Steppe Cement Ltd is the Malaysian-incorporated holding company of the two operating companies, Karcement J.S.C., and Central Asia Cement J.S.C., that form the cement manufacturing complex at Karaganda in central Kazakhstan.

Steppe Cement was listed on the AIM in London in September 2005 and raised US$21 million by the issue of 14 million new shares in March 2006 in order to finance its the refurbishment of two large dry-process kilns.

Its subsidiary, Karcement J.S.C., completed the Line 6 refurbishment project in October 2008. Karcement J.S.C. received all the necessary licenses for commencement of commercial operations in the first quarter 2009. The 5-year tax exemption for its operations commences in February 2009.

In May 2009, Steppe Cement successfully raised £10 million before expenses by way of an Offer for Subscription (“Offer”) of 40,000,000 new ordinary shares at 25 pence per share conditionally underwritten. The net proceeds of the Offer are principally used to repay a portion of the Company’s bank loans and for working capital purposes. The Offer was oversubscribed by 217% and the Offer shares were admitted to AIM for dealing on 11 May 2009.

In July 2009, the merger between Steppe Cement Holdings B.V. and Central Asia Cement Holding B.V. was completed. The purpose of the merger is to rationalise the Dutch investment holding entities to achieve future cost savings as the Kazakhstan operations are consolidated under the Dutch investment holding company, Steppe Cement Holdings B.V.

The Cement Market in Kazakhstan

In 2009, the cement market declined by 10% to 5.1 million tonnes from 5.7 million tonnes in 2008. The cement market in 2008 decreased by 25% to 5.7 million tonnes as GDP growth slowed to 3% per annum in 2008 from 10% per annum in 2007. The market saw a peak of 7.6 million tonnes in 2007. Steppe Cement expects the cement market demand in 2010 to at least match the volumes in 2008.