LSRG.L Regulatory News (LSRG)

15 Jan 2008 10:57

Open Joint-Stock Company LSR Group15 January 2008 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES For immediate release LSR Group to Invest €70.673 M in Equipment for One of the Largest BrickFactories in Russia As part of an investment project aimed at creating one of the largest brickfactories in Russia, OJSC Pobeda LSR (part of LSR Group) has signed a contractfor the delivery of brick-making equipment with CERIC, the world's leadingequipment manufacturer for ceramic building materials production. The value ofthe contract is €70.673 million. Equipment delivery is to start this year. The contract provides for the supply of two production lines, one for standardbuilding bricks with an annual capacity of 120 million, and the other for facingbricks with a capacity of 75 million per annum. The total capacity of thefactory will subsequently be increased to 220 million standard bricks annually.The factory is currently under construction in the Kirovsky District of theLeningrad Region and will be operational in 2010. The total investment isexpected to represent $280 million and the project will be financed in part fromthe IPO proceeds obtained by OJSC LSR Group in the autumn of 2007. The new brick factory will help to address growing demand for this buildingmaterial resulting from an increase in the volume of construction and thedynamic growth of the country housing segment (according to the Reshenieresearch and consulting company, the ceramic brick market in St. Petersburg andthe Leningrad Region represented 356 million bricks in 2006 while in 2007 itexceeded 390 million bricks). Under the contract, CERIC specialists are also to carry out start-up work andfactory personnel training. To select the equipment supplier for the new factory LSR Group invited bids froma number of leading manufacturers of ceramic building materials equipment.According to Georgy Vedernikov, managing director of LSR Group, the bid made byCERIC provided the best value for money, and CERIC surpassed other majorEuropean companies. "At this stage LSR Group has proceeded to select the maincontractor to undertake construction work," said Georgy Vedernikov. Commenting on the contract concluded, Charles-Antoine de Barbuat, president ofCERIC Group noted that "in the course of tendering and deal preparation thespecialists of LSR Group have shown high professionalism and subtle knowledge ofthe production process. The company knows exactly what it needs, Mr. de Barbuatstressed, - so it can competently define both the engineering and financialterms of the project. We feel privileged and proud to cooperate with such acompany." Notes to Editors Founded in 1993, LSR Group is one of the leading real estate development,construction and building materials companies in St. Petersburg and theLeningrad region, combining two complementary market leading businesses. The Group is one of the leaders in the development of elite residential realestate projects in St Petersburg and a significant developer of mass-market realestate there. The Group also has a market leading position in the production ofbuilding materials and aggregates in St Petersburg and the surrounding Leningradregion. The Group is one of the largest producers of ceramic bricks in Russia and one ofthe largest producers of aerated concrete in Russia. In 2006 it was, andremains, the market leader in St. Petersburg and the Leningrad region in each ofsand, crushed granite, bricks, reinforced concrete, ready-mix concrete andaerated concrete segments. LSR manages and operates its businesses through two divisions: • Real Estate Development, Commercial Real Estate and Construction, which represented approximately 35 per cent of consolidated revenues in 2006; and • Building Materials, Aggregates and Construction Services, which represented approximately 64 per cent of consolidated revenues in 2006. LSR Group employs nearly 15,000 people. In 2004, 2005 and 2006 the revenues ofLSR Group were RUB 7,530.9 million, RUB 13,085.5 million, and RUB 21,110.8million respectively. For the six months of 2007 the Group's revenues amountedto RUB 16,062.0 million compared to RUB 9,336.4 million for the same period lastyear. In July 2007, Moody's Investors Service assigned a B1 rating to LSR Group;outlook - stable. In December, 2007 LSR Group has been awarded a National Business Award as theCompany of the Year in 'Construction' category. OJSC Pobeda LSR (a company of LSR Group) is the leading ceramic brick producerin Russia comprising three brick factories in St. Petersburg and the LeningradRegion - Keramika, Lenstroikeramika and Pobeda. The total capacity of the brickassociation is 290 million standard bricks a year. Pobeda LSR produces all kindsof building and facing ceramic bricks as well as porous large format RAUFbricks, and has been extending its own retail network, Brick Centre. Thecompany also possesses its own resource base, the Krasny Bor andLenstroikeramika-Kariyer quarries of Cambrian blue clay. It has a regionaloffice in Moscow. CERIC was founded in France in 1960 by a team of expert engineers from theTechnical Brick and Roofing-tile Centre (CTTB). It is a world leader in the field of engineering and implementation ofintegrated turnkey solutions for the production of ceramic building materialsand technical ceramics. CERIC possesses expertise in manufacturing equipment for load handling andpreparation as well as in thermal technologies, and is a reputable provider ofservices such as auditing, consulting, personnel training and supply of spareparts. Today CERIC is an international company employing 560 people and havinghigh-tech manufacturing facilities in France and Europe as well as commercialrepresentative offices in Russia, Ukraine and China. In 2006, CERIC was mergedwith Legri Industry Group to form part of its KEIRIA division. At present KEYRIAemploys 2,000 workers and is engineering group No.1 in the world market ofplants for the production of building materials. For more details please contact: Press Service, LSR Group+7 (812) 314-1044press@lsrgroup.ruwww.lsrgroup.ru Legal disclaimer: NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,AUSTRALIA, CANADA OR JAPAN Some of the information in these materials may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company. You can identify forward looking statements by termssuch as "expect", "believe", "anticipate", "estimate", "intend", "will","could," "may" or "might" the negative of such terms or other similarexpressions. The Company wishes to caution you that these statements are onlypredictions and that actual events or results may differ materially. TheCompany does not intend to update these statements to reflect events andcircumstances occurring after the date hereof or to reflect the occurrence ofunanticipated events. Many factors could cause the actual results to differmaterially from those contained in projections or forward-looking statements ofthe Company, including, among others, general economic conditions, thecompetitive environment, risks associated with operating in Russia, rapidtechnological and market change in the industries the Company operates in, aswell as many other risks specifically related to the Company and its operations. Neither these materials nor any copy of it may be taken or transmitted into theUnited States, Australia, Canada or Japan. These materials do not constitute orform part of any offer or invitation to sell, or any solicitation of any offerto purchase nor shall it (or any part of it) or the fact of its distribution,form the basis of, or be relied on in connection with, any contract therefor.The offer and the distribution of these materials and other information inconnection with the listing and offer in certain jurisdictions may be restrictedby law and persons into whose possession any document or other informationreferred to herein comes should inform themselves about and observe any suchrestriction. Any failure to comply with these restrictions may constitute aviolation of the securities laws of any such jurisdiction. These materials are not an offer for sale of any securities in the UnitedStates. Securities may not be offered or sold in the United States absentregistration or an exemption from registration under the U.S. Securities Act of1933. The Company has not registered and does not intend to register anyportion of any offering in the United States or to conduct a public offering ofany securities in the United States. This communication is directed only at (i) persons who are outside the UnitedKingdom or (ii) persons who have professional experience in matters relating toinvestments falling within Article 19(1) of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worthentities, and other persons to whom it may lawfully be communicated, fallingwithin Article 49(2) of the Order (all such persons together being referred toas "relevant persons"). Any investment activity to which this communicationrelates will only be available to and will only be engaged with, relevantpersons. Any person who is not a relevant person should not act or rely on thisdocument or any of its contents. This communication is distributed in any member state of the European EconomicArea which applies Directive 2000/71/EC (this Directive together with anyimplementing measures in any member state, the "Prospectus Directive") only tothose persons who are investment professionals for the purposes of theProspectus Directive in such member state, and such other persons as thisdocument may be addressed on legal grounds, and no person that is not a relevantperson may act or rely on this document or any of its contents. This information is provided by RNS The company news service from the London Stock Exchange