EVRAZ Creates a Joint Venture Сonsisting of EvrazMetall and INPROM Distribution Networks
23 December 2010 – EVRAZ Group S.A. (LSE: EVR) (“Evraz”) announces the closing of a deal to acquire 100% of the shares of Cassar World Investments Corp., which controls 99.9% of OAO INPROM, a leading metal service company in Russia. As a result, a joint venture consisting of the assets of EvrazMetall and INPROM has been created. EVRAZ will have a 75% stake in the combined company and INPROM shareholders will have 25% of shares.
The joint venture will be the largest steel distribution company in the CIS. In 2010, total steel sales of the combined company are expected to amount to approximately 1.2 million tonnes.
EvrazMetall, a network of metal trading companies (former Carbofer Metall acquired by Evraz in October 2009), consists of 33 branches in Russia and the CIS countries (Kazakhstan).
INPROM has a chain of 27 metal centres, located in the industrially developed regions of Russia, and distributes products of Russian and CIS steel mills to 20,000 customers across all sectors of the economy. INPROM has modern steel processing equipment and is the largest metal service company in Russia for metal processing services. The location of INPROM’s metal centres in regions with a high market capacity and its professional team are an important competitive advantage. In 2010, INPROM’s sales are expected to exceed 400,000 tonnes with EVRAZ’s products accounting for one third of those sales.
As a result of the deal, EVRAZ will expand its presence in the steel retail trade in Russia, and in particular in the European part and the dynamically developing southern region. It is also expected that it will see an increase in profitability from high margin steel product sales.
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