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2 Apr, 2008 12:47

Steel giant hungry for foreign assets

Russian steelmaker Evraz enjoyed 56 per cent growth in net profits last year. Asset acquisitions on various markets and the favourable market situation helped it become the world’s most diversified steel firm after Arcelor Mittal.

Soaring steel prices along with increased production enabled Evraz to drive its revenues up to a record $US 2.1 million last year.

Evraz says the company’s presence in the high-value-added sector is a key reason of the strong growth.

The company spent $US 3.7 billion last year expanding in North America and South Africa.

The acquisitions made Evraz the second most diversified steel company in the world after Arcelor Mittal.

“The company currently exports roughly 40 per cent of what it produces in Russia. In order to take these exports up the value chain it’s sensible for them the make acquisitions in high-price and high-value-added markets like the United States,” believes Michael Cavanaugh, Senior Analyst at Uralsib.

With steel prices expected to continue on their upward trend, Evraz anticipates revenue growth of 60 per cent in the first half of this year.

Market watchers say that the positive outlook is likely to result in a rise in Evraz’ share price, in the short term at least.