Russian Steel Firm Snaps up Scrap Processor

Magnitogorsk Iron and Steel Works, based in Russia, has completed the acquisition of its subsidiary ZAO Profit, a large scrap metal recycling firm located in Russia. According to MMK, the acquisition of the strategic raw material supplier will significantly strengthen MMK security in terms of raw materials supplies.

MMK's board of directors approved the deal late last month, and includes the acquisition of subsidiaries of ZAO "Profit" specializing on collection and processing of scrap.

The scrap metal firm had traditionally been one of the largest suppliers of scrap metal to MMK, historically supplying around 75 percent, more than 5 million metric tons, of the scrap used by the steel company last year.

According to MMK, last year ZAO "Profit" accounted for 16.2 percent of the scrap metal market in Russia. The company purchases scrap in 64 regions of Russia, with more than 40 percent of the purchases coming from Chelyabinsk, Moscow, Nizhniy Novgorod, Samara regions and the Republics of Bashkortostan and Tatarstan.

Total supplies of scrap by ZAO "Profit" last year stood at 5.2 million metric tons.

MMK is the key customer and strategic partner of ZAO "Profit". The share of shipments to MMK accounted for more than 80 percent of the overall sales volume. ZAO "Profit" also has contracts with other steelmakers ¨C Severstal, Chelyabinsk steel mill, Ural Steel, Volzhsky pipe mill, Izhstal, ZSMK.