Athens 26/03/2013

Reorganization of Heracles GCC production structure

Aiming to ensure the competitiveness and the sustainable course of development of the company

Heracles GCC, following a decision of the Company's Board of Directors on March 25 2013, announces the reorganization of its cement production structure. The aim of the reorganization is to address effectively the impact of the recession in the construction sector, to support the company's viability and to ensure conditions for the business development of the Heracles Group, both in domestic and export markets.

The new structure comprises cement production by theVolosand Milaki plants, leveraging their competitive advantages, particularly their port facilities, to serve the domestic market and to enhance the company's export presence in the wider Mediterranean region.

The operation of Halkis plant, whose production activity is idle since July 2011, is ceased permanently. This decision follows a series of efforts with investments in new cement production technology and actions for new activities taking place in the last years aiming at a more competitive operation of the plant and at ensuring its viability. However, despite these efforts, the Halkis plant suffered a severe reduction in sales due to a contraction in construction activity in Attica, the plant's main market, by 80% since 2008. In the conditions of excessive cement production capacity in the market, the plant became no longer sustainable.

The reorganization is in effect immediately.

The company is committed to pursue every effort for possible solutions to reduce the personal and social impact to the plant's 236 employees that are affected. For this purpose, the company has invited the Halkis plant Union to consultation regarding the termination of employment contracts, in compliance with the conditions set by law.

With the new operational structure the company leverages the competencies of the Heracles two production facilities and supply chain, increases its productivity by 30%, ensures its viability and addresses the challenges of the future, strengthening and establishing its position as an export power for the Mediterranean region.

The production reorganization is estimated to have nonrecurring negative impact of €57 million on the 2013 financial results of the Heracles Company and the consolidated financial results of Heracles Group of Companies due to asset impairment, the cost of redundancy payments for staff, rehabilitation and restoration costs for the Halkis site. Regarding the coming years, it is estimated a positive impact of €18 million per year and increase of productivity.

As of 26/03/2013, all customers in Attica will be served by the Company's terminal in Drapetsona, while the domestic market will continue to be served by the cement plants in Volos and Milaki and the distribution terminals in Drapetsona, Thessaloniki, Kavala, Igoumenitsa, Rio and Heraklion.