Eurocement may invest in Belarusian cement plant upgrades
MINSK. Feb 5 (Interfax) - The Belarusian Architecture and Construction Ministry has reached agreement with Eurocement Group to involve the company in the modernization of Belarusian cement plants, Architecture and Construction Minister Anatoly Cherny said during a Wednesday press conference in Minsk.
"There is agreement with Eurocement on the modernization of our cement plants. Eurocement is prepared to invest $70-$80 million in the transformation of our lines," Cherny said.
This means the company being involved in a project for line conversion from working with wet cement to working with dry product, he said. The plan is for the project to be carried out before 2017.
Cherny did not specify just what Eurocement's contribution to the project would be, saying that it is a matter for negotiation. "Either it will be provided through the creation of a joint venture, or through the issue of additional shares. This is to be decided," he said.
The government has approved negotiations with Eurocement along these lines and "there is readiness to invest at Eurocement."
There are three cement plants in Belarus, all subject to the Architecture and Construction Ministry. Their capacity is 9.5 million tonnes of cement per year, of which 5.4 million tonnes is produced dry by new lines. "All the rest is produced by the loss-making wet [process]," Cherny said.
The cost of producing one tonne of wet cement is $89, where that of dry product is $60, the minister said. "The Russian market buys cement from us for $70, not counting the cost of transportation services," he said. "So cement produced by the dry [process] is competitive, but the cost of sales is higher than the price on the domestic market [for cement produced by the wet process]," he said.
Cherny also said that "a deal has been struck with the main player on this market in Russia - Eurocement - for guaranteed delivery [annually] of 1.5 million tonnes of Belarusian cement and another 500,000 tonnes for free sale."
Eurocement Group is an international vertically integrated industrial holding company. It produces building materials such as cement, concrete and crushed stone at 16 plants in Russia, Ukraine and Uzbekistan.