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NLMK Group Acquires VMI Scrap Processing Company
10/29/2010 - Novolipetsk Steel (NLMK) announced the acquisition of LLC VMI Recycling Group from a group of shareholders for a total of USD28.4 million, following approval from Russian regulatory authorities. VMI owns scrap collection and processing assets located in the Moscow region.
Novolipetsk Steel (NLMK) announced the acquisition of LLC VMI Recycling Group from a group of shareholders for a total of USD28.4 million, following approval from Russian regulatory authorities. VMI owns scrap collection and processing assets located in the Moscow region.
VMI operations include four sites equipped with modern scrap collection and processing facilities located in the Moscow region. Equipment such as Lindemann, Oberlander, and Sierra press shears; Liebherr and Fuchs loading machines; as well as a shredder machine commissioned at its Mytishchi site in March 2010 allows VMI to process up to 500,000 tonnes of ferrous scrap per year.
As part of NLMK’s vertical integration strategy to enhance its self-sufficiency in main raw materials, the acquisition will allow the company to optimize scrap deliveries to the main production site in Lipetsk and later to its 1.5 million tonnes-per-annum EAF mini-mill in the Kaluga region (80 km from Moscow) that is currently under construction.
NLMK’s current cash funds and existing credit lines will be used to finance the transaction. VMI will be consolidated on the balance sheets of NLMK Group’s 100% subsidiaries, Vtorchermet NLMK and NLMK-Long Products, at 99% and 1%, respectively.
VMI operations include four sites equipped with modern scrap collection and processing facilities located in the Moscow region. Equipment such as Lindemann, Oberlander, and Sierra press shears; Liebherr and Fuchs loading machines; as well as a shredder machine commissioned at its Mytishchi site in March 2010 allows VMI to process up to 500,000 tonnes of ferrous scrap per year.
As part of NLMK’s vertical integration strategy to enhance its self-sufficiency in main raw materials, the acquisition will allow the company to optimize scrap deliveries to the main production site in Lipetsk and later to its 1.5 million tonnes-per-annum EAF mini-mill in the Kaluga region (80 km from Moscow) that is currently under construction.
NLMK’s current cash funds and existing credit lines will be used to finance the transaction. VMI will be consolidated on the balance sheets of NLMK Group’s 100% subsidiaries, Vtorchermet NLMK and NLMK-Long Products, at 99% and 1%, respectively.
Alexey Lapshin, NLMK President, said: “NLMK’s presence in the Moscow region, surplus in terms of scrap collection, is strategically important. This region has substantial growth potential. As a result, we will be able to ensure efficient integration both with the Group’s existing production facilities and with the Kaluga mini-mill, scheduled for launch in 2012. In the long term, we are planning to grow VMI’s scrap processing capacities.”
