Russian Steel Company Acquires Scrap Metal Recycler

Novolipetsk Steel (NLMK) has announced the acquisition of Russia-based LLC VMI Recycling Group (VMI) for $28.4 million.

VMI owns four scrap collection and processing facilities in the Moscow region, including one auto shredder, which the company commissioned this past March. The sites are located in Liubertsi, Kotelniki, Mytishchi and Reutov. Equipment at the sites include Lindemann, Oberlander and Sierra press shears as well as Liebherr and Fuchs loading machines. The Mytishchi facility is where VMI is operating a shredder, which is capable of processing up to 120 000 metric tons of ferrous metal per year. In total, VMI’s scrap yards are capable of processing close to 500,000 metric tons of scrap metal per year.

Russian regulatory authorities approved the transaction.

In announcing the acquisition, NLMK says that the acquisition is in line with the company’s goal of becoming self sufficient in regards to raw material supply. According to the release, the purchase of VMI will allow NLMK to optimize scrap deliveries to its main production site in Lipetsk, as well as its 1.5 million-metric-ton-per-year electric arc furnace, currently being built near Moscow.

“This acquisition is another step towards enhancing the group’s self-sufficiency in main raw materials. Moreover, it is strategically important for NLMK to have a presence in the Moscow area since there is a surplus of scrap. This region has substantial growth potential. As a result, we will be able to ensure efficient integration, both with the group’s existing production facilities and with the Kaluga mini-mill, scheduled for launch in 2012. In the long-term, we are planning to grow VMI’s scrap processing capacities,” says Alexey Lapshin, NLMK’s president.