Development Strategy Update

CRH PLC
05 July 2005


            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

                                                                   5th July 2005

    CRH ANNOUNCES FURTHER DEVELOPMENT INITIATIVES TOTALLING EURO 231 MILLION

CRH plc, the international building materials group, today announces 31
development initiatives totalling euro 231 million (including capital
expenditure of euro 63 million on seven large capital projects) undertaken
during the first half of 2005.

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

'The pace of spend to date in 2005 has been somewhat lower than in recent years.
However, we continue to work on opportunities for acquisitions across all our
operations and remain committed to completing transactions at prices that will
contribute to long-term value creation for our shareholders. The acquisitions
and development capital projects announced today meet these criteria and are
geared towards building leadership positions across the building materials
industry with the objective of delivering organic and acquisitive growth and
increasing shareholder value.'

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

  • Europe Materials: three projects totalling euro 35 million

    Acquisition of 49% of a concrete paving producer together with a major
    capital investment in Poland and a major kiln conversion project in Ukraine.

  • Europe Products & Distribution: six deals totalling euro 47 million

    Geographical and product expansions in the Concrete, Clay and Building
    Products groups with the purchase of a leading natural stone supplier in
    Belgium, a facade/roofing systems business and a fencing company in The
    Netherlands, a brick-clad precast business in the United Kingdom, a glass
    roofing company in France and Belgium and a construction accessories company
    in Switzerland.

  • Americas Materials: nine deals totalling euro 41 million

    Four deals in Ohio (Central Division), comprising an initial entry into
    readymixed concrete, acquisition of an asphalt business, establishment of an
    asphalt joint venture and purchase of additional aggregate reserves. The
    West Division expanded its operations with five acquisitions in Idaho, Utah,
    Iowa and Wyoming.

  • Americas Products & Distribution: thirteen projects totalling euro 108
    million

    Two acquisitions in the Architectural Products Group in the United States
    (Carolinas) and Canada combined with the construction of two large pallet
    paver plants in Illinois and Massachusetts and the automation of a roof tile
    production line in Arizona; acquisition by the Glass Group of a
    Toronto-based window and curtain wall manufacturer together with two
    capacity-enhancing projects in Minnesota and Texas; purchase of four
    interior products distributors and a distributor of roofing and siding
    products by the Distribution Group.


Contact at Dublin 404 1000 ([phone])

Liam O'Mahony Chief Executive
Myles Lee Finance Director
Maeve Carton Group Controller

Europe Materials: euro 35 million

The Europe Materials Division acquired 49% of a concrete paving producer in
Poland in the first six months of 2005 at a total cost of euro 5 million giving
rise to goodwill of euro 2 million. Annual incremental sales amount to euro 5
million. In addition, the Division has commenced two major capital projects, one
in Poland and the other in Ukraine, at a total projected cost of euro 30
million.

Poland

In February, Grupa Ozarow acquired an initial 49% stake in Bazaltex, a leading
concrete paving producer based in the Silesia and Opole regions of southwestern
Poland. The remaining shareholding will be purchased in two tranches, the first
later in 2005 and the second in 2008 in line with a pre-agreed earn-out formula.
The investment in Bazaltex extends CRH's position in the concrete paving
segment.

Grupa Ozarow has recently commenced a capital project to install a new kiln at
its Trzuskawica lime plant located 200 kilometres south of Warsaw. The project
will allow firing with both natural gas and solid fuels and has a scheduled
completion date of January 2007.

Ukraine

Podilsky Cement has recently commenced a capital project to convert from
gas-fired kilns to coal and petcoke firing. With a targeted commissioning date
of January 2007, the investment will enable the realisation of substantial cost
savings predominantly in fuel usage.

Europe Products & Distribution: euro 47 million

The Europe Products & Distribution Division completed six deals in three of its
product groups at a total cost of euro 47 million including goodwill of euro 17
million. The annual incremental sales arising from these transactions amount to
euro 76 million.

Concrete Products

In June, the Concrete Products group acquired Hofman, a distributor of natural
stone products based in Belgium and focusing on the import and resale of new
pavers together with the purchase, cleaning and resale of used pavers. With
annual sales of euro 10 million, the acquisition expands the group's product
portfolio and strengthens its sales and procurement function in this
fast-growing segment.

Clay Products

In June, Clay Products Mainland Europe (CPME) purchased Leebo, a designer,
manufacturer and installer of facade and roofing systems in The Netherlands with
annual sales of euro 10 million. The company provides facade and roofing
solutions for new and existing commercial and industrial buildings and
residential developments to a broad end-user base. Leebo constitutes a strong
entry point into this market for CPME and complements its expansion in more
traditional product-market combinations.

In March, Ibstock acquired Manchester Brick & Precast, the market leader in
brick-clad precast arches in Great Britain with annual sales of euro 2 million.
This acquisition presents a high level of strategic fit with Ibstock's Kevington
subsidiary, the market-leading fabricator of brick specials and brick-clad
components which was acquired in May 2001.

Building Products

In February, the Daylight & Ventilation division of the Building Products group
purchased Laubeuf. With annual sales of euro 37 million, Laubeuf is engaged in
the engineering, manufacturing and installation of glass roofs in France and
Belgium. The acquisition affords market leadership in the Benelux and France and
gives rise to significant potential for cross-selling of products and technology
across geographical boundaries.

In June, the group's Construction Accessories division acquired Aschwanden, a
leading producer of metal-based construction accessories in Switzerland with
annual sales of euro 11 million. Aschwanden operates from one plant close to
Bern and carries an extensive product range. The combination of Aschwanden and
CRH's existing construction accessories business (comprising Plakabeton and
Mavotrans) will enable exchange of construction accessories products between the
individual businesses within the platform.

In May, the Fencing & Security division purchased Arfman, a specialised supplier
of fauna and railway fencing systems in The Netherlands with annual sales of
euro 6 million. This acquisition will strengthen Fencing & Security's market
leadership position in The Netherlands and also broaden its product range.

Americas Materials: euro 41 million

The Americas Materials Division completed nine deals at a combined cost of US$54
million (euro 41 million) yielding annual incremental sales of US$58 million.
Goodwill of US$11 million (euro 8 million) arose on these transactions.

Central Division

The Central Division completed four deals in Ohio through Shelly, its Ohio-based
subsidiary, during the period. In January, the Division entered the readymixed
concrete market in northwest Ohio with the acquisition of Dielman, a leading
readymixed concrete business in the greater Toledo area with annual volumes of
0.2 million cubic yards. Dielman builds on Shelly's integrated position in Ohio
and provides a platform for further growth in the readymixed concrete sector.
Erie Blacktop Materials, an asphalt producer in northwest Ohio, was acquired in
February. The business has been fully integrated into existing operations. In
April, Shelly entered into a 50/50 joint venture in the Columbus metropolitan
area with a regional construction company. The joint venture, which operates as
Scioto Materials, combines the existing asphalt operations of both companies in
the area into one modern, efficient plant operating to the highest environmental
standards. In June, Shelly purchased certain assets of C.E. Duff & Sons and
entered into a long-term quarry lease in western Ohio with the same party. The
transaction enables volume consolidation in the area with consequential scale
and production efficiency savings.

West Division

In March, the West Division completed four deals in Idaho, Utah and Iowa.
Mountain Home Redi-Mix, a readymixed concrete producer and the largest aggregate
supplier in Mountain Home, Idaho, will operate as a bolt-on to existing
operations. Mountain Home Redi-Mix enjoys a solid aggregate position and is an
excellent fit between market areas already served by existing operations. Fife
Rock Products Company, an aggregates, asphalt, readymixed concrete and
construction services company based in northern Utah, expands the Division's
readymixed concrete market position in northern Utah and brings 35 million tons
of high-quality reserves. The acquisition of Peterson Companies, a 0.2 million
cubic yard readymixed concrete production and concrete paving company in Des
Moines, Iowa, further enhances the Division's readymixed concrete position in
the Des Moines market. By way of expanding its reserve base in the central Iowa
region, the Division also purchased West Des Moines Sand Company.

Wyoming Materials and Improvement, an asphalt, readymixed concrete and
construction company based in northeast Wyoming, was acquired in April. The
acquisition, which adds readymixed concrete to the Division's product offerings
in Wyoming, has been integrated into existing operations in the state.

Americas Products & Distribution: euro 108 million

The Americas Products & Distribution Division completed a total of eight
acquisitions during the first half of 2005 at a combined cost of US$94 million
(euro 75 million) yielding annual incremental sales of US$145 million. These
deals generated goodwill of US$53 million (euro 43 million). In addition, the
Division has commenced five major capital projects during the period at a total
cost of US$41 million (euro 33 million).

Architectural Products Group (APG)

In January, APG purchased the assets of P&L Bark Nurseries, a leading supplier
of bagged and bulk mulch and soil operating two manufacturing plants in the
Carolinas. P&L Bark's primary customers are the national homecenter chains,
national mass merchants and independent retailers. The deal follows the
acquisition of Greenleaf Products in February 2004 and is part of APG's strategy
to further increase penetration of the homecenter market in the United States.

In February, APG purchased the hardscape assets of Central Precast, a
diversified Canadian manufacturer of hardscape products, comprising pavers,
segmental retaining walls and slabs. Central operates from two facilities in
Ottawa, on the border between Ontario and Quebec. In conjunction with
reinforcing APG's current presence in Ottawa through its Permacon subsidiary,
the acquisition consolidates APG's leadership in Quebec and gives rise to the
second largest hardscape producer in Ontario on a combined basis.

As part of its continuing development of an integrated manufacturing complex at
Channahon, Illinois, APG has commenced the construction of a large pallet paver
plant and stone bagging line at this location. Similarly, a project to install a
large pallet paver plant and block machine has been undertaken in Holbrook,
Massachusetts. Both facilities will enhance APG's ability to service the US
homecenter, hardscapes and masonry markets. Together with the above, a capital
investment has been made to automate a production line in Casa Grande, Arizona
with the objective of expanding capacity and enhancing APG's competitiveness in
the Arizona concrete roof tile market.
                                            
Glass Group

Fulton Windows, a leading manufacturer of architectural-rated operable windows
and curtain wall in Toronto, Canada, was acquired by the Glass Group in June.
Fulton's products, which complement the Glass Group's existing architectural
glass, storefront and structural glass wall products, are sold internationally
through a diversified network of specialised dealers and installers. The
acquisition of Fulton is another step towards achieving the Glass Group's
objective to become the leading provider of high-performance architectural glass
and aluminium glazing systems.

During the first half of 2005, the Glass Group commenced two major capital
expenditure projects in Albertville, Minnesota and Houston, Texas. Both projects
will enable the locations to manufacture new generation soft-coat
energy-efficient glass products, as well as enhance efficiency, throughput and
capacity.

Distribution Group

As detailed below, the Distribution Group (Allied Building Products) has
significantly expanded its interior products division with four acquisitions
during the period giving rise to incremental annual sales of US$70 million.
Interior products comprise gypsum wallboard, steel stud, acoustical ceiling tile
/grid and accessories. Allied also completed one acquisition with annual sales
of US$20 million in its traditional roofing and siding sector.

In January, Allied purchased Bryant Building Products, a single-branch interior
products distributor in Ohio. Also in January, Allied acquired Dashco, a New
Jersey-based two-branch interior products distributor. Dashco is the largest
distributor of Armstrong acoustical ceiling tile in northern New Jersey. In
June, Allied acquired Global Building Supply Company. With three branches in the
Washington D.C. area, Global services both commercial and residential customers.
RME Construction & Supply Co., a single-branch interior products distributor was
also acquired in June. Based on the Hawaiian island of Maui, RME represents an
attractive add-on for G.W. Killebrew which is based in Honolulu, the principal
city of the Hawaiian Islands, and was acquired in January 2004.

The acquisition of Norge Builders was completed by Allied in early June. Norge
is a distributor of siding, roofing, windows and garage doors in northern New
Jersey. Operating from four branches, Norge offers opportunities for Allied in
the garage doors product line while increasing Allied's presence in its core
roofing and siding markets.

                                   ** 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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