Mechel has purchased 100% shares of Donetsk Electrometallurgical Plant (DEMZ AO) during December, 2011. The plant acquisition was accepted by the Board of Directors of Mechal at the annual shareholders' meeting of the company. The value of this purchase is $537 million.
The company will pay for DEMZ AO in installments over a period of seven years. It was expected to pay in installments over four years during the annual shareholders' meeting of Mechel, but the term was expanded by three years, after the acquisition.
DEMZ is one of the modern steelmaking plants in Ukraine, with a capacity of producing more than 1 Mt annually. The plant has targeted on the continuously-cast billets production, together with the thermally treated and specialty steel rolls. Well-developed network of railways, geographic location of the plant and its nearness to the main seaports at Odessa and Mariupol, have made the company to supply the steel products efficiently to over 30 countries.
The electric furnace smelting units of the plant are operating at its full potential, which is producing steel up to 90,000 t monthly. It is anticipated that the production of steel will be more than 1 Mt, during 2011.
The company has planned to manufacture over 145,000 t of hot-rolled products. Equipment present at the rolling mill of the plant has facilitated the production of the rolls through different thermal treatments that includes annealing and normalization, and tempering and hardening. There is demand for these products in the global market in the modern industries, shipbuilding and engineering.