Russia’s Eurocement to sell 25% of cement output on exchange Sep
Russia’s largest cement producer Eurocement plans to sell 500,000t of cement, or 25% of its total output, on the Moscow Stock Exchange (MSE) in September, Russian business daily Vedomosti reported Wednesday, citing Andrei Kashevarov, deputy director of the Federal Antimonopoly Service (FAS).
Eurocement started trading cement on the MSE in July on the recommendation of the antimonopoly service, Kashevarov said.
In the future Eurocement may sell up to 40% of its cement output on the MSE, the company’s President Mikhail Skorokhod said, the daily reported.
In August Eurocement plans to sell 266,000t of cement on the MSE, with 163,000t having already been sold, the company said Tuesday.
The starting price of cement is currently set at 1,647 rubles per tonne, excluding value-added tax and transportation costs, the daily said. The average price of cement sold in August amounted to 2,064 rubles per tonne, Skorokhod said.
Demand for cement significantly exceeds supply, with all cement offered being purchased during the first 10-15 minutes of a trading session, said Alexei Ryzhikov, the MSE’s acting president, the daily reported. The market price of cement has already risen 20%, which is a price change limit, he added.
There are currently 37 participants registered in cement trading, and their number is constantly increasing, according to information provided by the MSE.
The MSE plans to hold trading in cement during the first 10 days of every month, Eurocement said Tuesday.
Eurocement decided to sell part of its produce on a stock exchange, after the antimonopoly service accused the company last year of unjustifiably increasing prices of cement and ordered the company to pay a 1.9 billion ruble fine. Eurocement disputed the regulator’s claims in several courts, with the courts ruling in favor of Eurocement. The dispute ended in an out-of-court settlement on July 4, whereby Eurocement was to pay a 267 million ruble fine to the federal government.
Through selling cement on a stock exchange Eurocement is trying to show the regulator that the market price of cement is high due to a shortage of cement and that the company cannot be blamed for increasing the price of cement, said Alexei Morozov, an analyst at UBS investment bank, the daily reported.
Eurocement includes 15 cement plants in Russia and Ukraine. In 2005, Eurocement produced 22.5Mt cement. The company’s consolidated revenue amounted to 26.7bn rubles in 2005.
Published under Cement News
