PART 1

EXCECUTIVE SUMMARY

“Report of the Executive Committee”

Despite the slow-down in the general economy, domestic cement
consumption continued to grow at seven percent per annum in 2005. The
steep rise in the price of energy was a significant challenge. Siam City
Cement has intensified efforts to implement more efficient production
techniques, to lay the foundations for the conversion to alternative
fuels and raw materials, and to seek constant improvements at all levels
of operations. We feel confident to have successfully adapted to the
current more challenging market environment.

Major achievements over the last year

We are now closer than ever to our goal of transforming from a
product-focused company to a customer-oriented organization. The entire
company is now united in its focus on meeting the needs of our customers
first and foremost through the “As I Wish” campaign. Our Customer
Service Center is helping to raise the level of customer satisfaction.
At the same time, our technical support team has been strengthened and
its service considerably expanded. The INSEE Logistics initiative has
also augmented this part of our operations to help make sure that the
‘cement solution provider’ strategy is fully realized.

Developments in other product offerings

2005 saw the launch of a number of new products and services from our
cement and wood replacement businesses. INSEE Mortar Max, introduced to
fulfill customers’ need for absolute convenience and quality, was
received well by the market. Conwood, in its second year of operation,
has successfully established its position as the provider of premium
quality products. Continued expansion of this product and range can be
expected in the years to come.

Our business unit, EcoSiam, continues to develop its ‘total service
concept’ in its unique-to-Thailand “Alternative Fuels and Raw Materials”
co-processing program. This offers a full waste treatment solution to
Thai industry, as well as saving fuel costs for SCCC itself. At
Saraburi, a series of investments has been committed to further exploit
this opportunity.

Our Environment & Our Community

At SCCC, the triple-bottom line (reporting on social, environmental and
economic performance) has become integral to our daily business. Our
community programs, for instance, are designed to help people to help
themselves by leveraging from the company’s strengths rather than simply
offering cash grants. We recognize that the long-term success of our
business is only feasible if we have the support of society at large and
are recognized as a valuable part of the community. The second
Sustainable Development Report, to be issued in 2006, will summarize our
objectives, priorities, and achievements in these important areas.

Our skills and vocational training for students and workers in the
construction industry is another example, aimed at transferring
knowledge of new construction techniques and technologies and their
application. It is establishing standards in the building industry for
the whole country.

Personnel Development

Employee Development through continuous learning remains a top priority,
critical to securing our long-term competitiveness. We acknowledge that
it is our employees that produce, refine, deliver and manage our product
and services everyday. Last year, we refined our set of “leadership
competencies” to focus on four key elements: “Think Business”, “Deliver
Results”, “Energize People” and “Model Professionalism” so that, with
training, managers in positions of responsibility will now be assessed
against this standard.

Occupational Health and Safety (OH&S)

Health and safety performance improved significantly in the last twelve
months, establishing the environment for change and push toward that of
a Safe Production Culture. Training at all levels of the organization
continues to reinforce the Safe Production Culture mindset and as such,
supports our drive for excellence. Including our subcontractors,
contractors and employees, we had a rolling “Lost Time Injuries
Frequency Rate”[1] (LTIFR) of 1.24 and a “Severe Injury Rate”[2] (ISR)
of 9.38 at the end of 2005, against a Holcim standard for these two
measures of 5 and 60 respectively.

The Coming Year 2006

Infrastructure spending is expected to be a significant driver of cement
demand over the next five years, with five percent national demand
growth per annum expected on the back of anticipated infrastructure
projects. However, volatility in both our markets and energy costs
continue to challenge us to find profitable and sustainable solutions.

Securing reliable sources of good quality sand and aggregates will help
to improve our ‘Ready-Mix’ concrete is another goal as it will help
produce a superior product which will command a premium. The company
plans to open its first sand operation within 2006.

Management is moving forward to meet these challenges in our market and,
with our highly-motivated employees as the solid base to tackle these
challenges, we are confident that we will find solutions that not only
support our continued sustainability as a company but also contribute to
our bottom line.

Please see Part II for further details.

[1] LTIFR is the number of Lost Time Injuries (LTI) multiplied by
1,000,000 work-hours and divided by the total number of hours worked

[2] ISR is the total number of work days lost for LTI’s multiplied by
1,000,000 work-hours and divided by the total number of hours worked