OREANDA-NEWS. August 22, 2007. The company is going to acquire a cement plant in Saratov and launch a weekly classified in Moscow, spending about $5M on this. Experts account for investing in non-core assets as their being more profitable than petroleum projects.

In June it became known that a SZNG structure – NWOG- is getting ready for transit to alternative stock markets. Presently three variants are being considered: NASDAQ BB, AmEx or AIM. The company wants to use the proceeds for the realization of two projects in the Middle East – either construction or modernization of a Banias refinery and oil recovery in Algeria.

According to what Ernest Malyshev, President of SZNG, told RBK daily, the company is preparing two new projects. The first one implies launching of a weekly classified with the circulation of 1,5M copies together with the Jordanian publishing house Al-Waseet International K.S.C.C., which controls 77% of the market of weekly classifieds in the Middle East. The partners have created a joint venture with the charter capital of $5M, whereby SZNG owns 40% and Al-Waseet 60% of the structure.

According to Mr. Malyshev, the newspaper is going to repeat the format of a range of Al-Waseet editions – notably advertisements for Russian and Middle-Eastern business. “Presently Russia is intensifying its relations with Arab countries, besides, 10% of Russians are Muslims”, - clarifies Mr. Malyshev. The newspaper is expected to be launched until the end of the year, the distribution region will be Moscow.

As well as that SZNG is striving for control over a Saratov cement plant JSC “Volsky zavod ATSI”. At the end of the year 2006 regional administration conducted a tender for the sale of the controlling stake of the plant, which was obtained by “NovoAltay-A” LLC, which represents the interests of an oil company. The sum of the transaction amounted to $30M. However, SZNG insists that these assets were later realized with law-breaking, and “NovoAltay-A” will presently appeal against the transaction in the arbitral court. With respect to illegal purchase a criminal case has been initiated, which is being controlled by Prosecutor General Office. Upon completion of the trial SZNG plans to restore the control of the production with the capacity of 1,5M tons of cement annually.

This is not the first time that oil industry invests in non-core assets. It should be mentioned, that as well as recovering oil in Saratov region, SZNG owns the elite hard alcohol brand Danziger. Field analyst of the IR “Brokercreditservice” Mazim Shein claims that the diversified interests of SZNG can be accounted for by the nationalization of Russian oil reserves, and high profitability of the business, that is not connected with recovering oil in small volumes. “As example, profitability in the cement branch constitutes about 30% due to demand increase, triggered off by the increase of