In response to moves by the Serbian government to privatize the country's cement industry, Holcim Ltd. submitted an offer for the Novi Popovac plant late last year. Serbia's privatization ministry has accepted Holcim's bid for 70 percent of the Novi Popovac share capital.

The Novi Popovac cement plant is located some 150 km south of the capital Belgrade and approximately 70 km north of Nis. The plant's two production lines have a combined annual cement capacity of one million tonnes. The first line came on stream in the '70s and the second in the '80s. The plant has been operating at full capacity over the last two years. Using a more energy-efficient dry process, Novi Popovac produces exclusively for the domestic market, including Central Serbia and Belgrade.

Holcim will pay approximately CHF 85 million (US$50.9 million) for this majority stake. Under the deal, Holcim will also make substantial investments in the course of the next five years and will introduce a social support plant. The final contract signing is scheduled for early 2002.

The acquisition marks a significant addition to Holcim Group's network of plants in Southeast Europe, each of which complements the others. Holcim's interests in the region include cement plants in Kosovo, Bulgaria, Macedonia, and Romania.