Basic Element, Strabag form cement jv, plan acquisitions in eastern Europe

Basic Element, Strabag form cement jv, plan acquisitions in eastern Europe
Published: 05 October 2007

Russia’s Basic Element and Austria’s Strabag SE have agreed to combine their cement activities into a 50/50 joint venture, which will be expanded via acquisitions and greenfield plant construction, Kommersant reported citing both companies.

A Strabag spokesman told the newspaper that within the next two to three years the joint venture plans to open at least 10 new cement plants in Russia and eastern Europe.

In addition, he said talks are ongoing to acquire existing cement production facilities in Russia, Ukraine and two unnamed countries.

The acquisitions and new factories will allow the companies to increase their combined cement production to more than 10 mln tonnes per year, up from the current 5 mln tonne level.

An industry expert told the newspaper that this would require an investment of about 1.5 bln usd, but the two companies did not confirm this figure.

Basic Element is controlled by Russian businessman Oleg Deripaska. His Rasperia Trading company earlier this year acquired about 30 pct of Strabag.

Strabag SE plans to list its shares on the Vienna Stock Exchange next week.

The Austrian builder also holds a controlling stake in Germany’s Strabag AG.