Obiedinenie 45 to Push up Production by 1.5 Times Next Year and to Spend US$ 35 Mio for that Purpose

Obiedinenie 45 OAO (makes part of LSR Group), the major commodity concrete producer, is to invest US$ 35 million into business development the next year. Based on the annual results, the company is going to push up production by 1.5 times. US$ 8.5 million out of these funds will be channeled towards development of St.Petersburg Office, which would cover the costs of introducing new production lines (BETOMAT-3 from Liebherr) at Sofiyskaya Street, with capacity of 230 cubic meters/hour, towards purchase of more than 20 units of special equipment and equipment maintenance. The remaining US$ 26.5 million will be put up into the Moscow chain — the plan is to commission the same plant, BETOMAT-3 from Liebherr, there and to purchase two production sites to be launched in 2008, plus purchase of 45 special machinery. During the next year, the plan is to produce 1.35 Mio cubic meters on the St. Petersburg market and 560,000 cubic meters on the Moscow market, which would bring the corporate production to 2 million cubic meters. During the last year, more than $20 million were funneled towards development; two plants were established in Moscow and one, in St. Petersburg. Shipments to the St. Petersburg market exceeded 1 Mio cubic meters of concrete solution mixtures, and to the Moscow market, 200,000 cubic meters. Similar volumes are manufactured in the capital only. And Moscow's major manufacturer, Mosinzhbeton OAO , hit the mark of 1 Mio cubic meters by the year-end only. The nearest competitor of the association in St. Petersburg, Lenstroidetal OAO , produces some 300,000 cubic meters a year. Having manufactured over 1.2 Mio cubic meters of products a year, Obiedinenie 45 became the major concrete manufacturer in Russia. «I am sure that such significant increase in production is based on the success of the initially developed idea of business establishment. A network of works that manufacture concrete types with identical properties and located across the city enables the builder to deal with a partner on a permanent basis, rather than to look for a new supplier for each construction site», explained Mr. Andrey Bibikov, Manager of the company. The association is to be developed in 2002. For four years, a network of 7 plants has been built during four years in St. Petersburg, with a well-established centralized quality and procurement management system. Such structure enables to make supplies to the construction sites anywhere in the city. The production facilities of most works of the company exceed averages. During the last two years, two St. Petersburg record production facilities were commissioned — with capacity of 180 m3/h and 230 m3/h. This enables the company to service the biggest construction sites in the region on its own. According to experts, the company accounts for some 35% of the St. Petersburg market, and the nearest competitor, 13%.

The company entered the Moscow market this April. Over three years, the company plans to establish a network of 5 production facilities operating in accordance with the St. Petersburg Office pattern. 2 works have been commissioned in the capital so far. The third one is to be launched early in the next year. The association is going to hit its first 1 millionth cubic meter in Moscow in 2009, thus occupying 10% of the region's concrete market. The free niche on the commodity concrete market in Moscow and the Moscow Region, which is not occupied by intra-corporate relations, is estimated by experts at 2.55-2.95 Mio cubic meters of concrete annually. It is with this segment that the company is going to deal with. Operation of the two Moscow works of the association is focused on mixture sales to construction companies within the 30-km zone around Moscow. It is at this distance that the company confidently undertakes to comply with its standard — product delivery to the facility during 45 minutes. The manufacturer's aggregate income in 2006, from January to December 1, doubled y-o-y, amounting to some RUB 3.5 billion versus RUB 1.7 billion last year. The plan for the next year envisages annual revenue increase by 1.5 times, to RUB 5.4 billion.

Obiedinenie 45 OAO (www.045.ru) is an enterprise of Russia's No.1 construction holding — LSR Group. The company manufactures concrete for all types of construction — housing, industrial, commercial, road construction — and it supplied its products to such facilities as the Ladoga Terminal, a complex of buildings of the Russian State Historic Archive, South-Western Treatment Facilities, The Hermitage repository, overhauling of Sadovaya Street and Engels Prospect, the interchange of Vantovy Bridge in the range of Obukhovskoy Oborony Prospect, dam construction (AFS), different sections of the St. Petersburg Highway, etc.

LSR Group (www.lsrgroup.ru), the biggest association of industrial and construction companies of Russia's North West, was established in 1993. It is the major player in the Russian construction industry. Companies of the Group are engaged in production and processing of non-metallic minerals, production and transportation of construction materials, provision of construction services, road construction, housing construction — from large-panel mass-series buildings to luxurious houses. The Group includes such industry leaders as Obiedinenie 45 OAO , Pobeda LSR ZAO , Barrikada Production Association, Vozrozhdenie Sankt Peterburga Construction Corporation OAO , Block DSK ZAO , Gatchinsky DSK ZAO , Rudas OAO , Granit Kuznechnoye OAO, etc.

Additional information and pictures are available: by phone 071 (in St. Petersburg), mobile: +7 812 940-95-51, e-mail:press@045.lsrgroup.ru, Yekaterina Kuzmina, PR Specialist, Obiedinenie 45 OAO , LSR Group.