Exhibit 13



                        GIANT CEMENT HOLDING, INC.

                           1996  ANNUAL  REPORT

                              TO SHAREHOLDERS

<PAGE>


                            CORPORATE PROFILE

     GIANT CEMENT HOLDING, INC. 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  manufacturing
facilities  are  fully  integrated from limestone mining  through  cement
production  and serve the rapidly growing South-Atlantic and the  Middle-
Atlantic  regions  of the United States.  The Company pioneered  resource
recovery techniques for use in the manufacturing of cement and is one  of
the largest users of waste-derived fuels in the cement industry.


Contents
Financial Highlights, 1
Letter To Shareholders, 2
Business Review, 4
Consolidated Financial Statements, 6
Notes to Consolidated Financial Statements, 10
Report of Independent Accountants, 19
Management's Discussion and Analysis, 20
Corporate Information, 26
Directors and Officers, 28

<PAGE>

            FIVE-YEAR SUMMARY OF CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                   1996            1995            1994           1993          1992
                                   ----            ----            ----           ----          ----
                                              (Amounts in thousands, except per share data)
<S>                              <C>             <C>             <C>            <C>           <C>
Income statement data:
   Total revenues                $110,198        $100,185        $90,802        $81,900       $72,256
   Gross profit                    32,380          27,314         20,443         14,845         5,348
   Operating income (loss)(1)      24,539          19,767         13,752          8,725        (3,833)
   Net income (loss)               15,421          12,715          9,195          5,148        (5,693)

   Net income (loss) per
      common share               $   1.57         $  1.27        $   .92        $   .51       $  (.57)
   Cash dividends                      -               -              -              -             -
   Weighted average common
      shares outstanding            9,833           9,990         10,000         10,000        10,000

Balance sheet and other data:
   Working capital               $ 26,706        $ 17,539       $ 20,513       $ 12,228       $ 7,830
   Total assets                   118,616         111,714         90,525         80,944        76,757
   Long-term debt                  11,751          15,525          8,403          9,312        10,879
   Shareholders' equity            77,128          64,614         54,203         42,394        38,225
   Return on beginning of
      year shareholders' equity      23.9%           23.5%          21.7%          13.5%        (12.7)%
   Cash flow  (2)                  26,664          22,708         17,746         13,663         3,466
   Percent cash flow to revenues     24.2%           22.7%          19.5%          16.7%          4.8%

</TABLE>

(1)  The 1992 operating results include a nonrecurring charge of $3.0 million to
     reflect the actuarial cost of early retirement programs for certain
     employees.

(2)  Net income plus depreciation and amortization, deferred income taxes, other
     non-cash charges or credits, and incremental charge for postretirement
     benefits.

                                       1

<PAGE>

LETTER TO SHAREHOLDERS

GIANT  CEMENT  HOLDING, INC. had another record year in  1996.   Earnings
increased 21% to $15.4 million or $1.57 per share, up from $12.7  million
or  $1.27 per share from a year earlier.  The 1996 earnings reflect a 14%
return  on  sales and a 24% return on equity.  The results were reflected
in  the  improvement in our stock price as GCHI stock ended the  year  at
$16.13,  up 40% for the year.  At year-end, the stock traded at a  modest
ten times 1996 earnings.

The  Company's  progress in 1996 was a result of improvements  in  almost
every aspect of its operations.  Sales volume, clinker production, cement
production,  and  resource recovery volumes were all  at  record  levels.
These improvements, in addition to holding per unit costs level with  the
prior  year  and  reducing  SG&A to 7.1% of  sales,  increased  operating
margins  to  22.3%  from  19.7%  a year earlier.   The  strong  operating
performance  and  reduced capital expenditures  allowed  the  Company  to
further  strengthen its balance sheet, ending the year with $10.0 million
in cash, only $10.7 million in long-term debt, and a current ratio of 2.5
to 1.

While  we  are  pleased  with our operational and financial  performance,
several  other events took place during the year which should  allow  the
Company to continue to deliver value to our shareholders.

The  lawsuit  filed  against  the  Company  in  1995  by  a  newly-formed
environmental group was dismissed with no financial impact or operational
changes required of the Company.  The results of testing performed during
the discovery stages were very positive for the Company and reinforce the
belief  that  our  resource recovery activities  are  protective  of  the
environment  and  health.   We  were disappointed  that  funding  to  the
environmental group was provided by a competing industry, which  confirms
our opinion that the issue was about market share, not the environment or
health.

The  Company established a $32 million revolving credit facility late  in
the  year.   The  new  banking relationship and  credit  facility  should
provide the Company with adequate financing to continue to take advantage
of growth opportunities.

In December, the Company entered into a letter of intent to acquire three
lightweight aggregate manufacturing plants, each with associated resource
recovery   facilities,   five  concrete  block   plants,   and   a   drum
processing/fuel   blending  facility  from  Solite  Corporation.    These
facilities,  with revenues of approximately $48 million, would  give  the
Company a presence in the construction products business from Florida  to
New  York.  We believe the acquisition would be a strategic fit  for  the
Company  as  it expands our product lines in both construction  materials
and resource recovery services across the East Coast.  Due to its complex
nature  and  certain required governmental and other approval  processes,
the transaction, if consummated, would be completed in the third quarter.

We  continue  to  believe that the Company's stock price does  not  fully
reflect the Company's earnings potential.  After substantially completing
the  original  $5  million stock repurchase program  late  in  1996,  the
Company's  Board  of Directors authorized an additional  $5  million  for
repurchases of common stock over the next eighteen months.

                                       2

<PAGE>

We are optimistic about 1997.  We believe the economic climate in both of
our  market  areas  will  be positive again in 1997.   The  supply/demand
situation  in  the  South-Atlantic region continues  to  be  tight.   The
supply/demand  balance  in  the  Middle-Atlantic  region  appears  to  be
significantly more balanced than at this time last year, and  we  believe
the  $4  price  increase announced for April 1997 will  be  substantially
realized.

The employees of Giant Cement Holding, Inc. worked hard to achieve record
results in 1996, and we appreciate their efforts.  We would also like  to
thank  our  customers, suppliers, and investors for the  confidence  they
have  shown in the Company.  Our goal for 1997 is the same as 1996, which
is  to achieve record revenues, production and earnings, which should  be
positive for all of us.


Gary Pechota
Chairman, President and Chief Executive Officer
March 7, 1997

                                       3

<PAGE>

                             BUSINESS REVIEW

A  strong  economy  incorporating a favorable interest  rate  environment
contributed  to cement consumption reaching record levels in  the  United
States  in 1996.  Portland cement consumption increased 6% from 1995,  to
approximately  91 million tons through November, while imports  increased
only  2.8%  to  approximately 15 million tons.  The strong  supply/demand
fundamentals  have allowed the industry to achieve record  profits.   The
favorable  conditions affecting the industry contributed to Giant  Cement
Holding,  Inc. achieving a 23% increase in net income, record  sales  and
all time high production levels.

Sales volume in 1996 increased 6.7%.  Increases were achieved in both the
Middle-Atlantic  (Keystone  Cement  Company)  and  South-Atlantic  (Giant
Cement  Company)  markets.   Both companies  increased  their  respective
market  shares  in  their  areas and were  able  to  sell  all  of  their
production  during the year.  Approximately 33,000 tons  of  cement  were
shipped from Keystone to Giant where demand was particularly robust.  The
strong  demand  allowed  the  Company to increase  its  pricing  by  4.1%
overall,  with  essentially all of the increase coming  from  the  South-
Atlantic  market.   By  the end of 1996, inventory levels  in  Keystone's
market  areas were significantly lower than those of the prior year,  and
as  a  result  a  $4 price increase was announced in the Keystone  market
effective April 1, 1997.  A slight increase in price is also expected  at
Giant.

During  1996,  the Company was successful in continuing  its  efforts  to
improve  its  manufacturing capabilities.  Clinker  production  increased
1.5% following a 5.2% increase in 1995, while cement production increased
2.5%  for  1996.  With a reasonable cost per-ton of capacity  investment,
within  the  same  level of capital expenditures as  in  1996,  increased
production levels are expected again in 1997.

Contributing  to  the record clinker production was an increase  in  kiln
utilization  which  improved to 90% for 1996 (94%  excluding  the  annual
maintenance  shutdown)  from 88% a year ago.   The  new  finish  mill  at
Keystone  added  to  cement production.  Per  unit  costs  were  kept  at
approximately  the same level as the prior year by aggressively  managing
all  costs and offsetting inflationary cost increases with more efficient
operations.   Selling,  general and administrative costs  increased  only
slightly in 1996 and decreased as a percentage of sales to 7.1% from 7.5%
in 1995.

The  Company's  resource recovery operations finished  1996  with  record
volumes  and revenues.  Total liquid solvents utilized increased 3.8%  to
36.0  million  gallons while the solids business doubled for  the  second
consecutive year.  The Company's strategy to move into higher-revenue-per-
ton  solids has been successful.  Pricing in the liquid solvent  business
declined 16.1%, as a result of strong competition in the marketplace  for
liquids.   The market did show improvement throughout the year,  and  the
outlook  is  favorable for slightly higher pricing in 1997.   Solid  fuel
pricing  improved by 3.2% in 1996.  While the solids revenue was  higher,
the  cost of processing the material was higher that anticipated as well.
Programs  to help lower processing costs have been implemented and  their
progress is being closely monitored.

The Company continues to improve its health and safety performance.  Lost-
time  accidents were reduced to seven in 1996, but the Company  continues
to focus upon safety for further improvement.

                                       4

<PAGE>

Capital expenditures in 1996 were $11.0 million.  This is slightly higher
than  depreciation  expense  for  1996 of  $9.0  million.   The  projects
competed  were a combination of environmental, equipment replacement  and
productivity  improvements projects.  Recent capital investment  projects
have  yielded good results with clinker production increasing  6.8%  over
the  last two years and cement production increasing 6.3%.  Major capital
investment  projects  included  the  investment  of  $930,000  for   dust
collection  at Giant and $800,000 toward the construction of  the  quarry
belt  project at Giant, which is anticipated to be completed  during  the
first  quarter of 1997.  Capital spending of approximately $10.0 -  $11.0
million is planned for 1997.  Capital spending at this level should allow
the  Company  to  add incremental capacity and replace  equipment  on  an
ongoing, as-needed basis.

The  improved  operating  performance of  the  Company  in  1996  greatly
contributed to a strengthened balance sheet.  Cash at year end was  $10.4
million.   The Company's current ratio improved to 2.5 from  1.8  a  year
ago,  and  total bank borrowings declined to $11.8 million in  1996  from
$17.8 in 1995.  High profitability has allowed the Company to enter  into
a  $32  million  revolving-credit  agreement  at  favorable  rates.   The
combination  of  a  strong  balance sheet, good  operating  margins,  and
internal  and  external  growth opportunities positions  the  Company  to
continue to deliver increased value to its shareholders.

                                       5

<PAGE>

GIANT CEMENT HOLDING, INC.
CONSOLIDATED STATEMENTS OF INCOME
for the years ended December 31,

<TABLE>
<CAPTION>

                                                           1996            1995           1994
                                                           ----            ----           ----
                                                          (In thousands, except per share data)
<S>                                                     <C>             <C>            <C>
Revenues:

Product sales .....................................     $ 96,186        $ 86,635       $ 77,883
Resource recovery services.........................       14,012          13,550         12,919
                                                        --------        --------       --------
       Total revenues..............................      110,198         100,185         90,802

Costs and expenses:

Cost of sales and services.........................       77,818          72,871         70,359
Selling, general and administrative................        7,841           7,547          6,691
                                                        --------        --------       --------
       Operating income ...........................       24,539          19,767         13,752

Other income (expense):

Interest expense...................................       (1,141)           (181)          (761)
Other, net.........................................          298             (24)          (219)
                                                        --------        --------       --------
       Income before income taxes .................       23,696          19,562         12,772
Provision for income taxes.........................        8,275           6,847          3,577
                                                        --------        --------       --------
       Net income .................................     $ 15,421        $ 12,715       $  9,195
                                                        ========        ========       ========
Net income per common share........................     $   1.57        $   1.27       $    .92
                                                        ========        ========       ========
Weighted average common shares outstanding.........        9,833           9,990         10,000

</TABLE>

See accompanying notes to consolidated financial statements.

                                       6

<PAGE>

GIANT CEMENT HOLDING, INC.
CONSOLIDATED BALANCE SHEETS
December 31,

                                                       1996             1995
                                                       ----             ----
                                                     (all amounts in thousands)
ASSETS
Current assets:
Cash and cash equivalents.........................  $ 10,432         $  8,102
  Accounts receivable, less allowances
    of $1,123 in 1996 and $973 in 1995............    14,897           12,557
  Inventories  ...................................    17,656           17,102
  Other current assets ...........................     2,071            1,750
                                                    --------         --------

    Total current assets .........................    45,056           39,511

Property, plant and equipment, net................    70,418           69,475
Deferred charges and other assets ................     3,142            2,728
                                                    --------         --------

    Total assets .................................  $118,616         $111,714
                                                    ========         ========
LIABILITIES
Current liabilities:
  Accounts payable ...............................  $ 10,437         $  8,172
  Short-term borrowings...........................       -              2,279
  Accrued expenses ...............................     6,843            7,333
  Current maturities of long-term debt ...........     1,070            4,188
                                                    --------         --------

    Total current liabilities ....................    18,350           21,972

Long-term debt, net of current maturities ........    10,681           11,337
Accrued pension and postretirement benefits.......     6,332            9,259
Deferred income taxes ............................     6,125            4,532
                                                    --------         --------

    Total liabilities  ...........................    41,488           47,100
                                                    --------         --------
Contingencies (Note 13)

SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value;
  2.0 million shares authorized..................        -                -
Common stock, $.01 par value;
  20.0 million shares authorized,
  10.0 million shares issued ....................        100              100
Capital in excess of par value...................     41,022           40,985
Retained earnings ...............................     42,035           26,614
                                                    --------         --------
                                                      83,157           67,699
Less: Treasury stock, at cost; 336 shares
       in 1996, 63 shares in 1995................      4,491              616
      Reduction  for additional pension liability      1,538            2,469
                                                    --------         --------
      Total shareholders' equity.................     77,128           64,614
                                                    --------         --------

Total liabilities and shareholders' equity ......   $118,616         $111,714
                                                    ========         ========


See accompanying notes to consolidated financial statements.

                                       7

<PAGE>

GIANT CEMENT HOLDING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,

<TABLE>
<CAPTION>

                                                        1996         1995         1994
                                                        ----         ----         ----
                                (all amounts in thousands)
<S>                                                    <C>          <C>          <C>
OPERATIONS:
Net income .....................................       $15,421      $12,715      $ 9,195
Depreciation and depletion......................         9,031        7,855        7,236
Deferred income taxes...........................         1,023          876         (290)
Amortization of deferred charges and other......           431          492          537
Changes in operating assets and liabilities:
    Receivables.................................        (2,340)      (2,023)         836
    Inventories.................................          (554)      (3,058)        (630)
    Other current assets and deferred charges...        (1,291)      (1,303)         (62)
    Accounts payable............................         2,110          (41)         155
    Accrued expenses............................        (1,538)      (2,029)       1,038
                                                       -------      -------      -------
           Net cash provided by operations......        22,293       13,484       18,015
                                                       -------      -------      -------

INVESTING:
Purchase of property, plant and equipment.......        (9,819)     (23,898)      (7,527)
Change in restricted cash equivalents...........           -            -            525
                                                       -------      -------      -------
           Net cash used by investing...........        (9,819)     (23,898)      (7,002)
                                                       -------      -------      -------

FINANCING:
Repayment of long-term debt.....................       (12,059)      (3,041)      (1,969)
Proceeds from long-term debt....................         8,285        8,500          -
Payments to former parent.......................           -           (201)      (2,378)
Capital contribution............................           -            -          2,000
Proceeds from short-term borrowings.............         3,000        2,279          -
Repayment of short-term borrowings..............        (5,279)         -            -
Purchase of treasury shares.....................        (4,091)        (616)         -
                                                       -------      -------      -------
         Net cash provided (used) by financing..       (10,144)       6,921       (2,347)
                                                       -------      -------      -------
         Increase (decrease) in cash and
            cash equivalents....................         2,330       (3,493)       8,666

CASH AND CASH EQUIVALENTS:
Beginning of period.............................         8,102       11,595        2,929
                                                       -------      -------      -------
End of period...................................       $10,432      $ 8,102      $11,595
                                                       =======      =======      =======

SUPPLEMENTAL INFORMATION:
Cash paid for:
   Interest (net of capitalized interest
    of $53 in 1996 and $733 in 1995)............       $ 1,141      $   186      $   867
   Income taxes.................................         6,987        7,519        3,077
Non cash investing and financing activities:
   Assets financed by notes and
    accounts payable............................         2,096        2,021          984
   Capital lease obligations....................           -            599        1,061

</TABLE>

See accompanying notes to consolidated financial statements.

                                       8

<PAGE>

GIANT CEMENT HOLDING, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
for the years ended December 31,

<TABLE>
<CAPTION>                                                                                          Reduction for    Total
                                                         Capital in                         Additional     Share-
                                             Common      Excess of   Retained   Treasury      Pension     holders'
                                              Stock      Par Value   Earnings     Stock      Liability     Equity
                                              -----      ---------   --------   --------     ---------     ------
                                                 (all amounts in thousands)
<S>                                          <C>         <C>         <C>         <C>         <C>         <C>
Balance, January  1, 1994...............      $100        $38,813     $ 5,485     $  -        $(2,004)    $42,394

Net income for 1994.....................                                9,195                               9,195
Capital transactions relating to the
    public sale of the Company..........                    2,000        (781)                              1,219
Increase in equity to reflect the change
    in the additional minimum pension
    liability, net of deferred income
    taxes of $630.......................                                                        1,223       1,223
Transfer of property from former parent.                      172                                             172
                                              ----        -------     -------     -----       -------     -------

Balance, December 31, 1994..............       100         40,985      13,899        -           (781)      4,203

Net income for 1995.....................                   12,715                                          12,715
Purchase of 630 treasury shares.........                                                         (616)       (616)
Reduction in equity to reflect additional
    minimum pension liability, net of
    deferred income taxes of $927.......                                                       (1,688)     (1,688)
                                              ----        -------     -------     -----       -------     -------

Balance, December 31, 1995                     100         40,985      26,614      (616)       (2,469)     64,614

Net income for 1996.....................                               15,421                              15,421
Issuance of 22 treasury shares to
    employee profit-sharing plans.......                       37                   216                       253
Purchase of 295 treasury shares.........                               (4,091)                 (4,091)
Increase in equity to reflect the change
    in the additional minimum pension
    liability, net of deferred income
    taxes of $501........................                                                         931         931
                                              ----        -------     -------     -----       -------     -------

Balance, December 31, 1996...............     $100        $41,022     $42,035   $(4,491)      $(1,538)    $77,128
                                              ====        =======     =======    ======       =======     =======

</TABLE>

      See accompanying notes to consolidated financial statements.

                                       9

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. Basis of Presentation:

Giant Cement Holding, Inc. (the "Company") was incorporated April 6, 1994
as  an  indirect subsidiary of GIANT GROUP, LTD. ("GROUP"), the Company's
former  parent. The common stock of Giant Cement Company, Keystone Cement
Company and Giant Resource Recovery Company, Inc. was transferred to  the
Company  in  exchange  for 10.0 million shares  of  common  stock.   This
transaction has been accounted for at historical cost in a manner similar
to  the  pooling  of  interest  method.   Accordingly,  the  accompanying
consolidated   financial  statements  include  the   combined   financial
position,  results of operations and cash flows of Giant  Cement  Company
("Giant"),  Keystone  Cement  Company ("Keystone"),  and  Giant  Resource
Recovery Company, Inc. ("GRR") for all periods presented.  Where referred
to  herein,  the "Company" includes these three predecessor subsidiaries.
All   significant  intercompany  transactions  and  balances  have   been
eliminated.

In  October 1994, GROUP completed the initial public offering ("IPO")  of
all   10.0  million shares of the Company's common stock that  GROUP  had
previously  held.   Common  stock, capital in excess  of  par  value  and
earnings  per  share  for all prior periods have been  adjusted  to  give
retroactive recognition to the issuance of 10.0 million shares of  common
stock.  In  connection with the offering, the Company received a  capital
contribution from GROUP of $2.0 million in cash.

2.  Significant Accounting Policies:

The  Company  is involved in a single business segment comprised  of  the
domestic manufacture and sale of portland and masonry cements and related
aggregates.  The Company is also involved in waste recycling and resource
recovery, utilizing industrial waste as supplemental fuels in its  cement
kilns.

Cash Equivalents:

For  purposes of the consolidated statements of cash flows, highly liquid
securities  with an original maturity date of three months  or  less  are
considered   cash equivalents.  Cash equivalents are recorded  at  market
value   and  consist  of  short-term  U.S.  Government  obligations   and
repurchase   agreements  collateralized  by  short-term  U.S.  Government
obligations.

Inventories:

Inventories are carried at the lower of average cost or market.

Property, Plant and Equipment:

Depreciation for financial reporting purposes is provided principally  by
the  straight-line method over the estimated useful lives of the  assets,
ranging from 3 to 50 years.  Depletion of the cost of quarry property  is
based  upon  the  tonnage  quarried in relation to  the  estimated  total
tonnage available.

Deferred Charges:

Deferred  charges include debt issuance costs and certain costs  incurred
to  obtain  multi-year operating permits upon certification of compliance
with environmental regulations.  Deferred permit certification costs  are
amortized  over  the  period benefitted, presently three  to  ten  years.
Deferred  loan costs are amortized by the straight-line method  over  the
life of the related debt.

                                       10

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Income Taxes:

Income  taxes  are  accounted for in accordance with  the  provisions  of
Statement  of  Financial Accounting Standards No.  109,  "Accounting  for
Income  Taxes" ("SFAS 109"). Prior to October 1994, Giant,  Keystone  and
GRR  joined  GROUP  in  filing a consolidated U.S. corporate  income  tax
return.  Pursuant to their tax-sharing agreement with GROUP, each company
was  charged  or  credited for its respective share of  the  consolidated
federal  income tax liability based upon the amount of tax that would  be
reported on a separate return basis.

Environmental Liabilities:

The  Company  evaluates environmental contingencies and, if  appropriate,
accrues the estimated cost by charging income for the gross liability for
all matters where a future loss is probable and reasonably estimable.  If
it is probable that the Company will be indemnified and/or recover all or
a  portion  of  a  probable  loss, and the amount  of  such  recovery  is
reasonably  estimable, the Company accrues the related asset on  a  gross
basis.   The Company utilizes all of the information available to  it  to
estimate the range or amount of loss and the timing of loss payments.

Revenue Recognition:

The  Company  derives revenues from product sales and  resource  recovery
services. Revenues for cement sales are recognized in the period in which
the  cement  is  shipped  to customers.  Revenues for  resource  recovery
services are recognized in the period in which the service is provided or
the  waste-derived  fuel is utilized.  Inventories of waste-derived  fuel
are immaterial.

Estimates:

The  preparation  of  financial statements in conformity  with  generally
accepted accounting principles requires management to make estimates  and
assumptions  that affect the reported amounts of assets and  liabilities,
the  disclosure of contingent assets and liabilities at the date  of  the
financial  statements, and the reported amounts of revenues and  expenses
during  the  reporting period.  Actual results could  differ  from  those
estimates.

3.Inventories:
                                                 1996         1995
                                                 ----         ----
     At December 31:                               (In thousands)
     Finished goods .......................    $ 3,141      $ 3,913
     In process ...........................      1,236        1,270
     Raw Materials ........................      2,025        1,527
     Supplies, repair parts and coal.......     11,254       10,392
                                               -------      -------
                                               $17,656      $17,102
                                               =======      =======

                                       11

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4. Property, Plant and Equipment:
   At December 31 (at cost):                           1996          1995
                                                       ----          ----
                                                         (In thousands)
   Land and quarries ..........................      $  2,335      $  2,335
   Buildings ..................................        10,772        10,446
   Machinery and equipment ....................       139,008       120,347
   Projects in process ........................         3,655        15,650
                                                     --------      --------
                                                      155,770       148,778
   Less accumulated depreciation and depletion.        85,352        79,303
                                                     --------      --------
                                                     $ 70,418      $ 69,475
                                                     ========      ========
5. Accrued Expenses:
   At December 31:                                     1996          1995
                                                       ----          ----
                                                         (In thousands)
   Compensation ...............................      $  2,161      $  1,913
   Pension plan contributions .................         2,781         3,446
   Other ......................................         1,901         1,974
                                                     --------      --------
                                                     $  6,843      $  7,333
                                                     ========      ========
6. Debt:
   Long-term debt consisted of the following at December 31:
                                                       1996          1995
                                                       ----          ----
                                                         (In thousand
   Term loans .................................      $  2,705      $ 14,069
   Revolving credit facility borrowings .......         8,285           -
   Other ......................................           761         1,456
                                                     --------      --------
                                                       11,751        15,525
   Less current maturities ...................          1,070         4,188
   Long-term debt, net of current maturities..       $ 10,681      $ 11,337
                                                     ========      ========


       The Term Loan bears interest at 8.4% annually and matures in 2000.
Property, plant and equipment having an aggregate net book value of $33.5
million have been pledged as collateral under the Term Loan Agreement.

       In  December 1996, the Company entered into a three-year, annually
renewable,  $32  million Revolving Credit Facility and Letter  of  Credit
Agreement (the "Credit Facility") with a bank.  Advances under the Credit
Facility  bear interest at the lessor of LIBOR plus 1.75% or  the  bank's
base rate minus 1.0%.  Borrowings under the Credit Facility are partially
collateralized   by  eligible  accounts receivable  and  inventories  (as
defined).    The  Company  is required to reduce  outstanding  borrowings
under  the  Credit  Facility to $22.0 million for a  period  of  30  days
annually.  At December 31, 1996, amounts outstanding and available  under
the Credit Facility totaled $8.3 million and $21.7 million, respectively.

                                       12

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The  Company's  Term  Loan and Credit Facility impose  restrictions  with
respect  to  the  maintenance of financial ratios and net  worth  of  the
Company  and its subsidiaries.  The most restrictive covenants  currently
require  maintaining tangible  net worth (as defined)  aggregating  $60.0
million.

Aggregate  maturities  of  long-term debt are as  follows:  1997  -  $1.1
million, 1998 - $896,000, 1999 - $9.2 million, 2000 - $581,000.

7. Stock Option Plans:

In  April  1994, the Company adopted the 1994 Employee Stock Option  Plan
(the "Employee Plan"), which authorizes the Stock Option Committee of the
Board of Directors to grant incentive or non-qualified stock options  for
the  purchase  of  up  to  1.0 million shares  of  common  stock  to  key
employees.   Additionally, the Company adopted the 1994  Directors  Stock
Option  Plan  for  non-employee directors (the  "Director  Plan"),  which
provides for an initial grant of non-qualified options for 10,000  shares
of common stock and thereafter an annual grant for 5,000 shares.  Options
to purchase up to 300,000 shares of Common Stock may be granted under the
Director Plan.  The exercise price under each stock option plan  will  be
equal to the market price at the date of grant.

In  1994,  292,000 options were granted under the plans,  with  one-third
exercisable immediately, one-third after one year and one-third after two
years, at an exercise price of $14.  In 1996, 71,000 options were granted
under  the  plans, at exercise prices ranging from $11.88 to  $15.00.  At
December  31,  1996, 352,000 of these options were outstanding  of  which
316,000 were exercisable.

As  permitted  by  Statement of Financial Accounting Standards  No.  123,
"Accounting  For Stock-Based Compensation" ("SFAS 123"), the Company  has
chosen  to  apply  APB  Opinion  No. 25 and  related  Interpretations  in
accounting for its stock option plans.  Accordingly, no compensation cost
has   been   recognized  for  options  granted  under  the  plans.    Had
compensation cost for the plans been determined based on the  fair  value
at  the grant dates for awards under the plans consistent with  SFAS 123,
the pro forma impact on the Company's net income and net income per share
would be immaterial.


8. Income Taxes:
      The provision (credit) for income taxes is comprised of the following:
                                        1996           1995          1994
                                        ----           ----          ----
                                                  (In thousands)
Current:     Federal                   $6,951         $5,391        $3,090
             State                        761            982           777
Deferred:    Federal                      847            495          (217)
             State                       (284)           (21)          (73)
                                       ------         ------        ------
                                       $8,275         $6,847        $3,577
                                       ======         ======        ======

                                       13

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    The following is a reconciliation between the federal income tax rate and
the Company's effective income tax rate:
                                           1996     1995     1994
                                           ----     ----     ----
Statutory tax rate ..................      35.0%    35.0%    35.0%
State income taxes, net of federal
  benefit............................       1.3      3.2      3.6
Excess depletion for tax purposes ...      (2.8)    (3.5)    (4.6)
Change in valuation allowance........        .3       -      (8.6)
Other, net ..........................       1.1       .3      2.6
                                           ----     ----     ----
Effective rate.......................      34.9%    35.0%    28.0%
                                           ====     ====     ====

    Cumulative  gross  deferred  tax assets and  liabilities  relate  to  the
following at December 31:
                                             1996          1995
                                             ----          ----
                                               (In thousands)
Pension and postretirement benefits..       $2,130        $3,273
Allowances for discounts and doubtful
  accounts and other liabilities.....          993           936
Other................................          189           204
                                            ------        ------
  Gross deferred tax assets..........        3,312         4,413

Valuation allowance..................            0          (188)
                                            ------        ------
Net deferred tax assets............          3,312         4,225
                                            ------        ------
Depreciation.........................        7,363         7,148

Other................................        1,246           851
                                            ------        ------
Gross deferred tax liabilities.......        8,609         7,999
                                            ------        ------
Net deferred tax liability...........        5,297         3,774
Deferred tax asset-current...........          828           758
                                            ------        ------
Deferred tax liability non-current...       $6,125        $4,532
                                            ======        ======
9. Pension Plans:

The  Company  maintains  noncontributory, defined benefit  pension  plans
which cover substantially all employees. The Company's policy is to  fund
at  least  the minimum required by applicable regulations.   Plan  assets
consist  principally of listed stocks and bonds and commingled stock  and
bond funds.

                                       14

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The  following table sets forth the plans' funded status as of  September
30  and  amounts  recognized  in the Company's  financial  statements  at
December 31:
                                                        1996       1995
                                                        ----       ----
Actuarial present value of benefit obligations:          (In thousands)
  Vested............................................   $32,784   $33,999
  Nonvested.........................................       449       457
                                                       -------   -------
Accumulated benefit obligation......................    33,233    34,456
Effect of future compensation increases ............       608       739
                                                       -------   -------
Projected benefit obligation .......................    33,841    35,195
Plan assets, at fair value .........................    27,852    24,773
                                                       -------   -------
Projected benefit obligation in
  excess of plan assets ............................     5,989    10,422
Unrecognized net transition asset ..................       411       526
Unrecognized prior service cost ....................    (1,335)   (1,424)
Unrecognized net loss ....... ......................    (3,437)   (5,160)
Cash contribution in the fourth quarter.............        (7)      (52)
Adjustment required to recognize
  additional minimum liability * ...................     3,753     5,379
                                                       -------   -------
Accrued pension expense ............................   $ 5,374   $ 9,691
                                                       =======   =======

*  An  intangible asset of $1.4 million in 1996 and  $1.6 million in 1995
and  a reduction of equity (net of deferred income taxes) of $1.5 million
in 1996 and $2.5 million in 1995 were recognized to record the additional
pension liability.


Pension expense for the defined benefit plans includes the following:
                                             1996          1995      1994
                                             ----          ----      ----
                                                      (In thousands)
Benefits earned during the year
   (service cost) ......................   $   500      $    405   $   529
Interest cost on projected benefit
   obligation ..........................     2,433         2,501     2,321
Actual return on plan assets ...........    (2,863)       (3,498)     (761)
Net amortization and deferral ..........       717         1,474    (1,259)
                                           -------      --------   -------
      Total                                $   787      $    882   $   830
                                           =======      ========   =======

The assumed discount rates, long-term rates of return on assets and rates
of   increase  for  future  compensation  were  7.5%,  9.25%  and   4.5%,
respectively, for 1996; and were 7.25%, 9.5% and 5.0%, respectively,  for
1995; and were 8.0%, 9.5% and 5.0%, respectively, for 1994.

The  Company also maintains tax deferred profit-sharing plans for certain
eligible employee groups. Expenses related to the plans, which are  based
upon  pre-tax income of the cement and resource recovery operations, were
$612,000 for 1996, $500,000 for 1995, and $301,000 for 1994.

                                       15

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10. Postretirement Health Benefits:

Postretirement  medical and life insurance is provided  to  substantially
all  employees.  The  Company accrues these benefits over  an  employee's
career,  rather than expense on a pay-as-you-go basis.  The  Company  has
elected  to  recognize the accumulated postretirement benefit  obligation
("APBO"),  determined as of January 1, 1993, prospectively as an  element
of periodic benefit cost over 20 years. The Company  funds these costs on
a  pay-as-you-go  basis  which amounted to $1.1  million  in  1996,  $1.4
million in 1995 and $1.2 million in 1994.

Postretirement medical and life insurance expense includes the following:

                                      1996      1995      1994
(In thousands)                        ----      ----      ----
Service cost                         $  261    $  266    $  367
Interest cost                           991     1,222     1,213
Amortization of items not previously
   recognized:
      Transition obligation             577       604       670
      Net actuarial losses                8        31        66
                                     ------    ------    ------
                                     $1,837    $2,123    $2,316
                                     ======    ======    ======


The  following sets forth the APBO applicable to each employee group  and
amounts included in the Company's December 31 balance sheet:

                                                     1996        1995
                                                     ----        ----
Accumulated postretirement benefit obligations:       (In thousands)
Retired employees                                  $11,453     $11,965
   Active employees - fully eligible                 1,208         891
   Active employees - not yet eligible               2,681       2,680
                                                   -------     -------
   Total APBO                                       15,342      15,536
Unrecognized transition obligation                  (9,233)    (10,250)
Unrecognized net loss                               (2,370)     (2,305)
                                                   -------     -------
Accrued postretirement benefits                    $ 3,739     $ 2,981
                                                   =======     =======

The  discount rate used in determining the APBO at December 31, 1996  and
1995  was 7.5%. The obligation is unfunded. The assumed health care  cost
trend  rate used in measuring the APBO as of December 31, 1996  and  1995
was  9%  and  8%,  respectively, declining  to  a  rate  of  5%  and  4%,
respectively, in 2001.  Increasing the assumed trend rate for health care
costs by one percentage point would result in an increase to the APBO  at
December 31, 1996 of $1.4 million and an increase to the related  expense
for 1996 of $151,000.

                                       16

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11. Leases:

The  Company  leases  office space, warehouse space and  equipment  under
operating  leases  which have remaining terms of up to five  years.   The
leases  generally include renewal options.  Total rental expense for  the
years 1996, 1995 and 1994 amounted to $2.2 million, $1.9 million and $1.6
million, respectively.

Future  minimum  rental  commitments under noncancelable  leases  with  a
remaining  term  in excess of one year as of December  31,  1996  are  as
follows (in thousands):

                       1997       $1,705
                       1998        1,014
                       1999          626
                       2000          368
                       2001          256
                                  ------
                                  $3,969
                                  ======


12.     Treasury Stock:

In  December 1996, the Company's Board of Directors approved  a  plan  to
expend  up  to $5.0 million for the repurchase of shares of the Company's
outstanding  common stock over an 18-month period.  Repurchases  under  a
prior program totaled 358,000 shares at a cost of $4.7 million.

13.  Contingencies:

       The  Company's operations and properties are subject to  extensive
and  changing  federal,  state  and local laws  (including  common  law),
regulations  and  ordinances relating to noise and dust suppression,  air
and  water  quality, as well as to the handling, treatment,  storage  and
disposal  of  wastes  ("Environmental Laws").   In  connection  with  the
Company's quarry sites and  utilization of hazardous waste-derived  fuel,
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.  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
was  previously  named  as a defendant in a civil  complaint  seeking  to
enjoin  Keystone  from burning hazardous waste and from  further  alleged
violations  of  Environmental Laws.  In August 1996,  the  complaint  was
dismissed with prejudice and the case closed.

                                       17

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.     Pending Acquisition:

In  December 1996, the Company announced it had entered into a Letter  of
Intent  to  acquire certain lightweight aggregate plants, concrete  block
plants  and a drum processing/fuel blending facility of a privately  held
manufacturer  with  operations principally in the  South-Atlantic  United
States.   The  acquisition  is subject to finalization  of  a  definitive
agreement  and,  among  other matters, approvals  by  various  regulatory
authorities.  If completed, the acquisition (which will be accounted  for
as  a  purchase)  will require approximately $38 million to  be  financed
through the issuance of approximately 1.3 million common shares and  bank
borrowings  of  approximately $18 million.  Additional shares  of  common
stock and cash are payable over a three-year period, contingent upon  the
acquired operations achieving certain earnings levels.

                                       18

<PAGE>

                    Report of Independent Accountants


Board of Directors and Shareholders
GIANT CEMENT HOLDING, INC.

We  have  audited the accompanying consolidated balance sheets  of  Giant
Cement  Holding, Inc. as of December 31, 1996 and 1995, and  the  related
consolidated  statements of income, shareholders' equity and  cash  flows
for each of the three years in the period ended December 31, 1996.  These
financial  statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We  conducted  our audits in accordance with generally accepted  auditing
standards.  Those standards require that we plan and perform the audit to
obtain  reasonable assurance about whether the financial  statements  are
free  of material misstatement.  An audit includes examining, on  a  test
basis,  evidence supporting the amounts and disclosures in the  financial
statements.   An audit also includes assessing the accounting  principles
used  and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In  our  opinion,  the  financial statements referred  to  above  present
fairly, in all material respects, the consolidated financial position  of
Giant  Cement  Holding, Inc. as of December 31, 1996 and  1995,  and  the
consolidated results of their operations and their cash flows for each of
the  three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.

Coopers & Lybrand LLP



Charlotte, North Carolina
February 7, 1997
                                       19

<PAGE>

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

General

The Company's cement operations are directly related to the  construction
industry. The regional markets in which the Company operates, the Middle-
Atlantic  and  South-Atlantic regions, are highly cyclical,  experiencing
peaks  and  valleys  in  demand corresponding to  regional  and  national
construction  cycles.  Additionally, the demand for  cement  is  seasonal
because  construction  activity diminishes during the  winter  months  of
December, January, and February.  The seasonal impact can be particularly
acute  in the Company's Middle-Atlantic market.  In addition, the Company
performs  a  substantial portion of its routine annual major  maintenance
projects during the period of low plant utilization, typically the  first
quarter  of  its  fiscal  year, which results in  significant  additional
expense during this period.  The Company believes that the routine annual
maintenance  performed in the first quarter results in lower  maintenance
costs throughout the remainder of the year.  Accordingly, the Company has
historically  experienced its lowest levels of revenue and  gross  profit
during the first quarter.

The Company derives revenues from the sales of products, primarily cement
and  construction aggregates, as well as from the provision  of  resource
recovery  services.   Resource  recovery services  revenue  is  primarily
derived from third parties that pay the Company to utilize their waste as
fuel,  which  additionally reduces the cost of traditional  fossil  fuels
used  in  the manufacture of cement.  Due to the nature of the  Company's
operations  and  the  fact  that the burning of  waste-derived  fuels  is
inseparable  from  the  manufacture  of  cement,  it  is  impractical  to
disaggregate  the costs of sales and services by revenue  classification.
The  Company's resource recovery operations are dependent on general  and
regional  economic  conditions; federal, state, and  local  environmental
policies; and competition from other waste disposal alternatives.

Cement is a commodity product sold primarily on the basis of price.   The
price  of cement tends to rise in periods of high demand and can fall  if
supply  exceeds demand. The economic recovery that began in 1993 resulted
in  improved  demand  and increased pricing for the  Company's  products.
Demand for cement has exceeded available supplies in the Company's South-
Atlantic  markets at various times since 1993, causing cement  shortages.
Demand in the Company's Middle-Atlantic markets has been good for most of
the past three years.  In 1995, the Company realized a price increase  of
$6 per ton in its Middle-Atlantic markets and a price increase  of $8 per
ton  in its South-Atlantic markets.  In 1996, the Company realized  a  $4
per  ton  price  increase in its South-Atlantic markets.   Effective  for
April  1,  1997, the Company has announced a $4 per ton increase  in  its
Middle-Atlantic  markets; and for package products only,  a  $4  per  ton
increase  in  its  South-Atlantic  markets,  although  there  can  be  no
assurance  that  these price increases will be realized or  that  current
price levels will not decline should cement demand decline in relation to
supply.

                                       20

<PAGE>

The  Company's  cement manufacturing hourly employees are represented  by
the  United  Paperworkers  International Union ("UPIU").   The  Agreement
between  Giant Cement Company and UPIU Local 50216 expires May  1,  1997.
While  the  Company will endeavor to negotiate a new agreement  with  the
UPIU,  there  can be no assurance that an agreement will  be  reached  on
terms  favorable  to  the Company, nor can there be  assurance  that  the
Company will not incur work stoppages, slowdowns or a strike.

Results of Operations
1996 Versus 1995

Total  operating  revenues increased $10.0 million  or  10.0%  to  $110.2
million  in  1996, compared with $100.2 million in 1995.   Product  sales
increased  $9.6 million or 11.0% to $96.2 million in 1996, compared  with
$86.6  million  in  1995, as a result of increased shipping  volumes  and
higher  average  selling  prices  of  cement.   Cement  shipping  volumes
increased  6.7% in 1996, as a result of volume increases in both  of  the
Company's market areas.  The Company's average selling price per  ton  of
cement  increased  4.1% in 1996, as a result of price  increases  in  its
South-Atlantic market.  No price increases were realized in the Company's
Middle-Atlantic  market  in 1996.  Resource recovery  revenues  increased
$462,000 or 3.4% to $14.0 million in 1996, compared with $13.6 million in
1995,  primarily as a result of a 124.2% increase in the volume of  solid
waste  fuels  utilized, partially offset by lower liquid  fuels  pricing.
Liquid  fuel volumes increased 3.8%; however, average liquid fuel pricing
decreased 16.1% in 1996 compared with 1995.

Improved  shipping volumes and cement pricing resulted in a $5.1  million
or  18.5%  increase in gross profit from $27.3 million in 1995  to  $32.4
million  in  1996.  The Company's gross margin percentage increased  from
27.3%  in  1995 to 29.4% in 1996.  The total cost of sales  and  services
increased  $4.9 million to $77.8 million primarily as a result of  higher
shipping volumes and increased depreciation expense. Cement costs per ton
increased less than one percent in 1996.  Clinker and cement manufactured
increased 1.5% and 2.5%, respectively, compared with 1995, as a result of
capital  and operating improvements made in 1995 and 1996.  Both  of  the
Company's plants have operated at effective capacity throughout 1996.

Selling, general and administrative expenses increased $294,000  to  $7.8
million,  but  decreased to 7.1% of operating revenues  as  a  result  of
higher  revenues.  The increase related primarily to higher  selling  and
promotional expenses.

Operating income improved $4.8 million or 24.1% to $24.5 million in 1996,
compared  with  $19.8 million in 1995, primarily as  the  result  of  the
increase  in operating revenues.  Operating income margins improved  from
19.7%  in  1995  to 22.3% in 1996, as a result of higher  cement  selling
prices with only minimal per unit cost increases.

Interest  expense  increased $1.0 million as a result of  higher  average
borrowings  outstanding and the capitalization of  $733,000  of  interest
cost in 1995.

Federal  and state income tax expenses resulted in an effective tax  rate
of   35.0% in 1995 and 34.9% in 1996. The Company's effective tax rate of
34.9% in 1996 is not expected to change materially under current tax law.

Net  income  increased $2.7 million or 21.3% to $15.4  million  in  1996,
compared with $12.7 million in 1995.  Net income as a percentage  of  net
sales increased from 12.7% in 1995 to 14.0% in 1996.

                                       21

<PAGE>

Results of Operations
1995 Versus 1994
----------------

Total  operating  revenues  increased $9.4 million  or  10.3%  to  $100.2
million  in  1995 as compared with $90.8 million in 1994.  Product  sales
increased $8.8 million or 11.2%, to $86.6 million in 1995, compared  with
$77.9  million  in 1994.  The increase resulted primarily from  an  11.3%
increase  in  the  average  selling price of cement  as  cement  shipping
volumes  increased 1.1% from 1994.  Resource recovery revenues  increased
$631,000, or 4.9%, to $13.6 million in 1995, compared with $12.9  million
in  1994,  primarily as a result of higher volumes of  liquid  and  solid
waste  fuels  utilized.  The Company experienced a  decline  in  resource
recovery  revenues  in the fourth quarter of 1995 as a  result  of  lower
prices realized for liquid fuels processed.

Improved cement pricing resulted in a $6.9 million, or 33.6%, increase in
gross  profit from $20.4 million in 1994 to $27.3 million in  1995.   The
Company's gross margin percentage increased from 22.5% in 1994  to  27.3%
in 1995.  The total cost  of sales and services increased $2.5 million to
$72.9 million in 1995, compared with $70.4 million in 1994, primarily  as
a  result  of  the  Company importing $2.5 million of cement  clinker  to
supplement  its  own production at Giant Cement.  Cement  costs  per  ton
increased  2.9%  in  1995, primarily as a result  of  the  aforementioned
clinker purchase and higher raw material costs versus 1994.

Selling, general and administrative expenses increased $856,000  to  $7.5
million, but remained at 7.5% of operating revenues as a result of higher
revenues.   The  increase related primarily to higher corporate  overhead
costs  associated with the Company's stock being publicly traded for  the
full year of 1995.

Operating  income  improved $6.0 million, or 43.7%, to $19.8  million  in
1995, compared with $13.8 million in 1994, primarily as the result of the
increase  in operating revenues.  Operating income margins improved  from
15.1% in 1994 to 19.7% in 1995, which represented a 30% improvement.

Interest expense decreased $580,000 as a result of the capitalization  of
$733,000  of interest costs associated with the construction of the  4400
horsepower finish mill at Keystone.

Federal  and  state  income tax expenses resulted in effective  rates  of
35.0%  in 1995 and 28.0% in 1994.  The Company incurred a lower effective
tax  rate in 1994 as a result of the greater utilization of net operating
loss carryforwards.  The Company's effective tax rate of 35.0% in 1995 is
not expected to change materially under current tax law.

Net  income increased $3.5 million, or 38.3%, to $12.7 million  in  1995,
compared  with $9.2 million in 1994.  Net income as a percentage  of  net
sales improved to 12.7% in 1995, compared with 10.1% in 1994.

                                       22

<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company's liquidity requirements arise primarily from the funding  of
capital expenditures, debt service obligations and working capital needs.
The  Company has historically met these needs through internal generation
of  cash  and  borrowings on revolving credit facilities.  The  Company's
borrowings have historically increased during the first half of the  year
because  of  the  seasonality  of  its  business  and  the  annual  plant
maintenance performed in the first quarter.

Cash  and  cash equivalents totalled $10.4 million at December 31,  1996,
compared  with $8.1 million at December 31, 1995.  At December  31,  1996
and  1995  the  Company had working capital of $26.7  million  and  $17.5
million,   respectively,   with  current  ratios   of   2.5    and   1.8,
respectively.   Accounts receivable increased $2.3 million  or  18.6%  to
$14.9  million,  compared  with  $12.6  million  at  December  31,  1995,
primarily as a result of higher cement revenues in the last two months of
1996  compared to 1995.  Inventories increased $554,000 or 3.2% to  $17.7
million  at  December 31, 1996, primarily as a result of an  increase  in
repair  parts and raw materials inventories, partially offset by  reduced
finished  cement inventories.  Total current liabilities  decreased  $3.6
million  or   16.5%  to  $18.4 million, primarily  as  a  result  of  the
repayment  of  all short-term borrowings and lower current maturities  of
long-term debt.

Net  cash provided by operations increased $8.8 million or 65.3% to $22.3
million  in  1996, compared with $13.5 million in 1995,  primarily  as  a
result of the Company's improved earnings, increased depreciation, higher
accounts  payable and a lesser increase in inventory.  Net cash  used  by
investing decreased to $9.8 million in 1996, compared with $23.9  million
in  1995, as a result of reduced capital expenditures.  Net cash used  by
financing  activities increased to $10.1 million in 1996,  compared  with
$6.9  million  net cash provided in 1995, primarily as a result  of  $3.8
million  net  repayments  of  long-term  borrowings,  $2.3  million   net
repayments of short-term borrowings and $4.1 million utilized to purchase
treasury shares.

In  December  1996,  the  Company entered  into  a  three-year,  annually
renewable,  $32  million Revolving Credit Facility and Letter  of  Credit
Agreement.   Advances  under the Credit Facility  bear  interest  at  the
lesser  of  LIBOR  plus  1.75%  or  the  bank's  base  rate  minus  1.0%.
Borrowings  under  the  Credit Facility are partially  collateralized  by
eligible  accounts receivable and inventories (as defined).  The  Company
is required to reduce outstanding borrowings under the Credit Facility to
$22.0  million for a period of 30 days annually.  At December  31,  1996,
amounts outstanding and available under the Credit Facility totaled  $8.3
million  and  $21.7 million, respectively.  See Note 6 of  the  Notes  to
Consolidated Financial Statements.

The  Company  anticipates  that its capital expenditures  for  plant  and
equipment,   including    certain   environmental   compliance    capital
expenditures, will be $10.0 to $12.0 million in 1997.  In addition to the
Company's  capital expenditure programs, the Company expends  substantial
resources on maintenance annually.  These costs are expensed as  incurred
and  were  $13.9 million, $12.2 million and $13.9 million for 1994,  1995
and 1996, respectively.  While a portion of these costs is discretionary,
the Company anticipates that maintenance expenditures will continue at or
near these levels.

                                       23

<PAGE>

In  December 1996, the Company announced it had entered into a Letter  of
Intent  to  acquire  certain  lightweight aggregate  and  concrete  block
facilities  of a privately held manufacturer with operations  principally
in  the  South-Atlantic  United States.  The acquisition  is  subject  to
finalization  of  a  definitive  agreement  and,  among  other   matters,
approvals   by   various  regulatory  authorities.   If  completed,   the
acquisition  (which  will be accounted for as a  purchase)  will  require
approximately  $38  million  to  be  financed  through  the  issuance  of
approximately   1.3  million  common  shares  and  bank   borrowings   of
approximately  $18 million.  Additional shares of common stock  and  cash
are  payable  over  a  three-year period, contingent  upon  the  acquired
operations  achieving  certain earnings levels. The  Company  intends  to
utilize  a  combination  of new term financing and  its  existing  Credit
Facility to finance the $18 million.

At  December  31, 1996, the Company's defined benefit pension  plans  had
projected benefit obligations of $6.0 million in excess of plan assets as
compared with $10.4 million at December 31, 1995.  The Company intends to
fund the excess benefit obligation from time to time as excess funds  are
available.  Additionally, under the provisions of Statement of  Financial
Accounting  Standards No. 106, "Employer's Accounting for  Postretirement
Benefits  Other  Than  Pensions,"  the  Company's  projected  accumulated
postretirement benefit obligation totalled $15.3 million at December  31,
1996,   of   which   $3.7  million  was  accrued.   The   Company   funds
postretirement  benefits  as  the claims  are  incurred  and  anticipates
continuing to do so.


Environmental Matters

    The Company's operations and properties are subject to extensive  and
changing   federal,  state  and  local  laws  (including   common   law),
regulations  and  ordinances relating to noise and dust suppression,  air
and  water  quality, as well as to the handling, treatment,  storage  and
disposal  of  wastes  ("Environmental Laws").   In  connection  with  the
Company's quarry sites and  utilization of hazardous waste-derived  fuel,
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. Violations of the permit  conditions  or  of  the
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
financial condition or results of operations.  In 1996, resource recovery
services  revenues  totalled  $14.0  million  or  12.7%  of  consolidated
revenues.

While  the  Company  endeavors  to  maintain  full  compliance  with  the
environmental laws and regulations at all times, violations have occurred
in  the  past and there is no assurance violations will not occur in  the
future,  due to the inherent complexity and differing interpretations  of
the  laws and regulations.  The Company maintains environmental liability
insurance  with limits of $5.0 million per occurrence and  $10.0  million
annual  aggregate at each of its cement manufacturing facilities.   These
policies  cover certain off-site environmental damage.   The policies  do
not  cover liabilities arising under CERCLA, fines or penalties, and thus
the Company has no claims for recovery of these items.

In  September 1995, Pennsylvania Environmental Enforcement Project,  Inc.
("PEEP") filed suit against Keystone Cement Company in the United  States
District Court for the Eastern District of Pennsylvania.  In August 1996,
the  PEEP suit was dismissed with no financial or operating impact on the
Company.

                                       24

<PAGE>

In  December  1994,  Keystone  settled all charges  relating  to  alleged
violations of certain environmental statutes from 1989 to early 1992.  As
a  result  of  the  settlement, Keystone will pay fines and  other  costs
totalling  $840,000 in installments over a six-year period.  The  charges
relating to this matter were fully accrued at December 31, 1994.

Disclosure Regarding Forward Looking Statements
-----------------------------------------------

This  report contains certain forward-looking statements, containing  the
words  "believes," "anticipates," "expects," and words of similar import,
based  upon  current  expectations that involve a  number  of  known  and
unknown  business risks and uncertainties.  The factors that could  cause
results  to  differ  materially  include  the  following:   national  and
regional  economic  conditions, changes in  the  levels  of  construction
spending, changes in supply or pricing of waste fuels and other risks  as
further described in the Company's Annual Report on Form 10-K filed  with
the SEC for the year ended December 31, 1996.

                                       25

<PAGE>

                          CORPORATE INFORMATION

Quarterly Results of Operations
(Unaudited; Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                Quarter Ended
                            -----------------------------------------------------------
1996                        March 31       June 30        September 30      December 31
----                        --------       -------        ------------      -----------
<S>                         <C>           <C>               <C>              <C>
Operating revenues           $20,791       $32,414           $29,335          $27,658
Gross profit                   4,010         9,923             9,699            8,748
Operating income               1,876         7,841             7,879            6,943
Net income                       986         4,913             5,098            4,424
Net income per
   common share              $   .10       $   .50           $   .52          $   .46

1995
----
Operating revenues           $19,318       $27,919           $28,800         $24,148
Gross profit                   2,682         7,487             9,513           7,632
Operating income                 770         5,766             7,721           5,510
Net income                       467         3,762             5,015           3,471
Net income per
   common share              $   .05       $   .38           $   .50         $   .35
</TABLE>

Market and Dividend Information

The  Company's common stock is traded on the Nasdaq National Market  tier
of The Nasdaq Stock Market under the symbol: GCHI.  On February 15, 1997,
the  approximate  number of registered holders of  the  Company's  common
stock  was  65 and the approximate number of beneficial shareholders  was
3,000.   The Company's common stock began trading on September  30,  1994
and  closed at $14.  The high and low price of the Company's common stock
during  the  calendar quarters of 1995 and 1996 are set forth below.  The
closing  price on December 31, 1996 was $16.13. The Company expects  that
earnings will be retained in the business, and  no cash dividends will be
paid to its common shareholders for the foreseeable future.


                                    Sales Price of Common Stock

Calendar Quarter                          1996                  1995
-------------------------------------------------------------------------
                                     High        Low         High    Low
First                              $ 12.75    $ 10.44     $ 13.50  $ 10.37
Second                             $ 14.63    $ 12.38     $ 13.87  $ 11.25
Third                              $ 16.38    $ 12.63     $ 13.50  $ 11.63
Fourth                             $ 16.13    $ 14.75     $ 11.87  $  8.75

                                       26

<PAGE>

Corporate Information              Form 10-K and Company Information

Corporate Offices                  A copy of Giant Cement Holding, Inc.'s
320-D Midland Parkway              Annual Report on Form 10-K for the  year
Summerville, South Carolina 29485  ended December 31, 1996, filed withthe
(803) 851-9898                     Securities and Exchange Commission, may be
                                   obtained by writing Terry L. Kinder, Vice
Auditors                           President and Chief Financial Officer, at
Coopers & Lybrand LLP              the corporate address.
Charlotte, North Carolina
                                   Annual Meeting
Transfer Agent                     The Annual Meeting of Shareholders for Giant
Registrar and Transfer Company     Cement Holding, Inc. will be held May 13,
10 Commerce Drive                  1997, in New York, New York.
Cranford, New Jersey 07016
                                   Recent Analyst Reports
                                   John O. Bermudez, Merrill Lynch & Co.
                                       (2/11/97)
                                   Walter Kirchberger, Paine Webber (2/10/97)
                                   Stephen D. Weinress, L.H. Friend, Weinress,
                                       Frankson & Presson, Inc. (12/31/96)
                                   William L. Oliver, Edgar M. Norris & Co.,
                                       Inc. (12/16/96)
                                   David L. Beeghly, Scott & Sringfellow, Inc.
                                       (12/9/96)
                                   John Stanley, Dillion, Reed & Co., Inc.
                                       (12/5/96)
                                   John F. Kasprzak, Jr., Davenport & Co.
                                       (11/26/96)

                                       27

<PAGE>

                       GIANT CEMENT HOLDING, INC.
                         DIRECTORS AND OFFICERS

                               DIRECTORS

                              Gary Pechota
                         Chairman of the Board,
          President and Chief Executive Officer of the Company

                             Terry L. Kinder
                Vice President, Chief Financial Officer,
                 Secretary and Treasurer of the Company

                             Dean M. Boylan
                      Vice Chairman and Director of
                   Boston Sand & Gravel Company, Inc.

                             Edward Brodsky
                       Partner in the law firm of
                  Proskauer Rose Goetz & Mendelsohn LLP

                             Robert L. Jones
            Chairman of Davidson - Jones - Beers  Corporation




                                OFFICERS

                              Gary Pechota
                  Chairman of the Board, President and
                         Chief Executive Officer

                             Terry L. Kinder
                Vice President, Chief Financial Officer,
                         Secretary and Treasurer

                              Rich Familia
                  Vice President, Environmental Affairs

                                       28

<PAGE>