Loma Negra Compania Industrial Argentina Sociedad Anonima (LOMA) Risk Factors

On September 1, 2019, the Argentine government issued Executive Decree No. 609/19 (as amended) which, inter alia, reinstated certain foreign currency exchange restrictions, most of which had been progressively repealed as from 2015. Decree No. 609/19 was further regulated, amended and complemented by several regulations issued by the BCRA (included, but not limited to, Communication "A" 6844, as further amended, supplemented and restated). Since then, the Argentine government implemented monetary and foreign exchange control measures that included restrictions on the transfer of funds abroad, including dividends, without prior approval by the BCRA or fulfillment of certain requirements. However, starting on January 17, 2020, local companies may transfer funds abroad in order to pay annual dividends only to foreign shareholders and the depositary for the benefit of the ADS holders, in an amount that (including the amount of the payment being made at the time of the access) does not exceed 30% of the value of new capital contributions of foreign direct investments. These contributions must be made to the local company and must be transferred to Argentina and sold for Pesos through the foreign exchange market as from such date. Access to the foreign exchange market for the payment of dividends in cases not above contemplated will require prior approval of the BCRA. In addition to the formal exchange controls and regulations, the Argentine Central Bank has exercised in the past a de facto prior approval power for certain foreign exchange transactions otherwise authorized to be carried out under the applicable regulations, such as dividend payments or repayment of principal of intercompany loans as well as the import of goods, by means of regulating the amount of foreign currency available to financial institutions to conduct such transactions. Payments of cash dividends and distributions, if any, will be made in pesos, although we reserve the right to pay in other currency to the extent permitted by applicable law. Subject to applicable law, the ADS depositary will convert such dividends received in pesos into U.S. dollars and pay such amount to holders of ADSs, net of any dividend distribution fees, ADS depositary´s fees and expenses, currency conversion expenses and taxes or governmental charges, if any. In the event that the ADS depositary is unable to convert immediately the amount in pesos received as cash dividends into U.S. dollars, the amount of U.S. dollars payable to holders of ADSs may be adversely affected by depreciation of the peso. Since the foreign exchange controls were reinstated, the depositary for the ADSs is prevented from converting pesos it receives in Argentina into U.S. dollars for the account of the ADS holders. Since the conversion is not practicable, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is practicable to do so. If the exchange rate fluctuates significantly during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution.

The United States Foreign Corrupt Practices Act (FCPA), the Argentine Anti-Money Laundering Law (Ley de Prevención del Lavado de Activos), the Argentine Corporate Criminal Liability Law (Ley de Responsabilidad Penal Empresaria) and other applicable anti-corruption laws prohibit companies and their intermediaries from offering or making improper payments (or giving anything of value) to government officials and/or persons in the private sector for the purpose of influencing them or obtaining or retaining business and require companies to keep accurate books and records and maintain appropriate internal controls. In particular, the Argentine Corporate Criminal Liability Law provides for the criminal liability of corporate entities for criminal offences against public administration and transnational bribery committed by, among others, its attorneys-in-fact, directors, managers, employees, or representatives. In this sense, a company may be held liable and subject to fines and/or suspension of its activities if such offences were committed, directly or indirectly, in its name, behalf or interest, the company obtained or may have obtained a benefit therefrom, and the offence resulted from a company's ineffective control. Although we have a Compliance Program with internal policies and procedures designed to ensure compliance with applicable laws and regulations, potential violations of anti-corruption laws could be identified on occasion as part of our compliance and internal control processes. In case such issues arise, we plan to attempt to act promptly to learn relevant facts and take any appropriate remedial action to address the risk. Given the size of our operations and the complexity of the production chain, there can be no assurance that our internal policies and procedures will be sufficient to prevent or detect all inappropriate practices, fraud or violations of law by our employees, directors, officers, partners, agents and service providers or that such persons will not take actions in violation of our policies and procedures (or otherwise in violation of the relevant anti-corruption laws and sanctions regulations) for which we or they may be ultimately held responsible. If we or individuals or entities that are or were related to us are found to be liable for violations of applicable anti-corruption laws (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we or other individuals or entities could face civil and criminal penalties or other sanctions, which in turn could have a material adverse impact on our reputation and business. Further, litigations or investigations relating to alleged or suspected violations of anti-corruption laws and sanctions regulations could be costly.

We engage in certain mining operations as part of our cement production processes. These activities are dependent on authorizations and concessions granted by the Argentine governmental authorities or regulatory agencies. The extraction, mining and mineral processing activities are also subject to applicable laws and regulations, which change from time to time. Although we believe that we are in substantial compliance with applicable laws relating to these activities as well as the terms of our current authorizations and concessions, the effect of any future applicable regulatory changes regarding such matters on our mining activities or mining rights cannot presently be determined. In addition, if our authorizations and licenses are revoked, we may be unable to maintain or improve our cement production levels, which could adversely impact our results of operation and financial condition. Governmental agencies or other authorities may adopt new laws or regulations that are more stringent than existing laws or regulations or may seek to more stringently interpret or enforce existing laws and regulations that would require us to expend additional funds on environmental or other regulatory compliance or delay or limit our ability to operate as we intend. In addition, these actions could increase the costs associated with the renewal of our existing licenses and permits or the cost of seeking new licenses or permits. We cannot assure you that these additional costs will not be material or that our existing permits will be renewed.

Our transportation operation take place in a regulated environment. The Argentine federal government has the legal authority to regulate rail activities in the country (by means of the enactment of applicable laws and regulations). Therefore, actions taken by the public administration in general may affect the services rendered by us. Law No. 27,132 in effect since May 20, 2015, provides for important changes in the regulatory framework of the railway system and empowered Argentina's federal government to renegotiate and, if necessary, terminate concessions currently in force. Pursuant to Decree No. 158/2020, published on March 12, 2021, the National Government imposed an update mechanism pursuant to which Ferrosur would have to substantially increase the amount of the performance guarantee it had originally posted according to the concession contract (and updated in 2018 voluntarily). Ferrosur has recently filed an administrative appeal against such Decree before the Executive Branch not only because the update is considered unreasonable but also because the National Government does not have the right to unilaterally modify the concession contract. We cannot be certain of the effects on the terms of our concession or any changes to the current regulatory framework that the competent authorities of the federal government may issue and whether these changes will adversely affect our results of operations.

Argentina's railway concessions are subject to early termination in certain circumstances, including the competent authorities' decision to reassume control of the service or to terminate the concession for breach of contract. Upon termination of a concession, the leased or operated assets must revert to the federal government. The amount of the compensation may not be sufficient to cover all the losses suffered by us as a result of such early termination. In addition, certain creditors may have priority with regards to such compensation. Likewise, upon termination, the competent authority may claim compensation alleging a purported breach in the concession contract. Ferrosur Roca's concession expires in 2023. The Argentine government may, upon our request at least five years prior to the expiration of the concession, choose to extend this term once for an additional 10 years (based on the fulfillment of obligations related to the concession, such as investments, maintenance and fines imposed, among others). Ferrosur Roca is obliged to invest the equivalent to 10.7% of its gross revenues every year. In addition, Law No. 27,132 (passed in April in 2015), inter alia, established that the Argentine Executive Branch must adopt all necessary measures to recover the administration of railways infrastructure, provide for open access for the Freight Railroad Transportation system and empowers the Ministry of Transport to terminate and to renegotiate the railways concession contracts. It also provided that the Executive Branch would create a National Registry of Railroad Operators. Such registry was created by Decree No. 1924/15, within the purview of the National Commission of Transport Regulation (CNRT).The full implementation of the open access scheme entails the re-assumption by the Government of the administration of the railways infrastructure and, once in place, would be a significant change in the Argentine railway system. This regulatory change may benefit those sectors which are interested in operating railways in Argentina, as well as those that wish to transport commodities and other products through them. On November 2018, Decree No. 1027/2018 was enacted. Decree No.1027/2018 regulates several provisions of Law No. 27,132. On the one hand, it establishes that the renegotiation processes of the current railways concession contracts may allow for an extension of their terms for up to ten years and, inter alia, regulate the investments to be made by the concessionaires. On the other hand, Decree No. 1027/2018 establishes that the open-access scheme will be fully implemented once all the current railway concession agreements have expired, including, if it were the case, the term of their extension. On March 8, 2018, Ferrosur Roca duly filed before the Ministry of Transport a request for an extension of the term of validity of the concession for ten more years. On March 20, 2019, the Ministry responded, informing Ferrosur Roca that the Special Commission created by Decree No. 1027/2018 would be in charge of the renegotiation of the concession agreement and that such process would include analysis of the concession term extension in order to enable the implementation of the open access scheme (as explained above). By the end of 2018, the Ministry of Transport issued Resolution No. 1112/18 through which it appointed new members of the Special Commission. During 2019 Ferrosur Roca participated in two preliminary meetings between the railway transport companies and the Special Commission. In the first days of December 2019, the members of the Special Commission submitted their resignation. The new members took a large part of 2020 to analyze the background and records of the concession. On May 8, 2020, the Board of Directors of Ferrosur decided to make the term extension request conditional on the renegotiation of certain terms and conditions of the concession contract, in order to mitigate certain issues that affect the Company's business and alter the balance of the concession contract. Moreover, the Board decided that, in case no agreement is reached during such renegotiation, then Ferrosur Roca would reserve its right to withdraw the concession's term extension request. In such sense, on May 13, 2020, Ferrosur Roca filed a note with the Ministry of Transport, the Special Commission and the CNRT informing the Board of Director's decision in accordance with the abovementioned. On November 3, 2020, the Ministry of Transport issued the Resolution No. 248/2020 to remove the Lobos-Bolívar railway branch of the General Roca line in the province of Buenos Aires (from km. 98,760 to km. 330,457) from the scope of the railway concession granted to Ferrosur Roca in 1992. By the end of 2020 the Special Commission requested Ferrosur to ratify the representatives of the company that would interact with the Special Commission, which the company duly complied with. In January 2021, Ferrosur Roca made a new filing before the Special Commission requesting the prompt resumption of the negotiations. As of the date of this report, Ferrosur has not been called to any further meeting and has not received any response related to the extension of the concession. In addition, on March 29, 2021, through Resolution No. 219/2021, the CNRT approved the Rules for the National Registry of Railroad Operators, and granted such capacity to Ferrosur and the other current railway concessionaires, among others. Pursuant to these rules, once the open access scheme is in force, any registered railroad operator will be allowed to provide railroad services regardless of who holds the ownership or possession of the facilities of the loading point or destination. In this sense, the National Government must adopt the necessary measures in order to resume the full administration of the railway infrastructure. The registration is subject to the compliance of certain requirements depending on the type of service (transport of people or goods), the filing of the information required by the CNRT, the compliance with any other regulations issued by the CNRT and the applicable law, and the compliance with the payment of a registration fee and annual fee. The obligations of the operators under this Registry includes the notification to the CNRT of any changes in its corporate structure, the sale of its equity and/or any circumstance adversely affecting the railroad services or the compliance with the requirements and conditions pursuant to which the registration was granted, among others; and the filing of its annual financial statements. The rules also created a set of provisions for determining the regime of violations to the rules and provide that the CNRT will prepare an annual report on each operator's performance and compliance with the rules and other applicable law. As of the date of this report, Ferrosur has not been informed about the information that the CRNT will request to the current railway concessionaires for their registration in the National Registry of Railroad Operators. Also, as of the day of this report, the National Government has not carried out any of the infrastructure works that needs to be done to enable the implementation of the open access scheme and has not yet informed Ferrosur if the open access scheme will come into effect once the current railway concessions have ended. However, according to certain news articles and non-official sources, the Ministry of Transport's intention would be to move forward with the implementation of an open access scheme, where the current railway concessionaries would become railway operators. In light of the above and the provisions of Ferrosur Roca's concession contract and the applicable legislation, although we have timely and duly taken all the steps provided for in the concession contract for the purpose of obtaining the extension of the concession for an additional period of 10 years, we cannot guarantee that the Argentine authorities will not terminate our railway concessions prior to their stated terms or that they will extend the term of the railway concession in the future. We cannot guarantee that the Argentine authorities will actually implement the open access scheme either. Any such action by the Argentine authorities could have a material adverse effect on our business, financial condition and results of operations. For additional information related to Ferrosur Roca's railway concession, See "Item 4.B Information on the Company-Business Overview-Ferrosur Roca".

On March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. This pandemic, as well as the reality or fear of any other adverse public health developments, is having and will likely continue to have a negative and material effect on, among other things, our manufacturing and supply chain operations, including due to the reduction or closure of our production units and the interruption of the supply of raw materials. The local, national and international response to the pandemic continues to rapidly evolve. Responses have included voluntary and, in some cases, mandatory quarantines as well as shutdowns and other restrictions on travel and commercial, social and other activities. The Argentine government has taken several measures to address the COVID-19 pandemic outbreak. On March 18, 2020, through Decree No. 287/2020 and Administrative Decision No. 409/2020, the Argentine Executive Branch extended the public health emergency established by the Solidarity Law and authorized the direct contracting of goods, services and equipment necessary to attend to the public health emergency for jurisdictions and entities that comprise the Argentine Public Sector during the term of the public health emergency. On March 20, 2020, the Decree No. 297/2020 ("Decree 297") was published in the Official Gazette by which the Argentine Executive Branch implemented a social, preventive and mandatory isolation regime ("Mandatory Isolation Regime"), beginning on March 20, 2020, which was extended until November 8, 2020 for the area of greater Buenos Aires and Olavarría, among many other jurisdictions, by means of Decree No. 875/2020. Pursuant to Decree 297, individuals had to remain at home, except for minimal and indispensable displacements to stock up on cleaning supplies, medicines and food. During the period of Mandatory Isolation Regime, no cultural, recreational, sports, religious or any other type of event involving the participation of people may be held. The opening of business premises, shopping centers, wholesale and retail establishments, and any other place requiring the presence of persons was also suspended. According to Decree 297 businesses and individuals within the activities and services declared essential were exempted from compliance with the Mandatory Isolation Regime in connection with the compliance with those essential activities and services. The construction of public works, the transportation of goods, and urban hazardous, dangerous and pathogenic waste treatment activities were included as essential services. After the adoption of the Mandatory Isolation Regime we shut down cement plant facilities but in April 2020 after adopting strict safety protocols, we restarted our operational activities at our cement facilities. Decree 297 also provided that employers must guarantee the hygiene and safety conditions established by the Ministry of Health to preserve the health of their employees. Furthermore, during the Mandatory Isolation Regime all employees in the private sector shall be entitled to the full enjoyment of their normal income, under the terms to be established by the regulations of the Ministry of Labor, Employment and Social Security. Furthermore, by means of Decree No. 329, published in the Official Gazette on March 31, 2020, the Argentine Executive Branch prohibited for a period of 60 days from the date of its publication: (i) employment terminations without cause; (ii) employment terminations and/or suspensions for lack of workload; (iii) employment terminations and/or suspensions due to reduced workload; and/or (iv) employment terminations and/or suspensions for force majeure. Suspensions pursuant to Section 223/bis of the Employment Contract Law are exempt from this prohibition. In addition, Decree No. 39/2021 further extended the prohibition on terminations without cause, terminations based on the lack or reduction of work, and suspensions for force majeure events until April 25, 2021. On April 3, 2020, Administrative Decision No. 450/2020 was published in the Official Gazette, expanding the list of activities and services declared essential during the health emergency, including the sale of building supplies and materials provided by building material depots, and activities related to production, distribution and commercialization of forestry and mining. On April 6, 2020, Resolution No. 135/2020 of the Ministry of Labor of the Province of Buenos Aires was published in the Official Gazette of said Province, which establishes that employers must prepare and implement, within two working days, a Protocol on Health and Safety in the Workplace within the framework of the health emergency. The resolution states that the Protocol must comply with the provisions in force and with the special needs of the activity developed by the company and/or the tasks performed by the workers in each of the employer's premises and/or workplaces, such as, (a) social distancing, (b) frequent hand washing with soap and water, (c) provision of hand sanitizer when handling things because of or in the occasion of work, (d) ventilation of the workplace and/or the disinfection of frequently used objects and work tools, and (e) display at least one Protocol per establishment, in prominent places that allow easy viewing by all workers. The Protocol must be communicated within a 24-hour term to the Joint Health and Safety Committee at Work, or to the trade union representing the workers in the establishment. The penalty for non-compliance is up to 2,000% of the minimum wage for each affected employee may be imposed on employers. Additionally, inspectors may adopt measures of immediate application in the event of serious and/or imminent danger to the health or safety of the worker, including the suspension of work. Moreover, on April 11, 2020, Decree No. 355/2020 and decision 490/2020 of the Chief of Cabinet of Ministers included the following activities and services as essential and therefore allowed under the current lockdown: (i) auto-repair shops, tire manufacturing and auto parts manufacturers, (ii) short outings for people with disabilities, (iii) banks, and (iv) stationery shops (only home delivery). In September 2020, Administrative Decision No. 1604/20 of the Chief of the Cabinet of Ministers exempted from the Mandatory Isolation Regime the construction of buildings of more than 5,000 square meters and the finalizations of construction projects that could be completed or finished within 90 days. Since November 9, 2020, by means of Decree No. 875/2020 the social, the Mandatory Isolation Regime was replaced by a mandatory distance regime ("Mandatory Distance Regime") in many Argentine jurisdictions, including the area of the Greater Buenos Aires, and Olavarría. During the Mandatory Distance Regime, among others, individuals must maintain a minimum distance of two meters between them, use face masks in shared spaces, sanitize their hands, and strictly comply with the protocols for activities, recommendations, and instructions implemented by the provincial and federal health authorities. In case of detecting situations of risk of spread of the COVID-19, the governors are empowered to reinstate the Mandatory Isolation Regime for individuals entering the province or the City of Buenos Aires from other jurisdictions, with prior intervention of the provincial health authority and for a maximum period of fourteen days. Pursuant to the Decree No. 168/2021 of the Argentine Executive Branch the Mandatory Distance Regime has been extended until April 9, 2021 in all Argentine jurisdictions. The economic, industrial, commercial, and service activities, including our activity, may be carried out, provided, they have an operating protocol approved by the provincial health authority that includes all the recommendations and instructions of the federal health authority and restrict the use of closed surfaces allowing a maximum of 50% of their capacity (subject to certain exceptions). Certain activities (e.g., social, cultural activities for maximum of 20 persons in closed spaces and 100 in open spaces, cinemas, theatres) remain prohibited during the Mandatory Distance Regime. As consequence of the second wave of COVID-19 infections that Argentina is experiencing since March 2021, and as cases continue to rise, pursuant to Decrees No. 235 and No. 241/2021, the Argentine Executive Branch re-established a limited number of restrictions on certain business operations and individuals circulation (like the restriction of groups' tourism travels, closing of shopping malls, shops operation restrictions between 19:00 and 6:00 on the following day, and general circulation restriction between 20:00 and 6:00 on the following day) in the most affected areas (including the City of Buenos Aires and its surroundings), initially until April 30, 2021. If these restrictions are extended or expanded, the economic activity could continue to fall, poverty continue to rise and all other economic indicators continue to deteriorate, all of which has had and continues to have an adverse impact in Argentina's economy and may negatively materially impact our industry and our business. The measures to control the COVID-19 pandemic have negatively impacted the global economy, disrupted financial markets and international trade, resulted in increased unemployment levels and significantly impacted global supply chains, all of which have had and may continue to have an adverse impact in Argentina's economy and may negatively materially impact our industry and our business.

Pursuant to Decree 332/2020, the Argentine Executive Branch created an emergency work and production assistance program available until December 31, 2020 to all employers (excluding those rendering services deemed essential, except under exceptional circumstances) that comply with any of the following requirements ("ATP Program"): i) perform activities critically affected by the geographical areas where they are carried out; and/or ii) have a significant number of employees infected with COVID 19 or subject to mandatory isolation or work exemption; and/or iii) have suffered a significant reduction of their sales after March 12, 2020. Benefits of the ATP Program included: i) extension of the expiration for the payment of employers' contributions to the Argentine Social Security System or a reduction of up to 95% on employers' contributions to the Argentine Social Security System; ii) the payment by the Social Security Authority (ANSES) of a complementary salary to all or a portion of the beneficiary's workers in an amount equal to 50% of the workers' net salary as of February 2020 provided that it could not be lower than the minimum salary nor higher than two minimum salaries or the total of the net salary for that month, to be computed on account of the full remuneration owed to the worker; and iii) subsidized interest rate loans. On April 5, 2020 the Argentine Executive Branch created the Committee for the Evaluation and Monitoring of the ATP Program. Pursuant to the Committee's decisions and recommendations, beneficiaries of the ATP Program with more than 800 workers as of February 29, 2020 are banned from: i) distributing dividends for the fiscal years ending since November 2019; ii) re-purchasing, directly or indirectly, their own shares; iii) purchasing securities with Pesos for their settlement in foreign currency or their transfer outside Argentina; and iv) making any payments to persons with residence in "non-cooperative jurisdictions" or other jurisdictions subject to low or no taxation at all. These restrictions apply during the fiscal year when the benefits were granted and the following 12 or 24 months depending on the benefit granted and the number of workers. On November 12, 2020, the Ministry of Work, Employment and Social Security created the Program for the Productive Recovery II (Programa de Recuperación Productiva – REPRO- II), which provided for the payment of a fixed amount of 9,000 pesos to each of the workers of the beneficiary on account of the salaries to be paid by such beneficiary for two months. However, the beneficiaries could re-register for the benefit within the second month of the benefit; and the number of employees subject to the benefit are determined on the basis of the number of beneficiaries, the economic and financial situation of each beneficiary, the general economic conditions and the program's budget. Pursuant to Resolution No. 57/2021, the Ministry or Work, Employment and Social Security approved new amounts of the benefit depending on the sector of the workers for 9,000 pesos for non-critical sectors workers, 12,000 pesos for critical sectors workers and 18,000 pesos for health sector workers. Our subsidiary Ferrosur applied for, and was granted, the following benefits under the ATP Program: i) the payment of the complementary salary during April and May 2020; and ii) the extension of the expiration for the payment of the employees' contributions to the Argentine Social Security System due in May 2020 until August 2020. Therefore, Ferrosur is subject to the restrictions described above until December 31, 2022. We cannot assure that neither we nor any of our Argentine subsidiaries will not be in a position to need to request these or any other assistance or benefits under these or other measures and aid programs issued by the Argentine government in response to the COVID-19 pandemic and/or under which conditions.

Weak, flat or negative economic growth in any of Argentina's major trading partners, such as Brazil, could adversely affect Argentina's balance of payments and, consequently, economic growth. The Argentine economy may also be affected by conditions in developed economies, such as the United States, that are significant trading partners of Argentina or have influence over world economic cycles and over short-term evolution of commodity prices. If interest rates increase significantly in developed economies, including the United States, Argentina and its developing economy trading partners, such as Brazil, could find it more difficult and expensive to borrow capital and refinance existing debt, which could adversely affect economic growth in those countries. Decreased growth from Argentina's trading partners could have a material adverse effect on the markets for Argentina's exports and, in turn, adversely affect economic growth. Any of these potential risks to the Argentine economy could have a material adverse effect on our business, financial condition and result of operations. The economy of Brazil, Argentina's largest export market and the principal source of imports, is currently experiencing heightened negative pressure due to the uncertainties stemming from ongoing political crisis. After the economic crisis of 2015 and 2016, the Brazilian economy is slowly recovering. The real growth per capita has fallen 8% since the recession started, and the poverty and inequality are growing. Even though the unemployment rate has fallen this year, it is still high in comparison with the rate before the crisis. On January 1, 2019, Jair Bolsonaro assumed office as a neoliberal and conservative politician. The Brazil economy is showing slow signs of recuperation sustained principally by higher consumption, low interest rates, controlled inflation and the expansion of credit operations. Nevertheless, Brazil faces serious obstacles such as the high unemployment rate and the ongoing political crisis. While the impact of Brazil's downturn on Argentina cannot be predicted, we cannot exclude the possibility that the Brazilian political and economic crisis could have a further negative impact on the Argentine economy. In a referendum on membership of the European Union held on June 23, 2016, the United Kingdom voted in favor of the British government taking the necessary action for the U.K. to leave the European Union (commonly known as "Brexit"). On January 31, 2020, the U.K. left the European Union and the parties had 11 months of transition to negotiate their future relationship. The transition period concluded on 31 December 2020 and, the Trade and Cooperation Agreement negotiated between the European Union and the U.K. entered into force provisionally on 1 January 2021. Even though it is expected that London will not continue to be the financial center of Europe, being probably replaced by Germany, we cannot predict the concrete impact that these circumstances and the Trade and Cooperation Agreement will have for the European Union or which are the additional agreements that the parties will further agree on. As a consequence of the Brexit, the economic conditions in general and of the financial and capital market in particular of the European Union may be adversely affected, all of which may cause instability in the rest of the global financial markets, such as Argentina. Any of these effects or other that we cannot predict, may have a negative impact on our business, results of operations and financial condition. On November 3, 2020, political elections took place in the U.S. and on January 20, 2021 Joe Biden took office. As of the date of this report, it is still unknown how the policies to be implemented by President Biden will impact on emerging market economies, including Argentina. Changes in social, political, regulatory and economic conditions in the United States, or in laws and policies governing foreign trade, could create uncertainty in the international markets and could have a negative impact on emerging market economies, including the Argentine economy, which in turn could have a negative impact on our business, results of operations and financial condition. On February 5, 2018, Jerome H. Powell took office as the chair of the Federal Reserve of U.S., succeeding Janet L. Yellen. Mr. Powell has expressed its intention to continue with the policies of the Federal Reserve to gradually rise the interest rates as the economic conditions of the U.S. improve. In case that the U.S. economy improves, the recent tax reform that reduced the income tax rate may cause an overheat in the U.S. economy and that the Federal Reserve becomes more aggressive as to the rise of the interest rates. In addition, Argentina is highly dependent on the export of certain commodities, such as soy, that has made the Argentine economy more vulnerable to fluctuations in the commodities prices. If international commodity prices decline, the Argentine economy could be adversely affected. In addition, adverse weather conditions can affect the production of commodities by the agricultural sector, which account for a significant portion of Argentina's export revenues. All these circumstances could have a negative impact on the levels of government revenues, available foreign exchange and the government's ability to service its sovereign debt, and could either generate recessionary or inflationary pressures, depending on the government's reaction. Either of these results would adversely impact Argentina's economic growth and, therefore, our financial condition and results of operations.

The Argentine banking system has experienced several crises in the past, and even collapsed in 2001 and 2002. However, in more recent years, the Argentine banking system has shown a recovery in credit activity, driven by increases in loans and deposits. However, most of the deposit growth is in short-term deposits and the sources of medium- and long-term funding for financial institutions are currently limited. As of December 2018, deposits in pesos to the private sector increased 42.4% over the prior year and loans in pesos to the private sector increased 19.0%. In particular, mortgage loans experienced a high growth rate in 2017, rising at an annual rate of 106% year over year and 71.5% in 2018; also expanding rapidly were consumer loans, which increased 60% year over year, according to BCRA. The average interest rate for fixed-term deposits of more than Ps.1,000,000 with maturities between 30 and 35 days paid by private banks in Argentina, as published by the BCRA, averaged 20.6% during 2017, 34.3% in 2018 and 48.8% in 2019, 29.92 % in 2020. Despite improvements in stability, we cannot be certain that another banking system crisis will not occur in the future. Financial institutions are particularly subject to significant regulation from multiple Regulatory Authorities, all of whom may, among other things, establish limits on commissions and impose sanctions on the financial institutions. The lack of a stable regulatory framework could impose significant limitations on the activities of the financial institutions and could induce uncertainty with respect to the financial system stability. A new crisis or the consequent instability of one or more of the larger banks, public or private, could have a material adverse effect on the prospects for economic growth and political stability in Argentina, resulting in a loss of consumer confidence, lower disposable income and fewer financing alternatives for consumers. These conditions would have a material adverse effect on us by resulting in lower sales of products and the possibility of a higher level of uncollectible accounts or increase the credit risk of the counterparties regarding our investments in local financial institutions. Exchange controls and restrictions on transfers abroad and capital inflows have limited, and could continue limiting, the availability of international credit. The continued limitation of international credit could have a material adverse impact on our financial condition, results of operations and cash flows.

Economic conditions in Argentina from 2012 to 2015 included increased inflation, continued demand for wage increases, a rising fiscal deficit and limitations on Argentina's ability to service its restructured debt in accordance with its terms due to its ongoing litigation with holdout creditors. In addition, beginning in the second half of 2011, an increase in local demand for foreign currency caused the Argentine government to strengthen its foreign exchange controls. Between 2013 and 2015 the government implemented price controls on certain goods and services to curb inflation. Starting in December 2015, former president Macri administration has maintained certain price controls over necessary goods, such as foods, cleaning products and toiletries. According to the revised calculation of the GDP published by the INDEC, Argentina's real GDP decreased by 2.1% in 2016 and increased by 2.7% in 2017. However, due to the foreign exchange crisis suffered during the first semester of 2018, and the measures adopted by the Argentine government to control such crisis, according to the INDEC, Argentina's real GDP decreased by 2.5% in 2018. Since May 2018, following the rate increase in the United States and the taxation of financial income from foreign residents, and until August 2018, the Peso depreciated 110.3% with respect to the U.S. Dollar. The Argentine government reacted by consecutively raising interest rates in pesos from 27.25% to 60% annually. As a way to alleviate the ensuing crisis, in June 2018, Argentina and the IMF agreed to a stand-by loan for US$50.0 billion with duration of 36 months with the IMF (the "Stand-By Agreement"). to back up the economic program, and which was extended to US$57.1 billion in September 2018. The IMF requested the Argentine government to implement the following measures: (i) reduce the primary deficit to 1.3% in 2019 and achieve the primary fiscal balance by 2020; and (ii) strengthen the autonomy of the BCRA. The reduction of the deficit implied a cut in public spending, reduction of energy and transportation subsidies, reduction of public works, transfers to the provinces, among other measures. As of the date of this annual report, the IMF disbursed an aggregate of US$44.70 billion under the Stand-By Agreement. The Argentine government is currently negotiating an extension with the IMF for payments under the Stand-By Agreement that mature in 2021 and 2022. In early September 2018, and for further control over inflation, the administration of the former president Mauricio Macri expanded price controls over necessary goods with the incorporation of 127 new products. Consequently, the price control program had over 550 products, with an average increase of only 3.1%. This agreement was valid until January 6, 2020 and included supermarkets, hypermarkets and wholesale stores. On January 7, 2020, the national government of Alberto Fernández unveiled the 2020 price control program with the intention of fostering consumption and establishing reference prices for products with the highest consumption in households. The plan for 2020 had over 310 products and decreases of 8% on average. The plan for 2021 had more than doubled the number of products included in the previous year, resulting in 660. Our products are not included in the price control program. Pursuant to Resolution No. 415/2020, published on September 28, 2020, the Secretary of Domestic Commerce approved a sample agreement with companies that commercialize or produce construction materials, to cap price increases of construction materials. In this regard, Loma Negra entered into an agreement with the Secretary of Domestic Commerce pursuant to which Loma Negra agreed to sell certain products to one of the biggest retail establishments of Argentina at a maximum price depending on the region of the country. The prices shall be subject to a quarterly review. The agreement shall be in force until September 1, 2021. In addition, and in order to prevent shortage of goods, the Secretary of Domestic Commerce issued Resolution No. 237/2021 by means of which it created the Information System for the Implementation of Economic Reactivation Policies ("Sistema Informativo para la Implementación de Políticas de Reactivación Económica" or "SIPRE"), in which certain companies, including our company, must report monthly the prices of their products, quantities sold and stocks of final and intermediate goods. Despite all these measures adopted by the Argentine government, according to the INDEC, Argentina's real GDP continues to decrease by 2.2% in 2019. In addition, in 2020 the general macroeconomic conditions worsened as a result of the COVID-19 pandemic. According to INDEC, during 2020 GDP declined by 9.9%. A decline in international demand for Argentine products, a lack of stability and competitiveness of the peso against other currencies, a decline in confidence among consumers and foreign and domestic investors, a higher rate of inflation and future political uncertainties, among other factors, may continue to adversely affect the development of the Argentine economy, which could lead to a reduced demand for our services and adversely affect our business, financial condition and results of operations.

Argentina is a developing economy and investing in such markets generally carries risks. These risks include political, social and economic instability that may affect Argentina's economic condition. In the past, instability in Argentina was caused by many different factors, including the following: -   aggravation of a financial crisis in several countries in the region;-   abrupt changes in the monetary and fiscal policies of countries with prominent economies due to macroeconomic conditions;-   increase in public expenses affecting the economy and fiscal deficits;-   inconsistent fiscal and monetary policies;-   uncertainty with respect to the Argentine public sector's payment capacity and the potential for obtaining international financing;-   low levels of investment;-   changes in governmental economic or tax policies;-   high levels of inflation;-   abrupt changes in currency values;-   high interest rates;-   wage increases and price controls;-   exchange and capital controls;-   political and social unrest;-   the growing effects of labor unions;-   the significant price drop of main commodities exported by Argentina;-   fluctuations in the BCRA reserves;-   widespread illnesses or epidemics, including the COVID-19; and -   restrictions on exports and imports. Any of the above factors either individually or taken together, could have material adverse effects on the Argentine economy and on our business, results of operations and financial condition.

The Argentine economy has experienced extreme volatility in the recent decades, with uneven periods of economic growth, periods of high inflation and devaluation of the peso against the U.S. dollar. Therefore, our business and operations may be affected by the economic and political events that may affect the Argentine economy, such as: price controls, foreign exchange controls, currency devaluations, high interest rates, increase in public expenses, tax increase or other regulatory initiatives that increase the Argentine government´s intervention in the economy. Between 2007 and 2015, INDEC's methodological processes were modified, leading to controversies regarding the credibility of the published information and statistics. In March 2021, the Southern District Court of New York admitted a claim from Aurelius Capital for the manipulation of the INDEC's statistics to avoid payments under Argentina's GDP-linked bonds issued in 2013, which as of the date of this annual report is pending. Despite in 2016 INDEC was subject to corrective measures to readjust the INDEC information and indexes in a manner consistent with Argentina's obligations under the Articles of Agreement with the IMF, we cannot assure you that INDEC methodological processes could be re-formulated, affecting the credibility of the information again. In fact, during March 2021, the Argentine government announced that it is analyzing to introduce changes in the methodological process for the calculation of the CPI. Since 2018, Argentina has experienced increasingly strong fluctuations in currency exchange rates and high inflation. Due to, among other reasons, rising inflation, continuous demand for wage increases, growing fiscal deficit, required payments on sovereign public debt, reduced industrial growth, increased demand for U.S. dollars and increased capital flight, on September 1, 2019 the Argentine government reintroduced strong restrictions and exchange controls, which, among other things, significantly restricted access to the exchange markets by individuals and entities and that remain effective as of the date of this report. See "Item 10.-D) Exchange Controls". In addition, the Social Solidarity and Productive Reactivation Law No. 27,541, enacted in December 2019, and its regulatory Decree No. 99/2019 (the "Solidarity Law"), as amended from time to time, declared the public emergency in economic, financial, fiscal, administrative, social security, tariff, energy, health and social matters and delegated legislative powers to the Argentine Executive Branch until December 21, 2021, and introduced important additional foreign exchange restrictions and tax modifications. All these conditions caused a deepening recession (GDP decreased 2.6% in 2018 and 2.1% in 2019), increasing unemployment and medium and small companies' failures. Since December 2019, upon the outbreak of the COVID-19, the global economy has been negatively impacted, causing the disruption of the financial markets and international trade, resulting in increasing unemployment levels and significantly impacting global supply chains. According to INDEC, during 2020, GDP declined by 9.9%. These conditions also led to an increase in poverty, which, according to INDEC, during 2020 affected more than 42% of the population. As consequence of the second wave of COVID-19 infections that Argentina is experiencing since March 2021, and as cases continue to rise, pursuant to Decrees No. 235 and No. 241/2021, the Argentine Executive Branch re-established a limited number of restrictions on certain business operations and individuals circulation (like the restriction of groups' tourism travels, closing of shopping malls, shops operation restrictions between 19:00 and 6:00 on the following day, and general circulation restriction between 20:00 and 6:00 on the following day) in the most affected areas (including the City of Buenos Aires and its surroundings), initially until April 30, 2021. If these restrictions are extended or expanded, the economic activity could continue to fall, poverty continue to rise and all other economic indicators continue to deteriorate, all of which has had and continues to have an adverse impact in Argentina's economy and may negatively materially impact our industry and our business. See " -The measures taken or to be implemented by the Argentine government in response to the COVID-19 pandemic have had and will likely continue to have an adverse effect on our business and operations" and "-Public health threats or outbreaks of communicable diseases, including the COVID-19, have had and will likely continue to have an adverse effect on our operations and financial results". In an effort to contain the escalation of the currency exchange rate, the Argentine Central Bank has been selling its reserves of U.S. dollars, which has resulted in a decrease in the Argentine Central Bank's international reserves from US$65.7 billion as of December 31, 2018 to US$39.4 billion as of December 31, 2020. However, the actual net liquid international reserves of the Argentine Central Bank would be substantially lower, as reported by private sources. Moreover, the Argentine government has been financing all economic assistance related to the COVID-19 pandemic with a significant issuance of currency, which has also contributed to increase inflation, the demand for U.S. dollars and the devaluation of the peso. The failure of the Argentine government to restructure its current debt with the IMF (see "Argentina's ability to obtain financing from international markets may be limited, which may in turn impair its ability to implement reforms and public policies and foster economic growth and could impact the ability of Argentine companies to obtain financing outside of Argentina") and to address the Argentine macroeconomic problems is worsening the economic conditions. In this regard, the country risk index published by J.P. Morgan as of April 29, 2021 1,555 basis points. If the Argentine government does not restructure its outstanding debt with the IMF and continues failing to urgently address the necessary measures to improve the macroeconomic condition of the country, the current economic conditions, including inflation, unemployment, decline in GDP, peso depreciation, and/or other economic factors over which we do not have control may continue to worsen, eventually provoking a general economic collapse, which could have an adverse effect on our financial condition, results and costs of operations.

In the past, Argentina has had important macroeconomic imbalances, including frequent and critical fiscal deficits. Since 1961, the Argentine government has had yearly fiscal deficit in approximately 90% of the time (47 years out of 53), which has led to very vulnerable macroeconomic conditions. The Argentine government has financed its fiscal deficit mainly in two ways: (i) by issuing foreign debt, which has historically led to rapid increments in national debt levels; and (ii) by monetary emission through the BCRA, which has led to periods of high inflation and, even in some cases, hyperinflation. The fiscal deficit reached 5.2% of GDP in 2015, 5.8% of GDP in 2016, 6.0% of GDP in 2017, 5.2% of GDP in 2018, 4.9% of GDP in 2019 and 8.5% of GDP in 2020. Failing to reduce fiscal deficits could lead to growing levels of uncertainty regarding Argentina's macroeconomic conditions. In particular, it could lead to growing inflation rates and unanticipated foreign exchange depreciation and balance of payments crisis, higher local vulnerability to international credit crisis or geopolitical shocks, higher interest rates and erratic monetary policies, a reduction in real salaries and as a consequence, in private consumption, and a reduction in growth rates. This level of uncertainty, over which we have no control, may adversely affect our financial condition or results of operations.

Between 2011 and 2015, until former president Macri took office, the Argentine government increased controls on the sale of foreign currencies and the acquisition of foreign assets by residents, limiting the possibility of transferring funds abroad. Through a combination of foreign exchange and tax regulations, the Fernández de Kirchner administration significantly curtailed access to the FX Market by individuals and private-sector entities. In addition, during former Fernández de Kirchner administration, the BCRA exercised a de facto prior approval power for certain foreign exchange transactions otherwise authorized to be carried out under the applicable regulations, such as dividend payments or repayment of principal of intercompany loans as well as the import of goods, by means of regulating the amount of foreign currency available to companies to conduct such transactions. The number of exchange controls introduced in the past and in particular between 2011 and 2015 during former Fernández de Kirchner administration gave rise to an unofficial U.S. dollar trading market, and the unofficial peso to U.S. dollar exchange rate in such market differed substantially from the official peso to U.S. dollar exchange rate. Due to the foreign exchange crisis generated in August 2019 and the continued reduction of the BCRA's foreign currency reserves, since September 1, 2019 the Argentine government imposed once again rigid exchange controls and transfer restrictions, substantially limiting the ability to obtain foreign currency or make certain payments or distributions out of Argentina See "Item 10.D Additional Information-Exchange Controls". In response to the re-imposed foreign exchange restrictions, an unofficial U.S. dollar trading market developed again in which the Peso-U.S. dollar exchange rate differed substantially from the official Peso-U.S. dollar exchange rate in the FX Market. In addition, access to foreign currency and its transfer out of Argentina can also be obtained through capital markets transactions denominated Blue-Chip Swaps, subject to certain restrictions, which is significantly more expensive than acquiring foreign currency in the FX Market. In the past, the Argentine government also imposed informal restrictions on the ability of entities and individuals to purchase foreign currency, consisting in de facto measures as those described in the first paragraph.Notwithstanding the measures adopted by the Argentine government in the recent years, in the future the Argentine government could reinstate further exchange controls, transfer restrictions, restrictions on the free movement of capital, and may implement other measures in response to capital flight or a significant depreciation of the peso, which could further limit our ability to access the international capital markets and impair our ability to make interest, principal or dividend payments abroad. Such measures could lead to renewed political and social tensions, and could undermine the Argentine government's public finances, which could adversely affect Argentina's economy and prospects for economic growth and, consequently, adversely affect our business and results of operations, and could further impair our ability to make dividend payments to holders of the ADSs, which may adversely affect the market value of the ADSs.

The Argentine government's ability to obtain financing from international markets has been limited:. The Argentina's sovereign default in 2001 limited Argentina's ability to access to international financing. Through exchange offers conducted between 2005 and 2010, Argentina restructured over 92% of the sovereign defaulted debt. However, holdout holders declined to participate in the restructuring commenced litigation against Argentina. The Argentine government settled US$9.2 billion outstanding principal amount of the untendered debt held by some of these holdout holders in April 2016 with the proceeds from a US$16.5 billion international bonds offering . Although the size of the outstanding claims has decreased significantly, as of the date of this report, litigation initiated by bondholders that have not accepted Argentina's settlement offer continues in several jurisdictions. However, after the settlement with the holdouts and offering Argentina regained access to the international capital markets. Additionally, foreign shareholders of several Argentine companies, including those of our controlling shareholder, have filed claims before the International Center for Settlement of Investment Disputes or the ICSID alleging that the emergency measures adopted by the Argentine government since the crisis in 2001 and 2002 differ from the just and equal treatment standards set forth in several bilateral investment treaties to which Argentina is a party. The ICSID has ruled against Argentina with respect to many of these claims. In July 2017, in a split decision, an ICSID tribunal ruled that Argentina had breached the terms of a bilateral investment treaty with Spain, alleging the unlawful expropriation by the Federal Government of Aerolíneas Argentinas and affiliates (including Optar, Jet Paq, Austral, among others). The ICSID tribunal has fined Argentina for an approximate amount of US$328.8 million, awarding plaintiffs about 20% of the US$1.6 billion they had initially claimed. In May 2019, a request of the Argentine government for annulment of the decision was denied by ICSID. In January 2020, a New York district court dismissed an $84 million lawsuit filed by Aurelius Capital against Argentina related to the alleged payment shortfall under Argentina's GDP-linked bonds issued in 2013, while additional claims were pending in New York and London in respect of the same bonds. However, in March 2020, Aurelius Capital filed two new claims in New York for $252 million alleging that the Republic of Argentina breached the terms and conditions of the GDP-linked bonds upon the manipulation of the INDEC's statistics determining the calculation of the GDP-based bonus under the bonds. In March 2021, the Southern District Court of New York admitted this claim, which as of the date of this annual report is pending. Future access to debt and equity financings in international markets may be limited as litigation with holdout bondholders as well as ICSID and other claims against the Argentine government continues, which in turn could limit economic growth, adversely affecting our business, results of operations and financial condition. In May 2018, the former Macri administration requested the IMF the granting of the Stand-By Agreement for up to US$57.1 billion with the purpose of supporting the government's economic plan. As of the date of this report, the IMF disbursed an aggregate of US$44.70 billion. The Fernández administration is negotiating the extension of the repayment terms of the Stand-By Agreement that mature in 2021 and 2022. Pursuant to a report issued by the Ministry of Economy of the Argentine government, as of December 2019, Argentina's foreign debt amounted to US$311.25 billion, which represented 91.6% of Argentina's GDP. In 2020 the Argentine government had to make payments of about US$52 billion on sovereign debt in U.S. dollar and pesos, including about US$37 billion in foreign sovereign; and in 2021 the Argentine government have to make payments of about US$37.1 billion on sovereign debt in U.S. dollars and pesos. On February 12, 2020, the Argentine Congress enacted the Law No. 27,544 for the Restoration of the Sustainability of the Public Debt issued under Foreign Law, which granted the Ministry of Economy the powers to restructure the Argentine government external public debt. And through Decree No. 250/2020, published in the Official Gazette on March 10, 2020, the Argentine Executive Branch authorized negotiations for the restructuring of US$68.85 billion in foreign currency and law governed sovereign bonds. On April 21, 2020, the Argentine government launched an exchange offer with respect to all eligible foreign currency and law-governed sovereign bonds, which included a reduction of the principal amount of certain series of the eligible bonds, an interest payment grace period until November 2022, and coupons between 0.5% and 0.6% between November 2022 and November 2023 or 2025, depending on the series of the new bonds, and increasing to between 1.0% and 4.875% from those dates until final maturity depending on the series of the new bonds. On April 22, 2020, approximately US$500 million in coupon payments under the eligible foreign bonds BIRAD/USD 6.875% due 2021, BIRAD/USD 7.5% due 2026 and BIRAD/USD 7,625% due 2046 became due, subject to a cure period through May 22, 2020. When the exchange offer was originally set to expire on May 8, 2020, the Argentine government's initial offer received a very low level of acceptance, resulting in the government extending the deadline of the exchange offer until May 22, 2020. After several extensions and the improvement of the initial offer, at the expiration of the last extension of the invitation term on August 28, 2020, the Argentine government obtained consents to exchange and/or restructure 99.01% of the aggregate principal amount of all series of the approximately US$64.8 billion eligible bonds. On April 6, 2020, Decree No. 346/2020 ("Decree 346") issued by the Argentine Executive Branch was published in the Official Gazette, setting forth, among other things, the deferral of interest payments and amortizations of principal, of the national public debt instrumented by bonds denominated in United States Dollars (USD) issued under the Argentine law, until December 31, 2020, or until any previous date to be determined by the Ministry of Economy. Certain intra-public sector public debt instruments issued under Argentine law and denominated in USD, were excluded from the deferral of payments. Decree 346 also provided for the exchange at their stated maturity of certain public debt instruments (mainly instruments held by the Argentine Central Bank and the Fondo de Garantía de Sustentabilidad, or the FGS) by new public debt instruments. In August 2020, by means of Law 27,556 Argentina launched an offer to exchange sovereign bonds denominated in US dollars and ‘dollar-linked' issued under Argentine law. As a result of this transaction, and as informed in a Ministry of Economy press release on September 15, 2020, 99.41% of the bondholders of eligible instruments denominated in US dollars or "dollar-linked" issued under Argentine law had accepted the offer. On November 4, 2020, the Ministry of Economy published Resolution No. 540/2020 in the Official Gazette, which provided for the procedure to allow eligible instruments which did not enter into the debt restructuring under Argentine law carried out on August and September 2020 to be tendered. The resolution provided that holders who were unable to enter the exchange within the prior invitation term may do so in successive acceptance terms which will be extended until July 28, 2021 in the conditions set forth therein. In addition, on January 26, 2020, the Province of Buenos Aires, the largest estate in Argentina, also had a maturity of provincial sovereign debt for US$277 million in principal amount and interests that, after the failure of the negotiations for an extension, cancelled within the curing period in February 5, 2020. The Province of Buenos Aires had additional payments under its sovereign debt for US$110 million maturing in May 2020 and US$750 million maturing in June 2020. In May 2020 the Province of Buenos Aires, defaulted in the payment of its international sovereign bonds and since then is seeking to restructure its sovereign bonds through an exchange offer. After several extensions without success, the Province of Buenos Aires has recently extended again the offer expiration date until April 23, 2021. However, due to the lack of progress in the negotiations, a group of creditors have filed lawsuits in New York claiming more than US$366 million in unpaid principal and interests on the defaulted bonds. As of the date of this annual report, the Argentine government and the IMF did not reach an agreement on the restructuring of the Stand-By Agreement and there are no assurances that such agreement would be reached during 2021, nor are we able to predict the future consequences for the Argentine economy in general or our business in particular if such agreement is not reached and is defaulted. Mainly due to the frustration of the negotiations with the IMF and the uncertainty on the restructuring of the Stand-By Agreement, as of April 29, 2021 the country risk index published by J.P. Morgan reached 1555 basis points. If the negotiations with the IMF fail or the Province of Buenos Aires or other provinces of Argentina fail to restructure their debt, the Argentine government defaults again in the payment of its sovereign debt or the measures adopted and to be adopted by the Argentine government to reduce the fiscal deficit, control inflation and stabilize the foreign exchange market are not effective, Argentina's ability to obtain international or multilateral private financing or direct foreign investment may be limited, which may in turn impair its ability to implement reforms and public policies to foster economic growth, impair the ability of private sector entities to access the international capital markets or make the terms of such financing much less favorable that those accessible by companies in other countries in the region and may accelerate the depreciation of the peso, foster inflation and deepen the economic crisis and recession. In addition, Argentina may face again litigation from sovereign debt holdout holders. Lack of access to international or domestic financial markets could affect the projected capital expenditures for our operations in Argentina, which, in turn, may have an adverse effect on our financial condition or the results of our operations.

We may construct new cement production facilities or expand existing ones. The construction or expansion of a cement production facility involves various risks. These risks include engineering, construction, regulatory and other significant challenges that may delay or prevent the successful operation of a project or significantly increase its cost. Our ability to successfully complete any construction or expansion project on schedule also may be subject to financing and other risks. The import of the capital goods and machinery to expand our production capacity are exempted from import duties under the Mining Investment Regime pursuant to Law No. 24,196 and the Large Investment Projects Regime set forth by Resolution No. 256/2000 of the Ministry of Economy. The loss of those benefits could significantly increase the project costs. Our financial condition and results of operations may be adversely affected if: -   we are not able to complete our construction or expansion projects on time or within budget;-   our new or expanded facilities do not operate at their designed capacity or cost more to construct, expand or operate than we anticipated; or -   we are unable to sell our additional production at attractive prices. As of the date of this annual report the works are in progress and close to completion. Clinker production is expected to begin by May 2021, and full commission is scheduled for second semester this year.

In the past, the Argentine government has introduced laws, regulations and decrees requiring private companies to maintain certain minimum wage standards and provide specific benefits to employees. The Argentine government may implement again such policies in the future. We cannot guarantee that the Argentine government will not take measures that will increase wages or require us to provide additional benefits. This would result in an increase in our costs and expenses, which could have a material adverse effect on our financial condition and results of operations. In addition to our own employees, we require third-party contractors to perform certain activities that are part of our business. Therefore, we maintain strict control policies on the compliance of these contractors with their activities. However, due to changes in the interpretation of labor laws made by case law that tend to favor employees, our labor and social security obligations to our employees and to the employees of its third-party contractors have increased significantly. As a result, the risk of being required to pay severance to our employees and to the employees of our third-party contractors has increased. Consequently, our labor and social security costs could increase to the extent that our severance costs and labor-related liabilities are increased by future changes in the interpretation of labor laws, adversely affecting our operating results.

We use certain raw materials in the production of cement, such as gypsum, slag, iron ore, steel slabs, clay, sand and pozzolana that we obtain from third parties. In 2020, our cost of raw materials supplied by third parties as a percentage of our total cost of sales was 10.1%, and 9.9% and 10.4% in 2019 and 2018, respectively. Should existing suppliers cease operations or reduce or eliminate production of these by-products, sourcing costs for these materials could increase significantly or require us to find alternative sources for these materials, which could have a material adverse effect on our business, financial condition, results of operations and prospects.