MOSCOW (Reuters) - Russian steel companies, owned by some of the country’s richest men, have invested about $9 billion in the last few years buying up steel melting and rolling assets in the United States and Canada.
Russian companies, led by Severstal (CHMF.MM) CHMFq.L and Evraz Group HK1q.L, have accumulated 9.1 percent of steel capacity in the United States, according to a Reuters calculation from data supplied by London-based consultancy CRU.
The United States ranks third among world steel producers behind China and Japan, last year accounting for 7.2 percent of global output. Russia, the fourth-largest producer, had a 5.4 percent market share, International Iron and Steel Institute data shows.
Following are some of the main North American steel assets owned, or in the process of being acquired by, Russian companies:
Main owner: Alexei Mordashov
Personal fortune (according to Forbes Magazine in March 2008): $21.2 billion (world’s 18th-richest man)
Its U.S. assets are grouped as Severstal North America:
Fifth-largest U.S. integrated steel maker
Acquired for $285.5 million in 2003
Main products: steel sheet. The plant was the in-house steelmaking unit for Ford Motor Co (F.N) until 1989.
Includes the following joint ventures:
- Double Eagle Steel Coating Co (with U.S. Steel Corp)
- Spartan Steel Coating (with Worthington Steel)
- Mountain State Carbon (with Wheeling-Pittsburgh Steel)
* SEVERCORR (owned 85 percent by Severstal)
Founded as joint venture with a group of U.S. steel industry veterans led by John Correnti, who sold out in April 2008. Production was launched in October 2007
Annual capacity: 1.5 million tonnes
Main products: steel sheet
Former Bethlehem Steel plant. World’s largest steel plant in the 1950s.
Acquired for $810 million in May 2008
Annual capacity: 3.6 million tonnes
Main products: steel sheet (including galvanized sheet), tin mill products
Currently being acquired for $140 million in cash, plus $230 million in debt and other obligations
Annual capacity: 1.22 million tonnes
Main products: High-quality, custom flat-rolled steel
Owner of Wheeling-Pittsburgh Steel
Subject to rival bids by Severstal and India’s Essar Steel Holdings
EVRAZ GROUP HK1q.L
Owners include: Roman Abramovich, personal fortune $23.5 billion, world’s 15th-richest man); Alexander Abramov ($11.5 billion, 65th-richest); Alexander Frolov ($5.5 billion, 178th-richest)
North American assets:
Acquired for $2.3 billion in 2007
Main products: steel plate, coil, tubes, rails
- Rocky Mountain Steel Mills (Pueblo, Colorado)
- Camrose steel mill, Camrose, Alberta, Canada
Acquired for $565 million in 2008
Annual capacity: over 450,000 metric tonnes
Main products: steel plate
Various locations in the United States and Canada
Currently being acquired for $4.025 billion from Sweden’s SSAB (SSABa.ST)
Main products: steel plate, pipe
* Evraz plans to retain IPSCO’s Canadian assets, worth $2.3 billion. It entered into a back-to-back agreement to sell U.S. pipe businesses to Russian steel pipe maker TMK (TRMKq.L) for $1.2 billion.
- IPSCO Tubulars Inc (100 percent)
- NS Group Inc (51 percent, plus an option to acquire the other 49 percent in 2009 for a further $500 million)
* Evraz Group also owns vanadium producer Stratcor Inc (Hot Springs, Arkansas)
Main owner: Dmitry Pumpyansky
Personal fortune: $6 billion (world’s 164th-richest man)
North American assets:
* IPSCO Tubulars Inc / NS Group Inc (see EVRAZ GROUP).
NOVOLIPETSK STEEL (NLMKq.L)
Main owner: Vladimir Lisin
Personal fortune: $20.3 billion (world’s 21st-richest man)
* Steel Invest & Finance S.A., a joint venture between Novolipetsk Steel and Switzerland-based steel trader Duferco, was formed in 2006 to acquire steel production facilities owned by Duferco in Europe and the United States. Novolipetsk paid $805 million to acquire a 50 percent stake in the joint venture and has an option to secure control.
* Duferco Farrell Corp
Annual hot-rolling capacity: 1.8 million tonnes
* Winner Steel Inc
Steel Invest & Finance S.A. in 2007 paid $211.6 million to acquire Winner Steel Inc, also in Pennsylvania. Winner Steel has annual capacity of 1.2 million tonnes of galvanized sheet.
Main owner: Viktor Rashnikov
Personal fortune: $10.4 billion (world’s 73rd-richest man)
* Magnitogorsk plans to invest over $1 billion building a plant in the state of Ohio to produce 1.5 million tonnes a year of steel sheet for supply to the automotive sector.
(Sources: company documents, Web sites, Forbes magazine)
Compiled by Robin Paxton