Paul Heinz Hugentobler

Chairman of the Board of Directors

Dear Shareholders,

The financial year under review has been a very challenging one as the expectations we had early in 2019 for our operations in Thailand with regards to a renewal of key economic policies, an acceleration of anticipated infrastructure projects and a broad-based economic recovery did not materialize at all. Macro-economic performance was decelerating quarter after quarter and the financial year 2019 ended with a GDP growth of 2.4 percent compared to a forecast of 3.5 - 4 percent, the lowest GDP growth rate for the last 14 years. As a result of such slowdowns demand for cement on a national basis did not grow compared to 2018. Our overseas operations in Cambodia and Bangladesh could operate in thriving environments both in terms of GDP and cement demand growth. Cement demand in South Vietnam was negatively impacted by a freeze in the issuance of construction licenses, and Sri Lanka was suffering from compounded impacts of political instability, currency devaluations and the Easter attacks in Colombo hitting the all-important hospitality industry and resulting in a poor macro-economic performance and negative demand growth for building materials including cement.

With such headwinds prevailing in most of our markets. Management had to step up and accelerate Group-wide business recovery and cost reduction initiatives to contain the impacts of such demand slowdowns and pricing pressures in a combination with a very disciplined allocation of capital to maintenance and expansion projects. Despite all efforts, however, the anticipated improvements in our operational and financial performance did not all materialize as expected. As a result, we realized a net profit after tax attributable to equity holders of THB 3.2 billion compared to THB 3.0 billion in 2018, a cash flow from operations of THB 7.6 billion after THB 7.0 billion in 2018, which led to a reduction of our gearing ratio to 76 percent at the end of 2019. The Board of Directors, therefore, is pleased to propose a full year dividend of THB 8 per share to the shareholders for approval at the AGM.

The Board of Directors and Management are confident that the Group is well prepared to face a continuation of the very demanding business environment in 2020. A rigorously tight financial regime combined with strategic and operational restructuring measures will be applied throughout 2020 to strengthen both our operational and financial performance as well as the overall financial position of the Group.

On behalf of the Board of Directors, I wish to thank our shareholders for their support and all our employees for their commitment to build our Group into an agile and successful regional player in the building materials space. We are grateful to our business partners, customers for their loyalty, and the communities we are operating in for their cooperation and trust in us.