The Russian mining and steel producer Evraz Group is reported to be in talks for the possible acquisition of the Russian steel distribution network of Luxembourg-based Carbofer Group, a private company that trades steel and raw material, invests in projects in those industries and provides shipping and financial services.
"Currently, the demand in the Russian market is low and we need to be closer to the client. We have to have more opportunities to increase the direct sales, so we think the Carbofer acquisition could have a positive effect," Evraz's CEO Alexander Frolov stated.
Carbofer Group's Russian steel distribution network Carbofer Metall consists of six companies that form a network of 35 warehouses in key regions of Russia and includes one warehouse in Kazakhstan, generating a total of over $1 billion in revenues in 2008. Carbofer Metall was set up in 2007 by shareholders of Evraz, who sold their EvrazMetal sales network with its annual rolled metal products turnover of one million mt to Carbofer in the same year. Reportedly, the transaction was valued at $100 million.
Carbofer Group's trading is focused on the commerce of steel, pig iron, coal and scrap worldwide and consists of 16 representative offices in Europe, the CIS, Asia, the Americas and the Middle East. The group's distribution network supports this trading activity by providing shipping services for all of its business and the logistics for door-to-door deliveries in Russia and most of Europe.