LSR Group obtains a Vnesheconombank loan for the cement plant project

On 25 June, LSR Group and State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) signed a loan documentation package to finance the final stage of LSR’s cement plant project for a total amount of EUR 237 million, with a ten-year maturity and the first interest payment due within 18 months. Thus, as a result of the new loan agreements the necessary funding is now fully ensured for the project.

The documentation was signed by Anatoly Ballo, Deputy Chairman and Management Board Member of Vnesheconombank, and Igor Levit, Chief Executive Officer of LSR Group.  

The event was also attended by Nikolay Pasyada, Vice-Governor of the Leningrad region and Ilgiz Valitov, Vnesheconombank’s Regions Development Department  Director.

The loan will be used to finance the construction project of a cement plant by OOO Cement (a company of LSR Group) in Slantsy, Leningrad region. The total estimated investment is EUR 445 million (incl. of VAT) including loans totalling EUR 344 million and extended by Vnesheconombank and ABN AMRO/HSBC. The balance amount comes from LSR’s own funds already invested.

The cement project is strategically important for LSR Group as the new plant will fully cover the internal needs of the company with cement, in necessary quantities: LSR is one of the largest cement consumers in Russia, with over 1 million tons of cement consumed by its companies in 2008.

In accordance with LSR’s plans, the cement plant with an annual capacity of 1.86 million tons is to be put into operation in 2010.  

The general contractor for the complete scope of design and construction work is OOO Cement Northwest, a 100 percent subsidiary of Chinese company, Hefei Cement Research and Design Institute. 

The plant will feature state-of-the-art production lines manufactured by FLSmidth of Denmark, a world leader in cement manufacturing equipment. It will use the most efficient dry technology which also provides for partial use of oil shale waste in the cement production process that will ensure over 40 percent of the energy required for production lines. Thus, the new cement plant of LSR Group will be one of the most energy efficient enterprises in the world.

In addition to its cost efficiency, the new plant includes an important environmental component. A large quantity of dumps has been accumulated in Slantsy, Leningrad region as a result of oil shale extraction, processing and enrichment. The waste dumps situated within the Slantsy city limits occupy a total of over 400 hectares of land taken out of use. The waste from the dumps will be used as an additional raw material for cement production. Consequently, the implementation of the cement project will significantly improve the environmental situation in the region, and more land will be brought back into use. The production technology and equipment performance will make the plant one of the most environment-friendly production facilities in Europe meeting the European environmental standards.   

By now, an access railway and a motor road have been completed for delivery of building materials and equipment, and a concrete mixing plant has been built and started up to manufacture concrete for the plant construction work. Piling as well as construction and installation work has been completed for casting foundations under the key production areas, and concrete work is in progress on 19 superstructures.  An integrated package of basic production equipment has been supplied to the site and is being assembled. The construction of camps has been completed for the customer and general contractor builders.
The construction of a laboratory to control the quality of input materials and final products is currently in full swing as well as the construction of a central control room and a permanent administration building. 

The new cement plant of LSR Group will provide over 400 jobs for the residents of the Leningrad region and will become one of a major taxpayer in the area.

Note to Editors:

OJSC LSR Group  is a real estate and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.
LSR Group has operations and offices in a number of cities in the Leningrad region, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany.
In 2007, the sales revenues of LSR Group (according to the IFRS) were RUR 35,858m, in 2008 – RUR 49,813m.
LSR Group is a public company, with its GDRs listed and traded on the London Stock Exchange and its shares listed and traded on MICEX and RTS.
In 2007, LSR Group was awarded ‘The Company of the Year’ National Award in the ‘Construction’ category.

State Corporation 'Bank for Development and Foreign Economic Affairs
(Vnesheconombank)' was established in spring 2007 in accordance with the Russian Federal Law "On the Bank for Development" on the basis of Vnesheconombank USSR. The Bank's activity is designed to remove economic growth infrastructure restrictions, modernize and boost non-raw materials economy, high-technology industries as well as to stimulate innovations and the export of high-tech products and implement projects in the special economic zones, projects in environment protection, provide support for small and medium-sized enterprises.

For more details please contact:

LSR Group Press Service
Tel.: +7 812 314 10 44
E-mail: press@lsrgroup.ru
www.lsrgroup.ru