A new 300,000 mt capacity plant for the production of rolled steel products used in the construction industry, Volga Electrometallurgical Plant (VEMZ), is currently under construction in Russia's Ivanovo region, northeast of Moscow.
The first phase of the plant, with an annual capacity of 65,000 mt of small diameter rebar (8-16 mm) is scheduled to be commissioned in March 2011. According to estimations, the total investment in the construction of the first phase of the plant will amount to Ruble 880 million (about $29 million), of which 30 percent will come from the company's own funds while 70 percent will be borrowed. Currently, VEMZ is in talks with several banks to obtain credit, and has agreed with the government of the Ivanovo region on subsidization of a part of the interest rates on credits issued for this project.
The equipment for the plant has already been ordered from Turkish company Pirimer Makina.
More than half of VEMZ's raw material needs are to be sourced in the Ivanovo region, while the remaining volumes of scrap are planned to be bought from neighboring regions. Finished products will be supplied to construction companies in the Ivanovo, Kostroma and Yaroslavl regions.