The region is located in the southern part of Kazakhstan with direct export routes to Kyrgyzstan, which will complement the group’s existing operations in the southeastern region. It will also produce and, or sell the produced cement upon completion of the product line (the project). The group’s indirect wholly-owned subsidiary, International Cement Korday, signed the joint venture agreement (JVA) with Nurzhan Shakirov on Sept 23. Shakirov, a Kazahstan citizen, is the local partner for the group’s two existing cement plants in the country, namely Alacem LLP and Sharcem LLP.
The new JV, named Korcem LLP, will be similarly undertaken through a limited liability partnership incorporated in Kazakhstan.
Under the JVA, International Cement Korday will acquire 87.5% of the initial 300,000 shares in the JV from Shakirov, while Shakirov will own the remaining 12.5%.
The JV company’s initial share capital stands at KZT300,000 ($950.60). The consideration for the 87.5% shares stood at KZT262,500.
International Cement Korday will be principally responsible for managing the JV company’s day-to-day operations, provide construction funds and make overall plans for the project.
Shakirov will provide some 50 hectares land for the construction of the project for five years. He will also provide the exploration and mining rights of the limestone mine and its land use right. The mine has around 50 million tonnes of limestone and has a supply of around 30 years’ worth. Shakirov will also obtain the licenses and permits issued by the government authorities, or other relevant organisations for the project and the JV under Kazakhstan laws. The project will cost the group around US$150 million.
According to the group, it has decided to expand its footprint into Central Asia following its successful diversification into the cement business in the region since 2016. The construction of the new plant is an “attractive opportunity” for it to establish a stronger foothold in Central Asia, where demand remains strong. The construction of the plant will increase the group’s current annual cement production by 1.5 million tonnes to a total of 5.5 million tonnes. Construction is slated to commence by end of 2021. It is expected to be completed within 18 to 24 months.