A N N U A L R E P O R T 2 0 0 7

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Contents

01 Agenda

02 Çimsa in Brief

03 Financial Highlights

04 Milestones

06 Message from the Chairman

08 Board of Directors and Audit Committee

09 Senior Management

11 Worldwide Developments in the Cement Industry in 2007

12 Developments in the Turkish Cement Industry in 2007

13 From an Investors’ Perspective

14 Activities in 2007

14 Our Production Plants

14 Çimsa Mersin Plant

16 Çimsa Kayseri Plant

17 Çimsa Eskiflehir Plant

18 Çimsa Ni¤de Plant

20 Ankara Cement Grinding and Packaging Facility

20 Çimsa Plant Information

21 Sales

21 2007 Production Figures

21 Capacity Utilization Rates of Rotating Kilns in 2007

21 Malatya Cement Packaging Plant

23 Products

26 Ready-Mixed Concrete

29 Cement and Ready-Mixed Concrete Plants

31 Investments in 2007

32 Organizational Studies and Training

32 Çimsa Development Programs

32 Senior Management Development Programs

32 Learning Organization Training

32 Behavioral and Vocational Training

34 Learning Organization Project

37 A New Performance Criterion: Measurement of the Organizational Climate

39 Çimsa’s Strategy Map

41 Links and Terminals Abroad

41 Çimsa Cementos Espãna S.A.U. - Spain

41 CSN Cement Sales North GmbH - Germany

41 Çimsa Cement Free Zone Ltd - Cyprus

41 C‹MSAROM Marketing Distributie S.R.L. - Romania

42 2007 Marketing Activities

47 Report on Compliance with Corporate Governance Principles

54 Annual Report 2007

55 Consolidated Financial Statements Together with Peport of Independent Auditors

103 Domestic Selling Points and Suppliers

128 Abroad Supply Points and Telephone Numbers

A G E N D A

Ç‹MSA Ç‹MENTO SANAY‹ VE T‹CARET A.fi.

The agenda was reviewed at the Board of Directors Meeting number 1128 on

March 18, 2008 and submitted to the General Assembly for endorsement.

The Agenda of the Regular General Assembly to be held at 14.00 hours on

Tuesday, April 8, 2008.

AGENDA:

1- Call to order and composition of the Administrative Board,

2- Authorization of the Administrative Board to approve the meeting minutes

3- Reading and discussion of the Board of Directors' Annual Report and the

Auditors' Reports,

4- Reading, discussion and approval of the balance sheet and income

statement; consideration of and decision on the dividend distribution

proposal,

5- Release of Board of Directors and Auditor Committee from their liabilities

6- General Assembly ratification of the board members elected by the board of

Directors to replace the outgoing members,

7- Re-election of board members whose terms have expired and specification of

their new terms,

8- Re-election of members of the Audit Committee whose terms have expired

and specification of their new terms and compensation,

9- Informing shareholders of donations made during the year,

10- Ratification of the independent auditing company selected by the Board of

Directors,

11- Authorization of the Chairman and Members of the Board of Directors to

conduct procedures set out in articles 334 and 335 of the Turkish Commercial

Code.

Authorized Capital Ceiling : TRY 200,000,000

Issued Capital : TRY 135,084,442

Date of Incorporation : December 21, 1972

Plant Location : Yenitaflkent Beldesi, Mersin / TURKEY

Tel: +90 (324) 454 00 60 - 454 00 68 (pbx)

Fax: +90 (324) 454 00 75 - 454 00 76

Website: www.cimsa.com.tr

Address: Toroslar Mah., Tekke Cad.,

Yenitaflkent 33013, Mersin,

Turkey

Annual Report 01

Ç ‹ M S A I N B R I E F

02 Annual Report

Çimsa aspires toachieve businessexcellence at aninternational standardin terms of its QualityManagement,EnvironmentalManagement, andOccupational Healthand Safety Systems.

A leading Turkish manufacturer ofcement and ready-mixed concreteproducts, Çimsa produces specialproducts such as white cement andcalcium aluminate cement, as well asgray cement. Founded in 1972, thecompany began operations in 1975. Inthe space of three decades thecompany has managed to triple itsproduction. Çimsa is the market leaderin the production of special-typecement, and it currently operatescement and ready-mixed concreteplants in Adana, Mersin, Kayseri,Eskiflehir, Ni¤de, Ankara, Antalya,Nevflehir, Osmaniye, Kahramanmarafl,Aksaray, Karaman, Konya, Bilecik, andKütahya.

Çimsa exports cement to thirty-fivecountries. As illustrated by its mostrecent investment of US$ 80.2 million,

it is an international company creatingemployment for the national economyof Turkey.

Çimsa aspires to achieve businessexcellence at an internationalstandard in terms of its QualityManagement, EnvironmentalManagement, and OccupationalHealth and Safety Systems. Theintroduction of the waste-burning unitin 2006 has brought significantbenefits towards protecting theenvironment while cutting fuel costs.The company also organizes scores ofactivities that contribute to the socialand cultural development of Turkey.

450

400

350

300

250

200

150

100

50

01998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Çimsa Cement Net Sales and EBITDA(US$ Million)

Net Sales - US$ Million

EBITDA - US$ Million

Cumulative Average Growth RateNet Sales : %15EBITDA : %16

Note: the figures are stand-alone values between 1997 and 2002, and consolidated figuresfor 2003 and after.

121 117 112 98121

173

219

267

354

440

44 42 36 39 41 4979

100

160 164

F I N A N C I A L H I G H L I G H T S

(Currency- New Turkish Lira (TRY))

Key Balance Sheet Indicators 2007 2006

Cash and Cash Equivalents 56,106,226 53,748,963Marketable Securities (net) - -Trade Receivables (net) 84,778,910 64,351,750Inventory (net) 89,401,544 59,283,064

Current Assets Total 268,317,077 207,731,229

Financial Assets (net) 289,655,470 262,250,857Property, Plant and Equipment (net) 420,086,190 350,312,729Intangible Assets (net) 20,396,240 21,602,208

Fixed Assets Total 863,357,198 767,661,786

Total Assets 1,131,674,275 975,393,015

Shareholders' Equity 926,572,046 702,697,758

Key Income Statement Indicators 2007 2006

Sales (net) 574,985,695 471,447,540Income and Profit from Other Operations 167,391,122 21,868,675Operating Profit before Tax 331,569,542 152,936,552Net Profit for the Year 290,274,845 136,096,434

Annual Report 03

07 06

Total Assets(TRY)

07 06

Shareholders' Equity(TRY)

07 06

Sales (Net) (TRY)

07 06

Net Profit for the Year(TRY)

1,200,000,000

1,000,000,000

800,000,000

600,000,000

400,000,000

200,000,000

0

M I L E S T O N E S

1972• The company is established in Mersin.

1975• Production commences with an annual production

capacity of 1,000,000 tons.

1983• Coal mill enters operation at the plant to bring down costs.

• Kiln units are installed.

1988• Construction work starts on ready-mixed concrete plants.

1990• Grey/white cement clinker production plant entered

operation, producing world-class white cement, and gray cement as required.

1993• Quality assurance system is established; the company

gains the TS-EN-ISO 9002 Quality Assurance System Certificate.

1995• Grinding/packing plant acquired in Kayseri.

1996• A 500,000 tons capacity storage/packing plant in Antalya is

acquired, in addition to another packing plant in Malatya.

2000• Çimsa becomes the world's largest white cement producer

under one roof with the establishment of the Hac› Sabanc› Production Plant, Çimsa's second white cement production line.

2002• The quality assurance system is revised in accordance

with the new ISO 9000 standard in order to convert to a quality management system. The Company is also awarded the TS-EN-ISO 9001:2000 Quality System Certificate.

• Production commences at a new plant, manufacturing calcium aluminate cement, a special type of hydraulic binder resistant to high temperatures, chemical corrosion and water, and that can rapidly reach high compressive strength.

2003• Closure of storage and packaging facility in Antalya.

• Initiation of the “Work Excellence Project” which accelerates and enhances performance as well as ensuring greater job security.

2005• Çimsa submits the highest bid in a Turkish Saving Deposits

Insurance Fund auction of Standart Cement (the Eskiflehir Cement Plant and the Ankara Cement Grinding Facility), resulting in Çimsa's acquisition of Standart Cement, which now supplies its products to the market under the Çimsa brand.

• A completely new gray clinker production plant with a daily capacity of 1,800 tons is established in Kayseri. Hence, the existing cement grinding and packing plant becomes an integrated plant by the end of the year, reaching an annual capacity of 600,000 tons of clinker production.

• To increase ready-mixed concrete production and capacity, ready-mixed concrete plants enter service in Osmaniye and Kahramanmarafl. In addition, one mobile concrete terminal, two concrete pumps and 10 mixers are added to the production and services fleet.

• Dust and gas emissions released during operations are brought under control thanks to electro-filters and bag filters. As part of a systematic approach to protect and preserve the environment and individual health and to raise awareness among employees, the company established the TS-EN-ISO-14001 Environment Management System and attained certification.

04 Annual Report

• To ensure the safety of employees, contracted employees and visitors, the company implemented the TSE 18001 Occupational Health and Safety Management System and attained certification.

• Çimsa obtained an Alternative Fuel Usage Certificate from the Ministry of Environment and Forestry enabling the incineration of category I and II waste oil.

• Erçim Çimento Sanayi Ltd. fiti., based in the Turkish Republic of Northern Cyprus, was acquired becoming the first international Çimsa subsidiary.

2006• A new cement mill with a capacity of 100 tons per hour and

a clinker silo with a capacity of 70,000 tons were built in Kayseri.

• A new cement mill with an 85 ton per hour capacity, a new cement storage plant with a capacity of 5,000 tons, and a closed trass (natural puzzolanic) silo were added to the Ankara Facility.

• Our second international subsidiary, Cimsarom Marketing Distributie S.R.L. was established in Romania.

• A 50% stake in the Germany-based Cement Sales North GmbH was acquired in June 2006, making it the third international subsidiary.

• Exportaciones Sabanc› S.A., located in Spain, was acquired to become Çimsa's fourth international subsidiary.

• License to Use Alternative Fuels as Supplementary Fuels was obtained for Plant I in Mersin.

• The ‹ncirlik Ready-Mixed Concrete Plant entered operation. In addition, the Tarsus Ready-Mixed Concrete Plant was purchased and the Bat›kent Ready-Mixed Concrete Plant was leased.

• Twenty-five mixers and two pumps were bought for ready-mixed concrete operations.

2007• An agreement was signed with Loesche in April for the

modernization of the Mersin Cement Mill III. The project is set for completion in mid-2008.

• Investment for modernizing Production Line I in Eskiflehir Plant was completed in May; the plant went back into operation.

• The new 85 tons per hour capacity cement mill in Eskiflehir was operating by the end of May.

• The new Production Line II went into operation in Mersin to produce calcium aluminate cement, a special type of hydraulic binder resistant to high temperatures, chemical corrosion and water, and that can rapidly reach high compressive strength.

• An agreement was signed with FLS at the end of July to renovate the clinker cooling and kiln units of the Mersin Production Facility I. The project is set to be completed in early 2009.

• In Eskiflehir, the new coal mill, with a grinding capacity of 40 tons of petroleum coke per hour to serve both production lines, went into service at the end of October.

• Oysa Ni¤de Cement Factory was taken over at the beginning of November under the name of Çimsa Çimento San ve Tic. A.fi. Ni¤de Cement Factory.

• The investment in Production Line II, with a production capacity of 2,300 tons of clinker per day, was completed in Eskiflehir, and the facility was operating by the end of the year.

• Construction began on a 600 tons cement silo at the Malatya Terminal, to be finished in February 2008.

• Operations were underway to establish new cement terminals in Spain (Alicante), Romania (Constanta) and Russia (Novorossiysk).

• License to Use Alternative Fuels as Supplementary Fuels obtained for Plant I in Mersin in 2006 was revised to extend its scope.

• New ready-mixed concrete plants were opened in Bilecik, Silifke, Karahan, and Kütahya plants. Twenty new trans-mixers and two concrete pumps were added to the fleet of vehicles.

• Twenty mixers and two pumps were bought for ready-mixed concrete operations. Twenty-seven mixers and five pumps were taken over from Oysa.

• Silifke and Ambarl› Plants went into operation. Plants were taken over from Oysa in Aksaray, Karaman, and Ere¤li on November 1, 2007. P›nar Ready-Mixed Concrete in Bilecik was taken over on May 17, 2007. The lease of a plant in Kütahya on November 1, 2007 concluded the plant purchases and leases for 2007.

Annual Report 05

M E S S A G E F R O M T H E C H A I R M A N

06 Annual Report

To efficiently managethe synergy andcoordinate ourincreasing number ofplants in Turkey, ourheadquarters wasmoved to Istanbul andwork to create theinfrastructure forgrowth abroad isunderway.

Dear Shareholders,

Cement consumption is rising aroundthe world. In Turkey, too, the cementsector has been among the mostvibrant in the past few years. Cementconsumption in Turkey demonstratedconsistent double-digit growth from2004 to 2006 and, despite theeconomic difficulties, it grew by 2% in2007, surpassing 42 million tons. Webelieve that in the forthcoming years,provided macroeconomic policiescontinue with structural reforms thatstrengthen competition, reliability, andinvestment in business, cementconsumption per capita in Turkey willrise from the current level of 650 kg to800-1000 kg, as seen in the EU.Although this bright picture of risingdemand is overshadowed in part bythe new production capacity of 8-10million tons that will come on line inthe short-term, we still view the futurepositively.

By the end of 2005, we investedapproximately US$ 100 million in ourEskiflehir and Ankara plants,purchased from the Saving DepositsInsurance Fund. As a result of theseinvestments in clinker lines and mills,

our clinker and cement grindingcapacity has tripled. Theseinvestments and the improvedcapacity utilization lowered fuel andcoal consumption. After the SavingDeposits Insurance Fund handed overthese two plants, their high dustemissions were reduced to levelscompliant with environmentalstandards.

In all markets where we operate wecontinued to expand our ready-mixedconcrete business, led by Eskiflehir,Bilecik, and Kütahya, throughtakeovers and building plants. In 2007,the merger with Oysa was completedand the Ni¤de plant was incorporatedinto Çimsa.

To efficiently manage the synergy andcoordinate our increasing number ofplants in Turkey, our headquarterswas moved to Istanbul and work tocreate the infrastructure for growthabroad is underway. In 2008, we willgrow via new investments in theMediterranean and Black Sea basins,and enlargement of our terminalnetwork in Germany, Spain, Romania,and TRNC.

As one of the three key players in theglobal white cement sector, Çimsa'ssales exceeded one million tons in2007. Similarly we have become thebiggest supplier in the calciumaluminate cement sector, which weentered relatively recently. In order tomeet increasing export demand, asecond kiln came on stream doublingour capacity.

Following “Ekobeyaz”, we marketed“Ekoharç” maintaining our efforts tooffer our customers economic andecological products. Our turnoverreached US$ 440 million and ouroperational profit (EBITDA) attainedthe US$ 163 million mark.

While growing, we aim to makecontributions that create benefits forthe future. To this end we supportformal and vocational educationactivities and environmental projects,especially in the regions where weoperate.

In recognition of socialresponsibilities, we have contributedto the preservation of the natural

habitat in those of our plants whichwere awarded the License to UseWastes as Supplementary Fuels. InMersin, 50,000 saplings are beingplanted for the rehabilitation ofquarries. An artificial lake is beingmade out of the old clay furnace in theEskiflehir plant to create a new habitatfor diverse animal and plant speciescompatible with the geography, on50,000 m2 of land.

For many years, we have organizedpanels, contests, and sponsorshipactivities to help preserve our artisticand cultural heritage and to supportnew talent. The most recent link in thischain of events was the sponsorshipof a book entitled, “A Historic Tour ofthe Asian Side of Istanbul” by GönülHal›c›. Within this framework, wecontinued our sponsorship for the2007 Archiprix-Turkey ArchitectureStudents Graduation Projects Contest.We are delighted with theachievement of ‹rem Yak›c›, whom wehave supported since 2006. She was73rd in the category for 10-year-oldsat the 2007 World ChessChampionships, in which 105contestants from 52 countriesparticipated. In the Turkish

Championship she took second place,earning a place on the TurkishNational Chess Team.

I thank everyone who contributed toand supported Çimsa's growthobjectives.

Best regards,

Erhan Kam›fll›Chairman of the Board

Annual Report 07

B O A R D O F D I R E C T O R S A N D A U D I T C O M M I T T E E

08 Annual Report

Board of Directors1 Erhan Kam›fll› Chairman2 Mehmet Göçmen Vice Chairman3 M. Nedim Bozfak›o¤lu Member 4 Tamer Güven Member 5 Y›lmaz Külcü Member 6 Mehmet Hac›kamilo¤lu General Manager

Audit CommitteeMehmet Sert AuditorBahad›r Boran Auditor

12 53 6 4

S E N I O R M A N A G E M E N T

Annual Report 09

1 Mehmet Hac›kamilo¤lu General Manager2 Hüseyin Özkan Assistant General Manager (Marketing and Sales) 3 Basri Dinçer Assistant General Manager (Cement Production)4 Tamer Denizci Assistant General Manager (Financial and Administrative

Departments)

5 fiahap Sar›er Assistant General Manager (Ready-Mixed Concrete)6 Mutlu Do¤ruöz Assistant General Manager (Investment and Automation)7 Mehmet fiahin Plant Manager (Kayseri)8 Fikret Uluakay Plant Manager (Eskiflehir)9 Do¤an Özkul Plant Manager (Ni¤de)10 Naci Rüzgar Plant Manager (Ankara)

123

45

78 10

9

6

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ance

MERS‹N

98 99 00 01 02 03 04 05 06T 07T 08T

1,54

3

1,58

9

1,64

0

1,68

0

1,83

2 2,01

2

2,11

0 2,27

8 2,55

7 2,75

5 2,93

4Global Cement Consumption(in millions of tons)

Source: The Global Cement Report, 7th Edition, 2007

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the big cement producers more obvious.To reinforce their market position indeveloped countries, they have verticallyintegrated in ready-mixed concrete andaggregates, while shifting cementproduction to developing markets. Thetakeovers of Orascom (active indeveloping markets) and Hanson PLC(producer of construction materials) byLafarge and HeidelbergCement,respectively, are the best examples of thisstrategy.

Influenced by debates around shrinkingfossil-fuel levels, the Kyoto Protocol, andthe restrictions on CO2 emissions, theissues of using alternative raw materialsand fuels, and the production of cementwith higher quantities of admixtures havestayed at the top of the agenda for thecement sector.

The global economic unrest surfacingtowards the end of 2007, the mortgagecrises, and the slowing world economyhint that 2008 will be tough in general, andthe abundance of liquidity will dwindle. Forthe cement sector specifically, the leaps inprices of oil, fuels, raw materials andfreight, and the fact that capacityinvestments made recently will come online, cast a question mark over 2008.

Another good year... What about 2008?

A shining star in the business firmamentover the last few years, the global cementsector continued to bustle in 2007.Regardless of world economic growth of5.1%, the global construction sector is stillmaking baby steps for the most part,particularly in emerging economies andAsian countries. Urbanization, the massiveshortage of housing stock, and expandinginfrastructural investments keep thedemand for construction materials alive.One view of the cement sector reveals thatglobal consumption in 2007 deceleratedslightly due to economic developments,with growth falling back to 7.7% to total2.76 billion tons. Although demand forcement has been strong in manydeveloped or developing countries, it hasslid in the USA - traditionally one of thebiggest markets for cement - under theimpact of the housing market turmoil.

The dynamism of Asian economies, adriving force in the growth of the globaleconomy, broke the shipping costs recordsset in 2005. Since the cost of transportingraw materials spiked, especially betweenLatin America (e.g. Brazil) and Asia,transportation costs in the cement sector(for raw materials, fuel, and also forexport) were exorbitant and it also becamedifficult to find ships to fix cargoes. On topof this, soaring oil and coal prices drovecement production costs up still further up.However, increased oil revenue causedconstruction work in oil producing MiddleEastern countries and Russia to boom,heightening the demand for cement.

Global economic developments and theireffect on the construction sector in recentyears have made the general strategies of

Annual Report 11

W O R L D W I D E D E V E L O P M E N T S I N T H E C E M E N T I N D U S T R YI N 2 0 0 7

D E V E L O P M E N T S I N T H E T U R K I S H C E M E N T I N D U S T R Y I N 2 0 0 7

Housing construction fueled cementconsumption…

Running parallel to GNP and the constructionsector, cement consumption in Turkey recordedthe highest level in its history in 2006 with growthof 19%. As GNP rose 4% by the third quarter of2007, the construction sector grew by 11.5%acting as an important factor in the increase indomestic cement consumption. In 2007, cementconsumption in Turkey stood at about 42 milliontons, according to the Turkish CementManufacturers Association.

The relatively warm winter allowed theconstruction sector to keep busy, but there was ahiatus when early elections were announced inthe second quarter. In previous years, the thirdquarter was always a time of high demand in theconstruction and cement sectors. However, thethird quarter of 2007 was dampened by theelections and the anticipated demand didn'tmaterialize. Hence, the growth for the first threequarters stayed at 3.6%. Lower than expectedconsumption in the final quarter brought theannual figure to 42 million tons, only 2% up on2006.

Although no cement was imported in 2007, 909,000tons of clinker was imported to meet demand inthe high season. Cement exports were up by 17%to reach 6.6 million tons while clinker exportswere up by 1% to total 1.6 million tons. In exports,the Iraqi market remained crucial, while Russiaand Syria became more attractive.

From the second half of the year, dramaticincreases in shipping freight costs, fuel prices(coal, petroleum coke) and, as a result, rawmaterial prices, pushed cement production costsup. Rising fuel and raw material prices will speedup cement producers move to alternative fuels(waste tires, waste oils, industrial waste, etc) andalternative raw materials (slag, fly ash, etc.) Otherfactors, such as rising electricity prices, willadversely influence cement production costs.

The significant development of the Turkishconstruction and cement sectors in the last fouryears has proved attractive to new investors.Investment in around 18 million tons of a newclinker capacity is planned for the upcomingyears and it is projected that almost half of theseinvestments will come on line in 2008. Such abuoyant market has drawn in foreign investors. In2007, two new international cement producerscame to Turkey through partnerships.

For 2008, negative developments in theconstruction and more especially the housingsectors will feed through to the cement sector inparallel with economic trends. This together withthe new capacities coming on line in 2008 willinduce the sector to turn to exports as analternative to domestic sales.

12 Annual Report

98 99 00 01 02 03 04 05 06 07 08T

34,1

27

31,5

30

30,9

99

25,0

82

26,8

11

28,1

06

30,6

70

35,0

83

41,6

10

42,4

56

45,3

00

538

490

470

371

387 40

2 425

487

570 60

0 610

Domestic Cement Sales (thousand tons)Consumption per Capita (kg per capita)

98 99 00 01 02 03 04 05 06 07

3.3

0.7

3.4

1.1

4.5

2.1

5.2

3.4

64.

5

7.4

3

8.2

2.5

7.7

2.8

5.6

1.6

6.6

1.6

Cement ExportClinker Export

Domestic Cement Sales andConsumption per Capita

Turkey's Cement Exports(million tons)

Source: Turkish Cement Manufacturers Association, Group Estimate Source: Turkish Cement Manufacturers Association

F R O M I N V E S T O R S ’ P E R S P E C T I V E

Finans InvestmentThe Best Cement Company on the Istanbul StockExchangeThanks to the diversity of its product portfolio andthe balanced distribution of its export anddomestic sales, Çimsa was less affected than itscompetitors by the drop in grey cement prices.We think Çimsa is the best cement company inthe sector.

Balanced Distribution of Exports and DomesticSales Due to its flexible production structure, Çimsa hasbecome the third biggest white cement producerin the world. We think that in the period between2007 and 2009, the company will prevail in theSyrian market, compensating for the fragility ofthe national market where competition is intense.

‹fl InvestmentÇimsa is Well-Positioned in TurkeyÇimsa has a 20% market share in Anatolia and a19% share in the Mediterranean region of Turkey,both rapidly growing Turkish regions. Thecompany benefits from the demand for cement,which expands in conjunction withindustrialization in those regions.

The World's Third Biggest Cement CompanyWith an annual production capacity of 1.1 milliontons, Çimsa is the third largest white cementcompany in the world following Cemex andAalborg. This commanding competitive advantagehas differentiated Çimsa from its rivals and givenit a distinct position in the national market.

JPMorganWe think that the diversity of its product portfoliowill partly insulate Çimsa from the uncongenialmarket conditions that may occur in the domesticmarket in 2008 and 2009. Concurrently, weestimate that Çimsa will expand its main marketshare. We predict that Çimsa will meet 9% ofdomestic demand in 2009, as opposed to 5.6% in2006.

In 2008, Çimsa will raise its grey clinker capacityto 4.2 million tons in addition to the currentcapacity of 1.1 million tons. This will place Çimsain third in the national market in terms of capacity.

Deutche BankThe 2007 Third Quarter Financial Results wereparallel to our estimates.By the end of the third quarter, Çimsaannouncement of TRY 142 million in earnings, TRY59 million in EBITDA, and TRY 44 million in netprofit verified our forecast of TRY 140 million, TRY60 million, and TRY 42 million, respectively.

Annual Report 13

A C T I V I T I E S I N 2 0 0 7

Our Production Plants

Çimsa Mersin Plant

First Production LineThe rotating kiln, which entered productionin 1975, has a diameter of 5.25 meters withtwo cyclone lines, each equipped withfour-stage preheating. It has a productioncapacity of 3,350 tons per day with 10 planttype-UNAX coolers. In 1983, cool grindingand burning systems were added to theplant to improve fuel efficiency. This kilnburns 100% petrocoke (with 4.5% sulfurcontent), enabling significant cuts in fuelcosts. In 2006 a waste incineration unitwas brought into operation, also providingadditional income for the plant. In this unit,wastes such as residual petroleum tanksludge, used air bag filters, used shop ragsand petroleum spilled soil are burned.Work to increase the capacity of the unit iscontinuing. The waste menu wasexpanded in 2007 and work continues onenhancing the capacity of the waste-burning unit.

The plant has two crushers, oneprehomogenization plant, two ball mills forraw materials, two raw meal silos, and twoenclosed stockholes for clinker reserves.The cement grinding process takes placein two ball mills and one vertical mill. Thecement conveyance system, which hadbeen pneumatic, was adapted into asystem with air slide and elevator deliveryin 2004, obtaining savings in electricity.

Again in 2004, the number two cement millwas converted into a one-cabin mill and byinstalling a roller-press system with VSKseparator, grinding capacity was improvedand energy consumption of the mill wasreduced.

Produced cement is stored in four 10,000tons, one 3,000 tons and three 2,000 tonssilos. Packing is carried out by fivepacking machines, each with a capacity of100 tons per hour and two 1.5 tons big-bagfilling machines.

Bulk cement is loaded through the fillingpoints below the silo.

Limestone and clay are the two main rawmaterials used during production.

Second Production LineThe production line consists of crushers, araw material mill with prehomogenizationsystems, two raw meal silos, a rotating kilnand a clinker stockhole. It is possible toproduce gray or white clinker in the kiln,which entered service in December 1989.

As a result of improvements to the rawmeal conveyance systems in 2003 and2004, the company was able to cut itselectricity consumption. In 2004, a newinstallation allowed hot waste gas from theclinker cooler to be used in the raw mealmill, which brought significant fuel savingsthrough deactivation of the drying kiln.

With the completion of its precalcinationmodification in 2005, the usage of 4.5%sulphurized petrocoke was improved from85% to 100%, allowing for considerablefuel savings.

14 Annual Report

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O U R P R O D U C T I O N P L A N T S ( C O N T I N U E D )

Third Production LineThis line, which entered operation in December1999, produces white cement. The plantcomprises of a crusher, a raw material mill with apre-homogenization plant, a raw meal silo, arotating kiln and a stockhole for clinker. A whitecement grinding mill with a capacity of 100 tonsper hour is also available at the plant. The kilnburns 100% (4.5% sulphur) petroleum coke.

Produced white cement is stored in two 5,000 tonssilos and one 2,000 tons silo.

The packaging unit consists of three packingmachines, each with a capacity of 100 tons perhour, and two big-bag filling machines. Bulkcement is loaded through the filling points belowthe silo. The plant also includes one palletizingmachine and one plastic wrapping unit withoutpallet.

Calcium Aluminate Cement Production PlantThe plant, which became operational in 2002,comprises of a kiln with a clinker productioncapacity of 2 tons per hour, a cement mill with agrinding capacity of 5 tons per hour and apackaging unit. In 2007, the second kiln with aclinker production capacity of two tons an hourbecame operational.

Çimsa Kayseri Plant

The plant was established by Akçimento, aSabanc› Group company, in 1992. It was acquiredby Çimsa in 1995. It original annual grinding andpackaging capacity of 820,000 tons of cement wassupplemented in 2005 by a rollerpress to increasethe grinding capacity and to reduce energyconsumption.

Work begun on a clinker production line onOctober 9, 2004 to transform the plant into anintegrated cement plant. After the plant'sconstruction and assembly process wascompleted, it entered operation, producing its firstclinker on December 26, 2005. The plant boastsstate-of-the-art technology comprising an ILC-type base unit, a low nitrous oxide emissionprecalcination system, a pre-heater with a five-stage cyclone, and a 55 meters long, 3.6 metersdiameter rotating kiln. The plant's initial dailyproduction capacity of 1,800 tons of clinker wasincreased to 2,000 tons after improvements. Inaddition, the plant has a raw material crusherwith an annual capacity of 300 tons, clay andlimestone pre-homogenization facilities, a rawmeal mill and a 5,000 tons capacity raw meal silo.The trass mill was modified into a coal mill with acapacity of 20 tons per hour. The clinker cooler isa SF-type grate cooler.

A second 110 tons per hour cement mill enteredoperation in August 2006, in addition to theexisting 100 tons per hour ball mill. Again in 2006,a second clinker storage plant with 70,000 tonscapacity was added to the existing 65,000 tonscapacity unit in order to prevent pollution andmaintain the clinker quality. The trass (puzzolanic)silo was converted into a 1,500 tons cement silo in2007.

The plant's packaging unit has two automaticrotary packers with a capacity of 100 tons perhour, and three bulk cement loading stations areavailable. The plant produces CEM I 42.5NPortland, CEM II/B-M (P-L) 32.5R and CEM II/A-M(P-L) 42.5R composite Portland cement.Production of masonry cement (Ekomasonry) TSEN 413-1 MC 12.5X has also begun.

16 Annual Report

In 2007, the Kayseri plant broke a record byproducing 766,000 tons of clinker, 27% above itscapacity at founding.

Moreover, waste burning operations were carriedout in 2007. The Alternative Fuel BurningOperation License was obtained. Initially limited towaste oils and contaminated waste, successfultrial burns allowed the license's scope to beextended to burn waste oils, contaminated waste,dye stuff, sludge, refinery waste, and scrap tiresas secondary fuels.

Çimsa Eskiflehir Plant

The Eskiflehir Plant is located 22 kilometers alongthe Eskiflehir-Istanbul highway on a site of about1,800 m2. Having entered operation in 1957, theplant utilized a 3.6 meters diameter, 125 meterslong (German MIAG technology) wet kiln with anannual capacity of 150,000 tons until 1987.

The total annual production capacity of the linewas raised to 425,000 tons in 1976 with theaddition of a 3.6 meters diameter, 52 meters longMIAG technology three-graded pre-heater dry kilnwith an annual production capacity of 275,000tons.

A surge in energy prices in the 1980s andtechnical developments in the sector encouragedthe replacement of the dry system productionline's preheater with the Polysius four-gradedpre-calcination pre-heater in 1987. Following thisand other modifications, the line's annualproduction capacity was expanded to 440,000tons. The wet kiln unit, by then economically andfunctionally obsolete, was halted and uninstalledin 2006.

Subsequently:

• In 1990, the laboratory building was refurbished. Automation by FLS technology was put in use for laboratory and process management.

• In 1994, the Polycom roller pres clinker pre-crusher became operational, raising the first cement mill's capacity from 27 to 40 tons per hour and the second cement mill's capacity to 95 tons per hour.

• In 1997 preparations and plans to raise the clinker capacity of the production line from 1,400 tons per day to 1,950 tons per day were completed. However, these plans were only partially realized due to financial constraints. Currently, the kiln has a daily production capacity of approximately 1,500 tons per day.

• In 1998, the capacity of the second cement mill was raised from 60 to 75 tons per hour after transforming it into a closed circuit system with the addition of a Polysius Sepol dynamic separator.

On December 22, 1999, Esbank was transferred tothe Banking Regulation and Supervision Board(BDDK). Esbank was the majority shareholder inEskiflehir Cement. This company eventuallytransferred from the BDDK to the RumeliCorporation, and then to the Saving DepositsInsurance Fund. Finally, on December 27, 2005,Çimsa acquired the plant.

The plant was able to produce a record 486,000tons of clinker in the first year following itsacquisition by Çimsa.

In order to meet regional demand and beprepared for upcoming years, the following stepswere taken to grow capacity by 30% and theywere completed in May 2007:

• Installation of a new dynamic separator in place of the old static separator located in the raw material mill

Annual Report 17

O U R P R O D U C T I O N P L A N T S ( C O N T I N U E D )

• Renewal of the pre-heating units and expansion and renovation in the first stage cyclones

• Replacement of the existing clinker cooler with a new high efficiency clinker cooler unit

• Installation of a new electro filter in the kiln unit

• Replacement of burning dosage system and kiln burner

• Setting up a new closed-circuit cement mill with a capacity of 85 tons per hour in addition to the present two cement mills

On November 6, 2006, similar to the investmentmade in the Kayseri production line, the followingwere completed for usage at the end of the year:

• The establishment of a new coal mill with a capacity of 40 tons per hour that can feed production lines I and II

• Raw meal crusher and conveyance systems with a capacity of 750 tons per hour (which will support both production lines) and 2 x 20,000 tons of mix materials, 2 x 4,000 tons of calcareous homogenization plants and raw meal conveyance systems

• A new clinker production line with an output capacity of 2,300 tons of per day.

The Eskiflehir Plant's production capacity wasraised from an initial 480,000 tons of clinker, to700,000 tons of clinker in 2006, to 1.4 million tonsof clinker in the last two years.

The plant produces three types of cement, CEM I42.5R Portland cement, CEM II/B-M (PL) 32.5Rcomposite Portland cement and MC 12.5XMasonry cement. The products are mainlymarketed in Eskiflehir, Kütahya, Bilecik, Sakarya,and Ankara.

Çimsa Ni¤de Plant

Turkish Cement Industry Inc. established theNi¤de Cement Plant in 1957 under the name Ni¤deCement Industry Inc. with the participation of 758founding partners for the development of Ni¤deand neighboring cities.

The wet system cement plant was built by F.Krupp on a 523 km2 area, three kilometers fromthe city center with a capacity of 85,000 tons/year.It went into production in 1964. After a capitalincrease on November 16, 1965, it was made apublic organization under Çitosan.

In 1972, when the wet system could no longersatisfy demand, the construction of productionLine II by K.H.D. Humboldt with an annualcapacity of 265,000 tons, and using pre-heated drysystem technology, was started. The line was inoperation on September 2, 1976 and raised theplant's total annual production capacity to 350,000tons.

Over time, 824 km2 of land was bought to fulfill theextra need for raw materials arising from theoperation of Production Line II, after which thetotal size of the plant increased to 1,348 km2.

Under resolution 89/4 of the High Board ofPlanning on March 30, 1989, 99.385% of the sharesof Çitosan in the Ni¤de Cement Plant werehanded over for privatization. On March 23, 1992,it was sold to Hac› Ömer Sabanc› Holding and theArmed Forces Pension Fund (Oyak). The plantchanged its name to Oysa-Ni¤de Cement IndustryInc.

The plant's wet system production line, anoutdated and costly system, idle since 1989, wassold as scrap in 2004. The silos of this system arenow being used by the new system.

18 Annual Report

Following the Turkish Competition Authority'sNovember 1, 2007 decision to revoke thepartnership between Sabanc› and Oyak, the plantwas re-named Çimsa Cement Industry and TradeInc. Ni¤de Cement Plant and production continuesunder that title.

The improvements in the double rotor, hammercrusher unit, manufactured by the sugar plant,raised capacity from 250 tons per hour to 325 tonsper hour.

The plant has a roller mill with 77 tons per hourcapacity built by K.H.D. Humboldt in 1976.

The pre-heating dry system added to the rollermill in 1998 after privatization, reduced raw mealhumidity levels from 8-10% to 2-3%. Improvementsraised the mill's capacity to 125 tons per hour.

The pre-heating dry system project won first prizein the Industrial Sector 2001 Energy EfficiencyProject contest organized by the Energy andNatural Resources Ministry.

The pre-heating dry system includes a rotary kilnmade by K.H.D. Humboldt (3.8 meters in diameter,52 meters in length) with a daily capacity of 850tons (265,000 tons per year). It was put intooperation in 1976.

After privatization, the replacements of thecyclone, cooling, burning system, flue gas andelectrofilter, and the modernization of conveyorsraised the kiln's daily capacity from 850 tons to1,150 tons.

The F.L.S.-type open cement mill commencedoperation in 1976. After privatization, to increase

mill capacity and cement quality, and to reduceenergy consumption, a sepax dynamic separator,pre-crushing roller press, and V separator wereadded to the mill, improving capacity from 60 tonsper hour to 130 tons per hour.

The plant has two packaging units, eight cementsilos and two train loading band systems (loadingpackaged cement onto trains directly from thesilo). It is also possible to transport bulk cementand clinker on the same line.

The Ni¤de Plant has the Flue Gas RefineryFacilities Certificate, Permit for Category AEmissions, License for Opening Non-SanitaryFacilities, TS EN ISO 9001 Quality ManagementSystem Certificate, TSE Certificate of Compliancewith Turkish Standards (TS EN 197-1), ProductionCompetence Certificate, OHSAS 18001 ‹SGManagement System Certificate and the BS ENISO 14001 Environment Management SystemCertificate.

The plant runs a quality control system incompliance with TS EN ISO 9001 QualityManagement System requirements. The qualitycontrol of the output is in accordance with the TSEN 196 standards series, conformity evaluationsand the TS EN 197-1 standard.

The products of the plant, which have the TSEProduction Competence Certificate and the TSECertificate of Compliance with Turkish Standards,are:• TS EN 197-1 CEM I 42.5 R

Portland Cement• TS EN 197-1 CEM II/A-M(P-L) 42.5 R

Portland Composite Cement• TS EN 197-1 CEM IV/B (P) 32.5 R

Puzzolanic Cement• TS 10157 SDÇ 32.5

Sulphate Resistant Cement

Annual Report 19

O U R P R O D U C T I O N P L A N T S ( C O N T I N U E D )

Ankara Cement Grinding and Packaging Facility

Construction of the Ankara Cement GrindingFacility started in January 2001 and wascompleted in July 2002, when it was opened. TheAnkara Cement Grinding Facility is located on theAnkara-Samsun Highway, 35 kilometers fromAnkara and on a 92 acre site. The plant joined theÇimsa family after the sale was completed by theSaving Deposits Insurance Fund on December 27,2005.

The facility came on stream with annual grindingcapacity of 150,000 tons in July 2002. AfterÇimsa's takeover, capacity was raised to 85 tonsper hour with a closed system ball mill (700,000tons per year capacity) and cement silo (5,000tons capacity).

The plant consists of:

• A hammer crusher of 80 tons per hour capacity

• A two-compartment ball mill (closed system) and a cement mill of 85 tons per hour capacity

• Two cement silos with capacities of 5,000 and 6,500 tons each

• One rotating scale with 16 platforms and 100 tons per hour capacity

• Two automatic chutes with a 100 tons per hour capacity

• A clinker silo of 16,500 tons• Three weighing scales of 80 tons of capacity

each

20 Annual Report

Ç‹MSA PLANT INFORMATION

Clinker

Production

Mersin Çimsa Capacity Kiln Diameter Raw Meal

Production Line (Tons/Day) (m) Cooler Type Mill Type Fuel Type

Plant 1 3,380 Gray Clinker 5.25 Unax Cooler Ball Mill 100% petrocoke

Plant 2 1,785 Gray Clinker or

1,450 White Clinker 3.60 Grilled Cooler Roller Mill 100% petrocoke

Plant 3 1,750 White Clinker 3.75 Grilled Cooler Roller Mill 100% petrocoke

Kayseri Çimsa

Production Line 2,175 Gray Clinker 3.60 Grilled Cooler Roller Mill 100% petrocoke

Eskiflehir Çimsa Domestic Lignite,

Production Line 1 1,700 Gray Clinker 3.60 Grilled Cooler Roller Mill Imported Steam Coal

Domestic Lignite,

Production Line 2 2,300 Gray Clinker 3.60 Cross Bar Cooler Vertical Mill Imported Steam Coal

Ni¤de Çimsa

Production Line 1,200 Gray Clinker 3.80 Grilled Cooler Ball Mill 100% petrocoke

Ankara Çimsa Mill Production Mill Diameter Mill Length Cement

Grinding Facility Capacity (Tons/Day) (m) (m) Mill Type

2,040 4.2 13 Ball Mill

• A closed trass stockpile measuring 54x35x6.5 meters

• A hot air furnace fed by natural gas with a capacity of 3.5 million Kcal/hour.

The Çimsa Kayseri Plant supplied clinker, themain input, in 2007. In 2008, the Çimsa EskiflehirPlant will supply it. The Ankara plant producesCEM I 42.5R (PÇ 42.5R) and CEM II 32.5R (PKÇ32.5R) cements, which are marketed to Ankaraand the surrounding areas. The Çimsa MersinPlant supplies the paper bags used for baggedcement.

The Ankara Plant has; Permit for Category BEmissions, License for Opening 1st Class Non-Sanitary Organization, OHSAS 18001 ISGManagement System Certificate, ISO 9001Certificate, Production Competence Certificate,CE Certificate for CEM I 42.5R production, CECertificate for CEM II 32.5R production, TSECertificate of Compliance with Turkish Standards,Operation Certificate, Industrial RegistrationCertificate and Capacity Report.

In 2007:

• There were no lost days through work accidents

• Work for the Business Excellence Project has continued since 2006 as well as Uptime and KPI activities

• The Learning Organization system was launched in December 2007

• Following the introduction of OHSAS Occupational Health and Safety measures, the certification inspection was finalized successfully on December 26, 2007

• As part of the company's environmental awareness concept, 2,908 saplings of various types (in total 5,205) were planted.

Malatya Cement Packaging Plant

The Malatya terminal, located near the MalatyaBattalgazi train station, has an annual storage andpackaging capacity of 40,000 tons.

Annual Report 21

2007 Production Figures

Clinker ProductionGray Clinker 2,400,000 tonsWhite Clinker 1,076,000 tonsCalcium Aluminate Clinker 20,000 tonsSulphate Resistant Clinker 11,000 tonsTOTAL 3,507,000 tons

Cement ProductionGray Cement 3,250,000 tonsWhite Cement 923,000 tonsCalcium Aluminate Cement 20,300 tonsMasonry Cement 34,500 tonsTOTAL 4,227,800 tonsReady-Mixed Concrete 1,584,000 m3

Capacity Utilization Rates of RotatingKilns in 2007Mersin Rotating Kiln I 90%Mersin Rotating Kiln II 96%Mersin Rotating Kiln III 98%Kayseri Rotating Kiln 97%Eskiflehir Rotating Kiln 83%

SalesÇimsa specializes in the production and sale of white/gray clinker, white/gray cement and calcium aluminate cement. In 2007, 42 million tons of cement was sold in Turkey. In the same period, Çimsa sold 4.4 million tons of cement/clinker.

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improving resistance to external factors. Itis especially preferred in high strengthconcrete classes, in the construction oftall reinforced concrete buildings, and inpre-tensioned prefabricated applications,and is also used in tunnel systemsegments on major residential projects.

White Portland CementTS 21 BPÇ 52.5 N

With an average degree of whiteness of85.5%, White Portland Cement has thehighest comprehensive strength of all thewhite and gray Portland cements sold inTurkey. It is resistant to alkaline aggregatereactions and it provides solidity, as wellas an exquisite appearance in structuralmaterials used in all kinds of works of artand architectural projects.

White Limestone Cement (Eco White)TS EN 197-1 CEM II/B-L 42.5 R

This cement, with an 86% whitenessaverage, is classified in the earlycompressive strength cement category. Itprovides high resistance to alkalinereactions and has a high level ofimpermeability. It is used in pre-castapplications, ready plaster, adhesive, andpointing and grouting materials, cityfurniture, floor tile production, and all kindsof artistic applications.

Portland CementTS EN 197-1 CEM I 42.5 R

Amongst high strength concrete classesand in the construction of tall reinforcedconcrete buildings, this is the mostcommonly used cement type. It isespecially preferred in pre-tensionedprefabricated applications, and also usedin tunnel system segments on majorresidential projects.

Composite Portland CementTS EN 197-1 CEM II/B-M (V/L) 32.5 R

Concrete made from this cement releaseslow levels of hydration heat in the earlystages of the hydration process. Thereforeit is suitable for concreting in hot weatherconditions.

TS EN 197-1 CEM II/B-M (V-L) 42.5 N

The finely blended puzzolanic materials,silical fly ash, used in the production ofcomposite Portland cements, ensureshigher final strength and durability byaccelerating later stage reactions and

Annual Report 23

P R O D U C T S ( C O N T I N U E D )

Calcium Aluminate Cement (Is›daç) TS 6271

This cement is used for airport runways, bridges,dams, highway and road construction, mining,pipes and wastewater engineering, and internallining of sewerage systems (due to its highresistance to chemical reactions), and inindustrial furnaces, stairs, lintels and beams, floorcoverings which need to be used quickly, plasterand various repair work, and concrete elementswhich may be exposed to sulphurized water orsea water. It is also highly popular in therefracting industry, in the production of refractingplasters, ovens, and fireplaces. Furthermore,when mixed with Portland cement, calciumaluminate cement can also be used in repair workand blocking water leaks from doors andwindows.

Sulphate Resistant CementTS 10157 SDÇ

This cement can be used on sulphate surfaces, indamn construction, around ports and dockingareas, in the renewal of water treatment facilitiesand similar water-related structures.

Masonry Cement (EKOHARÇ - ECOMASONRY)TS EN 413-1 MC 12.5 X

Masonry cement (MC12.5X) can be used to erectwalls with bricks, briquettes, stone, etc., inplastering interior or exterior facades, flooringconcrete, and laying mosaics, wall or floorceramics, fixing wall tiles and natural stone, etc.,by merely mixing it with appropriate amounts ofsand and water. Masonry cement is suitable asfloor concrete, thanks to its low shrinkage. It isalso suitable for exterior plastering because of its

24 Annual Report

CE Marking CertificatesEN 197-1 CEM I 52.5 N White Portland CementEN 197-1 CEM I 42.5 R Gray Portland CementEN 14647 Calcium Aluminate CementEN 197-1 CEM II/B-L 42.5 R White Portland Limestone CementEN 197-1 CEM II/B-M (V-L) 32.5 R Portland Composite CementEN 413-1 MC 12.5 X Masonry Cement

Kitemark CertificatesBS EN 197-1 CEM I 42.5 R Gray Portland CementBS EN 197-1 CEM I 52.5 N White Portland Cement

Certificate of Conformity with Spanish StandardBL I 52.5 N UNE 80305 White Portland Cement

Certificate of Conformity with ECCEM I 42.5 R Portland CementCEM II/B-M (V-L) 32.5 R Portland Composite Cement CEM II/B-M (V-L) 42.5 N Portland Composite Cement CEM II/A-L 42.5 R (White) Portland Limestone Cement

resistance to humidity and climatic extremes. Itprovides smooth, hard surfaces that can breathe,which makes it also suitable for interiorplastering.

CE Marking, EC, TSE and Other SuitabilityDocuments

To launch cement products on EU membercountry markets, it is compulsory to acquire ECCertification and CE marking. For this reason, allour export products are Kitemark Quality certifiedby the British Standards Institute along with ECCertification and CE marking.

For products which fall outside the scope of CEmarking, documents suitable to the target countryare acquired.

TS EN 197-1 Documents of General CementStandard Suitability

In compliance with EU harmonization efforts, newadapted cement standards were established onthe request of the Ministry of Public Works.Casting aside the previous cement standardsapplied to all types of cement sold on thedomestic market, Çimsa acquired TurkishStandards set in accordance with the EUharmonization process.

Annual Report 25

Mersin Kayseri Eskiflehir Ni¤de Ankara

Products Plant Plant Plant Plant Facility

TS EN 197-1 CEM I 42.5 R Portland Cement (Gray) x x x x x

TS EN 197-1 CEM II B/M (V-L) 32.5 R Portland Composite Cement x

TS EN 197-1 CEM II B/M (V-L) 42.5 N Portland Composite Cement x

TS EN 197-1 CEM I 52.5 N Portland Cement (White) x

TS EN 197-1 CEM II A-L 42.5 R Portland Limestone Cement (White) x

EN 413-1 MC 12.5 X Masonry Cement (ECOMORTAR) x x x

EN 14647 Calcium Aluminate Cement x

TS EN 197-1 CEM II/A/M (P-L) 42.5 R Portland Composite Cement x

TS EN 197-1 CEM II/A/M (P-L) 42.5 N x

TS EN 197-1 CEM II B/M (P-L) 32.5 R Portland Composite Cement x x x

EN 197-1:2000 CEM II/B-L 42.5 R Portland Composite Cement x

EN 197-1-2000 CEM IV/B (P) 32.5 R Puzzolanic Cement x

TS 10157 SDÇ 42.5 R Sulphate-resistant Cement x

R E A D Y - M I X E D C O N C R E T E

Çimsa Ready-Mixed Concrete startedproduction with the establishment of theZeytinli Ready-Mixed Concrete Plant in1988. It currently operates 24 ready-mixedconcrete plants, 19 with dry systems andfive with wet systems. Çimsa owns 23 ofthese plants and another is rented andoperated by Çimsa. After merging withNi¤de Cement on November 1, 2007,Aksaray, Karaman and Ere¤li (Konya)Ready-Mixed Concrete Plants, whichbelonged to Ni¤de, are now part of Çimsa.Total annual capacity of these ready-mixed concrete plants is 2.4 million cubicmeters. In 2007, concrete productionamounted to 1.5 million cubic meters,representing a capacity utilization rate of66%. The plants are staffed by 76experienced and specialized employees,and equipped with 218 trans-mixers, 46mobile pumps, and five fixed pumps. Çimsaowns 184 of the trans-mixers, 42 of themobile pumps, and all of the fixed pumps.Çimsa closely follows technological andscientific developments in its sector tooffer new products, new equipment andservices to its customers.

Though new to the market, production ofconcrete with dramix, one of the specialproducts line, has matured. As a result, in2007, it sold 13,000 m3 of special productfrom ready-mixed concrete plants.

The company introduced 20 new trans-mixers and 2 new 47 meters pumps in 2007.In addition, as a result of merging withNi¤de Cement Plant, 27 trans-mixers andfive mobile pumps used in Ni¤de ready-mixed concrete plants were added toÇimsa's assets.

Tekke ready-mixed concrete plant wasclosed and relocated to Silifke, AdanaKarsl› ready-mixed concrete plant wasclosed and relocated to Adana Karahan.On May 17, 2007, a ready-mixed concreteplant which belonged to P›nar Concrete inBilecik was bought by the company.Another ready-mixed concrete plant hasbeen leased and it started production inKütahya in November 2007. In addition tothese, it is planned that three new plants,one in central Eskiflehir, another in AdanaKozan, and the other in Mersin Limonlu,will come on line in early 2008.

In order to purify waste water and improvethe external appearance of plants, Çimsa,as an indication of the Company'ssensitivity to the environment, has carriedout significant improvements, beginningwith plants in the Adana and Mersinregions in 2007. Studies about EmployeeHealth and Work Safety in Ready-MixedConcrete started in 2007 and trainingsessions have been held.

26 Annual Report

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R E A D Y - M I X E D C O N C R E T E ( C O N T I N U E D )

1. Dost Beton (Self-Compacting and Self-LevelingConcrete)Dost Beton is a special, highly fluid concrete thathas long durability due to its unique design. It self-levels anywhere by gravity, requiring no vibration.It is free of condensation and decompositionproblems and is also self-compacting.

2. Aqua Beton (Underwater Concrete)Aqua Beton can flow easily underwater withoutwashing away or decomposition. It is self-levelingand self-compacting, and requires no vibrators orany other equipment. It has very low permeability,high viscosity, reliable strength, and is of a non-deteriorating quality.

3. Art Beton (Decoratively Colored and ImprintedConcrete)Art Beton is an easy-to-use base coating materialfor both indoors and outdoors, and is well-knownas textured and decoratively colored concrete, orsimply imprinted concrete. Its specificcharacteristics include ageing capability and theability to provide a surface appearance tailored tocustomer needs.

4. Drabeton (Concrete with Dramix and Fiber)Drabeton is particularly suitable for use as fieldconcrete, floor coating concrete, retaining orsustaining concrete and spraying concrete. Dueto its dramix content, Drabeton is highly resistantto and efficient against shrinkage cracks.

5. Yol Betonu (High Resistance Strength Concretewith Reinforced Tension Strength)This concrete is used as a surface material forroads, using cement as its binder. Its structurallife exceeds any material which uses an asphaltbased binder.

6. S›vamiks (Ready-to-use Wet Plaster)S›vamiks was created using Çimsa technology toreplace the so-called black plaster, which ishand-blended and therefore lacks consistentquality. This cement has strong adhesiveproperties and offers sound water resistance andheat insulation due to the absence of lime orsimilar materials in its formula. It can be paintedover relatively quickly compared with plastersince it has only a 72 hours settling period,enabling projects to be completed quickly. Allthese factors ensure that S›vamiks is much moreeconomic than manually prepared plaster.

7. Renkli Beton (Colored Concrete)Renkli Beton provides an exquisite appearanceand strength for all types of architectural,aesthetic and artistic applications and buildingmaterials. It also offers any desired color throughpigment addition, and surface texture by usingspecial patterns. It is hydraulically very active andwhen this characteristic is utilized, it increasesboth the speed of production and the quality ofthe product. During the production ofprefabricated concrete elements, Renkli Betondoes not require steam curing and contains onlylow-alkaline class cement. Çimsa remainscommitted to constant customer satisfaction andproduct quality improvement. In line with thisprinciple Çimsa manufactures, in addition to theabove products, high-resistance concrete (C50)and a range of C14 to C50 concretes specified bythe Turkish Standards Institute.

28 Annual Report

Annual Report 29

1. Mersin Plant2. Kayseri Plant3. Eskiflehir Plant4. Ni¤de Plant5. Ankara Cement Grinding

and Packaging Facility6. Malatya Cement Terminal7. Zeytinli-Adana8. Karahan-Adana9. Misis-Adana10. Adana Mobil11. ‹ncirlik-Adana12. Osmaniye13. Kahramanmarafl14. Tece-Mersin15. Yenihal-Mersin16. Bat›kent-Mersin

17. Silifke-Mersin18. Tarsus-Mersin19. Alanya-Antalya20. Manavgat-Antalya21. Çak›rlar-Antalya22. Gebiz-Antalya23. Kumarl›-Kayseri24. Anbar-Kayseri25. Nevflehir26. Aksaray27. Karaman28. Ere¤li-Konya29. Bilecik30. Kütahya (leased)

Cement and Ready-Mixed Concrete Plants

Packaging TypesBagged Loading CapacityBagged, 3 - layer 3-layer kraft paper 50 kgBagged, 4 - layer 4-layer kraft paper 50 kgBagged, 2+1+1 - layer 1-layer white, 1-layer laminated brown, and 2-layer hard-brown kraft paper 50 kgBagged, 3+1+1 - layer 1-layer white, 1-layer laminated brown, and 3-layer hard-brown kraft paper 50 kgBagged, 4+1+1 - layer 1-layer white, 1-layer laminated brown, and 4-layer hard-brown kraft paper 50 kgBagged, 2+1+1 - layer 1-layer white, 1-layer laminated brown, and 2-layer hard-brown kraft paper 25 kgBagged, 2+1 - layer 2-layer laminated brown, and 1-layer laminated hard-brown kraft paper 25 kgSling palletless 39 bags 1.95 tons 800 tons/dayBig Bag 1.5 tons 800 t/dLaminated Polypropylene 1.5 tons 800 t/dLaminated Polypropylene 1 ton 800 t/dPalletized Wooden 15x100x120 cm 30-40 bags (50 kg) 1.5-2 tons 800 t/dPalletized Wooden 15x100x120 cm 64 bags (25 kg) 1.6 tons 800 t/dOthersBulk Silobus 15-40 tons 4,000 t/dClinkerBulk Vessel 2,500 t/dBig Bag Laminated Polypropylene 1-1.5 tons 800 t/d

Cement Types and StandardsStandard Class TypeEN 197-1:2000 CEM I 42.5 R Gray Portland Cement EN 197-1:2000 CEM II/B-M (V-L) 32.5 R Portland Composite CementEN 197-1:2000 CEM I 52.5 N White Portland Cement EN 197-1:2000 CEM II/B-L 42.5 R White Portland Limestone Cement EN 197-1-2000 CEM IV/B (P) 32.5 R Puzzolanic CementTS 10157 SDÇ 42.5 R Sulphate Resistant Cement

Export MarketASTM C-150 Tip I White Portland CementUNE 80-305:96 BL I 52.5 White Portland CementNM 10.01-F.004 CPA 55 White Portland CementTS 6271 4. SINIF Calcium Aluminate CementTS 21:1194 BPÇ 42.5/85 White Portland CementTS EN 197-1:2002 CEM II/B-M (V-L) 42.5 N Portland Composite CementTS EN 197-1:2002 CEM II/B-M (V-L) 32.5 R Portland Composite CementTS EN 197-1:2002 CEM II/B-L 42.5 R White Portland Limestone Cement

Domestic MarketTS EN 197-1:2002 CEM I 42.5 R Gray Portland Cement TS 22 ENV 413-1 MC 12.5X Masonry CementTS 6271 4. SINIF Calcium Aluminate Cement

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After the completion of the Eskiflehirinvestments, Çimsa made significantprogress in a leadership capacity.

In Mersin, Production Line II for calciumaluminate cement, which is a special kindof hydraulic plaster which attains strongresistance to high heat, chemicalcorruption, and water in a short time, wasbrought into operation at the end of June2007.

Towards the end of 2007, Mersin Plant wasconnected to the natural gas system. It isplanned that the necessary connections forthe firing and annealing of ovens will bedone during overhauls of the ovens in 2008.

A contract was signed with Loesche for themodernization of Mersin Plant's CementMill III, and this work is planned to be donetowards the middle of 2008.

At the Malatya Plant, a new cement siloconstruction with a capacity of 600 tonswas commenced and is planned to becompleted in February 2008.

The construction of three cement plants isunderway in Spain (Alicante), Romania(Constanta), and Russia (Novorossiysk).These projects will continue in 2008.

A contract was signed between Çimsa andFLS in July 2007 to renew the clinker coolerand oven units of the Mersin Plant'sProduction Line I. This project is scheduledto be completed in the first quarter of 2009.

The most important investment activity of2007 is the completion of the Eskiflehirproject, begun one year previously.Eskiflehir Cement Plant became a part ofÇimsa at the end of 2005. Then, at thebeginning of 2006, investment activitiescommenced quickly. The project wasinitiated in May 2006 and construction workbegan in July 2006. By the end of July 2006all of the connections for exported goodsand services were made and contractswere signed. Eskiflehir investment activitieswere executed in the form of four mainprojects:

1. Modernization of the Product Line 1. This project, given priority, commenced in May 2006 and was completed at the end of May 2007. In particular, the clinker units were renewed and, thereby, the production capacity of gray clinker was targeted to increase to 1,950 t/d from 1,450 t/d.

2. The construction of a new grinding plant. A new mill and grinding group with 85 t/h capacity, imported from China, was put into operation at the end of May 2007.

3. The establishment of a coal mill with a petrocoke grinding capacity of 40 t/h. The new coal mill started operating at the end of October 2007.

4. The construction of a completely new II Gary Clinker Production Line with a capacity of 2,300 t/d. This was completed and production started at the end of 2007.

Eskiflehir Investments:1. Modernization US$ 9.2 million2. Cement mill US$ 8.0 million3. Coal mill US$ 8.7 million4. Production Line II US$ 64.6 millionTotal US$ 90.5 million

Annual Report 31

O R G A N I Z A T I O N A L S T U D I E S A N D T R A I N I N G

Çimsa Development Programs

Senior Management DevelopmentPrograms

Çimsa development programs encompassworkshop-based training founded on the360-degree feedback system, coachingand other activities to improve executivecompetence and the skills of senior andintermediary level executives, and toenhance the organizational climate. In2007, development programs were carriedout in three categories:

• The Sabanc› Leadership Team (SALT)• Leadership Executive Program• Strategic Leadership Program

Learning Organization Training

Learning Organization activities are a vitalpart of Çimsa's organizational developmentprocess and training sessions continued in2007 in three categories:

1. Training for Learning Organization Team Members

a. Learning Organization Application Team Training

2. Training for Learning Organization Coaching Candidates

a. Organizational Transformation and Training the Trainerb. Coach Trainingc. Coaching Refresher Training

3. Training for Implanting the Learning Organization Culture in Çimsa

a. Organizational Transformation and Leadership Training

Behavioral and Vocational Training

Vocational training to maximize Çimsaemployees' contributions by developingtheir technical competence andperformance is conducted every year.These training sessions were intensified in2007.

• 2007 CSI Vibration Analysis and Predictive Maintenance Training

• 6 Sigma Training (Green Belt)• 89-106-EEC Directive TS-EN 197-1/2

Product Safety Regulations of the Council for Quality and the Environment

• Use of Alternative Fuels • The Impact of Burning Waste at Kilns

(Turkish Cement Manufacturers Association)

• Environmental Regulations and Management in the EU process

• BEX Training• BW (Business Warehouse) IT Training• CO2 Calculation and Climate Change• Orientation Training in the Cement

Industry• New Standards in the Cement and

Concrete Sector and Characteristics of Blended Cement

• Foreign Trade Training Program• Ergonomics Training• Influencing Skills• Kiln (Gale) Settings• FLS Kiln Operation (Denmark)• Security Information Form Certificate

Training• (Gale) Settings • Haznedar Refractory Training• Targeted Selection• Hydraulic Training

32 Annual Report

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O R G A N I Z A T I O N A L S T U D I E S A N D T R A I N I N G ( C O N T I N U E D )

• Second Mining and Environment Symposium• International Quality Control Seminar• Internal Quality Examination Training• Payment and Delivery Terms in Export• Training for Investigation of Work Accidents• Protection from Lumbar and Back Aches at

Work - Ergonomics Training• Quality Management Inspection Training• Welding Technology and the Importance of

Lubrication • Chemical Admixtures Fly Ash, Aggregates, CE

Certification• Inter-Laboratory Test Program Training• OHSAS 18001 Internal Auditor Training• Changes brought by the OHSAS 18001-2007

Revision • Orientation Training• Automation Control System Training• Automatic Command and PLC Training• Explosives and Explosion Techniques Course

III Training• Manufacturing Hard Facing and Non-Abrasive

Plates• Siemens Automation and Drive Technology

Products Introduction Seminar• Strategic Purchasing Management• TE‹Afi (Turkish Electricity Transmission

Company) SOMA Facilities - Operation Technician Training

• TE‹Afi (Turkish Electricity Transmission Company) SOMA Facilities - Heavy Current Technician Training

• Technical Training• TSE EN ISO 9001-2000 Quality Management

System Training• TS-EN-ISO/IEC 17025:2005 Laboratory

Accreditation Training• IFRS (International Financial Reporting

Standards) (PWC)• Construction/Building Materials Certification

Training

Learning Organization Project

A learning organization continuously learns fromexperience, adapts these lessons to changingcircumstances within a system that can also bedeveloped by employees and, as a result, it existsas a constantly changing, developing, and self-renovating dynamic enterprise.

For an organization, the learning process not onlyincludes objective information but also theopinions, judgments or intuitions of employees.First, the organization creates an environment thatallows for the formation of these opinions,judgments and intuitions. Then, opportunities aremade to share the information with the rest of theemployees. Finally, the same information is putinto use for the efficiency of the organization.

Becoming a learning organization is a difficultprocess.

Classic companies are referred to as knowingorganizations. In these companies, 'well-

informed' management and specialists offer thebest-known solutions for the problems or issuesthat come up. Employees apply the solutions. Theby-products of learning are not found in theseorganizations. Instead, they change in reaction tothe changes taking place around them.

Understanding organizations aim to find the bestby adding the personal conceptions andjudgments of employees. In this stage, the

34 Annual Report

KnowingOrganization

UnderstandingOrganization

ThinkingOrganization

LearningOrganization

organization does not just view issues by what isbest but stresses that there may be different'bests', depending on circumstances, individualperceptions, and judgments. As well as thehuman element, the values brought by thecorporate culture, written rules and controlmechanisms are also at play.

At the next level is the thinking organization.Thinking organizations develop the systems andmodels that would rectify and even precludedisruptions in their operations. They trainexecutives in the quick identification of problemsand immediate action by analysis.

In the final stage of the development process, theclimax of all these aforementioned processes, isthe learning organization. This stage involvescontinuous learning (between employees, fromcustomers, suppliers, etc.), identification/solutionof problems and learning from experience. Thecorporatization of information becomes anorganizational reflex. This stage accompanies theprocess of change in which case both employeesand the organization take on responsibilities.

Since the changing process began in 2004, Çimsahas been taking assured steps towards becominga learning organization. Besides changes instrategy management, human resourcesmanagement, and the overall managementapproach, plans are made so that the process willinclude all employees, step by step, through thelearning of organizational application teamwork.

The reason for starting the learning oforganizational application team work was to makeongoing team work (e.g. concerning cost cutting,raising efficiency, saving, improvements forenvironmental) much more systematic andhuman-oriented. However, apart from these basicgoals, there have been additional benefits, suchas improving internal communication within theorganization, development of employeeawareness of individual competence andperformance, and cultivating the culture of basingarguments on data.

Since such benefits and activities will givemomentum to Çimsa's transformation towardsbecoming a customer-oriented and innovativecompany, they are being spread rapidly to allproduction facilities and plants.

Annual Report 35

Individual Learning

Learning asTeams

Learning as anOrganization

Çimsa as a LearningOrganization

O R G A N I Z A T I O N A L S T U D I E S A N D T R A I N I N G ( C O N T I N U E D )

The course of the organizational teams over a four-year period is projected in the table on a time line.

The tangible benefits accomplished by the teams as the result of learning organization activities since2004 are demonstrated in this table.

Team Target ResultK›v›lc›m 9% reduction in truck and grab use 20% saving, 26% fall in truck and grab use

Kar Damlac›klar› 1% reduction in annual raw meal, TRY 1,250,000 of savings

fuel and energy costs

Turkuaz 15% reduction in consumption of water Total saving of 500 tons per day, 25% lower

cost, Saving of drinking water for 2,500 people/day

Greenpeace 50% reduction in dust emissions 65% fall in dust emissions

Transformation Recycling wastes: 2% raw meal and Recycling wastes: 1.32% raw meal and

12% admixtures 11.32% admixtures

Optimum Reducing spare part stocks, etc to 25% 36% saving, reduction to TRY 1,823,000

from TRY 2,830,000

Çoban Y›ld›z› 15% saving in energy spending 58% saving without changing lighting quality

Crushing Power Reducing 178 hours of unplanned pauses in Reduction to 48 hours: 73% improvement

the crusher unit

Argus Reducing peak-time hours from 19% to Total saving of US$ 549,500

16% and reducing electricity usage for

grinding by 3% per product

Sentez Reducing customer complaints by 30% 74% drop in customer complaints

Increasing customer satisfaction by 10%

Redüktör Reducing stocks from TRY 18,824,000 Drop in stocks, new source of TRY 3.6 million

and 155 days to TRY 15,640,000 and 120 days in operating capital

Energy Hunters 7% saving in consumption of energy for grinding Saving of 9.84% and extra earnings of

Reducing work-related accidents to 5 TRY 815,000

Live Coverage Increase of 35% in mixer performance, 50% in increase in mixer performance of 86% in

mobile pump performance Mersin, 97% in Adana; increase in mobile

pump Performance of 85% in Mersin, 89% in Adana

Kumtafl› Reducing cement costs (from 100 units) to reduction to CEM I=97.76; CEM II=99.00,

CEM I=92.68; CEM II=98.25 ; CEM III=91.83 CEM III=99.00

De¤iflimsa 50% saving on the internal transport costs of Cumulative average of TRY 0.84/ton

TRY 1.20/ton Reducing accidents that cause a 29.71% improvement

absenteeism to “0”

36 Annual Report

Two teams in KayseriTwo teams in MersinOne team in Ready-mixed ConcreteTwo teams in Eskiflehir

One team in AnkaraOne team in Ni¤de

2008

22 teams211 members57 coaches

2007

13 teams130 members39 coaches

2004

The following critical factors played aninstrumental role in the achievement of thesavings above and the rapid results gained bylearning organization activities within Çimsa:

• Constant follow-up and contribution of the General Manager

• Participation of the sponsors in presentations and meetings; consistent and constructive provision of feedback to teams

• Support by all function heads to team members.

The intangible contributions of the learningorganization activities to Çimsa were:

• Increase in the number of employees who suggest solutions rather than waiting for the executives to find one

• The adoption, especially by junior-level executives, of a democratic and coaching management style that encourages participation and learning, instead of solving problems as a 'well-informed' executive

• An environment suitable for identifying and testing candidates for executive positions

• The reflection and reinforcement of our values• Disseminating the habit of showing up in

meetings prepared, basing arguments on data, and focusing on the main subject

• Development of skills that would contribute to employees' professional and personal lives.

In the first six months of 2008, the nine learningorganization teams are set to work on projects toimprove Çimsa's corporate performance,competitive advantage, corporate reputation, andemployee satisfaction.

A New Performance Criterion: Measurement ofthe Organizational Climate

Over three decades of research has shown thatgood executives make a considerable impact onthe financial results of companies. This impact isperceived more discernibly in circumstanceswhen the sector is constrained and the conditionsare severe.

The approaches and attitudes of executivesdirectly influence the organizational climate andthe feelings of employees regarding the workenvironment.

Concisely, “Organizational climate” is the mood ofthe work environment. It is the measurement ofwhether an environment has been set up in whichexecutives and employees can convey theirenergies and sincere contributions to their work.The average impact of the executive on theorganizational climate is calculated as 70%. Apositive organizational climate is found toinfluence the company's financial results.

Employees working in companies with a favorableorganizational climate express that:• The work environment motivates them and

they work efficiently and with pleasure• They perform to the best of their ability and

know that it is appreciated.

In companies where the organizational climate isregarded as unfavorable, the reverse is the case.

Annual Report 37

O R G A N I Z A T I O N A L S T U D I E S A N D T R A I N I N G ( C O N T I N U E D )

The most practical method for measuring theorganizational climate is by questionnaire.By analyzing the replies given to the questions“What is the current situation in the company?”and “What would be the ideal situation?”questionnaires can measure employee morale inrelation to the style of management and theorganization's performance.

The following is a summary of the six approachesto be taken by management for employees to dotheir best:

38 Annual Report

1. Clarity: providing clarity as to where the company goes and how employees can contribute to this2. Standards: persistent emphasis on excellence and performance enhancement3. Responsibility: delegating responsibility to ensure employees do their work properly and holding

those authorized responsible4. Flexibility: making sure that there are no unnecessary rules and procedures, and that good ideas

are put into practice5. Rewards: appreciation of the extent of contributions to results.6. Team Commitment: creating an environment of trust and pride.

Companies that would like to sustain their success acknowledge that organizational climate has anotable effect on company performance. It can be assessed, measured, and improved just like othermeasurable performance criteria (e.g. ROIC, EBITDA, market share, uptime-production performance).

In the context of SALT (Sabanc› Leadership Team), which has been the senior managementdevelopment platform of the Sabanc› Group since 1999, all senior management employees have beengoing through a 360-degree survey in connection with the organizational climate they induce, theirmanagement style, and competence. They receive feedback in return, and activities are geared towardsimproving the organizational climate. The Çimsa senior management team has been taking part in suchwork since 2000. The 360-degree survey and feedback-coaching meetings take place about once everytwo years. In 2007, most of the Çimsa senior management underwent the 360-degree survey. Executivesparticipated in a five-day workshop with coaching sessions, and worked on their individual action plans.These activities are planned for 2008 as well.

For executives at each level to receive feedback concerning the organizational climate they generateand for the Çimsa management team to make action plans for improvement, six workshops were held inMersin, Ankara, Ni¤de, Kayseri and Eskiflehir plants and including 221 non-union ready-mix concreteemployees, at the end of the year. During these workshops, an organizational climate SWOT analysiswas conducted. Mini surveys were made verbally and written statements and suggestions forimprovements about the organizational climate in the company were collected from Çimsa employees.As a result of this work, general and regional reports were written for feedback and suggestions ofimprovement. The next goal is to prepare and put into practice the improvement action plans.

Annual Report 39

Çimsa's Strategy Map

Develop New Production Capacitiesin Strategic Regions/Markets

Increase Generated Value Optimize Capital StructureCost Leadership

Know Your Customer Exceed Customer Expectations

Optimize Sales Mix(Customer/Product/Region)

Adapt Operational Best Practices

Enhance Communication for ReputationManagement

Identify Corporate Risks and Take Precautions

Decrease Optimize Production Costs and EnergyUsage

“MOST VAUABLE CONCRETE AND CEMENT ORGANIZATION OF TURKEY”

“INCREASE VALUE TO CUSTOMER”

“HIGH PERFORMANCE PROCESSES”

“Ç‹MSA DNA”

“HIGH-PERFORMANCE CULTURE FOR PROFITABLE GROWTH”

Achieve Outstanding Business Results

Improve Raw Materials & CementitiousMaterials/Resources Management

Increase Logistics Effinicy

Segment Management Operational Efficiency Supply Chain Management

Implement a Strategic Performance Management Model

Ensure Implementation of Effective HRManagement System and Framework

Harmonize & Unify the Information Platforms Develop Leadership & ManagementCapabilities

Standardize Our Way of Doing Business

Create Value through Organizational Synergies

Information Capital Human Capital Organizational Capital

Profitable Growth High Performance Culture

Our Values: Reliable - Customer Focused - Collaborative

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Çimsa Cement Free Zone Ltd.Cyprus

Çimsa follows growth potential in itscatchment area closely. In accordancewith the 2005 investment decisionconcerning the Turkish Republic ofNorthern Cyprus, Çimsa bought ErçimCement Industry Ltd. Subsequentinvestments revamped the Famagusta portfacility for stockpiling and selling bulkcement. The facility has the capacity tostockpile 5,000 tons of bulk cement. In2007, about 50,000 tons of grey cementwas sold. The sales target for 2008 in theCyprus market is 70,000 tons of greycement.

C‹MSAROM Marketing Distributie S.R.L.Romania

This facility was established by Çimsa(with 100% ownership) in Romania'sConstanta port in February 2006 to marketand distribute white cement in and outsideof Romania.

Çimsa Cementos Espãna S.A.U. Spain

Owned entirely by Çimsa, the terminal wasput into operation in 1996 in Seville, one ofSpain's key ports.

Çimsa's super white bulk cement isshipped from the company's MersinPlants. Using the packaging systems oftwo silos with 5,000 tons of capacity, theproduct is offered to the Spanish market inbulk or as packaged cement. The plantalso produces flooring materials usingwhite cement, and has an establishedgroup of buyers in the Spanish market.

CSN Cement Sales North GmbH Germany

CSN was founded by a partnershipbetween the German CTN GmbH andÇimsa. It has a cement silo with a capacityof 7,500 tons and markets white cement inGermany.

Annual Report 41

2 0 0 7 M A R K E T I N G A C T I V I T I E S

A variety of technical support activitieswere carried out to enhance customersatisfaction and commitment and to satisfycustomer needs before and after sales.These activities were conducted throughthe Çimsa Application Center laboratoriesand in the field.

Çimsa's mission, to become the preferredbusiness partner in the cement andconcrete sector, implies the necessity ofbuilding customer relations on solidfoundations. As the leader of its sector,especially white cement and specialproducts, Çimsa places great stress oncustomer satisfaction in existing and newmarkets, both before and after sales. Inthis regard, the research on applicationsfor Çimsa products (white/grey Portlandcement and calcium aluminate cement)conducted in the Cement ApplicationCenter was shared with customers.Promotions were organized to win newcustomers and differentiate the product.Through customer visits, the productionprocesses of customers were examinedand their expectations and demands werenoted. Research on applications wasconducted to meet these demands.Customer satisfaction surveys wereadministered to measure the level of

satisfaction of domestic and foreigncustomers and distributors, and to definetheir expectations.

Projects were run in conjunction with thetravertine sector, an important area inwhich super white cement is used.Travertine producers were visited to findways to enhance the performance of thegrout made from white cement. Seminarswere held to bolster the knowledge andextend the experience of travertineproducers in the usage of white cement.

To expand the use of white cement in thepre-cast sector, Çimsa cooperated withpre-cast producers to work on high-strength concrete. The characteristics ofwhite cement, such as not requiring steamcuring, allow for early removal of concretemolds, and early/high strength is ac