The Russian steelmaker Novolipetsk Steel (NLMK) has announced that it has acquired the scrap collection and processing company LLC VMI Recycling Group (VMI) from a group of shareholders for a total of $28.4 million.
Accordingly, VMI operations include four sites equipped with modern scrap collection and processing facilities located in the Moscow region, Russia's largest scrap collection region. Cutting edge equipment, including a shredder machine commissioned in March 2010, allows VMI to process up to 500,000 mt of ferrous scrap per year.
The acquisition is in line with NLMK's vertical integration strategy aimed at enhancing the group's self-sufficiency in main raw materials. It will also allow NLMK to optimize scrap deliveries to the main production site in Lipetsk and later to its new 1.5 million mt/year EAF mini-mill in the Kaluga region, 80 km from Moscow, which is currently under construction.
The transaction will be financed by NLMK's current cash funds and existing credit lines. VMI will be consolidated on the balance sheets of NLMK group's 100 percent subsidiaries, Vtorchermet NLMK and NLMK-Long Products at 99 percent and one percent respectively.