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LSR Group Opting For the Best

14 November 2007

LSR Group has entered into contracts for development of technology and supply of a complete cement plant with the well-known Danish concern FLSmidth & Co. A/S. The total amount of the contracts is over 128 mln euros. The contracts were signed in the framework of a greenfield cement plant construction project being implemented by LSR Group in the town of Slantsy, Leningrad Region.

The supply contract includes equipment for raw materials processing, clinker calcination, cement milling, and final products stores.

In addition, the contract provides for the supply of a complete electrical equipment package as well as the delivery of equipment to the plant site and training of the personnel.

The decision to construct its own cement plant near Slantsy, Leningrad Region was taken by LSR Group in 2006. A new company of LSR Group was then established — OOO Cement. In 2007-2010 the Group proposes to invest in the project $598 mln. The planned capacity of LSR’s cement plant is 1.85 mln tons of cement per year.

According to Georgy Vedernikov, Managing Director of LSR Group the equipment for the new plant will be supplied during two years. Meanwhile, production buildings are to be constructed and the cement plant infrastructure is to be developed.

“By now we have received the specifications for developing the infrastructure, and currently we are selecting contractors to build it,” said Evgeny Rodionov, CEO of OOO Cement.

To select the equipment supplier for the project LSR Group launched a tender among the world’s leading manufacturers of cement plants. According to the specialists of OOO Cement, the contract was awarded to the Danish company because FLSmidth has over 120 years of experience in the manufacture and supply of cement production equipment. Today plants supplied by FLSmidth are operating in the USA, China, African countries and most of the European countries. But the key advantage of FLSmidth is its experience in manufacturing and supplying equipment capable of producing cement using non-traditional raw materials. The fact is that in addition to deposits of limestone and clay for whose extraction LSR Group has all the necessary licenses, there are currently in Slantsy over 100 mln cub meters of waste materials accumulated as a result of extraction, processing and beneficiation of oil shale by OJSC Leningradslanets and OJSC Slanets. The waste kept within the city limits of Slantsy occupies a total of 160 hectares of land withdrawn from agricultural use. It is the waste that should serve as an additional raw material for cement production using the new Danish equipment. So by building a cement plant LSR Group will ensure a significant improvement in the environmental situation near Slantsy.

As commented by FLSmidth’s CEO Jшrgen Huno Rasmussen, the Russian customers wish to secure the future of their plants by using modern cutting-edge technology and environmentally optimized solutions.

For reference:

OOO Cement was established to construct a new cement plant of LSR Group in the Slantsevsky District, Leningrad Region. The company focuses on the implementation of a cement plant construction project of 1.85 mln tons annual capacity. The new plant will supply cement to the market of St. Petersburg and the Leningrad Region. The raw materials base of the plant includes quarries of limestone, clay and man-made waste resulting from oil shale extraction and processing.

OJSC LSR Group is a vertically integrated diversified holding company. Its core business areas are building materials manufacturing, construction and real estate development. The Group includes enterprises for aggregates extraction and processing, building materials manufacturing and transportation, and housing construction — from mass market large-panel housing to elite residential property built after designs made by leading domestic and foreign architects. LSR Group has companies and offices in St. Petersburg, Moscow, a number of cities in the Leningrad Region, in Lithuania, Latvia, Estonia, Ukraine and Germany. LSR employs approximately 15,000 people. According to the audited consolidated IFRS results of OAO LSR Group, its earnings in 2006 amounted to 21.1 billion rubles, a 61% increase over 2005, pre-tax income in 2006 reached 1.76 billion rubles, and net profit stood at 1.1 billion rubles. In July 2007, Moody’s Investors Service assigned a B1 rating to LSR Group; outlook — stable.

For more details please contact:

LSR Group Press Service
+7 (812) 314-10-44
press@lsrgroup.ru
www.lsrgroup.ru

«LSR Group» discloses information on the page on the Internet of LLC Interfax-TsRKI — the news agency accredited by the Central Bank of the Russian Federation to disclosure of information.
Information is available here.



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