OREANDA-NEWS. January 29, 2007. Basic Element and ITERA-Invest-Stroy have signed a cooperation agreement to build cement plants in countries of the CIS and in the Urals. The agreement will enable BaselCement to start the development of aggregates assets and cement production in new regions, and will enable ITERA to enter the cement market.

In October of last year, BaselCement, which is part of Basic Element's Construction and Materials Sector, and Austrian construction company Strabag, announced the creation of a Joint Venture (JV) to produce cement and aggregates assets in Russia and Eastern Europe. Strabag contributed to the JV the cement plant it was building in Hungary, while Basic Element contributed its cement plants in Russia and Kazakhstan, as well as additional plants which are still under construction.

The new agreement between BaselCement and ITERA, which was signed at the end of December last year, envisages the development of aggregates deposits and the construction of cement plants in Armenia, Belarus, Turkmenistan and the Urals. The two partner companies have preliminarily agreed to build 3-4 new cement plants in Russia and CIS countries by 2012 with a combined production capacity of 5-8 million tonnes of cement per year.

"ITERA is one of the largest players in the Russian energy sector, and is among the leaders in a number of CIS countries and Russian regions. Our partnership with ITERA will help us to accelerate production of new plants and to enter new markets," said BaselCement's General Director Dmitry Savenkov.

Cooperation with ITERA will strengthen BaselCement's business. ITERA has years of experience working in a number of key regions, and its local expertise will help to accelerate construction. In a number of regions, such as in the Sverdlovsk oblast and in Belarus, ITERA companies are actively engaged in building commercial and residential real estate. These companies will be potential customers for the cement plants. And the cement plants will have an opportunity to buy fuel from one of the country's largest gas companies.

BaselCement will be responsible for the construction and equipment of the plants, while the companies have agreed to finance projects on an equal basis.

BaselCement was formed in 2006. At the end of 2006, the company began cement and lime production at its Sastobe plant in Kazakhstan, which has a production capacity of 300,000 tonnes per year. In September 2007, BaselCement initiated production at the Achinsk Cement plant, which has a production capacity of 700,000 tonnes per year. Presently, construction is underway of three plants in Ryazan, Veliki Novgorod and Krasnodar region. BaselCement is also involved in the extraction of non-ferrous materials, including basalt, granite and sand. The company produces 200,000 tonnes aggregates materials per month.