Inprom challenges Evraz and Metinvest in Russian beam market

Inprom plans to take on Evraz and Ukraine's Metinvest in a battle for market share in the CIS constructional steel market, ceo Igor Konavalov told MB.

The distribution and steel service centre company is targeting takeovers of seven or eight H-beam producers and is planning new in-house facilities to provide other steel products for the construction market.

“There is a strong market for that kind of production [in the CIS],” said Konovalov, “and the demand is not satisfied by other producers.”

Konovalov identified Evraz’s Nizhny Tagil and Metinvest’s Azovstal as the two main competitors producing beams for the construction industry.

“We are now summarising our business plan,” he said. “We plan to invest over $130 mln in these projects.”

The company plans to increase throughput from around 1 million tonnes to closer to 2 mln tn over the next few years.

Inprom is preparing for a Russian IPO in the next couple of months, but is also considering investment offers from three “international” steel companies, according to Konovalov.

“Our IPO prospectus is ready,” he said, “but since the beginning of the year we have been approached by strategic investors to convince us to sell a minority shareholding.”

“We see benefits of a collaboration in terms of technology and experience, but we also see minuses,” he added. “Investors are still hungry for new IPOs.”

Evraz and Metinvest did not comment by the time of publication.