LSRG.L Regulatory News (LSRG)

Press release

Moscow

17 March 2011

LSR Group upgrades its production facilities in Moscow

OJSC Zavod ZhBI-6, a Moscow-based subsidiary of LSR Group, has held an opening ceremony of the new production line manufacturing reinforced concrete elements for residential construction. The annual capacity of the new equipment by Weckenmann-Vollert is 38 th cub. m. The launch of the new production line expands the annual capacity of Zavod ZhBI-6 up to 170 th cub.m of reinforced concrete elements (equivalent to 240 th sq. m of panel housing).

The ceremony was attended by:

- Alexandr Vakhmistrov, CEO of LSR Group, First Vice President of NOSTROY;

- Ivan Romanov, Managing Director of LSR Group Moscow Business Unit;

- Alexandr Sidorov, General Manager of OJSC Zavod ZhBI-6;

- Moscow and the Moscow region officials, representatives of large Moscow developers and media.

Installation of the modern line instead of the obsolete equipment is a part of modernisation programme, started in 2007 to increase production efficiency and capacity. The installed equipment will produce solid-core panels of different size for panel construction. As a result, Zavod ZhBI-6 will be able to significantly improve the quality of products and increase its capacity by 20%, being able to produce the amount of reinforced concrete elements equivalent to 240 th sq. m of housing per year.

The new line will produce Euro'PA series - a popular product line of panel houses in the Moscow region. These houses are now under construction in the Istrinsky district (Novoye Nakhabino) and Balashikha in the Moscow region. Besides, they will be built in the Leninsky district, Reutov and Domodedovo. The new line will also produce reinforced concrete products of bigger size for solid ceilings and floors. Thanks to high flexibility of equipment the new line is able to produce the elements of different complexity and work in "just-in-time" mode.

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 2009, the sales revenues of LSR Group were RUB 51,024 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 Zavod ZhBI-6, a subsidiary of LSR Group, is one of the largest reinforced concrete producers in Moscow. Established in 1955, it was acquired by LSR Group in 2006. The production capacity of the plant is 170,000 cub.m of reinforced concrete per year, with more than 15 million cub.m of products manufactured over the years of its operation.Flexible production lines enable the plant to efficiently produce large quantities of reinforced concrete elements. The plant is also capable of manufacturing bespoke concrete products. The company offers over 1,500 various reinforced concrete items for housing and commercial property construction.

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