Commercial Metals Closes Acquisition of Croatian Mill
09/20/2007 - Commercial Metals’ Swiss subsidiary completes its acquisition of the outstanding shares of Valjaonica Cijevi Sisak from the Croatian Privatization Fund and Croatian government.
Commercial Metals Co.’s Swiss subsidiary has completed its acquisition of all outstanding shares of Valjaonica Cijevi Sisak (VCS) from the Croatian Privatization Fund and Croatian government.
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CMC’s investment plans include expenditures for environmental improvements as well as improved efficiency in the steelmaking operation.
New installations will include a new electric arc furnace, new ladle furnace, and upgrades to the caster.
With the addition of CMC Sisak, CMC intends to expand its production capability in tubular and other products in the key markets of Central and Eastern Europe.
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With completion of the acquisition, VCS's name has been changed to CMC Sisak doo. CMC Sisak is an electric arc furnace based steel pipe manufacturer with annual capacity estimated at about 305,000 tonnes.
The purchase price includes the assumption of all debt (approximately U.S. $45 million) owed by VCS to the Croatian government, banks and trade creditors and an additional payment (maximum of approximately U.S. $7 million) for the shares.
"The new name denotes both CMC's financial strength, steelmaking expertise and global market emphasis while continuing the Sisak brand tradition which is synonymous with quality pipes and tubes,” said Hanns Zoellner, Executive Vice President of CMC and President of CMC International. “With better utilization of existing capacity and increased sales through the CMC International division, we believe CMC Sisak will become a profitable operation achieving our financial targets.
CMC Sisak plans to spend not less than U.S. $38 million over five years in capital expenditures and will retain existing employees for a period of three years.
“Our plans include expenditures for environmental improvements as well as improved efficiency in the steelmaking operation through installation of a new electric arc furnace, a ladle furnace and upgrades to the caster,” said Zoellner. “Our strategy is to expand CMC's production capability in tubular and other products in the key markets of Central and Eastern Europe, and CMC Sisak is the optimal platform for growth in this key region."
Murray R. McClean, CMC's President & CEO, added, "We are pleased with the successful completion of the privatization of CMC Sisak which is very important for the Croatian economy. Our main objective is to make what we now proudly call CMC Sisak competitive in global markets. I am certain with the combined experience and knowledge of our employees, adequate capital investments and the position of CMC in the global marketplace, we will realize that goal and ensure growth and prosperity for CMC Sisak."
Commercial Metals Co. and subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic overseas markets.
