Eurocement Group is planning to invest 15 billion rubles (almost 600 mln. dollars) in construction of a new cement plant in the Ulyanovsk region of Russia. The facility will be able to produce 2. 4 mln. tons of cement a year. An agreement between local governor and Eurocement president Mikhail Skorohod has already been signed.
The parties are keeping secret the dates of construction starting and the new plant beginning operation. The local authorities say the agreement with Eurocement is strategic and provides for many aspects of collaboration, including further development and modernization of Ulyanovskcement, the company's other cement plant already working in the region. The expected investment rate is much higher than at the group's facilities in other areas of Russia (e.g. Samara region), and thus Eurocement is likely to make Ulyanovsk its priority.
This is not hard to explain - the group's license for a minefield in Samara region is running out in 2015, and so it will have to curtail its production in the area. The license won't be reissued for environmental reasons - the minefield is located in Samarskaya Luka national park. Ulyanovk authorities, on the contrary, are eager to further develop cement production and raw material extraction for it, with the help of Eurocement, as the group plans further investment in local minefields.
Eurocement is trying to control the market - as for today, it is the second largest cement holding in the Volga region. Its two existing facilities produce a total of 2. 76 mln. tons of the material, while the local Mordovcement makes 2. 8 mln. tons.
Analysts predict six new major cement production centers will appear in the Volga area by 2010. And today's capacity of Eurocement's assets won't be the most powerful. Mordovtsement plans construction of its third 2. 5 mln. tons strong plant by 2009, and many other businesses have similar plans. Thus, total production of cement in the area will double in three years, which will cover the regions deficit of the material (only 8 mln. tons of the necessary 15 mln. are produced here today). Such development will end cement price growth, to the joy of local construction firms.
Natalia Diadik
Photo:eurocem.ru
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