The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced that it has completed the acquisition of 99.99 percent stake in Russia's largest metal scrap collector and processor ZAO Profit.
Accordingly, the acquisition of MMK's strategic raw material supplier Profit will significantly strengthen the company's security in terms of raw materials supplies. In 2008, Profit supplies accounted for 75 percent of more than five million mt of scrap consumed by MMK in previous year.
In 2008 Profit accounted for a 16.2 percent share of the Russian domestic scrap market, while its total supplies of scrap stood at 5.2 million mt. MMK is the key customer and strategic partner of Profit. Shipments to MMK accounted for more than 80 percent of Profit's overall sales volume. Besides, Profit has contracts with other Russian steelmakers such as Severstal, Chelyabinsk steel mill, Ural Steel, Volzhsky pipe mill, Izhstal, ZSMK. The company carries out scrap purchases in 64 regions of Russia.
The financial details of the acquisition have not been disclosed.