Following the announcement last week that Italian Cremona-based steelmaker Arvedi is interested in purchasing Trieste-based pig iron producer Ferriera di Servola from Lucchini (79.82 percent owned by Russia's Severstal Group), the indications are that there are three main factors behind the prospective takeover by Arvedi, which is thought possible at the end of the summer after the process of due diligence has been completed.
The first factor is the possibility of the reactivation of the second blast furnace (currently closed) at Ferriera di Servola, which would allow pig iron output to be doubled from 1,200-1,400 mt per day to 2,400-2,800 mt, i.e. an increase from 400,000 mt to 800,000 mt annually of various qualities of pig iron.
Logistics constitute a second factor. Ferriera di Servola's docking facilities at Trieste port are expected to be doubled, with berthing length to increase from 300 to 600 meters. This will allow two ships to dock at the same time, permitting an expansion in the trading of raw materials, including iron ore, pig iron, coke and scrap.
Energy costs make up the third factor, with the current favorable energy supply contract at Ferriera di Servola expected to be maintained up to 2015.
Arvedi has four facilities in northern Italy producing hot rolled flat products, welded carbon steel tubes, welded stainless steel tubes and precision stainless steel strip.