The company of the richest Russian businessman can buy factories in Europe

NLMK billionaire Vladimir Lisin - the only contender for the Belgian assets ArcelorMittal.
25.04.2018
Vedomosti
Origin source
NLMK Group is thinking about acquiring the Belgian assets of the steel company ArcelorMittal, NLMK President Grigory Fedorishin said on Tuesday at a conference call with investors: "This option [assets of ArcelorMittal] are including."

The main owner of NLMK is billionaire Vladimir Lisin. Forbes estimates his fortune at $ 19.1 billion, and Lisin is the richest Russian at the moment.

The interest of NLMK in the steel assets in Europe was told by the Belgian L'Echo - the newspaper learned about this at a meeting of representatives of the unions of the steel industry in the Belgian province of Liège with the Minister of Economy of Wallonia Pierre-Yves Yehole. NLMK is still the only contender for European assets ArcelorMittal, writes L'Echo, metallurgical workers are concerned about the uncertainty with the sale of plants and are afraid of losing jobs.

Trade union representatives insist on the sale of all ArcelorMittal assets in Liege (a flat-rolled and coated steel plant, a research center and a trading house) to one buyer: if they have different owners, transport and management failures will arise, Echo.

Fees are not a hindrance

Fedorishin also said that the group continues to ship steel products to the US, despite the introduction of a 25% import duty on steel: "At the moment, our business is in a positive zone. We pay a 25% duty, but we have a margin of $ 50-70 per tonne. " In March, the "daughter" of the company - NLMK USA - appealed to the US Ministry of Trade with a request to exclude slabs from the effect of duties. In the US, the company has three plants - NLMK Pennsylvania, NLMK Indiana, Sharon Coating, which account for 3% of flat products in the US market.

In Belgium, ArcelorMittal has two flat-rolled plants - in Liege (Wallonia) and in Ghent (East Flanders). ArcelorMittal is to sell the companies in Romania, Macedonia, the Czech Republic, Luxembourg and Belgium, as well as the galvanized steel plant in Italy, so that the antitrust authorities of the EU approve the purchase of the South Italian ILVA, the flat-plate manufacturer. The decision should be made public before May 23, writes L'Echo. In November 2017, the European Commission said it would analyze the possibility of ArcelorMittal's acquisition of ILVA for compliance with antitrust laws. "The deal could violate the competitive foundations of the steel rental market," the ministry said.

The representative of NLMK did not answer the questions - as did the representatives of the province of Liège, Wallonia, the Liege and ArcelorMittal steelworkers' union.

The European market is the second most important for NLMK after the Russian market, in 2017 it accounted for 18% of revenue. NLMK has two rolling plants in Europe: in Belgium NLMK La Louvièr (in Wallonia) and in France NLMK Strasbourg. According to the company, in 2017 they produced 4.8 million tons of hot, cold, galvanized steel and rolled products with polymer coatings.

NLMK occupies 8% of the European rental market. Acquisition of assets is an opportunity to increase supplies to the European market for NLMK, notes the director of the Center for Economic Forecasting of Gazprombank Airat Khalikov.

Aton analyst Andrei Lobazov recalls that the basis of NLMK's strategy is organic growth, the company expects an increase in steel production by 1 million tons by 2019 and a possible growth of another 1.2 million tons by 2022. But NLMK sends semi-finished products - slabs - to its rolling capacities in Europe and the US, so investments in increasing the rolling capacity are logical, the more investments in the European market are now less risky.

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