through 1997 to record levels for U.S.  cement  consumption.  While U.S.
cement  consumption was at or near record levels again in 1998 and exceeded U.S.
supply,  there can be no assurance that increased cement demand will continue or
that demand will remain at current levels.

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<PAGE>

         Competition.  Due  to the  lack  of  product  differentiation  and  the
commodity  nature of cement and  construction  products,  the business is highly
competitive.  Competition  is based  largely on price and,  to a lesser  extent,
quality and service.  The Company competes with national and regional  producers
in  its  markets.  Many  of  the  Company's  competitors  are  larger  and  have
significantly  greater  resources than the Company.  The prices that the Company
charges its customers are not likely to be materially  different from the prices
charged by other producers in the same markets.  Accordingly,  profitability  in
the cement and construction  products  industries is generally  dependent on the
level of demand and on a producer's  ability to contain operating costs.  Prices
are subject to material changes in response to relatively minor  fluctuations in
supply and demand,  general  economic  conditions  and other  market  conditions
beyond the Company's control. Prior to 1993, cement prices in the United States,
including the Company's  markets,  had fallen and remained depressed for several
years, primarily due to the economic recession and competition from lower priced
foreign  imports.  Although  the Company  has been able to  increase  its cement
prices in recent years,  there can be no assurance  that prices will not decline
in the future.

         There are 11 companies in the South-Atlantic  region which compete with
Giant in some portion of its market, including three direct competitors,  two of
which  compete  throughout  its  market  area.  There  are 15  companies  in the
Middle-Atlantic  region  which  compete  with  Keystone  in some  portion of its
market,  including five direct primary  competitors.  The Company  believes that
Keystone is the only cement plant currently  producing  low-alkali cement in its
immediate market area.  Additionally,  none of Keystone's direct competitors are
currently  permitted to utilize  waste-derived  fuel as an alternative source of
fuel.

         During the latter part of the  1980's,  an influx of  low-price  cement
imports caused prices to deteriorate in many domestic markets.  A portion of the
markets  served by the  Company  may be  directly  subject to imports of foreign
cement which can affect  pricing in all of its market  areas.  Imports  declined
significantly from 1987 to 1992. The Company believes the decline was the result
of increased foreign  consumption,  increased ocean transportation costs and the
imposition  of  anti-dumping  duties,  among  other  things.  From 1993 to 1998,
imports into the United States increased  significantly as a result of the U. S.
demand and consumption exceeding the domestic supply. Through 1998, the increase
in the cement imports has had little effect on current prices. While the Company
does not believe  imports had a significant  impact on its market areas in 1998,
nationally,  imports increased  significantly and there can be no assurance that
importation of lower-priced cement in the future will not increase.

         LWA for block production, which is the primary market for the Company's
LWA, is highly  competitive  as high  performance  is secondary  to  competitive
pricing.  There is  pressure  on block  makers to  utilize  low  cost,  marginal
aggregates  in order to reduce the cost of the masonry  unit.  Therefore  in the
block LWA material market, the Company competes primarily on the basis of price.
In the civil and high rise  construction  markets,  product  performance  drives
pricing  strategy.   High  performance  job  specifications  dictate  which  LWA
producers will be able to competitively bid on the project. The higher the level
of  performance,  the  less  competition  is  evident.  Foreign  importation  of
aggregates  has had a negative  impact on pricing.  Greecian and Italian  pumice
imports have  significantly  depressed  prices in the eastern coastal areas over
the past 5 years.  To attempt to reverse this trend,  Solite is continuing  it's
campaign to focus the design community on "quality" block specifications and not
allowing inferior aggregates.

         Resource  Recovery.   The  cost  of  energy  represents  a  significant
percentage of total cement and LWA  manufacturing  costs.  The Company's  cement
plants  utilize the "wet kiln"  process.  While the "wet kiln" process  requires
more thermal energy than the  alternative  "dry kiln"  process,  the Company has
implemented  technology which utilizes liquid and solid  industrial  wastes with
high  BTU  values   ("waste-derived   fuels")  as  fuel  substitutes  ("resource
recovery") in the process of manufacturing cement.

         In the late 1970's,  Keystone pioneered resource recovery techniques in
the U. S. cement  industry.  Giant also began the limited use of waste as a fuel
substitute  in 1987 and has since  expanded its use of  industrial  solvents and
other hazardous  waste-derived  fuels,  including  waste solids.  These resource
recovery efforts have  significantly  reduced the Company's  traditional  fossil
fuel  consumption  and production  costs,  while providing it with an additional
source of revenue  as  industrial  companies  pay the  Company to utilize  these
waste-derived fuels.  Waste-derived fuels normally comprise approximately 45-50%
of Keystone's total fuel usage and 50-60% of Giant's.

         Although  the  Company  was among the first in the cement  industry  to
utilize resource  recovery as a substitute for fossil fuels,  this technique has
since been adopted by a number of other U. S. cement  producers  and is utilized
at 18 cement  plants.  Four of the five largest  cement  companies in the United
States  and  four of the six  publicly  traded  companies  in the U. S.  utilize
resource  recovery at one or more of their production  facilities.  Keystone is,
however,  the only Pennsylvania  plant presently  permitted to commercially burn
hazardous waste.  Keystone is currently permitted to burn such waste at rates of
up to  approximately  50% of its fuel  requirements.  While  Giant is one of two

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plants in its immediate market area that is presently permitted to burn numerous
categories of hazardous and non-hazardous liquids and solids, it is the only one
in such area that is  presently  permitted to burn such wastes at rates of up to
approximately 100% of its fuel requirements.  Additionally,  Giant has developed
techniques to increase the proportion of higher revenue waste solids used in its
resource recovery activities.

         The  Company's  cement  and  LWA  subsidiaries  utilize  a  network  of
generators,  brokers,  fuel  blenders,  and  treatment,  storage,  and  disposal
facilities to obtain  waste-derived  fuels.  The sources for such waste products
range from Fortune 500 companies to small independent waste treatment,  storage,
and disposal facilities.

         The  Company's  LWA  facilities   constitute  three  of  the  four  LWA
facilities  nationally that utilize waste fuels as a substitute for fossil fuels
and are the  only  facilities  in  Virginia  and  North  Carolina  permitted  to
commercially  burn  hazardous  waste.  All three  facilities  are  permitted  to
substitute up to 100% of its fuel requirements with such wastes.

         The Company's resource recovery operations are dependent on general and
regional  economic  conditions;  federal,  state and local  environmental  laws,
regulations and policies; and the Company's cement and LWA kiln utilization. The
Company  competes with numerous other companies for the supply of  waste-derived
fuels primarily on the basis of service and price.

         Environmental  Matters.  The Company's  operations  and  properties are
subject to extensive and changing federal,  state, and local  environmental laws
relating  to air and  water  quality,  as well  as to the  handling,  treatment,
storage and disposal of wastes. In connection with the Company's  utilization of
hazardous  waste-derived  fuels,  environmental laws require certain permits and
other authorizations mandating procedures under which the Company shall operate.
Environmental laws also provide significant penalties for violators,  as well as
liabilities  and costs of  cleaning up  releases  of  hazardous  wastes into the
environment. In addition, the Company could be subject to claims by employees or
others  alleging  exposure to toxic or hazardous  substances  as a result of the
failure to observe  environmental laws.  Violations of mandated procedures under
operating  permits,  even if immaterial or  unintentional,  may result in fines,
shutdowns, remedial actions, or revocation of such permits.

         The Company has been performing industrial operations at its properties
for many years. Various materials from these operations have been disposed of in
on-site landfills and may have been disposed of in off-site  landfills and other
facilities.  As a  result,  the  Company  from time to time may be  involved  in
administrative  and other proceedings  involving  compliance matters and alleged
violations of environmental laws at its operations and facilities.

         The Company's annual  expenditures for environmental  compliance exceed
$3.5 million per year,  which includes dust  collection and control  systems and
compliance  expenditures  related to the Company's resource recovery operations.
Capital expenditures  relative to environmental  compliance totaled $2.8 million
in 1996,  $3.2  million in 1997 and $2.7 million in 1998.  In 1997,  the Company
committed to construct a residual waste landfill at its  Pennsylvania  plant for
the future  management  of CKD the total capital cost of which is expected to be
$2.5 million over the  landfill's  estimated 15 year life.  The Company does not
believe  compliance  expenditures  impair its competitive  position  because its
competitors are subject to the same laws and regulations,  with the exception of
those  regulations  specifically  relating to resource  recovery  operations for
which the Company currently  receives revenues that more than offset the related
compliance  costs.  However,  the Company has no knowledge  of its  competitors'
environmental  compliance  costs and such costs  could vary  depending  upon the
characteristics of a competitor's facilities.

         The Company's  operations are subject to the Resource  Conservation and
Recovery Act of 1976, as amended  ("RCRA"),  and five delegated  state programs,
which together provide a comprehensive  regulatory  framework for the management
of  hazardous  wastes at  active  facilities.  RCRA sets up a "cradle  to grave"
system for the  management  of hazardous  wastes,  imposing upon all parties who
generate,  transport,  treat,  store,  or dispose of waste above certain minimum
quantities,  requirements,  including permitting requirements,  for performance,
testing,  and  record  keeping.  The  boiler  and  industrial  furnaces  ("BIF")
regulations,  promulgated in 1991 under RCRA, also require,  among other things,
that  cement  and LWA  kilns  utilizing  waste-derived  fuels  obtain  operating
permits.  The BIF regulations are extremely  complex and certain  provisions are
subject to different interpretations.

         Each of the Company's  resource recovery  operations operate under RCRA
Part B Permits for the storage and management of hazardous  Waste.  In addition,
the facilities  operate under BIF "interim status" permits,  which allow them to
substitute various percentages,  up to as much as 100%, of their respective fuel
requirements  with  hazardous  waste-derived  fuels.  During this interim status
period, the Company's plants must comply with BIF standards  regarding emissions

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of  particulate  matter and other  parameters.  The Company's  subsidiaries  are
currently pursuing RCRA Part B permits for the burning of such fuels pursuant to
the BIF  regulations;  which the Company  believes may take one or more years to
obtain.

         Pursuant to the BIF  regulations,  in order to maintain  interim status
permits  for the  burning of  waste-derived  fuels,  the  Company is required to
perform BIF Compliance Tests ("BIF Tests") and submit Certificates of Compliance
("COC's") every three years . The Company  performed BIF tests in 1998 at a cost
of $760,000.  The BIF Tests results and COC's set various  operating  parameters
within which the Company must operate,  including volumes of waste-derived fuel,
qualitative aspects of waste-derived fuel and various other parameters.  The BIF
Tests are monitored by the EPA or its representative,  and the BIF Tests results
and COC's  are  subsequently  reviewed  by the EPA for  compliance  with the BIF
regulations. The Company believes its COC's are substantially in compliance with
the BIF regulations.  However,  there can be no assurance that upon EPA's review
of the  submissions,  the EPA will concur with the Company and not require a new
BIF Test or levy fines for  non-compliance.  There can be no assurance  that the
results of future BIF Tests will be successful or that future COC's will provide
favorable  operating  parameters  for burning  waste-derived  fuels.  Should the
Company fail a BIF Test,  it can continue to utilize  waste-derived  fuels for a
total of 720 hours including hours spent conducting a new BIF Test.

         Various  aspects  of the  Company's  operations  are  also  subject  to
regulation  under the federal  Clean Air Act, as amended  (the  "CAA").  The CAA
amendments of 1990 (the  "Amendments")  resulted in numerous changes to the CAA,
including a new federal  operating  permit  (Title V permit) and fee program for
virtually all  manufacturing  operations.  The Amendments  will likely result in
significantly  increased capital and operational  expenses for all manufacturers
in the cement and lightweight aggregate industries in the future, the amounts of
which are not presently  determinable.  In 1996, the Company's  plants submitted
detailed Title V permit applications for air emissions.  In addition, the EPA is
developing  regulations  for certain air  pollutants  under the Amendments for a
broad spectrum of industrial  sectors,  including portland cement  manufacturing
and commercial waste combustion  facilities.  The EPA has indicated that the new
maximum  available  control  technology  standard  ("MACT") for these pollutants
under these  Amendments  could require  significant  reduction of air pollutants
below  existing  levels  prevalent in the industry,  which could have a material
adverse  effect on the Company's  financial  condition or results of operations.
The EPA  issued  draft  regulations  for MACT in 1996  for  public  comment  and
requested  additional  public comment on  alternative  approaches in April 1997,
with final promulgation expected in mid 1999.

         Many of the raw materials, products, by-products, and wastes associated
with the  Company's  facilities  and  operations  contain  chemical  elements or
compounds that are regulated under the environmental laws. Some examples of such
materials  are CKD and general  purpose  solvents,  which in some  instances may
contain hazardous constituents including trace metals, organics or exhibit other
hazardous waste  characteristics.  The Company has from time to time transported
or delivered certain of these materials to various on-site and off-site disposal
sites.  Treatment and disposal of hazardous  wastes generated from operations at
on-site and off-site  locations  is  additionally  subject to the  Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980, as amended by
the Superfund  Amendments  and  Reauthorization  Act of 1986 ("CERCLA" ). CERCLA
imposes  joint and  several  liability  (without  regard  to  fault) on  certain
categories  of  persons  for  clean-up  costs  related  to  releases  of certain
materials at facility sites,  and for damage to natural  resources.  The Company
has been identified as a potentially responsible party at a site in Southington,
Connecticut under CERCLA. According to the EPA, it initially notified over 1,000
parties and subsequently  notified hundreds of additional  parties including the
Company,  of their potential  liabilities.  The final volumetric ranking for the
site,  dated July 1993,  indicates the Company  contributed  only .03206 percent
(3.2 one hundredths of a percent). The agent for the PRP group has estimated the
cleanup cost could range from $30 million to $100 million over the course of ten
to twelve years.  Unless a substantial  number of larger PRP's are released from
liability,  the  Company's  liability  at .03206  percent is not  expected to be
material.  In addition to CERCLA,  similar state or other environmental laws may
impose the same or even broader  liability for the  discharge,  release,  or the
mere presence of certain substances into and in the environment.

         CKD, a by-product of cement  manufacturing,  is currently excluded from
regulation as a hazardous waste under the "Bevill  Amendment" to RCRA.  However,
CKD that comes in contact with water might  produce a leachate  with an elevated
pH. In  December  1993,  the EPA issued a Report to Congress on CKD in which the
EPA concluded that risks  associated  with CKD management are generally low, but
that there is potential under certain  circumstances for CKD to pose a danger to
human health and the environment, or that it may do so in the future. On January
31, 1995 the EPA issued a Regulatory Determination on CKD. The EPA reported that
CKD  would  retain  its  status as a  "Bevill  Waste"  and  remain  exempt  from
regulation  as a  hazardous  waste  until such time as the EPA  promulgates  new
regulatory  controls.  The EPA  intends  to take a "common  sense"  approach  in
developing  a highly  tailored  set of standards  that will  "prevent  damage to
ground and potable water and reduce health risks  associated  with breathing and
ingesting  dust from cement kilns." The EPA further made it clear that it has no

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<PAGE>

problems with recycling or reuse of CKD, and that it has not limited  beneficial
uses  of  CKD;  however,  the  EPA  does  not  encourage  the  use  of CKD as an
agricultural  lime  additive.  Though the EPA  originally  intended to conduct a
typical  rule-making   process  which  would  involve   information   gathering,
eventually  followed by the development of a proposed rule and the  promulgation
of a final  rule,  the  EPA is now  considering  two  alternatives  to the  full
rule-making  process.  Under the first  alternative,  a state  with a  federally
approved  hazardous waste program would be able to oversee the management of CKD
on a site-by-site  basis,  either  through  regulation,  permit,  or enforceable
agreement.  The second  alternative  would be to create federal rules that would
set  contingent  management  standards for cement kiln dust to meet before being
exempt from  Subtitle C of the  Resource  Conservation  and  Recovery  Act.  Key
components  of management  conditions  would be based on the design of the waste
management unit, dust control practices,  and other factors. The EPA is expected
to issue a proposed rule sometime in 1999, with a final rule to follow.

         The cement industry will be vigorously  pursuing a range of regulatory,
legislative and judicial remedies because the industry continues to believe that
CKD is not a hazardous  waste,  should never be classified as a hazardous  waste
and,  therefore,  does not warrant  RCRA  Subtitle C  regulation.  The  industry
believes its voluntary enforceable agreement that was submitted to the Agency in
1995 offers a responsible  and valid approach for managing CKD outside the realm
of RCRA Subtitle C. These standards  address all possible  exposure pathways and
are fully protective of human health and the environment.  The industry is fully
committed to avoiding  regulation of CKD as a hazardous  waste while at the same
time acknowledging the need to generally improve CKD management.

         Accepted industry  practice has been to store CKD on-site.  The Company
collects  and  stores  CKD  at  its  plants  and  recycles  CKD  related  to its
operations.   Additionally,   the  Company  markets  CKD  and,  occasionally,  a
customized blend of CKD and cement under the registered trade name "StableSorb."
StableSorb is utilized by construction,  remediation,  and other contractors for
the purpose of  solidifying  soil,  wastes,  and other  materials.  Although the
potential  costs and impact of repeal of the  Bevill  Amendment  exemption  with
respect to CKD or adoption of particular EPA or State  management  standards for
CKD in the future cannot be estimated at this time,  such costs and impact could
have a material adverse effect on the Company's  financial  condition or results
of operations.

         Another  RCRA concern in the cement  industry  involves the disposal of
refractory brick containing  chromium.  Refractory brick containing chromium was
formerly  widely used in the cement  industry to line cement  kilns and has been
utilized  and  disposed  of on-site by the  Company in the past.  The  Company's
facilities  conduct  tests on all  brick  removed  from its  kilns to  determine
whether or not it is a  hazardous  waste,  and these tests have  confirmed  such
brick to be  non-hazardous  under the  applicable  RCRA  standards.  The Company
conducts these tests in accordance  with EPA standards and believes that the EPA
would reach the same conclusions.

         The discussion  above regarding CKD and refractory brick applies to the
dust collected in pollution control devices,  and refractory brick utilized,  in
the LWA manufacturing  process as well. Because of the nature of the product and
the dust,  Solite is presently  able to recycle all of its dust and brick in its
lightweight aggregate product.  However,  there can be no assurance that it will
be able to continue to do so should  regulations or the nature of the product or
dust change in the future.

         The Company's  quarry sites must comply with noise and dust suppression
regulations, zoning, and special use permitting requirements,  applicable mining
regulations and federal health and safety requirements  administered by the Mine
Safety and Health Administration. The Company is also obligated under certain of
its mining  permits and certain  regulations  to engage in  reclamation  of land
within the quarries upon completion of extraction and mining.

         The  burning of  hazardous  waste-derived  fuels is a key factor to the
profitability of the Company.  A substantial  reduction in the Company's ability
to substitute  hazardous  waste-derived fuels for traditional fossil fuels could
have a material adverse effect on the Company's  financial  condition or results
of  operations.  The Company  regularly  monitors  and  reviews its  operations,
procedures,  and policies for compliance with these  environmental  laws and the
Company's  operating  permits.  The Company believes that its current procedures
and practices in its operations,  including those for handling hazardous wastes,
are  substantially  in compliance with all  environmental  laws and its material
operating  permits.  There can be no  assurance,  however,  that a review of the
Company's past,  present,  or future operations by courts or federal,  state, or
local regulatory authorities will not result in determinations that could have a
material  adverse  effect on the  Company's  financial  condition  or results of
operations.  In  addition,  the  revocation  of any of the  Company's  operating
permits,  the  denial  of any  application  by the  Company  for a permit or the
failure to renew any interim permit could have a material  adverse effect on the
Company's  financial  condition  or results of  operations.  The Company  cannot
predict what  environmental laws will be enacted or adopted in the future or how

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<PAGE>

such future  environmental  laws will be administered or interpreted.  The trend
has been toward more stringent  environmental  standards.  Compliance  with more
stringent  environmental laws or more vigorous  enforcement policies or stricter
interpretation  of current  environmental  laws  could  have a material  adverse
effect on the Company's financial condition or results of operation.

         In  December  1997,  the  resource   recovery   operation  at  Keystone
experienced  a fire at its waste fuel storage tank farm.  There were no injuries
and no known  environmental  damage.  Keystone  negotiated an agreement with the
Pennsylvania  Department of Environmental  ("PADEP") to allow it to resume waste
fuel burning  effective July 1998.  Under the terms of the  agreement,  Keystone
will  pay a fine  of  $488,000  in  installments  over a  ten-year  period.  The
inability  to utilize  waste  fuels for seven  months in 1998  resulted  in lost
revenues and additional fuel costs of approximately $3.5 million.  In June 1998,
the Company  settled its business  interruption  insurance  claim related to the
Keystone  incident  for $1.6  million,  which is  included  in other  income  at
December 31, 1998. See "Legal Proceedings".

         Safety and Health Matters.  The Company's facilities and operations are
governed by laws and regulations relating to worker health and workplace safety.
The Company believes that appropriate precautions are taken to protect employees
and others  from  harmful  exposure  to  materials  handled  and  managed at its
facilities.  The Company  does not believe  that it will be required in the near
future to expend  amounts  that are material in the  aggregate to the  Company's
overall operations by reason of such health and safety laws and regulations.

         Insurance. The Company maintains property insurance and other insurance
such as business  interruption and boiler and machinery  insurance on all of its
plants in types and amounts  believed to be customary for  companies  engaged in
similar operations. The Company also maintains environmental liability insurance
policies which,  under certain  circumstances,  provide coverage in the event of
certain off-site  environmental  damage  resulting from the facilities'  on-site
operations of $5.0 million per occurrence and $10.0 million annual  aggregate at
each of its cement and LWA  manufacturing  facilities.  The  policies  contain a
number of  exclusions,  including  liabilities  arising under CERCLA,  fines and
penalties.

         Employees.  As of December 31, 1998, the Company employed approximately
789  people.  Approximately  258 of  the  Company's  employees  are  covered  by
contracts  with labor  unions which expire on April 30, 2000 and April 30, 2001.
The Company considers  relations with employees to be satisfactory.  The Company
has  substantially  reduced its work force through  voluntary  early  retirement
programs  offered to certain groups of employees and other  measures  during the
1990's.

         The Company's cement manufacturing, hourly employees are represented by
the United Paperworkers  International Union ("UPIU").  During 1998, the Company
reached a new three-year  labor agreement with the hourly employees at Keystone,
granting  annual wage  increases  ranging  from 3% to 4% per annum,  among other
changes,  the total impact of which is not expected to have a material effect on
the Company's results of operations.

         Trademarks. While the Company has trademarks registered with the United
States and with  certain  states in which its  products  are sold,  the  Company
believes that its products sold in bulk form are sold  primarily on the basis of
price, and to a lesser extent,  quality and service.  Packaged products are sold
on the  basis of price and  trade  name,  and to a lesser  extent,  quality  and
service.

         Seasonal  and  Cyclical  Business.  Regional  cement  and  construction
products markets are highly cyclical,  experiencing volatility  corresponding to
regional  construction  cycles.  While the  impact on the  Company  of  regional
downturns  in the  construction  industry may be mitigated to some degree by the
Company's  presence  in both the  Middle-Atlantic  and  South-Atlantic  markets,
profitability  is  significantly   affected  by  such  construction  cycles.  In
addition,  the construction  industry is seasonal in nature primarily due to the
effect  of  weather  conditions  on  construction   activity.  The  Company  has
historically  experienced  lower operating income during the months of December,
January and February,  particularly with respect to its Middle-Atlantic  markets
where construction activity is more significantly affected by inclement weather.

         The cement and  construction  products  industries are highly dependent
upon the level of demand as a result of the high  fixed  costs  associated  with
production. The Company's cost per unit of production is directly related to the
number of units  manufactured;  decreases in  production  increase the Company's
fixed cost per unit. Equipment  utilization  percentages or uptime can vary from
year to year based  upon  demand for the  Company's  products  or as a result of
equipment failure.  Much of the Company's  significant  manufacturing  equipment
requires long lead-times to replace and is very costly to replace or repair. The
Company attempts to maintain  sufficient  spare parts  inventories to avoid long

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<PAGE>

periods  of  shutdown  in the event of  equipment  failure,  but there can be no
assurance such shutdowns can be avoided.

Financial Information About Foreign and Domestic Operations and Export Sales

         The  Company  does  not  export   products  in  the  normal  course  of
operations;  however,  through  its  subsidiaries,  it exports an  insignificant
amount of products from time to time.

Disclosure Regarding Forward Looking Statements

         The Private  Securities  Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements.  Certain information in Items 1, 3 and 7
of this Form  10-K  include  information  that is or could be  considered  to be
forward looking, such as the Company's development of techniques to increase the
proportion  of  higher  revenue  waste  solids  used  in its  resource  recovery
activities,  its exposure to foreign  imports,  its  anticipated  liquidity  and
capital   requirements,   and  the  results  of  regulatory  changes  and  legal
proceedings.  The matters  referred to in forward  looking  statements  could be
affected  by the risks and  uncertainties  involved in the  Company's  business.
These  risks and  uncertainties  include,  but are not limited to: the effect of
national,  regional  and  local  economic  conditions,  changes  in the level of
housing  starts  or  commercial,   industrial  and  infrastructure  construction
spending, increases in cement supplies in relation to demand, possible increases
in shipping rates or interruptions in shipping service, the level and volatility
of interest rates, the impact of current,  pending, or future federal, state and
local  legislation,  policies  and  regulations,  interruptions  in  waste  fuel
supplies,  the  loss  of any  operating  permits  or  other  disruptions  of the
Company's  ability to  utilize  waste  fuels,  as well as  certain  other  risks
described above in this Item under  "Competition",  "Environmental  Matters" and
"Seasonal and Cyclical Business", and below in Item 3 in "Legal Proceedings" and
in Item 7 in  "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations."  Subsequent  written and oral forward looking statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by the  cautionary  statements in this paragraph and
elsewhere in this Form 10-K.

Executive Officers of the Registrant

         Set forth below are the  executive  officers of the  Company,  together
with their  ages,  their  positions  with the Company and the year in which they
first became an officer of the Company or its subsidiaries.

         Gary L. Pechota, 49, has served as Chairman, President, Chief Executive
Officer and a director of the Company  since its  inception  in April 1994.  Mr.
Pechota  also has  served  as  President  of  Giant  since  January  1993 and as
President of Keystone  since May 1992.  Prior to joining  Keystone,  Mr. Pechota
served as President and Chief  Executive  Officer of Dacotah Cement  Company,  a
state-owned cement company, from January 1982 to May 1992. Mr.  Pechota has been
employed in the cement industry for over 16 years.

         Terry L.  Kinder,  40, has served as Vice  President,  Chief  Financial
Officer,  Secretary,  Treasurer  and a director of the Company since April 1994.
Mr. Kinder has served as Vice President, Secretary and Treasurer of Giant Group,
Ltd.  ("GROUP"),  the Company's  former parent,  from June 1986 to September 29,
1994.  From June 1989 to December  1992,  Mr. Kinder also served as President of
Giant and from June 1989 to April  1992,  he served as  President  of  Keystone.
Prior to joining  GROUP,  Mr.  Kinder was a  Certified  Public  Accountant  with
Coopers & Lybrand from January 1980 to June 1986.

         Richard A.  Familia,  46, has served as Vice  President,  Environmental
Affairs  of the  Company  since  April  1994.  Mr.  Familia  has also  served as
President and Chief  Operating  Officer of GRR since February 1992. From 1987 to
February  1992,  he served as  Director  of  Operations  for  various  operating
facilities of Laidlaw  Environmental  Services,  Inc., a  publicly-held  company
engaged in  various  environmental and  other  businesses.  Mr.Familia  has been
employed in the environmental industry for over 20 years.

         ITEM 2.  PROPERTIES

         Harleyville,   South   Carolina   Cement   Plant.   The  Company   owns
approximately  2,100  acres of land  near  Harleyville,  South  Carolina,  where
Giant's  plant and the quarry for its primary raw material are located.  Giant's
manufacturing  plant includes crushing,  raw grinding,  finished cement grinding
and other cement processing  facilities.  The ages of the plant kilns range from
22 to 45 years.

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<PAGE>

         Bath,  Pennsylvania  Cement Plant. The Company owns  approximately 1000
acres of land located in the Bath, Pennsylvania area, where Keystone's plant and
the  quarries  for its primary raw  material  are  located.  The plant  includes
crushing,  raw grinding,  finished cement  grinding and other cement  processing
facilities. One of its cement kilns was installed in 1956 and the other in 1966.

         The  Company's  cement  manufacturing  facilities  have an annual rated
clinker  capacity of  approximately  1.4 million tons and an annual rated cement
grinding  capacity  of  1.7  million  tons.  The  Company  believes  that  these
facilities are adequately maintained and suitable for its purposes.

         Arvonia,  Virginia LWA Plant. The Company owns  approximately 600 acres
of land in Buckingham County,  Virginia,  where a Solite LWA plant and quarry is
located.  At present,  the plant's kilns operate at an annual production rate of
approximately 150,000 tons.

         Cascade,  Virginia LWA Plant. The Company owns  approximately 500 acres
of land in Pittsylvania County,  Virginia where a Solite LWA plant and quarry is
located.  At present,  the plant's kilns operate at an annual production rate of
approximately 190,000 tons.

         Acquadale, North Carolina LWA Plant. The Company owns approximately 750
acres in Stanly County,  North Carolina,  where a Solite LWA plant and quarry is
located.  At present,  the plant's kilns operate at an annual production rate of
approximately 130,000 tons.

         Block Plants.  The Company owns and operates five concrete block plants
with a combined production capacity of 18 million blocks. The plants are located
at: Charlotte, NC; Eden, NC; Lynchburg, VA; South Boston, VA and Lexington, NC.

         Other Properties. The Company's and Giant's headquarters are located in
leased  space in  Summerville,  South  Carolina.  The  Company  also  operates a
distribution  facility on its land in Durham, North Carolina,  which has storage
facilities for  approximately  775 tons of cement,  and rents warehouse space in
Atlanta  ,  Georgia,  as  well  as in  Durham  and  Charlotte,  North  Carolina.
Keystone's offices are located in leased space in Bath,  Pennsylvania.  Solite's
offices are located in leased space in Richmond, VA.

         The majority of the Company's assets  are  pledged  as collateral under
the terms of financing agreements.(See Note 7 of Notes to Consolidated Financial
Statements)

ITEM 3.  LEGAL PROCEEDINGS

         On December 8, 1997, the resource recovery operation at Keystone Cement
Company, a wholly-owned  subsidiary of Giant Cement Holding, Inc., experienced a
fire at its waste fuel  storage  tank farm.  There were no injuries and no known
environmental damage.

         Immediately  after the incident,  Keystone ceased  utilization of waste
fuels and later entered into a negotiated  consent  agreement  with the PADEP to
halt the use of waste fuels at its plant pending an  investigation  of the cause
and determination of the appropriate corrective actions to ensure that a similar
incident does not occur in the future.  A report on the findings and recommended
corrective  actions was  submitted to the PADEP on December  31, 1997.  Keystone
negotiated an agreement  with the PADEP to allow it to resume waste fuel burning
effective July 1998. Under the terms of the agreement,  Keystone will pay a fine
of $488,000 in installments  over a ten-year  period.  In June 1998, the Company
settled  its  business  interruption  insurance  claim  related to the  Keystone
incident  for $1.6  million,  which is included in other  income at December 31,
1998.

         In April 1995,  the PADEP issued  Keystone an air quality plan approval
with new  requirements  for emission  rates,  operating  conditions,  and a risk
assessment.  While the new air quality plan approval left Keystone's  waste fuel
substitution  rates  intact,  Keystone  subsequently  filed an  appeal  with the
Pennsylvania  Environmental  Hearing  Board  (EHB)  challenging  certain  permit
conditions as outside the PADEP's  authority,  among other things.  On March 11,
1997 the EHB entered a Partial  Consent  Adjudication  in which Keystone and the
PADEP agreed to a process to resolve all outstanding  issues.  Under the Consent
Adjudication,  Keystone  agreed  to  perform  a  multipath  risk  assessment  in
accordance  with a  negotiated  protocol  and the PADEP  agreed to  process  and
publish a permit modification  allowing Keystone to increase its hazardous waste
fuel usage to 75% of its fuel needs if the risk  assessment  meets  certain risk
thresholds.  Keystone  completed the risk assessment and filed it and the permit
modification  with the PADEP.  The PADEP  currently has  Keystone's  submissions

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<PAGE>

under   review  and   consideration,   consistent   with  the  Partial   Consent
Adjudication. The date of the issuance of the revised permit cannot be estimated
at this time.

         Keystone  has  been  identified  as a PRP  under  CERCLA  at a site  in
Southington,  Connecticut.  According to the U. S. EPA Volumetric  Ranking List,
dated July 22, 1993,  Keystone's  percentage of waste disposed of at the site is
 .0302 percent (3.2  one-hundredths  of a percent) of the total  attributable  to
identifiable  parties.  Because liability under CERCLA is joint and several, the
insolvency  or  discharge  from  liability  of any other PRP could  increase the
Company's  potential  liability.  Although no assurances  can be given that this
percentage represents a limitation on Keystone's liability, the Company believes
that the final outcome of this matter will not have a material adverse effect on
the Company's financial condition or results of operations.

         In general, violations of the permit conditions or of the environmental
regulations,  even  if  immaterial  or  unintentional,   may  result  in  fines,
shutdowns, remedial actions or revocation of the permits, the loss of any one of
which  could  have a  material  adverse  effect  on  the  Company's  results  of
operations.

         The  Company  is  involved   in  various   administrative   matters  or
litigation.  While the final  resolution of any matter may have an impact on the
Company's  financial  results  for a  particular  reporting  period,  management
believes  that  the  ultimate  disposition  of  these  matters  will  not have a
materially adverse effect upon the financial position of the Company.

         The basis for the Company's estimate as to the probable effect of these
proceedings   is  its  current   analysis  of  such   proceedings.   Should  the
determination of these proceedings be adverse to the Company,  such result could
have a material adverse effect on the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

         The information  included in the section  entitled "Market and Dividend
Information" in the 1998 Annual Report is incorporated herein by reference.

ITEM 6.  SELECTED  FINANCIAL  DATA

         The information  included in the section entitled "Five-Year Summary of
Consolidated Financial Data" in the 1998 Annual Report is incorporated herein by
reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS  OF  FINANCIAL CONDITION AND
         RESULTS  OF OPERATIONS

         The  information   included  in  the  section  entitled   "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
1998 Annual Report is incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements of the Company, quarterly results
of operations, and the Report of Independent Accountants,  appearing in the 1998
Annual Report, are incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

13
<PAGE>


                                    PART III

ITEMS 10, 11, 12 and 13.

          DIRECTORS AND EXECUTIVE  OFFICERS OF THE  REGISTRANT;  EXECUTIVE
          COMPENSATION;  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS
          AND   MANAGEMENT;   AND   CERTAIN   RELATIONSHIPS   AND  RELATED
          TRANSACTIONS.

         The  information  required by these items,  other than  information set
forth in this Form 10-K under Item I,  "Executive  Officers of  Registrant,"  is
omitted because the Company is filing a definitive  proxy statement  pursuant to
Regulation  14A not later than 120 days after the end of the fiscal year covered
by this Report which includes the required information. The required information
contained in the Company's proxy statement is incorporated herein by reference.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND   REPORTS  ON  FORM  8-K

(a)       Documents Filed as Part of this Report:

  (1)     The  following  financial  statements  of Giant  Cement Holding,  Inc.
          required  to be  filed  as part  of  this  Report  on  Form  10-K  are
          incorporated  herein by reference to the 1998 Annual Report,  attached
          hereto as Exhibit 13:

          Report of Independent Accountants

          Consolidated Balance Sheets,  December 31, 1998 and 1997

          Consolidated Statements of Income, for the  years 1998, 1997 and 1996

          Consolidated Statements of  Cash  Flows,  for the years 1998, 1997 and
          1996

          Consolidated Statements  of Shareholders' Equity,  for the years 1998,
          1997, and 1996

          Notes to Consolidated Financial Statements

          Five-Year Summary of Consolidated Financial Data

          Quarterly Results of Operations

          Management's Discussion  and  Analysis  of  Financial  Condition  and 
          Results of Operations

          Market and Dividend Information

  (2)     The following financial statement schedule of  GIANT  CEMENT  HOLDING,
          INC. is attached:

          Schedule II - Valuation and Qualifying  Accounts - Years ended
          December 31, 1998, 1997 and 1996

          Report of Independent Accountants

14
<PAGE>


(b)  Exhibits

     Exhibit
       No.   Description of Exhibit
        2.1  Form  of  Agreement  and  Plan of Merger  between  the Company  and
             Solite  Corporation   (Filed as  Exhibit  6(a)(2) to the Company's
             Registration  Statement  on  Form  S-4  dated  September  30,  1997
             and incorporated herein by reference).

        2.2  Form of  Amendment  to the  Agreement  and Plan of  Merger  between
             the  Company  and  Solite Corporation.  (Filed as  Exhibit   2.2 to
             the  Company's  1997 10-K is  incorporated  herein by reference).

        3.1  Certificate  of  Incorporation  (Exhibit  3.1  to  Registration No.
             33-78260 is incorporated herein by reference).

        3.2  By-Laws  (Exhibit  3.2 to Registration No. 33-78260 is incorporated
             herein by reference).
        
          4  Specimen form of stock  certificate  for Common Stock (Exhibit 4 to
             Amendment 3 to Registration No. 33-78260 is incorporated  herein by
             reference).

       10.1  Registrant's  1994  Employee  Stock  Option  Plan  (Exhibit 10.1 to
             Registration  No.  33-78260 is incorporated herein by reference).

       10.2  Registrant's  1994  Outside  Director  Stock Option Plan   (Exhibit
             10.2  to  Registration  No. 33-78260  is  incorporated  herein  by
             reference).

       10.3  Form of Employment  Agreement  between  the  Company  and  Gary  L.
             Pechota, as   amended  (Exhibit  10.3 to  the  Company's  Quarterly
             Report  on  Form  10-Q for the quarter ended September 30, 1997, is
             incorporated herein by reference).

       10.4  Form of Employment  Agreement  between  the   Company  and Terry L.
             Kinder,  as  amended  (Exhibit  10.2  to  the  Company's Quarterly
             Report  on  Form  10-Q  for the  quarter  ended September 30, 1997,
             is incorporated herein by reference).

       10.5  Form  of  Employment  Agreement  between the Company and Richard A.
             Familia.  (Exhibit 10.5 to the  Company's 1997 10-K is incorporated
             herein by reference).

     10.6.1  Loan   and   Security    Agreement,    dated   November  23,  1993,
             between   Giant   and   The   CIT  Group/Equipment  Financing, Inc.
             ("CIT")  (Exhibit   10.5.1  to   Registration   No.  33-78260    is
             incorporated herein by reference).

     10.6.2  Secured  Promissory  Note,  date  November  23,  1993,   from Giant
             to CIT     (Exhibit  10.5.2  to  Registration  No.   33-78260    is
             incorporated herein by reference).

     10.6.3  South    Carolina    Mortgage    and   Security   Agreement,  dated
             November  23,  1993,    between Giant  and  CIT (Exhibit  10.5.3 to
             Registration  No.  33-78260 is  incorporated  herein by reference).

     10.6.4  Continuing   Guarantee   Agreement,   dated    November   23, 1993,
             between Giant and CIT (Exhibit 10.5.4  to Registration No. 33-78260
             is incorporated herein by reference).

     10.6.5  Collateral Value Maintenance  Agreement,  dated  November  23,1993,
             between Giant  and CIT (Exhibit 10.5.5 to Registration No. 33-78260
             is incorporated herein by reference).

     10.6.6  Form of First Amendment  to Loan and  Security  Agreement  between 
             Giant and CIT (Exhibit  10.5.6 to Amendment 4 to Registration  No. 
             33-78260  is  incorporated   herein  by reference).

     10.6.7  Form of  Continuing  Guaranty  Agreement  by the  Company in  favor
             of CIT  (Exhibit 10.5.7 to Amendment 4 to Registration No. 33-78260
             is incorporated herein by reference).

     10.6.8 Form of Second  Amendment  to Loan and  Security  Agreement  between
            Giant and CIT.

     10.6.9 Secured  Promissory Note, dated August 31, 1995, from Giant to CIT.

15
<PAGE>



     Exhibit
       No.      Description of Exhibit


       10.7    Form of Release and  Indemnification  Agreement  between   GROUP,
               KCC Delaware Company, and the Company (Exhibit 10.7 to Amendment
               5  to  Registration   No. 33-78260  is  incorporated  herein  by
               reference).

     10.8.1    Tax Sharing  Agreement,  dated  November  23, 1993,  between  the
               Company and GROUP  (Exhibit 10.6.4  to  Registration No. 33-78260
               is incorporated herein by reference).

     10.8.2    Form of Tax Sharing and   Indemnification  Agreement  between the
               Company and GROUP  (Exhibit10.6.5 to Amendment 3 to Registration
               No. 33-78260 is incorporated herein by reference).

       10.9    Credit Agreement, dated December 20, 1996, between GCHI,   Giant,
               Keystone, GRR, GCHI Investments and Giant NC and SouthTrust  Bank
               of  Alabama   (Exhibit  10.8  to  the Company's   1996   10-K  is
               incorporated   herein   by reference).

      10.10    Credit and Security  Agreement,  dated  April 30,  1998  between 
               GCHI and subsidiaries, and SouthTrust Bank, N.A.  (Exhibit 10.10 
               to the Company's Quarterly Report on Form10-Q  for  the   quarter
               ended  June  30,   1998,   is incorporated herein by reference).

        *13    Copy of the Company's Annual Report to Shareholders for the  Year
               ended December 31, 1998.

        *21    List of Subsidiaries.

   *23.1(a)    Consent of PricewaterhouseCoopers LLP

        *27    Financial Data Schedule

*Filed herewith

(c)      Reports filed on Form 8-K:

         No reports on Form 8-K were filed during the quarter ended December 31,
         1998.

(d)      Exhibits Required by Item 601 of Regulation S-K:

         Described in Item 14 (b) of this Annual Report on Form 10-K.

(e)      Separate Financial Statements and Schedules

         Not applicable.

16
<PAGE>


                                   SIGNATURES

         PURSUANT TO THE  REQUIREMENTS  OF SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE  ACT OF 1934,  THE  REGISTRANT  HAS DULY  UNDERSIGNED,  THEREUNTO  DULY
AUTHORIZED.


                                 Giant Cement Holding, Inc.
                                 Registrant



Date:  March 31, 1999        By: /S/ Gary Pechota
                                 -----------------
                                 Gary Pechota
                                 Chairman


         PURSUANT TO THE  REQUIREMENTS  OF THE SECURITIES  EXCHANGE ACT OF 1934,
THIS  REPORT HAS BEEN  SIGNED  BELOW BY THE  FOLLOWING  PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.


Date:  March 31, 1999        By: /S/Gary Pechota
                                 -------------------
                                 Gary Pechota
                                 Chairman of the Board,
                                 President and Chief Executive Officer
                                 (Director and Principal Executive Officer)


Date:  March 31, 1999        By: /S/Terry L. Kinder
                                 -------------------
                                 Terry L. Kinder
                                 Vice President and Chief Financial Officer
                                 Secretary and Treasurer
                                 (Director and Principal Financial and
                                  Accounting Officer)


Date:  March 31, 1999        By: /S/Dean M. Boylan
                                 ------------------
                                 Dean M. Boylan
                                 Director


Date:  March 31, 1999        By: /S/Edward Brodsky
                                 Edward Brodsky
                                 Director


Date:  March 31, 1999        By: /S/Robert L. Jones
                                 -------------------
                                 Robert L. Jones
                                 Director


Date:  March 31, 1999        By: /S/John W. Roberts
                                 -------------------
                                 John W. Roberts
                                 Director


17
<PAGE>


                           ANNUAL REPORT ON FORM 10-K

                          YEAR ENDED DECEMBER 31, 1998

                                  ITEM 14(a)(2)

                          FINANCIAL STATEMENT SCHEDULE

                           GIANT CEMENT HOLDING, INC.


<PAGE>
                           GIANT CEMENT HOLDING, INC.
                                   SCHEDULE II
                                 VALUATION AND
                              QUALIFYING ACCOUNTS



COL. A                      COL. B       COL. C           COL. D        COL. E
------                      ------       ------           ------        ------
                                       Additions
                                       Charged
                         Balance at   to Costs and                     Balance
                         Beginning    Expenses &                       at End
Description              of Period   Charged to Other  Deductions(2)  of Period
-----------              ---------   ----------------  ----------     ---------
Year ended December 31,
1998

Deducted from related
 current asset accounts:

Accounts receivable:
 Allowance for doubtful
  accounts                $849,000      $795,000 (1)   $256,000(2) $1,388,000
 Allowance for cash
  discounts                476,000     1,654,000 (1)  1,538,000(3)    592,000
                        ----------    ----------     ----------    ---------- 
                        $1,325,000    $2,449,000     $1,794,000    $1,980,000
                        ==========    ==========     ==========    ==========

Year ended December 31,
1997

Deducted from related
 current asset accounts:

Accounts receivable:
 Allowance for doubtful
  accounts                $836,000      $238,000       $225,000(1)   $849,000
 Allowance for cash
  discounts                287,000     1,820,000      1,631,000(2)    476,000
                        ----------    ----------     ----------    ----------

                        $1,123,000    $2,058,000     $1,856,000    $1,325,000
                        ==========    ==========     ==========    ==========

Year ended December 31,
1996

Deducted from related
 current asset accounts:

Accounts receivable:
 Allowance for doubtful
  accounts                $750,000      $344,000       $258,000(1)   $836,000
 Allowance for cash
  discounts                223,000     2,389,000      2,325,000(2)    287,000
                          --------    ----------     ----------    ----------

                          $973,000    $2,733,000     $2,583,000    $1,123,000
                          ========    ==========     ==========    ==========

Notes: (1)  Includes beginning balances from the Solite acquisition of $398,000
            and $70,000 for the allowance for doubtful accounts and the 
            allowance for cash discounts, respectively.
       (2)  Uncollectible accounts written off, net of recoveries.
       (3)  The Company's normal payment terms allow a $1 per ton discount for
            payment by the 10th day of the month following shipment (net 30),
            which the Company believes is a standard industry practice.  The
            deductions above represent cash discounts allowed for prompt payment
            and other allowances.




<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Shareholders
Giant Cement Holding, Inc.:

Our report on the  consolidated  financial  statements of Giant Cement  Holding,
Inc. has been  incorporated  by reference in this Form 10-K from the 1998 Annual
Report to  Shareholders  of Giant Cement  Holding,  Inc. In connection  with our
audits of such financial statements,  we have also audited the related financial
statement schedule listed in the index of this Form 10-K.

In our  opinion,  the  financial  statement  schedule  referred  to above,  when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents  fairly,  in all  material  respects,  the  information  required to be
included therein.

PricewaterhouseCoopers LLP
March 30, 1999


<PAGE>


                           GIANT CEMENT HOLDING, INC.

                                   EXHIBITS TO

                                    FORM 10-K

                     FOR FISCAL YEAR ENDED DECEMBER 31, 1998


<PAGE>


                                  EXHIBIT INDEX

    Exhibit
      No.         Description of Exhibit

       13         Copy of the Company's  Annual Report to  Shareholders  for the
                  year ended December 31, 1998

       21         List of Subsidiaries

    23(a)         Consent of PricewaterhouseCoopers LLP

       27         Financial Data Schedule


<PAGE>