Azerbaijan Investment Company gains Holcim stake

Azerbaijan Investment Company gains Holcim stake
Published: 03 October 2007

Negotiations under which Azerbaijan Investment Company (AIC) will acquire an
equity stake in Garadagh Cement (GC) JSC factory have been completed. The
minister of economic development Heydar Babayev of Azerbaijan said that very
difficult talks with Garadagh Cement have been finished.

“We obtained that AIC will participate in reconstruction of the existing
cement factory and building of a new cement producer enterprise to be
constructed by Garadagh Cement major shareholder Holcim (Switzerland),”
Babayev said.

“I think an agreement with Garadagh Cement will be signed in 2007. In the
process of reconstruction factory’s capacity will be increased from current
1.4Mta clinker and 1.5Mta of cement a year,” the minister said.

At present the enterprise produces only 1.1Mt of cement a year from its to
its own clinker, and the balance as a result of clinker imported from

At the same time AIC expects that Holcim that has sold a 10% equity stake in
Garadagh Cement will keep a control package of shares. AIC has already
received preliminary consent of both Holcim and EBRD (GC key shareholders)
on acquisition of a 20% equity stake in GC capital stock. Holcim has 79.5%
of GC shares.

In 2006, Garadagh Cement produced 1.28Mt of cement that provided
48% share at the domestic market of some 2.7Mt. Since 1999 Holcim has
invested US$44m in the enterprise having cement sales of US$80m a year.