SOURCE: Orascom Construction Industries

January 26, 2006 04:35 ET

Orascom Construction Industries - Invests in Turkey

Cairo -- (MARKET WIRE) -- January 26, 2006 -- NEWS RELEASE


OCI Invests in the Turkish Cement Market

OCI earmarks up to US$ 250 million for cement acquisitions and investments in Turkey

Cairo, Egypt - 26 January 2006: Orascom Construction Industries announced that it has completed the acquisition of an integrated cement plant in Eastern Turkey near the City of Van for a total consideration of US$ 54 million. The plant has an annual cement production capacity of 0.6 million tons with large potential for upgrade, which implies an acquisition cost per ton of US$ 97. The Van cement plant assets were sold to OCI through a public auction conducted by the Turkish Savings & Deposits Fund. OCI Chief Executive Officer, Mr. Nassef Sawiris commented "In addition to the Van plant acquisition, OCI intends to increase its capacity in the Eastern region of Turkey to around 3 million tons through a local partnership that will be subject to regulatory approvals."

In Western Turkey, OCI has also completed the acquisition of a 20% stake in Baticim Cimento, a cement company with a consolidated annual cement capacity of 3 million tons and clinker capacity of 2.2 million tons for a total sum of US$ 54.7 million implying an estimated cement enterprise value (EV) / ton of US$ 82 based on the latest available audited financial statements. The average acquisition cost per share was TRL 5.689 compared to the current price of TRL 7.14 (price at close of business on 25 January 06). Baticim Cimento is the majority shareholder (75%) of Bati Soke Cimento. Both companies are listed on the Istanbul Stock Exchange. On a consolidated basis Baticim Cimento is one of the top five cement exporters in Turkey and holds close to 50% market share of the Aegean region.

Mr. Sawiris added "OCI has approximately earmarked a total of US$ 250 million for its investments in both regions of Turkey. We view Turkey as a natural extension to our core geographic markets around the Mediterranean rim. Turkey has solid growth prospects in light of its favorable macroeconomic environment and continues to be one of the largest cement markets in the Mediterranean region experiencing double-digit growth in consumption. Domestic consumption during January-October 2005 grew 14%. It also plays a pivotal role in the cement exports arena being ranked as one of world's largest cement export sources. Our new investment in the Eastern region of Turkey compliments our expanded presence in northern Iraq where OCI already has a majority stake in a long-term lease on a 2.3 million ton cement plant and in a state-of-the-art 3 million ton greenfield cement plant that is scheduled for commissioning during 2007."


CONTACT: Hassan H. Badrawi

Investor Relations Director

Tel: +202 461 1039/1036


Orascom Construction Industries

Orascom Construction Industries (OCI) is a leading cement producer and construction contractor active in emerging markets. As a cement producer, we own and operate cement plants in Egypt and Algeria which have a combined annual production capacity of 13.5 million tons. Our new investments in Pakistan, northern Iraq, Nigeria, Algeria, the United Arab Emirates and Spain will increase our annual production capacity to 30 million tons by 2007. As a contractor, we provide engineering procurement and construction services on industrial, commercial and infrastructure projects for private and public customers principally in the Middle East, Africa and Central Asia.

For additional information on OCI:

Orascom Construction Industries (OCI)

Nile City Towers - South Tower

2005A Corniche El Nil, Cairo, Egypt

Tel: +202 461 1111, Fax: +202 461 9400,

OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD LI

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