AMBUJA CEMENTS ENTERS INTO STRATEGIC ALLIANCE

WITH HOLCIM

ANNOUNCE A PUBLIC OPEN OFFER TO

THE SHAREHOLDERS OF THE ASSOCIATED CEMENT COMPANIES
LIMITED (ACC) AND AMBUJA CEMENT EASTERN LIMITED (ACEL)

Gujarat Ambuja Cements Limited and Holcim Ltd, Zurich have entered into a strategic
partnership to realise value-creating projects in India and to participate in the Indian
Cement Industry’s dynamic growth.

Holcim is the 2nd largest cement producer in the world, its turnover for FY2003 was
about USD 9.4 Billion and current market capitalisation is USD 12 Billion. It is
considered to be one of the best cement companies around the world.

Holcim has been evaluating several options to participate into the growing cement
markets of India for some time. The Board of Directors of both the companies have
agreed to form a long term strategic alliance to participate in the growing cement markets
in Indian sub-continent. Ambuja Cements is the fastest growing cement company and
considered as one of the most reputed companies in India. Both the partners, apart from
participating in the growing cement markets of India, also aim to strengthen their cement
trading activities in South Asia, Middle East and the adjoining regions in Indian ocean.
In addition, they would also complement each other by exchanging experiences in
product development, Human Resources and Information Technology. Holcim, in future,
intends to use India as an additional base for its IT and R & D , sourcing hub to generate
additional synergies and value.
AMBUJA CEMENT INDIA LIMITED (ACIL) – ALLIANCE VEHICLE

Holcim has entered into an agreement with private equity investors Asian Infrastructure
Ganesha Cement Holding Inc., Knight Investments Ltd. , Indivest Pte Ltd. of ACIL to
acquire their entire 40% shareholding in ACIL. Simultaneously, Holcim has also entered
into Share Subscription Agreement with ACIL for its proposed subscription of
approximately USD 600 million towards capital, both of these being subject to necessary
regulatory approvals. Post these approvals, Holcim will have 67% equity capital in
ACIL and balance 33% would be held by Ambuja Cements.

Ambuja Cements and Holcim have agreed to make ACIL as the platform for this
strategic alliance and in line with this objective, Holcim through ACIL has announced an
open offer to acquire a majority shareholding in ACC. ACIL already owns 13.8%
shareholding in ACC. Holcim through ACIL is now offering ACC shareholders Rs. 370
per share by way of an open offer to increase ACIL’s shareholding in ACC upto
50.01%. This open offer is subject to necessary regulatory approvals in India.

ACIL also owns 94% of ACEL, which is one of the most profitable cement companies in
India. Holcim through ACIL is also making an open offer to acquire its entire public
shareholding from the minority shareholders at Rs. 70 per share, subject to necessary
approvals.

For the above objectives, Holcim proposes to invest approximately USD 800 million into
India, which will be financed, entirely through internal sources and existing credit
facilities. This is by far the largest Foreign Direct Investments in the Indian Cement
Industry.
This strategic alliance is a landmark in the Indian Cement Industry as it will bring
significant advantages to the shareholders of both the partners and their commitments to
the growth of cement markets in India.

THE ASSOCIATED CEMENT COMPANIES LTD (ACC)

ACC is the most experienced and 2nd largest cement producer in India. It has 12 cement
plants and 3 grinding plants with the current capacity of 18.2 million tonnes per annum
and a national market share of about 13%. ACC is the only Pan Indian cement company ,
which also has presence in other construction materials viz. Ready-mix concrete. It has
11 Ready-mix concrete facility located in important consumption centres in India. ACC
also operates concrete research laboratory and manages cement plants and projects in
Saudi Arabia and Africa. In the fiscal year 2003-2004 ACC reported net sales of about
Rs. 3560 Crores, EBIDTA of Rs. 606 Crores, Net profit after minority interests of
Rs. 220 Crores.

AMBUJA CEMENT EASTERN LIMITED (ACEL)

ACEL owns a cement plant and a grinding plant with a combined cement capacity of 2
million tonnes. In the fiscal year 2003-2004, the company reported net sales of about Rs.
407 Crores, EBIDTA of Rs. 108 Crores and Net profit of Rs. 45 Crores.

INDIAN CEMENT INDUSTRY

India is the 2nd most populated country in the world. It is a huge emerging market with
immense potential, particularly in the industrial and services sector. The country's
economic prospects are bright, which is reflected in 6 to 7% economic growth that has
been predicted for next few years. The housing boom and rapid expansion of the India’s
infrastructure are bolstering the construction sector. Per capita consumption is currently
in the region of 115 kgs per year, one of the lowest consumption in Asia. After having
witnessed the slower growth than the GDP growth, cement consumption looks set to
achieve a good growth going forward. Cement consumption in the fiscal year 2005
(April-March) is likely to exceed 125 million tonnes which will make India, world’s 2nd
biggest cement market after China. It is expected that Indian Cement market will grow
by 7-8% in the coming years, as a result, Industry will have to expand its capacity
substantially over the next decade.

The above partnership of the two leading cement companies will definitely be a
formidable force for the future growth in the Indian Cement Industry.

Anil Singhvi Paul Hugentobler

Whole Time Director Executive Committee Member
GUJARAT AMBUJA CEMENTS LIMITED HOLCIM LTD

Mumbai , January 20, 2005