This is a Story About... A company that is American-owned, employee-built and customer-driven. It is Also About One Company’s... Vision, Its Mission, Its Values and its Enduring Commitment to: Its Customers Its Employees’ Future Production Excellence Environmental Stewardship and the Communities it serves Finally, It’s a Story About... Kansas Speedway, Kansas City, KS Exploration place, wichita, ks Where we came from, where we are going and the employees and customers who made it – and now make it – all possible. Chairman’s Message T he story of Ash Grove Cement Company is really the story of the growth of America, beginning with its great westward expansion in the second half of the 19th century – fueled by the transcontinental rail system and the growth of a robust economy. It was characterized by new cities and towns that soon became the anchors for unparalled expansion into the suburbs, driven by the automobile and ultimately networked by the airplane into the prosperous country we know today. It shouldn’t escape notice that one of the great common denominators of this expansion was a growing infrastructure – of road surfaces and parking surfaces, of buildings and warehouses, of shopping complexes and entertainment centers, of neighborhood sidewalks and driveways and homes and structured garages. That all takes cement. And concrete. And aggregate. A lot of it. Louisville Plant, Circa 1929 Seattle Plant, Present Day And that is exactly what Ash Grove Cement Company does. We make the products that build the infrastructure of an everchanging, ever-growing American landscape through multiple companies and nine cement plants across the western half of the United States. Changing Times, Unchanging Values We’ve been doing it now for one hundred and twenty-five years. And we’ve done it based on hard work, employee commitment, superior products, geographic expansion and a constant goal of responsible market leadership. And we did it as a totally American-owned company. Now the business dynamics change almost every day as we adjust to new opportunitites and challenges. But what doesn’t change are the basic values and business practices we bring to the table. They are the same ones that have seen us through good times and bad. Steady growth and economic downturn – through outright success and, yes, even the occasional failure. We have different names for them: values, operating principles, Rules of the Road. But they all lead to the same place. And they don’t change ever. So the story we are about to tell in the following pages is really in every respect a story of “changing times and unchanging values.” It is at once our strong foundation and our even stronger future. We hope you enjoy it. For the board, the shareholders and every Ash Grove employee. Charlie Sunderland Chairman We came out of the heartland And grew west with America; Now we stand at the threshold of a globalizing world Still building the future On the solid foundations of the past Pictured ABOVE: Control Room, Chanute, KS, with (L-R) Ken Taylor, Arlene Taylor, and Paul Godinez. Pictured Right: Finish Mill, Chanute, KS, with Mark Ward Our Vision, Our Mission, Our Unchanging Values What We Strive to Become Our Unchanging “Rules of the Road” • Open, honest and fair dealing with all customers and suppliers at all times and in all places We seek to become the undisputed low-cost leader in the manufacture and sale of portland cement and related products that consistently add value to our customers’ businesses. • Full, candid and responsible participation by every employee in building every phase of our company’s present success and future growth • Straightforward communication to, from and between all levels, functions and How We Will Get There We will achieve our vision by assuring a consistent supply of reliable products; by providing world-class service to our customers; by promoting safety, efficiency, locations of the company • Active participation in building a better quality of life in every community we serve and all projects we participate in product quality and marketplace integrity by regularly upgrading the education, training and competitive skills of our people; and by exercising our corporate citizenship obligation toward the communities, customers and markets we serve. Open and Honest, Candid and Responsible, Straightforward and Active. It’s what we’ve believed in for over one hundred twenty five years. Our Commitment to Our Customers From the very beginning, Ash Grove Cement has been built around a core of loyal and satisfied customers. The names change, but the honor roll remains. We may do it a little differently today than we did 125 years ago, but our commitment to keep every customer in that elusive “completely satisfied” column is still firmly fixed in place. Even in these times of great technological change and tough new demands, satisfaction is still measured by superior materials, process integrity, competitive pricing, reliable supply and the forging of a true working partnership between company and customer. Many of our customers have known us for decades, some for a shorter time. We value each and every one of them. Each and every day. Qwest Field, Seattle, WA Hyatt Hotel, Wichita, KS Our Commitment to Our Employees They are, in our estimation, the best and the brightest. They come from diverse backgrounds and a broad geography. And in the process of the growth and assimilation they have built one of the most dedicated, productive work forces anywhere. Our commitment to them is straight-to-the-point. You take care of business; we’ll take care of you. Through: • Competitive compensation and continuous training opportunities • Plus the constant challenge to do better, think smarter, give back to your community and honor and provide for your family Years ago we had a company logo that said “Best on Earth.” Well, “Best on Earth” also describes our employees. Our commitment to them is to make sure they stay that way. Kristen Freeman, Ash Grove Technical Center Pictured L-R Channa Hay, Seattle, WA; Steve Taylor, Little Rock, AR; Ellord Steen, Louisville, NE; Brian Farmer, Louisville, NE. Our Commitment to a Sustainable Environment Earning “Our License to Operate” Our Commitment to Our Communities Ash Grove territory is a lot of ground to cover – from the Midwest heartland to the shores of the Pacific. After water itself, no material is more used on our planet leadership in emission controls, land-use practices and than concrete. That fact alone has meant the worldwide climate protection. This is why Ash Grove was the first cement industry has a special accountability for American-owned cement producer to join the Cement assuring the safe, environmentally-responsible sourcing, Sustainability Initiative of the World Business Council And along the way there are a lot of buildings to be repaired and restored, manufacture and end-use of its products. for Sustainable Development, a worldwide consortium renovations to be made and new structures to be built – schools, churches, museums, of cement companies whose shared goal is to “reduce, clinics, youth clubs and civic centers. Environmental stewardship also makes good business. recycle and reuse,” and by so doing to lower CO2 You can create energy from the “leftovers” of other emissions a full ten percent by the year 2020. million, ranging from $150 to a small public school foundation to $1,000,000 to a industries, and you can lower costs to your customers while at the same time reducing impact on the natural Our “Group of 16” now represents more than half the resource base. world’s cement production outside China. That’s a Fact: Ash Grove consumes nearly seven million (that’s In the last fifteen years alone, the Sunderland Foundation has contributed over $37 health care foundation in Kansas City. significant beginning, and we are proud of our early In addition, the Ash Grove Charitable Foundation has awarded over $1.5 million to involvement and dedicated commitment. causes near and dear to employee hearts. All of this in addition to the countless hours spent by individual Ash Grove employees. right 7,000,000) used tires per year as an energy producing alternative fuel in six of its plants across the Environmental stewardship. Social responsibility. Western U.S. That’s the equivalent of 66,000 tons of coal Economic prosperity – the three inter-locking faces of So wherever the time and money is allocated – and for whatever kind of project it mined from the earth—about 700 rail cars, comprising a progress. It’s what we seek to achieve as we continue to supports – the aim is always the same: to build and serve; to create and contribute. train approximately seven miles long. earn our public “license to operate.” And through generosity to others, bring our communities together in common causes. Fact: Cement used in the manufacture of building and surfacing products creates five percent of the world’s carbon dioxide emissions. We recognize that this simple fact of nature requires all companies like us to take Our Plants Import Terminal Sales Office Home Office Cement Terminal Cement Plant Hand Picking imestone, Springfield, MO, plant circa 1917 Limestone Storage Dome, Chanute, KS Ash Grove locations across the country Pictured in the Header Chanute, KS, Plant Present Day The Sunderland Family I n a day and age when big is He was followed by his son, frequently confused with better; the legendary “Mr. Paul,” who when outsourcing is more “cost remained active until his death at efficient” than using local labor; age 107; by Robert and James, his and when “hands-off” is more grandsons and now, by Charlie fashionable than “hands-on,” the as chairman and brother Kent as century-long saga of the Sunderland vice-chairman – both grandsons, family reads like a John Wayne in turn, of Paul. classic – stand proud, deliver the goods and don’t bet the ranch on What is most important is that it one throw. works – not so much because it’s the Sunderland family business, Since that day in 1909 when Lester but because it’s the business of (LT) Sunderland became a vice- the nearly 3,000 people who president, one or more members of this pioneering make up the Ash Grove family of employees – more than business family have been associated with the successful 300 of whom have worked here for better than a quarter management of Ash Grove – a company that started with of a century. 200 acres of Missouri limestone quarry and $10,000 in capital. And, oh yes, we might add that the entire Ash Grove family is more committed than ever to a strong future. LT assumed the presidency in 1913 and with a steady hand guided the fledgling company through early growth, a near-collapse during the Great Depression, and the rigorous demands of two World Wars. Sacking Cement, Chanute, KS, Plant circa 1920 Pictured in the Header (left to right) Lester Sunderland, Paul Sunderland, Robert Sunderland, James Sunderland, Charlie Sunderland, and Kent Sunderland Pictured in the Frame Lester Sunderland, 1950 Ash Grove Timeline 1880 1890 1900 1910 1920 1904 - Lime produced at Ash Grove’s Springfield plant won top honors in Louisiana Purchase Exposition 1882 - Ash Grove White Lime Association incorporated with a capital of $10,000 1930 1939 1921 - L.T. Sunderland elected as President of the Portland Cement Association 1908 - Ash Grove’s portland cement plant completed in Chanute, KS 1891 - Ash Grove’s main offices moved to Kansas City, MO 1950 1960 1949 - New kiln installed at Louisville plant, increasing production to 375,000 tons annually 1970 1929 - Construction completed on Ash Grove’s second cement plant in Louisville, NE 1980 1962 - Ash Grove cement transfer station completed in Kansas City, KS, to handle truck deliveries 1964 - Modernization of Chanute plant increases capacity to 500,000 tons annually 1907 - Company reorganized as Ash Grove Lime and Portland Cement Company 1909 - Lester T. Sunderland moves to Kansas City from Omaha to accept position of Vice President and Manager. 1940 1964 - Lime plant constructed in Portland to supply product to Pacific Northwest 1968 - Company shortens name to Ash Grove Cement Company 1913 - L.T. Sunderland elected President of Ash Grove 1990 2000+ 1982 - Expansion of Louisville plant increases production capacity to 1,000,000 tons annually 1983 - Company acquires Oregon Portland Cement Co. in Durkee, OR and Inkom, ID and Quarry in Blubber Bay, British Columbia. 1984 - Seattle, WA, plant acquired. 1985 - Foreman, AR, plant acquired. 1987 - Montana City, MT, plant acquired. 1989 - Leamington, UT, plant acquired. 1992 - Expansion and modernization of Seattle, WA, plant 2000 - Ash Grove aquires Lyman-Richey Co. 2001 - Expansion and modernization of Chanute, KS, plant 2002 - Ash Grove takes major stake in Texas and solidifies position as fifth largest US cement producer after taking full ownership of Midlothian, TX, cement plant. 2003 - Ash Grove moves into new headquarters building in Overland Park, KS 2005 - Moapa, NV, plant project announced. 2006 - Company expands import terminals in Houston, TX, and Portland, OR 2007-08 - Construction to begin on $190 million expansion of Foreman, AR, plant Schematic drawing of Chanute Plant, circa 1920. Ash Grove’s home office opened in 2003 Directors & Executives JAMES P. SUNDERLAND DAVID H. BAKER Honorary Chairman of the Board Vice President - Sales, Western Division CHARLES T. SUNDERLAND RONALD V. DELEENHEER Chairman of the Board Vice President - Sales, Midwestern Division KENT W. SUNDERLAND DAVID W. EZELL Vice Chairman of the Board & Secretary Vice President - Human Resources GEORGE M. WELLS JIM GATENS Vice Chairman - Strategic Relationships Vice President - Sales, Texas Division CHARLES T. WIEDENHOFT MICHAEL J. HRIZUK President and Chief Operating Officer Vice President - Manufacturing, Western Division JOHN H. ROSS III STEPHEN JOYCE Senior Vice President & General Counsel Vice President - Manufacturing Services JOHN W. WEBSTER EDWIN S. PIERCE Private Investor Vice President - Manufacturing, Midwestern Division CHARLES W. LARSON KENNETH J. RONE, JR. Private Investor Vice President - Manufacturing Services, Western Division JOHN F. WOODFILL Vice President - Finance F. LYNN MARKEL Private Investor Preheater Tower, Chanute, KS, Plant Online at www.ashgrove.com FRAN STREITMAN Vice President - Environmental Affairs Ash Grove Cement Company Home Office 11011 Cody Overland Park, Kansas 66210 913.451.8900 800.545.1882 www.ashgrove.com