Evraz Group (LSE: EVR) (“Evraz” or the “Group”) announces that its Board of Directors has approved investment in both the Yuzhny Rolling Mill in the Rostov Region of Southern Russia and the Kostanay Rolling Mill in Kazakhstan.
The Yuzhny Mill will be constructed in the Rostov Region near the port Ust-Donetsk. It is expected to be commissioned in the middle of 2013 and will have a production capacity of approximately 450,000 tonnes of light sections per annum, including 315,000 tonnes of rebar and 135,000 tonnes of angles and channels. The total cost of the project is estimated to be approximately US$158 million.
Yuzhny Mill will provide Evraz with a presence in the fast-growing area of Southern Russia and is expected to be supplied by the billets from Evraz’s Ukrainian steel plant, DMZ.
Construction of the Kostanay Mill in Kazakhstan will provide Evraz with exposure to the local rebar market which has high growth potential. Evraz will own a 65% stake in the project. Its local partner will be Caspian Group.
Evraz has already obtained the necessary anti-monopoly and construction permits for the implementation of Kostanay project. The plant is expected to be launched in mid-2013. Production capacity is forecast to be approximately 450,000 tonnes of rebar per annum. Evraz’s Siberian plants ZSMK and NKMK will supply billets to this mill. The total investment in the project is expected to be approximately US$131 million.
Both of these projects are aligned with the Group’s strategy of shifting from the production of semi-finished to finished products and of vertical integration in the steel value chain.