LSR Group completed the purchase of Aeroc AS (Estonia) and Aeroc Poribet SIA (Latvia). By consolidating them with its own enterprise in St. Petersburg, the Group created its own gas concrete sub-holding called Aeroc International.

Aeroc — light as air, hard as rock — is a brand that demonstrably describes such construction material as gas concrete. It is used to erect external walls and internal partitions. Gas concrete costs rather low, has excellent operating properties and improved environmental safety.

With creation of Aeroc International, LSR Group became the biggest gas concrete manufacturer not only in Russia but also in Northern Europe. The aggregate production capacity of gas concrete works of the Group amounts to 600,000 cubic meters a year. Total investments of LSR Group into creation of the gas concrete sub-holding, Aeroc International, amounted to some RUB 1 billion.

Aeroc International products are successfully sold in Russia, the Baltic states and Scandinavia. LSR's share in St. Petersburg and the Leningrad Region gas concrete market amounts to 55%; the Group is the only gas concrete manufacturer in Estonia and Latvia.

«Gas concrete is a very promising direction in the construction materials industry, and we do not intend to stop where we are: we are actively studying the possibility of expanding our gas concrete subholding to other regions of Russia and neighboring countries,» comments Igor Levit, General Manager at LSR Group.

LSR Group is the leading player of Russia's construction industry. Its core lines of business are production of construction materials, real estate construction and development.

IAS consolidated statements of LSR Group was certified by KPMG. According to these, LSR Group turnover in 2005 amounted to some RUB 15.6 billion. In the first half of 2006, this parameter amounted to RUB 9.3 billion, which is almost twice as high as in 1H05. EBIT in the first half of the current year came to RUB 721 million, and net profit stood at RUB 500 million.

A considerable portion of LSR Group business (a bit more than a half) is in the field of production of construction materials, so the Group is not so susceptible to pricing risks existing on the real estate market.