Sace conference, russia and italy, seizing new business opportunities — moscow
1. Russia and Italy: Prospects for Co-operation in Steel
Industry
Alexander Abramov “Russia & Italy, Seizing New Business
Opportunities”, SACE Conference,
Moscow, 2 December 2005
1
2. Russian and Italian Steel Exports
Structure in 2004, 000’ tons
Russia Average price per ton Italy
Stainless, 14
0% $850
Wire, 258, 1% Alloy Steel,
Stainless, Semis, 330, 3%
1,806 Bar & rod, 895
Sections, profiles, 1,049
angles 875 8%
Semis, Alloyed steel,
3% 10%
6% 13,191 1,323
Bar & Rod, Sections,
8% profiles, anlles,
2,368 12%
20% 2,215
$406
CRC+Coated, Plate, 828
10% 46% 8%
2,776
Rails, 98, 1%
17%
26% 18% Wire, 335, 3%
CRC+ Coated,
1,817 HRC, 1,975
HRC, 7,375
28.7 mt Russia Italy 10.1 mt
Semi-products 46% Semi-products 3%
Flat Products 36% Flat Products 52%
Long Products 11% Long Products 45%
Source: UN
2
3. Russia: Cost Advantages in “Hot End”
3
Electricity, US ¢/ kWh Natural Gas, US $/ 1,000 m
9.4
223.0
7.5
6.7 180.0
90.0
3.1
41.0
Russia Italy China Turkey Russia Italy China Turkey
Scrap, US $/ ton Coke, US $/ ton
255
230 200 200
170
152
138 150
Russia Italy China Turkey Russia Italy China Turkey
Average wholesale price estimates for summer 2005
3
4. Russian Steel Export to Italy, 2004, 000’t
5.3% of Total Russian Export 8.4% of Total Italian Import
Alloy and
Stainless,
170.2
Coated coil, 11.8,
Slabs, 438.9
1%
11%
CRC, 139.3
30%
9%
25%
15%
HRC, 379.6
Billets, 225.1
7%
Plate, 28.1, 2%
1,493 kt long products,
98.8
Semi-products 45%
Flat Products 48%
Long Products 7%
Source: UN
4
5. Direct Export of Steel Making Equipment
from Italy to Russia, 2001-2004, US$ m
88.1
8.2
Machines for metal processing
53.3
Forging equipment
44.4
Converters, ladles, casting, blast
5.5 furnace equipment
30.9
0.3 16.7
Metal-rolling mill equipment
13.5 4
15.8
0.5 16.2
9.9 11.3 22.6
2.4 5.8 6
3
2001 2002 2003 2004
Source: UN
5
6. Evraz Strategy in Europe
n Developing markets outside Russia
n Achieve growth by capturing additional margins through focused
acquisitions of re-rolling and other complementary assets
outside Russia, which can be supplied by its fast growing slab
production capacity
n As part of this strategy, Evraz acquired Palini e Bertoli, a
producer of quality steel plate located in Italy and Vitkovice
Steel, a heavy plate producer. Evraz is also considering further
acquisitions of steel production assets outside Russia
2,177
European
producers of 1.136 kt,
steel plate, 1,200 8.4% of European plate production
1,000 947
2004, 000’t 921 869
839 780
706 651
540 505 500
454
356 350 350
200 140
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7. Palini & Bertoli
n Rolling mill operator, founded in 1963 in Spinadesco (Cremona). Since 1992, it
Foundation
Foundation has been producing steel plate using a 4-high mill at its new San Giorgio di Nogaro
plant (in the province of Udine). In 1999 was realized modernization program
Production n2004 – 354,000 t
Production
n2005(E) - 415,000 t
nMax - 450,000 t
Labour
Labour n115 persons
Tonnes by Country (’04 – Total Sales 340,000 t)
ROW, 24%
Markets
Markets Other Italy, 45%
Europe, 2%
France, 6%
Spain, 4%
Austria, 4%
Germany, 15%
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9. Evraz Group
n Evraz is one of the largest vertically-integrated steel and mining businesses with
operations mainly in the Russian Federation
n Evraz’s total consolidated revenues in 2004 amounted to US$5,933 million,
compared to US$2,168 million in 2003
n IPO completed in London in June 2005
n The Evraz Group S.A. aims to strengthen its position as a world-class, low-cost
and vertically-integrated steel producer
n The Evraz Group S.A. aims to strengthen its position as a world-class, low-cost
and vertically-integrated steel producer
n The Evraz Group S.A. aims to strengthen its position as a world-class, low-cost
and vertically-integrated steel producer
n More focus on strategic acquisitions:
ndownstream assets complimentary to Russian steel semis exports
nsteel-making in low cost regions
ngreenfield / brownfield ore and coal mining
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