Executive Summary

The Siam Cement Group (SCG) is a holding company and has diversified
into five core businesses encompassing SCG Chemicals, SCG Paper, SCG
Cement, SCG Building Materials, and SCG Distribution. (Details are
presented under “Business Operation” section.)

Main risk factors have been disclosed in “Risk Factors” section.

The world economy in 2008 plunged into a deep economic slowdown which
was caused by two major factors; the U.S. financial crisis that spread
globally and the volatile energy costs. Further, the Thai economy was
worsened by the ongoing domestic political turmoil which affected export
growth as well as consumer and investment confidence.

Nevertheless, thanks to SCG’s adaptation to the business environment
along with the operational efficiency improvement of its business units,
SCG managed to achieve a healthy revenue of 293,230 Million Baht, an
increase of 10% from 2007 with a net profit without non-recurring items
of 16,479 Million Baht and a net profit of 16,771 Million Baht. In the
4^(th)quarter of 2008, SCG reported one - time stock loss approximately
Baht 5,000 Million (resulting in the quarterly loss of 3,480 Million
Baht). By taking into account the Group’s performance, the overall
financial status, and the global economic conditions, the Board of
Directors resolved to propose the ordinary general meeting of
shareholders on March 25, 2009, the full-year dividends of 7.5 Baht per
share, representing 54% of the consolidated net profit, of which the
interim dividends of 5.5 Baht per share were paid on August 21, 2008.
The final dividends of 2 Baht per share will be paid on April 22, 2009.

The world economy and Thai economy in 2009 are expected to see further
slowdown. As a result, the domestic spending and investment are going to
decline. In order to cope with these unfavorable situations, SCG has
adjusted its strategies by focusing on solid financial status and
organizational stability rather than short-term growth. These efforts
will enable SCG to weather economic downturn and retain its sustainable
growth in the long run. SCG affirmatively executes the following
approaches:

Managing liquidity and working capital

SCG has steadily enhanced its financial efficiency, maintained optimum
working capital and reduced funding risks by raising domestic fund in
the form of local debentures since the 1997 financial crisis. We have
emphasized efficient inventory management, monitored trade credit risks
and reserved adequate funds for our future business expansion.

Suspending all new investment projects

In order to strengthen its financial stability, SCG has cancelled and
suspend new projects of which the markets do not expand as earlier
expected. In the meantime, the on-going projects of which the markets
seem to recover are strictly hastened to complete as planned within the
budget limit.

Strengthening domestic market and expanding export coverage

SCG has strengthened its domestic market base by capitalizing on its
distribution network and tightening its relationship with business
partners. At the same time, with cost efficiency and world-class quality
products, the Group strives to expand its export bases to cover more
emerging markets such as the Middle East and Africa, targeting
high-potential customers to create opportunities and diversify risks.

Developing of high value-added products and services

To avoid price competition and to better address customers’ needs, SCG
commits itself to driving innovations in products and services as well
as continuously developing its own technology. The Group keenly
emphasizes the importance of intellectual property management to enhance
its competitiveness with the confidence that, in the long run, SCG will
be beneficial from these policies when the domestic and world economy
recover.

Monitoring cost effectiveness

By means of technology development, SCG has relentlessly applied new
ways to reduce costs, save energy, and minimize wastes in its operation
using the 3Rs concept: Reduce, Reuse/Recycle, and Replenish. The
initiatives taken include using biomass as alternative energy,
developing a shared energy procurement system, exchanging of
environmental best practices between each business unit, and boosting
employees’ awareness in saving energy and reducing costs. With the
collaboration organization-wide, SCG will gain competitiveness both
short term and long term.

Preparing employees for the continuous challenges

SCG believes in the value of its employees in every country. Despite the
difficult economic environment, the Group has continued its human
resources development programs so that its employees are best equipped
and well alert for any emerging challenge and new opportunity. During
the domestic and the world economic crisis, SCG aims to cause less
effect to its employees.

Contributing to society and environment everywhere SCG operates

To be a part of the community in a sustainable manner, SCG has
constantly supported socially-beneficial activities both in Thailand and
the ASEAN region. The Group specially focuses on developing the
potential of the youths who are driving force for the future while also
actively assisting environmental conservation through water
preservation.

These executions are part of SCG’s careful risk management; covering
finance, competition, demand, cost, exchange rates, interest rates, and
the environment. Thus, it can be assured that SCG will be able to firmly
progress through the economic crisis, and continue to prosper in the
future.