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Mobility Boosts Progress.

13 August 2007

OAO Granit-Kuznechnoye (a company of LSR Group) has put into service a new crushing and screening plant supplied by Telsmith (USA) featuring mobility as a key advantage. The project investment was approx. 200 mln. rubles.

The portable plant mounted on a wheel chassis may be if necessary shifted to another site and reassembled within a very short time thus providing for lower costs of transportation and installation of permanent structures as well as for prompt response to changes in the market situation in case of an increase in the demand for particular products.

A granite quarry and a fixed crushing and screening plant (CSP) next to it — such was the typical layout of the production facility of OAO Granit-Kuznechnoye up until recently while each CSP kept producing crushed rock of different types for various applications depending on the deposit where the specific plant was located. However such arrangement did not meet today's requirements because, for instance, when a plant was closed for routine maintenance the production of crushed stone of a particular type was suspended.

To optimize the production process company specialists developed a business plan and the concept of «Wandering Plant.» The new technology provides for installing the crushing and screening plant at any quarry and swiftly moving it from one deposit to another which in its turn ensures more efficient utilization of the raw materials available resorting to the field where crushed stone of the required fraction is produced. «The introduction of a new mobile plant will help the company to swiftly respond to changes on the market,» confidently stated the CEO of OAO Granit-Kuznechnoye, Vassily Kostritsa.

Currently the new portable plant is based in the settlement of Kuznechnoye, Leningrad Oblast by the Rovnoye Quarry. It is from this quarry that most of crushed rock is shipped by river transport. The fixed plant located here has been turning out the 5-20 mm and 25-60 mm fractions of crushed stone. The mobile plant has not only contributed to increased production which is vital during the navigation season but also helped to extend the product-mix to include the 20-40 mm fraction. In addition, the advanced equipment used by the new plant provides for the manufacture of 100 percent of crushed stone of the 5-20 mm fraction without reducing the overall capacity of the complex.

«For LSR Group an innovative approach to business has always been one of the priorities so the launching of a new technology intensive portable plant to produce crushed stone is yet another example of this approach,» said Alexey Yushkov, Head of Construction Aggregates Department of LSR Group. «To my mind, the introduction of such plants that make it possible to increase the production volume is a task of state importance.»

For reference:

OAO Granit-Kuznechnoye is the largest crushed granite rock producer in Northwest Russia. For its core business the company uses its own quarries applying open-cast mining methods in the deposits of fossil granite and gneissogranite with subsequent processing of the rock mass to produce fractionated rock and other construction aggregates. The company has three plants turning out crushed rock.

The company was founded in 1952. Since 2000, OAO Granit-Kuznechnoye forms part of LSR Group.

The total proved reserves of the company are approx. 360 mln. cub. m. It employs over 1,300 people.

In 2006, the company produced about 3.6 mln. cub. m of crushed stone. The key markets of its products are the Northwest and Central regions of Russia.

OAO LSR Group is a vertically integrated diversified holding company. Its core business areas are building materials, 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 comprises a total of 21 business units consolidated into 6 business segments. LSR Group has enterprises and offices in St. Petersburg, Moscow, a number of cities in Leningrad Oblast, in Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs over 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.

For more details and photographs please contact:

Press Service, LSR Group

Tel.: +7(812) 314-1044

press@lsrgroup.ru

www.lsrgroup.ru

Press Service, OAO Granit-Kuznechnoye

Alexandr Alekseev

Tel.: +7(812) 702-2682; +7(961) 800-0466

press@granit2000.ru

www.granit2000.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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