Our core business is the production and distribution of cement. We own a cement plant and a grinding station in Tajikistan, and a cement plant in Kazakhstan. Our cement is primarily used in the construction of infrastructure projects such as residential buildings, roads, bridges, highways and railways.
We have been able to continually increase our production capacity in the Central Asia region year-on-year. With our two cement plants and grinding station, we have a combined annual cement production capacity of 3 million metric tonnes. This puts us in an advantageous position to meet the projected demands for reconstruction, urbanisation, and infrastructure growth in the Central Asia region.
We own and operate the largest cement plant, the Mohir plant, in the Yovon district, Khatlon region in Tajikistan in Central Asia. With an annual production capacity of 1.2 million metric tonnes, it is also one of the largest cement producers in the country. In the past year, operations at the Mohir plant gained ground, largely due to growth in the country’s construction sector leading to an increase in demand for cement. In addition, the plant’s brand name has gained prominence over the past few years, thus resulting in the Group gaining a bigger market share in Tajikistan.
In May 2019, we completed the US$32.8 million (S$45.9 million) construction of a grinding station in Tajikistan, adding 0.6 million metric tonnes to our total production capacity. While our main cement plant is located in the Yovon district, our grinding station is in the Kolkhozabad district of the Khatlon Province, which is closer to our export customers. This greatly reduces overall transportation costs.
Our operations in Tajikistan target both domestic and export markets. Currently, our export sales are to Afghanistan and Uzbekistan. We sell our products to retail customers, construction firms, and distributors who then resell our cement to other end users. We are optimistic about the future of the plant and its contribution to our revenue stream, especially considering the Tajikistan government’s commitment towards reconstructing the country’s infrastructure.
ICG’s Grinding Station in Tajikistan
Preheater and Kiln of the IMCCMC
In line with the strong demand for construction materials within Tajikistan, we also plan to invest US$15.0 million (S$19.8 million) to build a drywall (gypsum plasterboard) production line within our main Tajikistan cement plant, with an anticipated annual production capacity of 30 million square metres of drywall. Construction for the production line was delayed due to the pandemic and is slated to commence in 2021. We believe our drywall production line is well-positioned to meet local demand for building materials, and we intend to bring our new product offering to the domestic market by tapping into our existing distribution network in Tajikistan.
Our operations in Kazakhstan currently consist of a cement plant, located in Sary-Ozek in the Almaty region. Almaty is the biggest city in Kazakhstan and also the Central Asian region. The plant commenced commercial production in 2020 and has an annual production capacity of 1.2 million metric tonnes. It produces cement under the Alacem brand and supplies cement to the domestic market, specifically the Almaty and Taldykorgan areas, as well as the Horgos port near the Kazakh-Chinese border. It is owned and operated through a joint venture with our local partner, Mr Nurzhan Shakirov, and is the Group’s largest investment in Central Asia to date, with a construction cost of approximately US$130.0 million (S$172.0 million), including other ancillary facilities.
In line with our plans to grow our cement operations, the Company’s subsidiary, Sharcem LLP, entered into a sale and purchase agreement with Kazakhcement and Development Bank of Kazakhstan in April 2021 to acquire a cement plant located in East Kazakhstan, for a purchase consideration of approximately 7.1 billion Kazakhstan tenge (S$22.1 million). The cement plant is located in a strategically important region in East Kazakhstan with direct export routes to Russia and will complement the Group’s existing operations in South-eastern Kazakhstan.
ICG’s Cement Plant in Almaty, Kazakhstan
Ignition Ceremony of ICG’s Cement Plant in Almaty, Kazakhstan