Eurocement Group win approval for Russia cement factory purchase

3704 Eurocement Group has had its application to buy the cement factory belonging to LSR in Slantsy, Leningrad Region, approved by the Federal Anti-Monolopy Service (FAS) of Russia. LSR had invested €240.19 million (RUB 18 billion) in the factory, some of which was euro and dollar loans. In the current economic situation, it is reported that the factory's profits do not allow for these loans to be serviced. Experts estimate that the Eurocement Group deal is worth €198.89 million (RUB 17bn): €58.49 million (RUB 5bn) in cash and €140.39 million (RUB 12bn) in debt liabilities.

After the deal is closed, Eurocement Group will have 61% of the market in the Northwest Federal District of Russia, which, some experts have claimed, could lead to cement prices rising by 30%. LSR plans to use the money from the sale to service its debts. The design capacity of the factory is 1.86 million tonnes of cement/year. Raw materials come from the Duboyem and Bolshie Polya quarries, which have 95 million tonnes of confirmed limestone and 41 million tonnes of clay reserves, respectively. In 2013, Eurocement group sold 1.3 million tonnes of cement for €35.09 million (RUB 3bn). The Reshenie company says that the Slantsy factory alone takes up 22% of the St. Petersburg and Leningrad Region market, which has a total annual volume of 4.7 million tonnes of cement.