OREANDA-NEWS. January 15, 2008. As part of an investment project aimed at creating one of the largest brick factories in Russia, OJSC Pobeda LSR (part of LSR Group) has signed a contract for the delivery of brick-making equipment with CERIC, the world’s leading equipment manufacturer for ceramic building materials production, LSR's press service reported. The value of the contract is ?70.673 million. Equipment delivery is to start this year.

The contract provides for the supply of two production lines, one for standard building bricks with an annual capacity of 120 million, and the other for facing bricks with a capacity of 75 million per annum. The total capacity of the factory will subsequently be increased to 220 million standard bricks annually. The factory is currently under construction in the Kirovsky District of the Leningrad Region and will be operational in 2010. The total investment is expected to represent $280 million and the project will be financed in part from the IPO proceeds obtained by OJSC LSR Group in the autumn of 2007.

The new brick factory will help to address growing demand for this building material resulting from an increase in the volume of construction and the dynamic growth of the country housing segment (according to the Reshenie research and consulting company, the ceramic brick market in St. Petersburg and the Leningrad Region represented 356 million bricks in 2006 while in 2007 it exceeded 390 million bricks).

Under the contract, CERIC specialists are also to carry out start-up work and factory personnel training. To select the equipment supplier for the new factory LSR Group invited bids from a number of leading manufacturers of ceramic building materials equipment. According to Georgy Vedernikov, managing director of LSR Group, the bid made by CERIC provided the best value for money, and CERIC surpassed other major European companies. “At this stage LSR Group has proceeded to select the main contractor to undertake construction work,” said Georgy Vedernikov.

Commenting on the contract concluded, Charles-Antoine de Barbuat, president of CERIC Group noted that “in the course of tendering and deal preparation the specialists of LSR Group have shown high professionalism and subtle knowledge of the production process. The company knows exactly what it needs, Mr. de Barbuat stressed, – so it can competently define both the engineering and financial terms of the project. We feel privileged and proud to cooperate with such a company.”