OREANDA-NEWS. January 14, 2007. Rostov Electrometallurgical Plant (REMZ) launched testing of a mill to produce semi-finished metal products with capacity of 730 thousand tons per year. It is scheduled to be put into operation in March 2008. The end of the year will see commissioning of a light sections and wire rolling mill which will enable the plant to produce various products. Hence, REMZ might need about RUR 6 bln to purchase raw materials. 

Last week, REMZ started hot testing of equipment and cast first melts, according to the Managing Company ESTAR. The hot testing period will last for around three months. The plant’s first phase, that is commissioning of a continuous casting line, is set to come into operation in March 2008. It should reach full capacity of 730 thousand tons per year in August 2008. REMZ’s second phase is planned to come on stream at the end of next year. With its commissioning the plant will be able to produce cast sections, rolled products, reinforcement and wire rod (180 thousand tons of cast sections and 550 thousand tons of metal-roll).

Shakhty plant will require over 800 thousand t/y of scrap metal. At present, the plant has allocated most of its own and borrowed funds out of $200 mn invested in the project, ESTAR press service told N newspaper. (JSC People’s Bank of Kazakhstan, which is among top3 banks of the Republic, is one of main lenders. - N) The plant has most probably identified its suppliers of raw materials and consumers of REMZ’s products, yet, the company is not eager to disclose such information saying that TD ESTAR will deal with sales, and ZAO Lomprom, a part of the Estar group, will supply scrap. According to previous statements of the holding’s president Andrey Mishin, the plant’s products will used to satisfy needs of the Southern Federal District which will grow due to future Olympic Games. As to raw materials, Lomprom is only a site to collect and process metal scrap, which the plant will have to buy from other operators.

The region today has every opportunity to supply raw materials to REMZ – about 200 thousand tons of metal scrap is sold here on a monthly basis, with the bulk of materials exported. A ton of metal scrap costs RUR 6-7 thousand. As a rule, plants offer higher prices, by RR300-500 per ton, than exporters, which might be of interest to the sellers. If we take such prices, REMZ will need about RUR 6 bln to buy metal scrap next year.