Business
Market Update
Market Update.
About this update from Steppe Cement Ltd
[{"type":"text","content":"\n Steppe Cement Limited\n15 December 2005\n\n\n Steppe Cement Limited\n\n Market Update on Proposals to Expand Production Capacity and Financing - 15\n December 2005\n\nThe directors of Steppe Cement are pleased to update the market on proposals to\nrefurbish the Company's two dry-process clinker production kilns.\n\nClinker Production Capacity\n\nSince admission to AIM in September 2005, the Company has continued to operate\nits four wet-process kilns (numbers 1 to 4) which have a combined annual clinker\nproduction capacity of 600,000 tonnes. At the same time the Company has\nprogressed with studies to recommence production from its two dry-process kilns\n(numbers 5 and 6) which have been mothballed since 1995.\n\nEach of the dry-process kilns had a clinker production capacity of 1 million\ntonnes per annum prior to them being mothballed.\n\nThe findings of the studies into the dry-process lines and proposals of the\nCompany arising there from are:\n\nLine number 5 which was commissioned in 1975, had some design faults that\nrequire the cyclones, kiln and cooler to be rebuilt. The Company proposes to\nmaintain the crushers, raw materials, coal and cement mills. Filters and control\nequipment will be upgraded to western standards. It is anticipated that this\nsubstantial refurbishment will cost US$73 million inclusive of interest and\ntaxes during construction and will take 18 to 24 months to complete. The company\nhas tendered 3 out of 9 packages and it expects that the kiln will be\nre-commissioned before the end of 2007. It will have a capacity of 1 million\ntons of clinker (1.3 million tons cement).\n\nLine number 6 was commissioned in 1983 with an improved design from that used on\nthe number 5 line and the Company has been advised by its technical consultants\nthat it can be refurbished and re-commissioned at a cost estimated at\napproximately US$20 million. A project management team has been recruited to\nundertake this project and work has commenced. Present estimates are that this\nwork will be unlikely to be completed before the winter of 2006/7 On\nre-commissioning the number 6 line will have a maximum design capacity of 0.8\nmillion tons per annum of clinker (1.0 million tons of cement).\n\nFinancing Proposals for the Expansion of Production Capacity: EBRD loan\nagreement, proposed bond issue and new equity capital...