Project summary document

Project description
and objectives:

The proposed project will co-finance the construction of Wienerberger’s first greenfield brick plant in Russia, near the village of Kiprevo, 120 km North-East of Moscow. Total project costs will be in the range of € 38 million. The plant will have an annual production capacity of 120 million brick standard units of facing bricks, or alternatively 220 million brick standard units of hollow bricks.

The proposed project is a sub-project under the existing multi-project facility (“MPF”), under which the EBRD will co-invest in the brick and roof tiling manufacturing in the EBRD’s countries of operations (mainly SEEC and some of CIS countries), jointly with Wienerberger AG of Austria.

The sponsor, Wienerberger AG, Austria, one of the largest brick and tile producers in the world, aims at entering the brick market in the Moscow region offering primarily high quality facing bricks with the option to switch to hollow bricks and frost resistant Porotherm, subject to market demand.  Wienerberger plans to gradually increase output and market share in the coming years.

Transition impact:

The proposed project will support a strong industrial investor during their first phase of development of their manufacturing operations in Russia, thereby sending a positive signal to other potential investors in Russia. As a substantial Greenfield operation, the Project will demonstrate the possibilities for improvement in the fragmented industry of construction materials.

The proposed project will bring modern, world-standard technology to the Russian brick sector and will increase efficiency, quality and reliability. It will also enhance competition and transfer technical and managerial skills and know-how to a local manufacturing company and possibly to local partners.

The client:

OOO Wienerberger Kirpitch (Russia) is a limited liability company, established in 2003 by Wienerberger AG of Austria with its primary objective to build and operate a greenfield brick facility in Russia. The Company has its corporate HQ in the town of Kirzhach, Vladimir region.

EBRD finance:

EBRD participation will amount to EUR 13.3 million through equity investment of EUR 2.5 million which represents about 18.1% of the Company’s shares, and debt financing of EUR10.8 million. The rest will be financed by Wienerberger AG.

Total project cost:

Total estimated cost is EUR 38 million.

Environmental impact:

Screened MPF. In accordance with the Environmental Procedures agreed for the existing multi-project facility, Wienerberger has carried out an environmental impact assessment study of the project and a public consultation procedure compliant with Russian permitting regulations. The Bank’s environmental specialists have reviewed the environmental studies and an environmental due diligence report prepared by Wienerberger and found them satisfactory, providing evidence that the sub-project will meet the Bank’s environmental requirements.

The investigations showed that the project is expected to have no significant environmental, health and safety (“EHS”) impacts and has been structured to meet national EHS regulations, Wienerberger’s corporate EHS standards based on EU environmental standards and good international industry practise. Specifically, the facility will meet the requirements of the Draft Reference Document on Best Available Techniques in the Ceramic Manufacturing Industry (June 2005) under EU IPPC Directive (96/61/EC). The kiln chimney will be equipped with improved filters to ensure that the ground level concentrations of all pollutants remain within the Russian hygienic standards. The plant will also adhere to the EU air quality standards. Due to the chosen technology, no industrial wastewater is generated. Noise impacts will be mitigated by an earth wall built between the plant and the village of Kiprevo. Raw materials (clay, trepel and sand) are supplied by external operators from existing open-pit quarries. The plant will introduce an environmental management system, including monitoring of the ambient air quality and noise levels, to ensure the operation of the facility will adhere to the designed environmental and health and safety standards.

Wienerberger organised a public hearing in December 2005 in the village Kiprevo. The meeting was attended by approximately 30 local villagers who expressed their general support for the project. The plant management has agreed with the villagers to hold quarterly meetings to ensure that all the environment-related and other concerns are timely and adequately addressed.

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Karl Thaller, Wienerberger International N.V.
Tel. +43 1 60192-458

EBRD contact:

Dimitry Trusilov, Operation Leader: trusilod@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com