CORPORATE NEWS:
Mittal acquires 93% stake in Ukraine’s KryvorizhStal
Mittal Steel has acquired a 93.02% stake in the capital of KryvorizhStal from the State Property Fund of Ukraine following a public auction.
KryvorizhStal is the largest carbon steel long products producer in Ukraine and the surrounding region with liquid steel production of 7.7m tonnes in 2004 and 17.1m tonnes of iron ore. The company recorded net income of US$378m in that year.
A statement from Mittal Steel remarked: “This transaction marks another key milestone for our business in Eastern Europe, which is an integral part of our European and global strategy. KryvorizhStal is a low-cost production platform with a strategic location, at the heart of a strong growth market. KryvorizhStal operates a single integrated steel plant located within a large iron ore mining complex
(over a billon tonnes of iron ore reserves) assuring 90% of the company’s requirements at low mining costs.”
KryvorizhStal is also almost self-sufficient in coke and is predominantly supplied by nearby coalmines. Eighty per cent of the total sales are exported through major ports only 400km from the plant, which has the added benefit of a good rail network.
Today, KryvorizhStal has a 10m tonne crude steel capacity, but only 6m tonnes of rolling capacity. Mittal says that this creates attractive ‘de-bottlenecking’ opportunities with additional capacity that can be easily leveraged within its group of companies.
Commenting, Lakshmi Mittal, Chairman and CEO, Mittal Steel, said: “KryvorizhStal is a high quality steel and mining asset and we are confident that we can help the company expand further by providing our marketing, procurement and technological knowledge and expertise. We are excited about the prospects of accelerating its growth.”
“The company could, over the years, become our largest steel plant in the region and
it offers significant flexibility regarding the develop-ment of its product range. KryvorizhStal will add valuable mining
reserves to the group. Overall, we expect to generate over $200m of pre-tax synergies
by the end of the financial year 2006.”
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Mittal Steel NV |
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The Netherlands |
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www.ispat.com |