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Garadagh Cement to spend EBRD loan on output and export expansion

12 October 2009 15:51 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. The EBRD will extend a loan of EUR 120 million for Garadagh Cement OJSC modernisation and expansion, said Afghan Isayev, Executive Director of Azerbaijan Investment Company.

Azerbaijan Investment Company holds a 10% stake in Garadagh Cement OJSC, the largest cement maker based in Azerbaijan.

He told a press conference that proceeds of the loan will go to the expansion of output and export.

Horia Adrian, General Director of Garadagh Cement, added that the annual cement sales increased from 380 000 tons in 2000 to 1.350 million tons in 2008.

In his words, the company will increase annual cement production capacity from 1.3 million tons to 1.7 million tons.

He said that the plant will be 70-80% modernized and made more eco-friendly by 2011. The total project cost is over EUR 300 million, of which EUR 120 million will be provided by the EBRD.

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 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 project has also been structured to meet European Union Integrated Pollution and Prevention â€œIPPCâ€ Directive, BREF Note for Cement and Lime Manufacture and the IFC EHS Guidelines for Cement Manufacture. The project will include appropriate dust and NOx abatement, meeting both Azerbaijanâ€™s and EU environmental standards.

Garadagh OJSC 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 companyâ€™s share capital and provides managerial, technical and commercial resources. The project implementation under a turnkey contract is directly supervised by Garadagh.

The plant is located approximately 35km south of Baku, the capital of Azerbaijan. 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.