3decades

MIRA INFORM REPORT

Report No. :	495825
Report Date :	04.04.2018

IDENTIFICATION DETAILS

Name :	HEIDELBERGCEMENT GEORGIA LLC

Formerly Known As :	SAQCEMENTI LLC (SAQCEMENTI SHPS)

Registered Office :	Kazbegi Avenue 21, Saburtalo District, Tbilisi 0160

Country :	Georgia

Date of Incorporation :	20.05.2004

Com. Reg. No.:	36/4-113

Legal Form :	Limited Liability Company

Line of Business :	The company is involved in the following activities: Operators of Concrete and Cement Plants.

No. of Employees :	1,200 (Heidelberg Cement Georgia) 60,424 (Group)

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

Credit Rating

Explanation

Rating Comments

Acceptable Risk

Business dealings permissible with moderate risk of default

Maximum Credit Limit :	LARI 6,000,000

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Georgia

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

GEORGIA - ECONOMIC OVERVIEW

Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. The country imports nearly all of its needed supplies of natural gas and oil products. It has sizeable hydropower capacity that now provides most of its electricity needs.

Georgia has overcome the chronic energy shortages and gas supply interruptions of the past by renovating hydropower plants and by increasingly relying on natural gas imports from Azerbaijan instead of from Russia. Construction of the Baku-Tbilisi-Ceyhan oil pipeline, the South Caucasus gas pipeline, and the Baku-Tbilisi-Kars railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit hub for gas, oil, and other goods.

Georgia's economy sustained GDP growth of more than 10% in 2006-07, based on strong inflows of foreign investment and robust government spending. However, GDP growth slowed following the August 2008 conflict with Russia, and sunk to negative 4% in 2009 as foreign direct investment and workers' remittances declined in the wake of the global financial crisis. The economy rebounded in the period 2010-17, but FDI inflows, the engine of Georgian economic growth prior to the 2008 conflict, have not recovered fully. Unemployment remains persistently high.

The country is pinning its hopes for faster growth on a continued effort to build up infrastructure, enhance support for entrepreneurship, simplify regulations, and improve professional education, in order to attract foreign investment and boost employment, with a focus on transportation projects, hydropower, agriculture, and tourism. Georgia has historically suffered from a chronic failure to collect tax revenues; however, since 2004 the government has simplified the tax code, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. The government has received high marks from the World Bank for improvements in business transparency. Since 2012, the Georgian Dream-led government has continued the previous administration's low-regulation, low-tax, free market policies, while modestly increasing social spending, strengthening anti-trust policy, and amending the labor code to comply with International Labor Standards. In mid-2014, Georgia concluded an association agreement with the EU, paving the way to free trade and visa-free travel. In 2017, Georgia signed Free Trade Agreement (FTA) with China as part of Tbilisi’s efforts to diversify its economic ties. Georgia is seeking to develop its Black Sea ports to further facilitate East-West trade.

Source : CIA

COMPANY REPORT

CO. NAME : HEIDELBERGCEMENT GEORGIA LLC (CORRECT)

HEIDELBERG CEMENT GEORGIA (REQUESTED)

ADDRESS

Street : Kazbegi Avenue 21

Area : Saburtalo District

Town : Tbilisi 0160

Country : Georgia

Telephone: (995 32) 247 4747 ext. 180 (Nona Kasoshvili) / ext. 119 (Irakli Makharoblidze) / Mobile (995 577) 511 075 (Eka Tkeshelashvili) / (995 577) 778 887 (Besarion Gagnidze)

Fax : (995 32) 247 0707

E-Mail : eka.tkeshelashvili@heidelbergcement.com / hcc@heidelbergcement.ge / irakli.makharoblidze@heidelbergcement.ge

Website : www.heidelbergcement.ge

Trading Styles : HeidelbergCement Georgia

Also known as : HeidelbergTsement Jorjia ShPS

Formerly known as : Saqcementi LLC (Saqcementi ShPS)

SENIOR COMPANY PERSONNEL

Name Position

1. Michael Jurgen Hampel Managing Director

2. Eka Tkeshelashvili Financial Director

3. Irakli Makharoblidze Sales & Marketing Director

4. Besarion Gagnidze Purchasing Director

5. Ekaterine Vashakidze Human Resources Director

6. Nona Kasoshvili Accountant / Tax

7. Marika Kapdalishvili Accountant

8. Olga Marchyuk Assistant to Financial Director

Total Employees : 1,200 (Heidelberg Cement Georgia)

60,424 (group)

PAYMENTS

No complaints have been heard regarding payments from local suppliers or banks.

Subject is a member of Heidelberg Cement Group of Companies, Germany, operating in around 60 countries across the world and employing 60,424 as of 31 December 2016. The core activities of Heidelberg Cement include the production and distribution of cement and aggregates, the two essential raw materials for concrete. The Group supplements its product range with downstream activities such as ready-mixed concrete, concrete products and concrete elements, as well as other related products and services. In 2016, Group turnover amounted to approximately EURO 15,166 million and the Group share of profit exceeded EUR 896 million.

We consider it is acceptable to deal with subject for LARGE amounts, although it is normal accepted practice for international suppliers to deal on secured terms with Georgian importers.

Opinion on maximum credit: LARI 6,000,000 (higher amounts may be considered with assurances from the parent company)

Trade risk assessment: Normal

SIGNIFICANT CHANGES

MERGER & ACQUISITION

On 2 April 2018, HeidelbergCement Georgia LLC (ID Code: 230866435) submitted an application for acquisition (merger) of HeidelbergCement Caucasus LLC (ID Code : 204430400). Once acquisition (merger) is completed Haidelbergtsement Kaukasusi ShPS (HeidelbergCement Caucusus Ltd) cease to exist as a legal entity and will be absorbed by HeidelbergCement Georgia LLC.

PRINCIPAL BANKERS

NAME : BANK OF GEORGIA JSC

Branch : Pushkin Street 3

Town : Tbilisi 0105

Telephone: (995 32) 244 4256

Fax : (995 32) 244 4289

Subject also has an account with:

Cartu Bank

0162, 39a Ilia Chavchavadze Avenue

Tbilisi

Telephone: (995 32) 292 5592

FINANCIAL INFORMATION

Private companies in Georgia are not required to publish or

disclose balance sheets. However, the subject interviewed offered

the following information :

Revenue : EURO 100,000,000 – 2017 - exact

: EURO 105,000,000 – 2018 – projected

Net Profit : not given but stated to be profitable’

Total Invested Capital: EURO 200,000,000

Financial year ends 31 December.

The following consolidated balance sheets as at 31 December 2016 applies to Heidelberg Cement Group (latest available):

31/12/2015 31/12/2016

(in millions on EURO)

Assets

Non-Current Assets

Goodwill 10,180.6 11,828.2

Other intangible assets 258.1 491.5

10,438.8 12,319.7

Other components of equity 377.9 290.1

Land and buildings 4,997.3 6,883.7

Plant and machinery 3,671.9 5,578.9

Other operating equipment 272.2 355.9

Prepayments and assets under construction 929.7 1,146.0

Financial assets

Investments in joint ventures 1,452.7 1,433.5

Investments in associates 254.1 486.9

Financial investments 69.0 378.5

Loans and derivative financial instruments 56.0 88.5

1,831.8 2,387.4

Fixed assets 22,141.7 28,671.7

Deferred taxes 805.0 946.0

Other non-current receivables 710.6 781.2

Non-current income tax assets 10.4 47.0

Total non-current assets 23,667.7 30,445.9

2,695.5 3,748.5

Current assets

Raw materials and consumables 613.4 936.5

Work in progress 188.1 329.9

Finished goods and goods for resale 616.9 776.3

Prepayments 25.8 40.7

1,444.1 2,083.4

Receivables and other assets

Current interest-bearing receivables 168.7 108.4

Trade receivables 1,214.6 1,804.1

Other current operating receivables 395.5 550.6

Current income tax assets 58.2 103.1

Short-term financial investments - 19.4

Derivative financial instruments 75.1 59.9

Cash and cash equivalents 1,350.5 1,972.4

Total current assets 4,706.7 6,701.2

Assets held for sale and discontinued operations - 6.7

Balance sheet total 28,374.4 37,153.8

Shareholders' Equity and Non-Controlling Interests

Subscribed share capital 563.7 595.2

Share premium 5,539.4 6,225.4

Retained earnings 8,434.4 8,982.3

Other components of equity 377.9 290.1

Equity attributable to shareholders 14,915.4 16,093.1

Non-controlling interests 1,060.9 1,779.5

Total equity 15,976.4 17,872.6

Non-current liabilities

Bonds payable 4,685.8 7,651.9

Bank loans 123.8 785.5

Other non-current interest-bearing liabilities 21.6 62.8

Non-controlling interests with put options 4.2 22.5

Pension provisions 974.2 1,284.6

Deferred taxes 435.9 657.4

Other non-current provisions 1,118.2 1,359.5

Other non-current operating liabilities 94.6 255.7

Non-current income tax liabilities 72.7 191.3

Total non-current liabilities 7,531.0 12,271.2

Current liabilities

Bonds payable (current portion) 1,109.4 1,853.5

Bank loans (current portion) 397.4 457.1

Other current interest-bearing liabilities 343.4 166.2

Non-controlling interests with put options 25.8 51.3

Pension provisions (current portion) 91.3 102.8

Other current provisions 239.8 347.9

Trade payables 1,450.8 2,178.9

Other current operating liabilities 1,091.1 1,655.9

Current income tax liabilities 117.9 196.4

Total current liabilities 4,866.9 7,010.0

Total liabilities 12,398.0 19,281.2

Balance sheet total 28,374.4 37,153.8

INCOME STATEMENT

Revenue 13,464.7 15,165.7

Change in finished goods and work in progress 23.2 (51.1)

Own work capitalized 8.8 13.2

Operating revenue 13,496.7 15,127.8

Other operating income 355.3 426.5

Material costs (5,477.1) (5,823.4)

Employee and personnel costs (2,274.2) (2,673.5)

Other operating expenses (3,689.2) (4,329.2)

Result from joint ventures 201.2 211.3

Result from current operations before

depreciation and amortisation (RCOBD) 2,612.7 2,939.4

Depreciation and amortisation (766.6) (955.1)

Result from current operations 1,846.1 1,984.3

Additional ordinary income 84.7 70.2

Additional ordinary expenses (97.0) (394.6)

Additional ordinary result (12.4) (324.4)

Result from associates 28.7 37.8

Result from other participations 0.8 0.5

Result from participations 29.5 38.2

Earnings before interest and taxes (EBIT) 1,863.2 1,698.1

Interest income 72.9 66.0

Interest expenses (469.1) (451.4)

Foreign exchange losses (35.3) (16.2)

Other financial result (118.2) (92.1)

Financial result (549.8) (493.6)

Profit before tax from continuing operations 1,313.4 1,204.5

Income taxes (294.5) (305.0)

Net income from continuing operations 1,018.9 899.5

Net loss from discontinued operations (35.7) (3.2)

Profit for the financial year 983.3 896.3

Thereof non-controlling interests 183.1 190.1

Thereof Group share of profit 800.1 706.2

Thereof proposed dividend 244.3 317.5

Earnings per share attributable to the

parent entity 4.26 3.66

Earnings per share – continuing operations 4.45 3.67

Loss per share – discontinued operations (0.19) (0.02)

Financial year ends 31 December.

LEGAL STATUS AND HISTORY

Date Started : 20 May 2004

History : The subject company was established in Georgia on 20 May 2004 under the name Saqcementi LLC (Saqcementi ShPS).

In February 2007 became part of HeidelbergCement Group of Companies with CaucasusCement Holding B.V. (The Netherlands)) as subject’s sole shareholder.

On 4 July 2007, Saqcementi LLC merged (absorbed) three legal entities, namely Meliza LLC ID Code: 224071359) and Kaspitsementi (ID Code: 230866747) and Karierinvesti LLC (ID Code: 216439888).

On 1 July 2008, Saqcementi LLC merged (absorbed) Rustavtsementi LLC (ID Code: 216291992).

On 1 June 2009, Saqcementi LLC merged (absorbed) Kavkazatrans LLC (ID Code: 216439879).

On 3 August 2011, Saqcementi LLC changed its name to HeidelbergCement Georgia LLC, its present style.

C.R. No. : 36/4-113

ID Code : 230866435

Capital : not given

Shazguduli Pasukhismbgeblobis Sazagadoeba (limited liability

company) with the following directors and sole shareholder :

Directors

1. Michael Jurgen Hampel

(German national / Personal No. C8z551RV8)

2. Eka Tkeshelashvili

(Georgian national / Personal No. 01009001043)

Shareholder Percentage

CaucasusCement Holding BV 100%

s-Hertogenbosch

The Netherlands

Est.: 13 February 2002

C.R. No.: 17142926

Ultimate Parent Company

HeidelbergCement AG

Berliner Strasse 6

Heidelberg 69120

Germany

Telephone: (49) 6221 4810

Fax : (49) 6221 481 554

HeidelbergCement AG engages in the production and distribution of cement and aggregates worldwide. The company also offers ready-mixed concrete, concrete products, and concrete elements, as well as other related products and services. Its cement products comprise specialty cements, including white cements and trass cements, sulphate resisting aquament and portland cement for hydraulic engineering, anti-sulphate for sewage works construction, microcem cement for soil injection and masonry repair, and depocrete and procrete for waste dump sealing; masonry cement; and specific binders, including tailor-made ready-mixed cement products for geotechnology, environmental technology, and road construction. The company provides aggregates for ready mixed concrete and concrete products, as well as for structural fill, road base, railway ballast, and various other applications. Its concrete products consist of ready-mixed concrete, ready-mixed mortar, and other concrete products, such as light, heavy, and aerated concrete building blocks; pavers; and prefabricated ceilings and walls, and prefabricated cellar units and sewage works units. In addition, the company offers building products, which include limestone and lime products comprising limestone aggregates, limestone sand, pulverised limestone, burnt limestone, white pulverised limestone, and limestone hydrate; sand-lime bricks, such as sand-lime brick construction systems and sand-lime bricks; and specialty products and services for waste stabilization, landfill construction, and immobilization of toxic compounds. HeidelbergCement AG was founded in 1873 and is headquartered in Heidelberg, Germany.

Affiliated companies of Heidelbergcement Caucasus ShPS in Georgia:

Associates

1. HeidelbergCement Caucasus LLC

(Haidelbergtsement Kaukasusi ShPS)

(formerly known as: Kartuli Tsementi ShPS)

Kazbegi Avenue 21

Saburtalo District

Tbilisi 0160

Est: 20 October 2001

C.R. No. : 06/4-833

ID Code : 204430400

History:

HeidelbergCement Caucasus LLC was established in Georgia on 20

October 2001.

On 1 June 2009 HeidelbergCement Caucasus LLC merged (absorbed)

Alge-Mineral LLC (ID Code: 216441660).

On 10 February 2017, HeidelbergCement Caucasus LLC merged

(absorbed) two companies, namely HeidelbergCement Caucasus LLC (ID

Code: 202394391) and HeidelbergBeton Georgia LLC (ID Code:

204559003).

2. Terjola-Quarry LLC

(Terjola-Karieri ShPS)

Kazbegi Avenue 21

Saburtalo District

Tbilisi 0160

Est.: 21 January 2008

ID code: 204546811

Sole shareholder: CaucasusCement Holding BV

Subject’s former affiliated companies :

1. Alge-Mineral LLC

(Alge-Minerali ShPS)

Melikishvili Street 16

Tbilisi 0179

Est.: 10 August 2007

C.R. No.: 06/4-833

ID Code : 216441660

(amalgamated into HeidelbergCement Caucasus LLC)

2. HeidelbergBeton Georgia LLC

(Haidelbergbeton Jorjia ShPS)

Lermontov Street 18

Tbilisi

E-mail: beton@heidelbergcement.ge

Managing Director: Davit Jughashvili

Est.: 6 August 2008

ID code: 204559003

Sole shareholder : HeidelbergCement Central Europe East

Holding B.V.

(amalgamated into HeidelbergCement Caucasus LLC)

3. Meliza LLC

ID Code: 224071359