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02 March 2006

Severstal buys Ukrainian wire rod producer

Russia’s Severstal-Metiz, the steel fabrications branch of the Severstal Group, has bought 60% plus one share of the Ukrainian wire rod producer Dneprometiz as part of its strategy to expand into other European countries. 

Due diligence is currently being carried out and the deal will be finalised in 3-5 months’ time, Steel Business Briefing is told by Severstal-Metiz’s development director. After this, new equipment, sales and marketing plans will be developed. Dneprometiz, located in Dnepropetrovsk, will produce some 123,100 tonnes of wire rod in 2006, he adds. 

Meanwhile, Severstal has confirmed that its 2006 investment spending will be 26bn roubles (€778.1m), up 30% on last year. Most of the capital will be spent on its largest blast furnace (No. 5), which will be shut down in May for a reline, as previously reported by SBB. By the end of 2007, finished steel output will increase by 200,000 tonnes/year to 9.5m t/y. 

Severstal-Metiz produced 825,400 tonnes of fabricated steel products last year, 200,000t of which were exported.

Steel Business Briefing

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