This is a statement issued by the Bermuda Cement Company in response to the West End Development Corporation's release of a statement of facts concerning the controversy over the BCC and Wedco lease:

-BCC has operated successfully from Dockyard for over 43 years on land leased from various Bermuda Government entities -currently the West End Development Corporation ("Wedco"). The silos and plant were built by BCC at its own expense - no other entity has invested one cent in the property. Eleven Bermudian shareholders (including SAL and Biermans) own 61.37% of the Company, and the balance of 38.63% is owned by Cemex, the largest cement company in the world.

-The Company has provided the island with a virtually uninterrupted supply of cement during that period, at prices which are currently at least 40% lower than in many Caribbean islands, despite our greater shipping distance from the source of product.

-Although the silos themselves are in excellent condition and fit for many more years of use (as confirmed by an independent surveyor employed by Wedco in 2004), in August 2001 BCC realised that it needed to spend in excess of $1 million to refurbish the plant, and as only 4 years of its lease remained, it approached Wedco with a view to securing an extension in order to justify such a large investment.

-Initially Wedco advised that it would not consider renewing the lease, and that there was no place for a cement plant in their future plans for the West End.

-BCC searched the island from St. George's to Southside to Morgan's Point, but were unable to locate any available and suitable deep water sites. Wedco then advised that a cement plant could be built in Dockyard but at a location some 300 yards south of the present plant as the existing site was earmarked for residential development; they also said that they were going to seek expressions of interest to develop the proposed site, with the successful applicant being required to demolish the present plant once the new facility was up and running.

-BCC submitted an application which was accepted and a 21 year lease was offered by Wedco. The Company's initial estimate was that construction of a new plant and demolition of the existing one could be achieved for around $6 to $8 million, but as more detailed engineering and design work was undertaken it became apparent that the cost would be considerably higher - possibly between $12 and $15 million, and conceivably even more than that.

-BCC's sales and profits obviously fluctuate in line with activity in the construction industry, and over the last ten years sales of cement have ranged between 28,267 tons and 57,446 tons, and net profit has averaged $972,905 per year. Whilst construction activity in Bermuda currently is at a high level, it would be imprudent to expect this level to continue for the next 21 years. Further, Government has actively encouraged the construction of a cement distribution facility at Southside and has requested expressions of interest in that proposal; if a second distribution facility was to be developed, BCC's sales from Dockyard would be reduced. Recent references to BCC as a monopoly are incorrect, as anyone is free to import cement to Bermuda and indeed other entities have done so on several occasions in the past.

-Wedco has submitted a draft lease which would only be for 21 years with no guarantee of an opportunity of renewal and no provision for compensation to BCC for its investment, the new plant. This makes the necessary finance costs and repayment impractical. The lease also requires that BCC makes at least 20% of its shares available to the public at large. The Company has no problem with this requirement, and indeed has recently amended its bye-laws to remove restrictions on the sale of shares, but financial advisors have pointed out that it would be difficult, if not impossible, to sell shares in a Company which only has a 21 year life, and which will be burdened with substantial finance costs during that period.

-BCC has consistently expressed to Wedco its view that the most reasonable way forward is for the existing plant to be re-furbished and to continue in use. The Company has spent over half a million dollars on exploratory investigations, architectural services, engineering drawings and legal fees and has failed to come up with a cost effective way of constructing a new plant. Senior executives from Cemex - which operates in more than 50 countries including many Caribbean islands, owns 66 cement plants and has a minority interest in a further 11 plants - have visited Bermuda frequently and have stated that we are fortunate to have the facility which we do have, and that constructing a new plant for the small quantities of cement which we use would not be a practical proposition. Other Caribbean islands have far more costly and inefficient systems involving transferring cement by truck from ship to storage, importing and splitting big bags etc, whilst Bermuda has an underground pipeline from ship to silo and an efficient system for delivering to bulk trucks or filling small bags.

-Cemex has offered to have their experts join a committee with representatives of BCC, Wedco and Government to explore less costly methods of distributing cement such as importing in big bags, and BCC has approached Wedco to ask for an extension of time whilst such an approach was undertaken, but its proposal was rejected.