Evraz Group SA, one of the world biggest vertically-integrated metal-making and mining concerns, sets out to sell its Ukrainian assets. Bagleikoks and Dniprodzerzhins’k chemical-recovery plants have already been old, presumably to Metinvest group.
The plants, alongside with Dniprokoks, Sukhaya Balka concentrating plant and Petrivs’kiy metallurgy mill, were bought by Evraz from Privat group for $3.8 bn in 2007.
Evraz’s entering the Ukrainian market failed to increase the competition against all expectations.
Evraz has not invested into the re-equipment and repairs of the plants, nor has it been willing to entertain any programs for corporate responsibility. Evraz seems to lose the Ukrainian game, having incurred the growing deprecation of its capital funds and decreased assets value by the end of 2011.
As Evraz press service relates, the total annual capacity of the three chemical-recovery enterprises reaches c 3 bn t of metallurgic coke. In 2010, Dniprokoks, Bagleikoks and Dniprodzerzhins’k plants produced only 664, 638 and 547 thousand t, respectively, the latter winning 1.538 m hryvnas of net profit while Bagleikoks suffering 13.691 m hryvnas of net loss. As Alexander Starovoyt (Ukrkoks, CEO) informs, in 2011 the plants’ deliveries dropped.
The general shortage of coking coal in Ukraine coupled with the lack of its own mines in the country may increase the production costs at Petrivs’kiy metallurgy mill, the principal customer of the chemical-recovery plants production, already decreasing its output in 2011; thus Evraz might wish to sell its remaining Ukrainian assets.
Experts expect Evraz to face problems finding the buyer for its assets, as Metinvest has already balanced its coke-producing and coke-consuming capacities, and the Industrial Union of Donbass (ISD) may be deterred by the assets deprecation.