Steppe Cement poised for growth, Kazakhstan

Steppe Cement poised for growth, Kazakhstan
Published: 15 October 2007

Steppe Cement Ltd chief executive officer Javier Del Ser Perez talks about its operations in Kazakhstan.

When did Steppe Cement start operations in Kazakhstan and was it a struggle at the beginning? 

The plant was brought back into operations in 1998 after several painful months of resuscitation efforts by a management team comprising mostly Malaysians. 

Soon after production recommenced, severe setbacks occurred due to the Russian rouble financial crisis in 1998, which resulted in the collapse in the value of equity stocks in Russian companies and other unanticipated challenges. 

This situation has reversed since 2005. 

What is the Malaysian equity in Steppe Cement currently? 

Kuala Lumpur based investors – Tan Sri Azmi Wan Hamzah and David Crichton-Watt – are the two largest shareholders and between them and myself, we have a third of the company’s equity. 

The Karaganda cement business was listed on the Alternative Investment Market (AIM), London on September 2005, via a Labuan vehicle – Steppe Cement Ltd, making us one of the first Malaysian registered companies to be admitted into AIM. 

What are the challenges?

Steppe Cement Ltd’s wholly owned subsidiary, Central Asia Cement JSC is producing 860,000t of cement per year. Another wholly owned subsidiary, Karcement JSC, is undertaking the refurbishment of two dormant dry lines. Upon completion of the refurbishment – 2.4 million tonnes would be added to our current production capacity making Steppe Cement the largest cement producer in Kazakhstan with over three million tonnes per year. 

The European Bank of Reconstruction and Development had committed a RM147mil loan to the refurbishment project. 

Would you recommend Malaysian companies, especially those involved in the construction industry such as roof tile makers, piling experts, construction companies and property developers to do business there? 

Yes, I would definitely recommend Malaysian investors to have a look at the compelling opportunities in Kazakhstan. 

The construction boom looks likely to be prolonged and has expanded rapidly over the last four years opening opportunities for many businesses in import and manufacturing. 

While the distances between cities are significant the overall risk/reward continues to look positive. Oil production is expected to peak in 13 years so we can still expect good demand for ancillary services to continue for some time.

StarBiz, Malaysia