LSRG.L Regulatory News (LSRG)

5 Mar 2008 08:29

Open Joint-Stock Company LSR Group05 March 2008 NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN For immediate release BOARD OF OJSC LSR GROUP APPROVES CONSTRUCTION OF NEW BRICK PLANT St. Petersburg, 5 March 2008 - LSR Group ("LSR" or the "Group") one of theleading real estate developers and building materials producers in St Petersburgand the Leningrad region (LSE: LSRG, MICEX, RTS: LSRG), announced today that aspart of Group's strategy and investment programme, it approved a contract for aconstruction of a new brick factory in the Kirovsky District, Leningrad Region.The total cost of the project is expected to be around Euro 95 million, to befinanced through loans as well as proceeds from the recent IPO of the Group. Following a tender, ZAO Kompakt was chosen as a general contractor on thisproject and will undertake the full design and construction of the plant. OJSCPobeda LSR, a fully owned subsidiary of LSR Group and a leading brickmanufacturer in Russia will lead the project. The construction work will be undertaken in three stages over a total of 34.5months to ensure a gradual launch of the production facilities. The firstproduction line is expected to be completed by 2010 with a capacity of 120million of building bricks a year, followed by the launch of the facing brickline with a capacity of 75 million bricks, with further lines to be launched toreach a total plant capacity of 220 million units a year. Commenting on the announcement, Mr. Levit, CEO and member of the Board ofDirectors of LSR Group, said: "We are witnessing an increasing demand for building materials, particularlybricks, driven by the growing construction volumes in the region and a rapiddevelopment of the regional property segment. The new plant will help to meetthe demand for this building material, further strengthening the Group's revenuestreams." According to the Russian research and consulting company Resheniye, the size ofthe ceramic brick market in St. Petersburg and the Leningrad Region increasedfrom 356 million units in 2006 to over 390 million units in 2007. For more details please contact:Press Service, LSR Group+7 (812) 314-1044press@lsrgroup.ruwww.lsrgroup.ru NOTES TO EDITORS OJSC LSR Group is a diversified construction company founded in 1993 andoperating in a number of complementary market segments. Its core business areasare building materials, construction and real estate development. The Groupincludes enterprises for extraction and processing of aggregates, productionand transportation of building materials, and housing construction - from massmarket large-panel housing to elite property built after designs made by leadingdomestic and foreign architects. LSR Group has operations and offices in a number of cities in the LeningradOblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia,Ukraine and Germany. LSR Group employs over 15,000 people. In 2005 and 2006 the revenues of LSR Group(according to IFRS statements) were 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 November 2007, OJSC LSR Group implemented an IPO. InDecember 2007, LSR Group was bestowed a National Award in the field of businessas 'The Company of the Year' in the 'Construction' category. OJSC Pobeda LSR (a fully owned subsidiary of LSR Group) is the major ceramicbrick manufacturer in Russia with a total production capacity of 290 millionstandard units a year. It comprises three brick factories in St. Petersburg andthe Leningrad Oblast - Keramika, Lenstroikeramika and Pobeda. It produces alltypes of building and facing ceramic bricks as well as RAUF large-format porousbricks. The company has been expanding its own retail chain known as the BrickCentre since 2005. It has its own raw materials resources of Cambrian blue clayquarries at Krasny Bor and Lenstroikeramika-Kariyer. The company has a regionalrepresentative office in Moscow. ZAO Kompakt is a well established contractor and offers a broad range ofservices such as turnkey construction projects, main repairs and renovations,engineering services, design work and building materials production. Since itsfoundation in 1992, the company has taken part in the construction of a numberof large-scale industrial and civil engineering projects including, inparticular, the St. Petersburg Flood Protection Barrier (the Dam), BaltiyskyZavod, Sufflet- St.Petersburg and Avangard-Solod (Moscow Region) malting plants,AssiDoman Packaging AB packaging materials factory in Vsevolozhsk, Ford carfactory, Gillette production and warehouse facilities, Pulkovo-2 internationalairport complex and Pulkovo Cargo Terminal, a number of facilities for the RFCentral Bank in St. Petersburg etc. 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. 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