CSR Limited announced today thatits 50-50 cement joint venture with Hanson PLC, Australian Cement Holdings Pty Ltd(ACH), will merge with Queensland Cement Ltd (QCL), to form Australia’s largestcement group, with turnover around $750 million.

The new group - which is stillto be named - will be an Australian company, owned 50% by Holcim and 25% eachby CSR and Hanson.

It will produce around threemillion tonnes of cement annually, from three principal plants – Gladstone, inQueensland (currently a QCL plant), Railton in Tasmania (ACH) and Kandos in NewSouth Wales (ACH).

CSR Limited Managing DirectorPeter Kirby welcomed the merger. “The new company will have a network of plantsand terminals capable of providing better service to a wider group of customersin the eastern states,” he said.

“It significantly enhances theutilisation of capital for all parties, and will enable us to compete moreeffectively in a very competitive international market.

“ACH mainly supplies the NSW andVictorian markets, whilst QCL mainly supplies Queensland and export markets, sothere is very little overlap. However,the merger offers cost savings in areas such as logistics and corporateoverheads. QCL’s excess cement capacityat Gladstone will be used to supply Hanson and CSR in the NSW market, whichwill obviate the current need for ACH to invest heavily in lifting capacity inNSW,” he said.

The transaction is expected tobe earnings neutral in the first year, and earnings positive thereafter. The Board and management are still to beappointed. The board appointments areexpected to reflect the shareholdings of the new company.

Subject to regulatory approvalby the ACCC and the due diligence process, the merger is scheduled forcompletion during the first quarter of 2003.