6 - Vicat

6BUSINESS OVERVIEW6.3. DESCRIPTION OF THE BUSINESSES AND INTRODUCTION TO THE MARKETSing system, the construction sector stabilized in2009. Cement consumption recovered slightly by2 % in 2009 compared with the previous year, butdid not return to 2007 levels. The fall in the sellingprice favored local production at the expenseof imports, coming mainly from Russia and, to alesser extent Kyrgyzstan.Beyond the economic slow-down created by theimpact of the international financial crisis on thelocal banking system, the increase in cement consumptionshould continue, sustained by growth inthe urban population and by continuous increasein per capita income related to significant incomefrom the raw material sector. Projected consumptionshould be somewhere between 9 and 10 milliontonnes in the medium term.After the Group took control of the project companyin December 2007, the legal structure ofoperations in Kazakhstan is as follows :• Mynaral TAS, a joint venture company 60 %owned by Vigier, a subsidiary of the Group,holds the mining securities and the land rightsrelating to them ;• Jambyl Cement Production Company, a 100 %subsidiary of Mynaral Tas, is to become the cementproduction and marketing company.The financing, which amounts to 160 million USdollars, was set up with the Société FinancièreInternationale (SFI), a subsidiary of the WorldBank. Alongside this financing, SFI took a 10 %stake in Mynaral Tas in December 2008 ; theGroup’s Kazakh partner, Homebroker, holds30 %.The Group is building a greenfield plant that willbe located near Lake Balkach, about 400 kilometersfrom Almaty and 900 kilometers fromAstana. This plant, which has a 1.2 million tonnescement capacity, is being built by China TriumphEngineering under a turnkey agreement concludedin August 2007. It will implement recent andproven cement techniques (vertical raw meal mill,5 stage pre-heating tower, bag filters, coveredclinker storage, etc.). Located along the Almaty/Karaganda/Astana road and rail-way, the plantwill supply the region of Almaty and its surroundings,the southern region (Taraz, Chymkent), thecenter and the Astana region primarily by rail.The factory construction work started in 2008 continuesand start-up is on schedule for the second half of2010. A program to recruit a target workforce of 150was launched at the beginning of 2010.(i) MauritaniaDuring the second half of 2008, the Group consolidatedits position in West Africa by acquiring 65 %of BSA Ciment, which operates a cement grinder inNouakchott, the capital of Mauritania, since the beginningof 2008. This acquisition enabled the Groupto :• obtain a foothold in the Mauritanian market and tobe in a position to ascertain its growth ;• consolidate its strategic position in Mali by positioningitself on the access roads to the north-westof the country ;• have an outlet for Sococim’s surplus clinker capacityin Senegal, following the start up of the new kilnin October 2009.BSA Ciment owns a cement grinding center, a concretebatching plant and a prefabrication producingunit. The Polysius grinder has an annual capacity of450,000 tonnes. These installations are located nearthe country’s main port area.In 2009, the normalization of the political situationin Mauritania enabled a gradual recovery in the constructionsector. Cement consumption increased byaround 5 % compared with 2008, to 630,000 tonnes,benefiting local production.In this context, BSA has grown its business substantiallyto become the third largest player in theMauritanian market with sales in excess of 100,000tonnes, despite the problems in the third quarter.In order to overcome the problem of the numerouspublic supply power cuts, which seriously disruptedproduction in the third quarter of 2009 andto guarantee its future energy independence, BSAhas invested in an alternative electricity generationfacility.(j) IndiaDuring the last ten years, India has experienced anaverage annual growth of more than 7 % in its GDP.Its growth in 2008 is estimated to be at 7.3 %, andthe country is taking advantage of an abundance ofskilled labor, which has allowed it to develop in theservice sector in particular.46 VICAT - 2009 registration document