Development Strategy Update

CRH PLC
30 June 2003

 D  E  V  E  L  O  P  M  E  N  T    S  T  R  A  T  E  G  Y    U  P  D  A  T  E

                                                                  30th June 2003



                CRH ANNOUNCES DEVELOPMENT INITIATIVES TOTALLING
              EURO 375 MILLION BRINGING ACQUISITION SPEND FOR THE
                  FIRST HALF OF 2003 TO OVER EURO 550 MILLION


CRH plc, the international building materials group, today announces a range of
19 development initiatives totalling euro 375 million undertaken during the
first half of 2003. These initiatives, which are in addition to the euro 189
million S.E. Johnson transaction announced in May, bring total development spend
in the first half of 2003 to over euro 550 million, three-quarters of which
arises in North America with the balance in Europe.


Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said:


'We are pleased that our development teams continue to deliver a strong deal
flow with a first half spend of over euro 550 million, broadly in line with the
levels of 2002 and 2001. This once again demonstrates that our development
approach continues to deliver for CRH and we look forward to a further good
level of development spend in the second half of the year.'



The principal initiatives contained in this Development Strategy Update are:

  • Europe Materials : two deals totalling euro 28 million


    Purchase of a lime business in Poland and an add-on aggregates acquisition
    in Finland.

  • Europe Products & Distribution : seven deals totalling euro 115 million


    Two acquisitions in Germany and Slovakia for the Concrete Products Group and
    one add-on deal in Germany for the Fencing & Security business; the
    establishment of a new platform for the Building Products Group with the
    acquisition of a metal-based building accessories business, and the addition
    of 16 DIY stores by the Distribution Group in three deals in the Benelux.

  • Americas Materials : three deals totalling euro 34 million


    Two add-on deals for Shelly in the Central Group and one add-on acquisition
    in Washington state.

  • Americas Products & Distribution : seven deals totalling euro 198 million


    Three acquisitions in the Architectural Products Group expanding operations
    in the Midwest and Florida; two acquisitions by the Glass Group building on
    the Architectural Systems development platform in the United States and
    strengthening CRH's presence in eastern Canada; and two acquisitions by the
    Distribution Group bringing its network of stores in the United States to
    122.



Contact at Dublin 404 1000 ([phone])
Liam O'Mahony Chief Executive
Harry Sheridan Finance Director
Myles Lee Finance Director - Designate


Europe Materials: euro 28 million



Poland



In February, the Group acquired 85% of Zaklady Przemyslu Wapienniczego '
Trzuskawica', a leading Polish lime producer. With access to over 360 million
tonnes of premium quality reserves and annual sales of approximately euro 29
million, Trzuskawica represents an excellent opportunity to enter the lime
business in Poland. The investment is in line with the strategy to add further
core products to build on our integrated building materials business in Poland
and provides an opportunity to replicate our profitable Irish lime business in a
new market.



Finland



In May, Lohja Rudus expanded its operations in the southeast of Finland with the
purchase of selected assets of Veljekset Turpeinen, including one rock quarry
and four sand and gravel pits located near Kotka, a significant port town 100
kilometres east of Helsinki. Annual sales are euro 2 million. Integration of the
acquired assets, which include aggregate reserves of approximately 2 million
tonnes, with existing operations in the region should result in benefits in
logistics and asset utilisation.



The total cost of the two acquisitions completed by the Europe Materials
Division is euro 28 million including goodwill of euro 19 million.





Europe Products & Distribution: euro 115 million



Concrete Products Group



The Concrete Products Group extended its activities with two acquisitions during
the first six months of 2003, one in Slovakia and one in eastern Germany.
Combined annual sales of these businesses are approximately euro 22 million.



Premac, the market leader in concrete paving in Slovakia, was acquired in June.
With a network of three production plants offering national coverage, Premac
provides a base for further expansion in eastern Europe. There is considerable
scope for synergies in product development, production and logistics from
benchmarking with CRH's existing concrete products businesses, particularly with
EHL, the market leader in concrete paving and landscape walling products in
Germany, which was acquired by CRH in May 2002.



Also in June, the EHL Group purchased a modern concrete paving plant at Gera in
eastern Germany. The purchase facilitates the rationalisation of two existing
EHL plants in the region and is expected to give rise to substantial added value
from higher volumes and best practice initiatives.



Building Products Group



In March, CRH acquired Adronit, a leading fencing and access control systems
supplier in Germany. The addition of Adronit's range of high-quality technical
products complements CRH Fencing & Security's existing range of fences and
gates, adding sales of euro 39 million and bringing annualised sales for this
group to approximately 170 million. With its network of strong local fencing
contractors, and a good reputation for quality, Adronit is regarded as the
market leader in the German fencing and gate industry.



The Building Products Group established a new growth platform in April with the
acquisition of Plakabeton, the leading supplier of metal-based accessories to
the building industry, which is headquartered in Brussels. The company supplies
a range of metal fixing and support systems and facade and brick support systems
to precast companies and building contractors. Annual sales amount to euro 54
million. With a strong focus on innovation and an established presence in
Belgium, France, the Netherlands and Spain, Plakabeton provides an ideal entry
into this pan-European business sector.



Distribution Group



During the first half of 2003, the Distribution group added a total of 16 DIY
stores to its existing network of 48 GAMMA and 13 Karwei stores in the Benelux.
Van Neerbos expects to realise synergies from economies of scale, efficiency
improvements and implementation of best practices following the integration of
these stores, which have combined annual turnover of approximately euro 42
million, into the Van Neerbos network.



In January, 3 DIY stores in the Netherlands were acquired from the French
distribution group Bricorama. These stores, have now been rebranded by Van
Neerbos as GAMMA stores. In April, the Group became the second-largest
Intergamma franchisee in Belgium with the acquisition of the 12 GAMMA stores
operated by the Heeren group, and in a separate deal, the acquisition of a
single GAMMA store at Leuven. These stores are located close to the border with
the Netherlands in the Flemish-speaking area of Belgium.



The total cost of the seven Europe Products & Distribution initiatives is euro
115 million, on which goodwill of euro 40 million arises.





Americas Materials : euro 34 million



Central Group



Two add-on acquisitions have been completed by the Shelly Group during the first
half of 2003. These acquisitions, which have combined annual sales of euro 26
million, further strengthen the Materials Group's Central Division in Ohio and
West Virginia.



In May, Shelly Group acquired the assets of Thomas Asphalt Paving Company and
Portage Limestone Company (collectively 'Thomas') in northeastern Ohio. Thomas
is an asphalt producer, paving contractor and limestone distributor and
represents a strong fit with Shelly's existing operations in this part of Ohio,
including the recently-acquired S.E. Johnson asphalt operations in this area.
Annual volumes average 0.3 million tonnes of asphalt and 0.4 million tonnes of
aggregates (sourced externally from various suppliers). Integration of this
acquisition should generate good synergies in overhead and purchasing savings.



In June, the Shelly Group acquired the asphalt assets of Bean's Lime & Stone in
Cabins, West Virginia. The integration of Bean's with the R.H. Armstrong
operations acquired in June 2002 strengthens the Shelly Group's ability to
participate in major infrastructure projects scheduled for the northeastern
region of West Virginia.



Western Group



In January, the Group acquired the assets of Valley Readymix in Yakima Valley in
central Washington state. With 14 million tonnes of excellent quality owned
reserves, Valley is fully self-sufficient in aggregates. The company produced
0.3 million tonnes of aggregates and 0.06 million cubic metres of readymixed
concrete in 2002, generating sales of approximately euro 7 million. Valley is a
good geographic fit with the Materials Division's existing CPM operations in
central Washington, and since acquisition has been integrated fully into these
operations.



The total cost of the three deals completed by the Americas Materials Division
amounts to euro 34 million, on which goodwill of euro 11 million arises.



Americas Products & Distribution : euro 198 million

Architectural Products Group (APG)

Three acquisitions were completed by APG during the first half of 2003,
expanding operations in the Midwest and Florida and adding annual sales of 130
million to the Group.

Two acquisitions in the Midwest represent a significant strategic expansion for
APG of its operations in the region, providing first-class manufacturing
facilities in this large and growing market. Both companies are major regional
producers of concrete masonry, segmental retaining walls and hardscape products
with well-located plants which provide substantial capacity for future growth.
In January, APG acquired Northfield Block, which has four modern block
facilities in the Chicago area. Northfield has a strong reputation for product
quality and customer service, and its established contractor and distributor
network will serve as an outlet for other APG products. Bend Industries, which
has two plants at West Bend and Appleton, Wisconsin, was acquired in March. Bend
supplies a wide range of concrete products, including readymixed concrete, to
the eastern Wisconsin and northern Illinois markets.

In June, APG purchased Matt Stone Company, the leading manufacturer of patio
products in Florida with production activities in Florida, Texas, South
Carolina, Georgia and Kentucky. The deal significantly strengthens APG's
position in the retail sector in the southeast and provides a strong base on
which to pursue the continued roll-out of its professional hardscapes programme
in Florida.

Glass Group

Two acquisitions, with combined annual sales of euro 33 million, have been
completed by the Glass Group to date in 2003.

In March, the Glass Group acquired Southwest Aluminum Systems, the leading
regional producer of architectural glazing systems in the southwestern United
States. Southwest manufactures custom architectural aluminium storefront glazing
systems (doors and frames, door hardware and engineered storefront extrusions)
from one manufacturing facility at Chandler, Arizona. Southwest significantly
expands the product offering of Glass Group's Architectural Systems division
which had been established in mid-2002 following a modest investment in branded
entrance systems.

In May, the Glass Group expanded its limited existing presence in the attractive
eastern Canadian market with the acquisition of April Industries. From its
modern and well-equipped manufacturing facility in Montreal, Quebec, April
provides a complete range of glass fabrication services to a diversified
commercial construction customer base in this significant market. April also
enhances the Glass Group's ability to serve the northeastern United States
market more efficiently.

Distribution Group

In the first six months of 2003, the Distribution Group added a total of five
branches in two deals, bringing its total network of outlets in the United
States to 122. Combined annual sales for these acquisitions amount to
approximately euro 45 million.

Gypsum Products, the largest interior products (comprising wallboard, metal
stud, acoustical tile/grid and accessories) distributor in Colorado, was
acquired in January. Gypsum's four branches strengthen the Distribution Group's
presence in the interior products sector, which is currently in the early stages
of consolidation in the United States.

In March, a further step in Distribution's stated development strategy of
increasing its presence in major metropolitan areas was made with the
acquisition of the roofing and siding assets of Remodelers Supply (South Side)
in the south side of Chicago. This follows the acquisition by the Group of the
central Chicago branch of Remodelers in March 2002.

The total cost of the seven acquisitions completed by the Americas Products &
Distribution Division amounts to euro 198 million including goodwill of euro 74
million.

                                   ** Ends **



  CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland TELEPHONE [phone]
                            1000 FAX [phone]
   E-MAIL [e-mail] WEBSITE www.crh.com Registered Office, 42 Fitzwilliam
                           Square, Dublin 2, Ireland


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