LSRG.L Regulatory News (LSRG)

LSR Group acquires a leading housebuilding factory in the Urals

OJSC Betfor Reinforced Concrete Factory (a subsidiary of LSR Group) has acquired 100% of CJSC Kamensk-Uralsk ZhBI. The total value of transaction is RUB 75 million.

CJSC Kamensk-Uralsk ZhBI (KUZZhBI) is one of the leading reinforced concrete factories in the Urals region supplying mainly for large-panel housebuilding. The factory's project capacity is 70 thousand cub. m of reinforced concrete per year and 10 thousand cub. m of ready-mix concrete per year. The factory, founded 75 years ago, is now among three leading producers for large-panel housebuilding in the Sverdlovsk region (according to our estimates, in 2010 KUZZhBI market share was 17%). Besides, the production is sought-after in the Kurgan and Tumen regions and in the Khanty-Mansiisk autonomous district.

KUZZhBI mainly produces Series 141 heat-insulated three-layer external wall panels for construction of houses of various heights with improved layout. The factory's production is also used in construction of industrial buildings, engineering installations and office-utility buildings. Due to high quality of the external wall panels, produced at the factory, Urals Research Centre for Architecture and Construction considered it suitable for construction in severe conditions compared to the climate of the Far North.

The factory is located in Kamensk-Uralsk, the 3rd populated town in the Sverdlovsk region. The town is a well developed industrial centre with 4 major enterprises. In addition, it is one of the Russia's 10 largest railway hubs with transport connectivity to Sverdlovsk, Kurgansk, Chelyabinsk and Tumen districts as well as to the Khanty-Mansiisk autonomous district. Kamensk Uralsk also has an attractive location near deposits and storage sites of the materials used in reinforced concrete production (cement, sand, crushed granite, metal).

Alexandr Vakhmistrov, Chief Executive Officer, Chairman of the Executive Committee of LSR Group, comments:"The new reinforced concrete factory Kamensk-Uralsk ZhBI will allow us to strengthen our position on the market of large panel housebuilding both in Yekaterinburg and the Sverdlovsk region and the whole Urals region, including the North Urals. The factory is well known on the market. The main consumers are the largest construction companies.Besides, as LSR Group subsidiaries provided design and general contractor works for the factory, our specialists are already familiar with the production and the technology. This fact significantly simplifies the integration and future management process".

In addition, the factory also has a sand quarry, railway line, railway vehicle and 47 industrial and office buildings. Moreover, it has 31 ha of leasehold land which can be used for construction.

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.

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