Holcim Refuses to Increase Azerbaijan Investment Company’s Share in New Cement Plant

Business Materials 3 November 2007 11:21 (UTC +04:00)

Azerbaijan, Baku /corr. Trend I.Khalilova / The Azerbaijani Investment Company (AIC) and the Swiss company Holcim which is a major shareholder of the Garadagh Cement company hold talks to increase AIC's participation in the new cement plant, Azerbaijan's Minister of Economic Development, Heydar Babayev, said on 2 November.

"We intend to acquire more than 10%, but Holcim does not agree to provide more than this share. It is a great success because more than €150mln will be invested in the construction of the new plant," the Minister said.

The new cement plant with a capacity of 1.5mln tons is intended to be constructed in Garadagh plant. The initial conditions on EBRD's participation in the project have already been signed with Garadagh Cement.

According to the Minister, investments will also be put into the existing Garadagh Cement plant to improve its technologies because one of the main conditions made by the Government of Azerbaijan before Holcim is to advance the ecological situation in the plant.

"Currently the plant is working practically with old technologies and all their efforts to mitigate the environmental impacts are ineffective. It is intended to transfer to dry technology of cement production and organize production in accordance with the European standards," Babayev said.

In addition, as a result of reconstruction, the production capacity (1.4mln tons) of existing Garadagh Cement will be increased. Azerbaijan Investment Company was planning to acquire 20% more the shares in Garadagh Cement company. The Investment Company will take its shares from the Holcim company's shares which possessed 89.4% until EBRD's joined the shareholders. The EBRD Board of Directors made a decision in 2006 to acquire 20% share for $10 mln in Garadagh Cement.

Swiss Holcim privatized Garadagh Cement company in 1999.