Development Strategy Update

CRH PLC
06 July 2004


           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


                                                                   6th July 2004



    CRH ANNOUNCES FURTHER DEVELOPMENT INITIATIVES TOTALLING EURO 366 MILLION

CRH plc, the international building materials group, today announces 22
development initiatives totalling euro 366 million (including developmental
capital expenditure of euro 22 million) undertaken during the first half of
2004. These initiatives, which are in addition to the completion of the Secil
joint venture transaction in Portugal announced on 3rd June 2004, bring total
acquisition and investment spend for the first six months of 2004 to
approximately euro 700 million.

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

'Following a year of record development spend in 2003, CRH has successfully
maintained momentum with total expenditure of circa euro 700 million
year-to-date. The capital expenditure projects and acquisitions announced today
consolidate the potential for growth across our various operating Divisions and
enhance market presence with the objectives of generating synergies and
augmenting shareholder value.'

The principal initiatives contained in this Development Strategy Update are as
follows:

  • Europe Materials : three deals totalling euro 127 million

    Acquisition of a major aggregates and readymixed concrete producer in
    Switzerland, a leading manufacturer of concrete products in Finland and an
    aggregates business in Russia.

  • Europe Products & Distribution : five deals totalling euro 78 million

    Purchase of a producer of concrete products with a market presence in
    Belgium, France and Poland accompanied by the acquisition of a clay merchant
    in Belgium and a daylight and ventilation business in the United Kingdom;
    further expansion of the Distribution Group's network of DIY stores in
    Belgium and an additional investment in a regional builders merchant in
    France.

  • Americas Materials : seven deals totalling euro 50 million

    Acquisition of a sand and gravel pit in New York State together with two
    add-on transactions for Pike Industries in Maine, two deals in the Western
    Division (New Mexico and Utah) and two transactions in the Central Division.

  • Americas Products & Distribution : seven projects totalling euro 111
    million

    Three acquisitions in the Architectural Products Group serving the states of
    Florida, Georgia, Alabama and South Carolina combined with the construction
    of a large pallet paver plant in northern California and a large pallet
    paver and stone bagging facility in Ohio; purchase by the Distribution Group
    of an interior products distributor in Hawaii; and buyout of a glass
    fabricator in Chile.


Contact at Dublin 404 1000 ([phone])
Liam O'Mahony Chief Executive
Myles Lee Finance Director
Maeve Carton Group Controller

Europe Materials : euro 127 million

The Europe Materials Division undertook three deals in Switzerland, Finland and
Russia in the first six months of 2004 at a total cost of euro 127 million
inclusive of goodwill of euro 3 million. Annual incremental sales amount to euro
123 million.

Switzerland

In January, the Division acquired Hastag Holding, the second-largest producer of
aggregates and readymixed concrete in Switzerland with annual sales of euro 95
million and market leadership in the cantons of Zurich and St. Gallen. Hastag
has fully permitted aggregate reserves of circa 75 million tonnes located mainly
at Wil, 25 kilometres to the north of the Zurich conurbation, two-thirds of
which are owned. With strong forecast growth in the residential sector in both
the Zurich and St. Gallen cantons and substantial savings and synergies stemming
from integration with existing activities, the acquisition improves the end-use
balance of JURA's existing business from its traditional infrastructure bias and
extends its reach to the critically important Zurich market and its environs.

Finland

In January, Lohja Rudus, which is engaged in the production of aggregates and
readymixed concrete in Finland and the Baltic States, completed the purchase of
Abetoni, a market-leading manufacturer of concrete pipes and piling and the
third-largest producer of paving products in Finland. With annual sales of euro
28 million and 11 locations predominantly in the southwest of the country, the
deal enables the expansion of Lohja Rudus' existing product portfolio and
provides an excellent opportunity to capitalise on growing demand for landscape
and paving products and to enhance margins through the sharing of best
practices.

Russia

Also in January, Lohja Rudus expanded its existing presence in the readymixed
concrete sector in St. Petersburg in Russia by acquiring TSMK, which owns an
unexploited quarry in the Russian province of Karelia adjacent to the Finnish
border. With estimated permitted aggregate reserves of 100 million tonnes, the
purchase facilitates the development of a greenfield hard rock quarry, which is
currently planned to be in a position to serve the burgeoning St. Petersburg
aggregates market within a 12-month timeframe.

Europe Products & Distribution : euro 78 million

The Europe Products & Distribution Division completed five deals in four of its
product groups at a total cost of euro 78 million including goodwill of euro 22
million. The annual incremental sales arising from these transactions amount to
euro 126 million.

Concrete Products

In June, the Concrete Products Group purchased Ergon, a Belgian-headquartered
manufacturer of precast concrete products with annual sales of euro 61 million.
Ergon operates a state-of-the-art production facility at Lier near Antwerp and
enjoys market leadership in the design, engineering and production of precast
building components and structural concrete elements. In northern France, Ergon
has a factory located 45 kilometres north of Paris and has developed a strong
regional position. Ergon entered the Polish market in 2001 with the construction
of a modern greenfield production facility located 35 kilometres south of
Warsaw. The acquisition of Ergon provides CRH with clear market leadership in
precast structural concrete in Belgium and offers expansion platforms in this
sector in France and Poland.

Clay Products

In June, the Clay Products Group acquired De Saegher, the leading specialist
brick merchant in Belgium with annual sales of euro 4 million. De Saegher has a
large showroom in Antwerp and via its sales force maintains contact with
architects, contractors and house builders throughout Belgium, selling an
exclusive range of facing bricks sourced from manufacturers in Belgium, the
Netherlands, Germany and the United Kingdom. CRH Clay Products' existing
commercial activities in Belgium will be integrated into De Saegher.

Building Products

In April, the Daylight & Ventilation Group expanded its presence in the United
Kingdom through the acquisition of Airvent, a manufacturer of smoke and heat
exhaust ventilation (SHEV) systems with annual sales of euro 6 million.
Following integration into Daylight & Ventilation's existing activities, the
acquisition should provide good growth opportunities particularly in the
industrial and commercial sectors.

Distribution

In January, the Distribution Group acquired three additional DIY stores from a
fellow member of the Intergamma franchise organisation bringing its network of
GAMMA stores in Belgium to 17 in total. These stores are located in St. Niklaas,
Wilrijk and Hasselt in Flanders and have total sales of euro 7 million.

Since the January 2004 Update, the joint venture company established by CRH (45%
stake) and SAMSE (55%) has acquired an additional 57.5% of the share capital of
G. Doras, bringing its stake to 92.2%. With annual sales of euro 185 million
(the incremental CRH sales applicable to this part of the transaction amount to
euro 48 million), Doras is a regional builders merchant operating a total of 45
specialist and generalist builders merchanting outlets in the Burgundy and
Franche Comte regions of France. The remaining 7.8% shareholding in Doras will
be purchased by the joint venture early in the second half of 2004. This
transaction enables CRH to continue its strategy of achieving regional
leadership in the merchanting sector in France.

Americas Materials : euro 50 million

The Americas Materials Division continued its development programme through the
completion of seven deals at a combined cost of US$62 million (euro 50 million)
yielding annual incremental sales of US$42 million. Goodwill of US$19 million
(euro 15 million) arose on these transactions.

New York/New Jersey Division

In February, Tilcon New York acquired a sand and gravel pit in Mendon, New York
from Elam Corporation. With 16 million tons of high-quality permitted aggregate
reserves adjacent to the Rochester market, the purchase of the Mendon Pit
provides a long-term source of aggregates for the Materials Group's operations
in the area.

New England Division

In order to address the long-term aggregate requirements of its existing asphalt
plants at Fairfield and Augusta in northern Maine, Pike Industries acquired the
aggregate and asphalt assets of Blue Rock Industries (which is based in Sidney,
Maine) in February. The assets purchased comprise an owned and fully permitted
quarry with 12 million tons of aggregate reserves, a sand deposit and one
asphalt plant. The deal enhances Pike's competitive positioning in central Maine
enabling it to increase its focus on private work and to expand sales of
aggregates to third parties.

Also in February, Pike Industries purchased Bridgecorp, a heavy highway
contractor based in Augusta in central Maine. Bridgecorp provides Pike with an
additional aggregates source and underpins Pike's materials sales in the Maine
market.

Western Division

In January, Oldcastle Materials expanded its activities in the 'Four Corners'
region (being the intersection of Utah, Colorado, New Mexico and Arizona)
through the acquisition of a leased aggregate pit with 7 million tons of
reserves in Aztec, New Mexico together with a readymixed concrete plant and
associated mobile equipment. Located 15 miles east of Farmington, the deal
complements the Division's existing operations and should lead to savings in
terms of reduced quarry and haulage costs.

The Materials Division acquired the aggregate and readymixed concrete operations
of Construction Products Corporation in Salt Lake City, Utah in March. The
assets purchased comprise an aggregate pit at Point of the Mountain with 13
million tons of owned permitted reserves together with four readymixed concrete
plants and associated mobile equipment. In conjunction with an improving market
outlook, the deal is expected to improve asset utilisation through plant and
mixer fleet synergies and to enhance profitability through overhead savings.

Central Division

Following the acquisition of S.E. Johnson in May 2003, which substantially
increased Oldcastle Materials' aggregates and asphalt presence in Ohio,
Oldcastle Materials purchased Wyandot Dolomite in February. Wyandot operates one
quarry with in excess of 200 million tons of owned and fully permitted
high-quality limestone reserves together with two small asphalt plants and two
rail depots in northern Ohio. With annual volumes of 1.9 million tons of
aggregates and 0.16 million tons of asphalt, the transaction represents an
excellent strategic and operational fit with existing activities and should
generate substantial savings from greater production efficiency and overhead
savings.

In May, Oldcastle Materials concluded an asset swap transaction whereby Shelly's
asphalt and paving assets in metropolitan Cincinnati, Ohio were exchanged for an
asphalt and paving operation in the Delaware/Maryland peninsula, an aggregates,
liquid asphalt, asphalt and paving business in Maine and a leased stone quarry
in Sylvania in northwest Ohio. The assets acquired enhance vertical integration
in each of the market areas impacted and should lead to efficiencies in
production, asset utilisation and cost management.

Americas Products & Distribution : euro 111 million

The Americas Products & Distribution Division completed a total of five
acquisitions during the first half of 2004 at a combined cost of US$112 million
(euro 89 million) yielding annual incremental sales of US$141 million. These
deals included goodwill of US$68 million (euro 54 million). In addition, the
Division undertook two major capital projects at a combined cost of US$27
million (euro 22 million).

Architectural Products Group (APG)

In January, APG acquired a 50% stake in Paver Systems, a leading manufacturer of
interlocking concrete pavers in Florida with annual sales of US$31 million to
the professionally-installed residential and commercial markets. The company
operates five paver machines from three facilities in West Palm Beach, Tampa and
Orlando and provides a sound base on which to build APG's market presence in the
high-growth professional hardscapes market in Florida. The deal contains both
put and call options relating to the residual 50% shareholding and will
accordingly be consolidated with a 50% minority.

In February, APG purchased Greenleaf Products, a leading supplier of bagged lawn
& garden products (mulch, soil and decorative stone) with three bagging plants
in Florida, one in southern Georgia and one in Mississippi. With annual sales of
US$46 million, Greenleaf's principal customers comprise the national homecenter
chains, national mass merchants and independent retailers. The deal represents a
natural complement to APG's existing retail activities and will lead to
increased penetration of the key homecenter market in the United States.

In March, APG acquired an 80% stake in Custom Surfaces, a market-leading
fabricator and installer of marble, granite and solid surface countertops in
Georgia and South Carolina with annual sales of US$32 million from two
production locations in Atlanta, Georgia and Hardeeville, South Carolina. Its
customers are high-volume residential and commercial building contractors and
national homecenter chains. The acquisition provides an initial base in this
sector in the high-growth markets of the southeastern United States.

As part of its ongoing investment programme to service the fast-growing US
homecenter and hardscape markets, APG has begun construction of large pallet
paver plants in Stockton, California and Cleveland, Ohio. The new Cleveland
facility also includes a stone bagging plant which will enable APG to service
the decorative stone market in Ohio and western Pennsylvania. These projects,
which have a combined cost of euro 22 million, will be commissioned towards the
end of 2004 and join the recently commissioned Kansas City paver plant as
components of the APG network to service its national and regional customers.

Distribution Group

In January, Allied Building Products purchased G.W. Killebrew ('GWK'), the
largest distributor of interior products (comprising wallboard, steel studs,
stucco products, acoustical tile, grid and accessories) in the Hawaiian Islands.
With annual sales of US$32 million, GWK operates from two leased facilities in
Honolulu, the principal city of Oahu. The acquisition should enable Allied to
derive substantial benefits from planned increases in residential construction
on Oahu, the most populous island, and to secure additional synergies on the
purchasing front both for GWK and its existing interior products undertakings.

South America

In June, in accordance with the terms of a buyout option negotiated at the time
of its initial 50% investment in 1999, CRH acquired the final 20% stake in
Vidrios Dell Orto. Dell Orto is the market leader in glass tempering and glass/
aluminium distribution in Chile with annual sales of euro 7 million. This
investment, which follows the purchase of an additional 30% shareholding in
August 2002, positions CRH to benefit fully from the product mix and
productivity enhancements undertaken by Dell Orto management in recent years.


                                   ** 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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