SteelAsia has closed deals with two of Russia’s leading steel industry players for a steady supply of billets and technology and skills transfer worth $250 million.
Evraz PLc. and SteelAsia have signed a $250 million, long-term supply agreement for a guaranteed monthly supply of 50,000 tons of semi-finished steel (also known as billets), for SteelAsia’s rolling mills in Davao City and Meycauayan, Bulacan. Billets are the input material for many long steel products, including rebars.
“We have found that Russian companies are very reliable business partners,” Benjamin Yao, SteelAsia chairman and chief executive officer, said in a statement on Friday.
Moreover, SteelAsia has also worked out a cooperation arrangement with Kurganstalmost JSC for the latter to provide engineering services as well as training and technology transfer to SteelAsia. Kurganstalmost is Russia’s leading producer of steel structures.
“The long-term billet supply contract assures the company of a stable supply of raw material, insulating the country from rebar shortage, while the technology and skills transfer are in preparation for SteelAsia’s diversification into steel structures,” Yao said.
“Our expansion plans are all geared towards supporting the country’s focus on massive infrastructure build up,” he added.
Since 1998, SteelAsia has procured about 3.24 million tons of billets worth $1.23 billion from Russia. In the first quarter of 2017 alone, the company purchased 240,000 tons of billets worth $93 million.
SteelAsia also transacts with several Russian steel companies, including NLMK and Evraz (Russia’s two largest steel makers), OEMK/Ural Steel/Metalloinvest, JSC Amurmetal, Amurstaal, KMK, and Mechel.
Evraz has operations in the Russian Federation, Ukraine, United States, Canada, Czech Republic, Italy, Kazakhstan and South Africa. Its crude steel output last year topped 13.5 million tons.
Kurganstalmost, part of the Russian industrial and infrastructure giant Mostostroyindustria of the Transstroy Corporation, brings with it cutting-edge technology and engineering service, experience in steel structure production, a training center, and Russian Exim financing at competitive rates and terms.
SteelAsia is the Philippines’ leading steel company and the largest manufacturer of steel bars (rebar) in Southeast Asia. It has a capacity of 2.3 million metric tons, with six plants strategically located across the country, and is expanding its rebar capacity to four million metric tons in the next five to seven years.