Today Holcim started to expand its cement plant in Azerbaijan

The presidential press-service informs that noting auspicious conditions in the country for foreign investments Ilham Aliyev stressed development of relations with Holcim. Marcus Akerman told about modernization plans at the cement plant in Azerbaijan.

Also today President of Azerbaijan Ilham Aliyev attended a presentation of the Garadagh OJSC`s cement plant reconstruction project and groundbreaking ceremony for a state-of-the-art dry-process rotary kiln.

Garadagh Cement (GC) plans to increase clinker production capacity from 2,616 tpd to 4,000 tpd and annual cement production capacity from 1.1 mt to 1.7mt, without clinker imports. The financing will be drawn down during the construction period from mid 2009 through the first half of 2011, when commissioning of the new kiln is expected.

The European Bank of Reconstruction and Development (EBRD) earlier indicated that the project will achieve significant energy savings through the use of dry technology (in excess of 50% reduction of energy use per unit of clinker produced). The introduction of state-of-the-art technology will provide the opportunity for a massive transfer and upgrading of skills. The EBRD loan will support a company that pioneers high corporate governance and business standards in a challenging environment. As the largest foreign direct investment outside the oil and energy sectors in Azerbaijan, the project should have a demonstration effect for other potential private sector investors. It is geared to attract co-financing from commercial banks in amounts and maturities not yet achieved outside the oil sector in Azerbaijan.

GC is the largest cement and sole clinker producer in Azerbaijan. Holcim, a leading global supplier of concrete and cement based in Switzerland, acquired a controlling stake in Garadagh privatisation in 1999. Today it owns 69.4% of the company’s share capital and provides managerial, technical and commercial resources.

Earlier in accord with its business plan Garadagh Cement planned beginning of clinker production in a new stove in the 2nd quarter of 2011.

Construction of the stove #6 for dry cement production method will allow to replace four existing stoves, save energy and reduce atmospheric emission.

Garadagh Cement is owned by Switzerland’s Holcim (69.4%), Azerbaijani government in the person of the Azerbaijan Investment Company (10%) and European Bank of Reconstruction and Development (10.6%). Garadagh Cement started operating in 1999. For construction of a new production line Holcim allocated EUR 300 million for project budget.

According to Holcim’s forecasts, country’s demand for cement till the end of 2009 will make approximately 3.7 million tons and in 2011 more than 4 million tons.