LSRG.L Regulatory News (LSRG)

LSR Group acquires equipment for its new brick plant

On 3 May 2011 OJSC Pobeda LSR (a subsidiary of LSR Group) signed contracts with Händle and Lingl (Germany) to produce and supply equipment for the new brick plant which is currently under construction in the Leningrad region. The annual production capacity of the plant is 220 million bricks. The total value of the contracts is EUR 32.03 million (excluding VAT).

Händle and Lingl, leading suppliers of equipment for the brick manufacturing industry worldwide, were chosen as a result of the tender. Under the contract, Händle is to provide a full range of engineering services and supply raw materials preparation equipment for the new brick plant. Equipment supply will begin in July 2011, installation and commissioning is to be completed by June 2013.

Under the contract, Lingl is to provide a full range of engineering services and supply machinery for the production line to manufacture various types of bricks from hollow to porous. The line's annual capacity is 120 million bricks. Equipment supply will begin in July 2011, installation and commissioning is to be completed by April 2013.

Sergey Begoulev, Managing Director of OJSC Pobeda, comments:

"We believe that we have made the right decision. Undoubtedly, Händle and Lingl possess significant experience in supply of the equipment for brick plants. Besides, they have offered us favourable conditions, regarding both costs and terms.

Today the buildings and infrastructure at the new brick plant of LSR Group is almost completed. However, the plant commissioning has been postponed because our supplier of equipment, CERIC, turned insolvent. Despite this the project is still underway. As a result, LSR Group will get a new advanced brick plant as well as a large land plot, available for development and construction of housing after the relocation of the production facility".

Pobeda LSR has also a contract with TECTON GmbH Keramikanlagen to supply production line for specific ceramic items (approximate annual production capacity of the line is 25 million bricks). The equipment installation is to be completed by the end of June 2013.

Currently OJSC Pobeda LSR is in the process of selecting a supplier of the equipment for facing bricks production line with an annual capacity of 75 million bricks.

Note to Editors:

OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction.LSR Group's main operations are located in St. Petersburg, Moscow, Yekaterinburg and Ukraine.In 2010, the sales revenues of LSR Group were RUB 49,950 million (IFRS).LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX and RTS.

OJSC Pobeda LSR (a subsidiary of LSR Group), founded on 1 July 2005, comprises three LSR Group brick factories: Keramika, Lenstroikeramika and Pobeda. Pobeda LSR has its own raw materials base, including blue clay quarries - Krasny Bor and Lenstroykeramika-quarry. The product range of Pobeda LSR includes all types of bricks for high-rise and low-rise construction: solid and hollow bricks, red facing bricks, standard and "Euro" bricks of various colours with either flat or textured surface. Moreover, OJSC Pobeda LSR Group has been the first producer of large-size porous stones which were launched into the market in 2007 under the RAUF brand.

HÄNDLE GmbH Maschinen und Anlagenbau was founded in 1870. The company produces and supplies a full range of industrial equipment for raw material preparation and molding as well as analyses material and automates technological process.

HANS LINGL Anlagenbau und Verfahrenstechnik GmbH & Co. KG, founded in 1938, is a leading producer of equipment for ceramic building materials.

TECTON GmbH Keramikanlagen is a German company, manufacturing and supplying innovative equipment for the production of building materials, tile roofs and bathroom ceramics.

For more details please contact:LSR Group Press ServiceTel.: +7 812 314 10 44Fax: +7 812 458 83 72E-mail: press@lsrgroup.ruwww.lsrgroup.ru