Reuters quoted Mr Alexei Mordashov CEO of Severstal as saying that the company will focus on expanding the customer base for its current plants in the United States rather than buying other factories in the country.
Mr Mordashov said that means it has no plans to buy the former Severstal plant in Maryland currently owned by bankrupt RG Steel or an Alabama facility that Germany ThyssenKrupp is looking to sell.
He said referring to Severstal recent investment in its two existing US steel plants in Dearborn, Michigan and Columbus, Mississippi that “We don’t have any plans to buy new plants for the moment, just because we have to harvest the results of our investments first. We are in a ramp-up period.”
He said that even if the RG Steel or ThyssenKrupp plants were offered at bargain prices, Severstal would need to make sure its existing facilities were well-established before considering expansion.
Mr Mordashov said “It’s not our primary goal to be the biggest, anywhere. He said that we appreciate size but only if it is robust growth. Just to be big is not a target.”
Mr Mordashov spoke from the Dearborn plant, celebrating the opening of two new lines capable of producing lightweight steel for US automakers a USD 450 million pickle line tandem cold mill and a USD 285 million hot dip galvanizing line.
Severstal has so far invested USD 1.4 billion in upgrading the facility, opened nearly a century ago by Ford Motor founder Henry Ford and situated near one of Ford largest auto assembly plants. It paid USD 285.5 million in 2003 to buy the plant from bankrupt Rouge Industries.
In all, Severstal has spent about USD 3 billion at the two plants an investment that Mr Mordashov said he is confident will be fruitful for Russia No. 2 steelmaker.
A Severstal spokeswoman added that the firm had applied for a USD 320 million advanced-technology-vehicles-manufacturing loan from the US Department of Energy to build a continuous annealing line at the Dearborn plant.
The move comes after the Obama administration in January decided against granting Severstal a USD 730 million loan for the same purpose, following close scrutiny of a loan the Energy Department made to a solar company.
Source - The Moscow Times
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