Cairo--(Marketwire - July 16, 2007) -
NEWS RELEASE OCI Invests in DPRK Cement Industry OCI signs agreement to acquire 50% of Sangwon Cement through capital increase with aim to modernize and upgrade plant Cairo, Egypt - 16 July 2007: Orascom Construction Industries ("OCI") has announced that it has signed an agreement with the state-owned Pyongyang Myongdang Trading Corporation to acquire a 50% stake in Sangwon Cement which owns and operates the cement plant nearest to Pyongyang, the capital city of the Democratic People's Republic of Korea ("DPRK"). The plant, which is originally supplied by German equipment supplier KHD, has two dry-process production lines with a combined design-based nominal capacity of 2.5 million tonnes per year. Based on the signed agreement, OCI will acquire 50% of Sangwon Cement for a total value of US$ 115 million. The acquisition will take the form of a capital increase from which the proceeds will be used to modernize, rehabilitate and upgrade the plant capacity to reach 3 million tonnes per year. The proceeds will also be used to invest in ready-mix concrete and distribution activities. In addition to the Sangwon cement plant, the agreement also includes mining operations related to the cement production including limestone quarries, a coal mine and a gypsum quarry. It also includes a dedicated hydroelectric power station near the plant. The plant also has its own railway connection to the national railway grid which connects the plant to the Port of Nampo thus allowing for exports. Technical proposals for the rehabilitation and upgrade of the Sangwon cement plant are currently being prepared by F.L.Smidth, Polysius and KHD, all global leaders in the field of cement plant equipment technology. With surveys of the plant already completed, a decision on the award is imminent and should be finalized during the third quarter. Work on the plant is expected to begin soon after. OCI Chief Executive Officer, Nassef Sawiris commented "we have been impressed by the level of professionalism and technical know-how demonstrated by our partners. We have sensed an earnest eagerness for development and modernization. Our investment in cement marks the beginning of a variety of investments including the potential establishment of an economic trade zone in the northern part of the country. We are also exploring opportunities in the mining and power sectors. We hope that our pioneering efforts in the DPRK market will contribute to the development of the country and create significant value to our shareholders. " New investments in northern Iraq, Algeria, the United Arab Emirates, Nigeria, Turkey, Saudi Arabia, Syria and DPRK will increase the OCI Cement Group annual production capacity to 42 million tonnes. -------------------------------------------------------------------------------------------------------------- For additional information CONTACT: Investor Relations Department: Hassan H. Badrawi Email: hassan.badrawi@orascomci.com Omar Darwazah Email: omar.darwazah@orascomci.com Tel: +202 2461 1039/1036 Fax: +202 2461 9409 Orascom Construction Industries Orascom Construction Industries (OCI) is a leading cement producer and construction contractor active in emerging markets. Based in Cairo, we employ more than 40,000 people in over 20 countries. Working together with our employees, business partners and customers, we are helping to build the future in developing countries around the world. As a cement producer, we own and operate cement plants in Egypt, Algeria, Turkey, Pakistan, northern Iraq, and Spain which have a combined annual production capacity approaching 21 million tonnes. Our new investments in northern Iraq, Turkey, Nigeria, Algeria, the United Arab Emirates, Saudi Arabia, Syria and North Korea will increase our annual production capacity to 42 million tonnes. Our Cement Group exports from Egypt and Algeria to customers in more than 30 countries including the USA, Europe, Africa and the Middle East. We produce and distribute aggregates and ready-mix concrete in Spain, Egypt and Algeria. We also manufacture cement bags in Egypt and Algeria. As a contractor, we provide engineering procurement and construction services on large, complex and demanding industrial, commercial, water/sewage, transportation, telecommunications, maritime, tourism and railway projects for private and public customers principally in the Middle East, Africa and Central Asia. Our Construction Group is active in over 100 projects in more than 20 countries. Through partnerships with industry leaders, we also manufacture fabricated steel products as well as architectural curtain walling and window systems. As part of our long-term strategy to create a sustainable flow of construction opportunities, we also have investments in natural gas industries, including fertilizers and in infrastructure concessions including a port operator and an industrial park developer. For additional information on OCI: www.orascomci.com Orascom Construction Industries (OCI) Nile City Towers - South Tower 2005A Corniche El Nil, Cairo, Egypt Tel: +202 2461 1111, Fax: +202 2461 9400, OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD LI This information is provided by RNS The company news service from the London Stock Exchange END