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Wienerberger Accelerates Growth Programme in Central-East Europe

Wienerberger AG (Vienna, Austria) is increasing the pace of its expansion in Central-East Europe with further projects.

In Poland, plans call for the construction of a hollow brick plant at Olesnica in the southern region of the country as well as the enlargement of the Lebork plant near Gdansk and the Dobre plant near Warsaw. The installation of an additional production line for facing bricks at Torun, 180km south of Gdansk, will allow the group to strengthen its market position.

In the Czech Republic, Wienerberger is broadening its activities to also include a new hollow brick plant in Brozany, north of Prague. The Hodonin plant, which was acquired at the end of 2006 and is located at the crossroads of the Czech Republic, Slovakia and Austria, will be expanded and reopened for production. The total investment for these projects in Poland and the Czech Republic are estimated at roughly €120 million and form part of Wienerberger's bolt-on programme.

"Poland is one of our most important markets in Central-East Europe. In the past year, the number of housing starts rose substantially by more than 30%. We expect a favorable market climate in 2007 and the following years with steady and strong demand - in particular, since the number of housing starts per 1,000 residents is still very low in comparison to Western Europe," explained Johann Windisch, member of the Managing Board of Wienerberger AG with responsibility for Central-East Europe and the USA, in connection with the group's focus on this country.

The planned annual capacity of 230 million NF (=standard size for bricks) at Olesnica, which is situated 60km north of Tarnow in Southern Poland, as well as the expansion of Lebork and Dobre to 180 million NF in each facility will increase the production of hollow bricks by roughly 30% at the Wienerberger plants in this country. In addition, the construction of a second production line at the clinker plant in Torun will raise facing brick capacity by 60%. These investment projects are designed to meet the expected high demand in Poland and prevent supply shortages. The current level of demand can only be met through imports from Germany and the Czech Republic, which are connected with higher freight costs, as well as the start-up of older plants that were previously closed. The above-mentioned investment projects are scheduled for completion by the third quarter of 2008.

"The Czech Republic is also an important growth market for Wienerberger. Although the number of housing starts per 1,000 residents is significantly higher than in Poland, this country also recorded growth of 8% in 2006," indicated Johann Windisch. In the Czech Republic, the total investment for the expansion and start-up of production at Hodonin and the construction of a hollow brick plant at Brozany are estimated at approximately €40 million. Brozany is a particularly important location for strategic reasons because of its excellent logistic connections to the motorway network and close proximity to the primary market in Prague. After all permits have been received, the start of construction is scheduled for the first half of 2008.

In conclusion, Johann Windisch added: "We are focusing the production in these plants on state-of-the-art, high thermal insulating products. This will allow us to meet the demand for high-quality brick products in Central-East Europe in the future".

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