HeidelbergCement AG said Tuesday it has bought a 51 per cent stake in Georgian cement producer Kartuli Tsementi, investing for the first time in the Caucasus region. The Georgian planthas a capacity of 100,000tpa but HeidelbergCement said it plans to increase production to 500,000tpa by the start of 2008 and, at a later stage, to 1Mta.
Heidelberg sees potential for economic growth in Georgia and expects rising demand for cement as the country develops its infrastructure to full exploit its geographic location as a transit country between the Black Sea and Caspian Sea and as a neighbor of oil-producing Azerbaijan.
Chief Executive Bernd Scheifele said the acquisition in Georgia is an "important step" in the company’s growth strategy in Eastern Europe and Central Asia. Towards the end of 2005, HeidelbergCement bought Buchtarma Cement in Kazakhstan and Donzement in Ukraine.
Speaking at the company’s annual general meeting Tuesday, Scheifele said business developments in the first three months of 2006 confirmed the company’s forecast of two-digit percentage growth for the full year. In the first quarter, HeidelbergCement’s revenue was Euro1.7bn, 29 per cent higher than the same period a year earlier, mainly due to cost-cutting measures, the company said.