LSR Group (LSE: LSRG; MICEX-RTS: LSRG) increases its brick production capacity - the company swapping assets to acquire one of the leading brick production facilities in the North-West region – Ryabovsky brick plant.
LSR Group acquires 100% of OOO Gazstroy, owner of Ryabovsky brick plant, in exchange for office centers in St. Petersburg. This complies with the company’s strategy to concentrate operations in the following key business areas: production of building materials, construction and residential real estate development.
The annual production capacity of the new plant is up to 150 million bricks. Fully automated manufacturing equipment supplied by Handle and Lingl allows to produce various types of bricks – from construction and solid bricks to large-format porous blocks and facing bricks of different colors.
As a result our combined brick production capacity in St. Petersburg, the Leningrad and Moscow regions increases to approximately 450 million bricks per year.
As a part of the deal LSR Group also obtains a license for clay deposit “Krasny Latysh”, which is located close to the plant, with proven reserves enough for about 30 years of operations.
Aleksandr Vakhmistrov, CEO and Chairman of the Executive Committee of LSR Group, comments:
“LSR Group discontinues its commercial real estate business. We plan to focus on the production of building materials, construction and residential real estate development. This deal will significantly strengthen our position in the market and also increase effectiveness of our brick plants. Each production facility will concentrate on manufacturing only particular types of brick thus reducing production and sales costs”.
Notes to Editors:
OJSC LSR Group is a diversified construction company operating in a number of complementary market segments. The company was founded in 1993. Its core business areas are production of building materials, panel construction and real estate development. The company unites business units for extraction and processing of aggregates, production and transportation of building materials, construction upon projects of leading Russian and foreign architects – from mass-market to elite residential properties. LSR Group's main operations are located in St. Petersburg, Leningrad region, Moscow, Moscow region, Yekaterinburg and Ural region. As of 31 December 2012 (according to Cushman & Wakefield Russia), the net sellable area of the projects in LSR Group’s real estate portfolio is equal to 8.7m m2 with the market value of RUB 120bn. In 2012, the sales revenue of LSR Group amounted to RUB 61,122m (IFRS) LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX-RTS.
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