Lafarge plans Russian expansion

Lafarge plans Russian expansion
Published: 19 October 2010

Lafarge is planning to invest around EUR1-2bn in the Russian cement industry over coming years, according to reports from local press.

Russian Prime Minister Vladimir Putin has confirmed the major plans of Lafarge at the annual meeting of Council on Foreign Investments, saying the company is ready to expand production capacity despite economic volatility.

“In the midst of economic turmoil the company has started the construction of a cement plant in the Kaluga region.

Lafarge has operated in Russia since 1995 and owns the “Voskresenskcement” cement plant in the Moscow region and “Uralcement” near Chelyabinsk. In 2006, it signed an agreement to build a 150 million euro plant in the Rostov region with a production capacity of 2Mta. The construction plans for Kaluga cement plant was announced in 2008, but later put on hold due to declining cement demand.

A Lafarge agent says the company has managed to overcome several administrative barriers and has resumed its plans for the Rostov and Kaluga regions.

“The company has worked out a strategy for the Russian market, putting forward the most important and profitable projects such as Kaluzhsky plant, after trade conditions have been eased by the government and license for resource exploration in Rostov has been obtained”

The Russian government has agreed to remove all duties on the cement exports from Russian production, with a new law to come into force in November. Lafarge says this will open wider opportunities and spur demand.

“Recent policy and trade law amendments will positively influence the demand for cement and lead to increase of production. We also think that the central region is very attractive and Kaluzhsky plant with 2- 4Mt production output will reduce the shortage in the region. In Rostov at current stage Lafarge is busy on the preparation needed to launch the active stage of Rostov project development, dealing mainly with permitting issues."