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Mechel Acquires Laminorul Braila Metallurgical Plant in Romania

04/23/2010 - Mechel recently acquired 100% of the shares of Donau Commodities SRL, which holds 90.9% of the shares of Laminorul SA, a steel plant located in Braila, Romania, for a consideration of €9.4 million.

Mechel recently acquired 100% of the shares of Donau Commodities SRL, which holds 90.9% of the shares of Laminorul SA, a steel plant located in Braila, Romania, for a consideration of €9.4 million. The final price adjustment is expected to be agreed by the end of April.
 
The Romanian Competition Council approved the transaction on April 19.
 
Laminorul Braila plant is located in southeast Romania on the Danube River close to Braila ports. The ports’ facilities allow for embarkation onto ships with cargo capacity of up to 5000 tonnes. Constantsa international port (Black Sea) is also nearby.
 
The plant’s main production facilities include two rolling mills with total capacity of more than 380,000 tonnes per year. The plant is said to be the only one in Romania manufacturing special profile (bulb bar), which is used in shipbuilding. All types of products have European quality certificates. Bulb bars manufactured by the plant are certified by the international sea registers such as DNV, BV, LR, ABS, GL, and the Russian Sea Register.
 
The plant manufactured more than 50,000 tonnes of structural shapes in 2009, and 65% of the plant’s products are delivered to Western and Eastern Europe; the rest is consumed domestically. Laminorul Braila is sourced with billets supplied by Mechel Targoviste steel plant, a Romanian subsidiary of Mechel. The plant employs more than 570 people.
 
“The acquisition of Laminorul Braila is a one more step in implementation of Mechel’s steel business development strategy, particularly aimed at increasing the share of high-margin products in the group’s product portfolio,” said Victor Dyshlevich, CEO of East-European Steel Division. “The plant allows producing downstream products from Mechel’s billets and increase synergies of all Romanian assets of the group. The products manufactured at Laminorul Braila are a good supplement to the product portfolio of Mechel’s steel plants in Romania. The new products—structural shapes and bulb bars—will undoubtedly expand our positions on the market of Romania and other countries of the European Union and also would allow diversifying distribution of our products. The company plans to increase production volume for the future.”
 
Mechel’s East-European Steel Division consists of Mechel Targoviste, Mechel Campia Turzii, Ductil Steel Buzau, and Otelu Rosu.
 
Mechel is one of the leading Russian mining and metals companies. Its business includes four segments: mining, steel, ferroalloy, and power. The company unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Its products are marketed domestically and internationally.