Project description
and objectives:
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An EBRD equity investment in VIZ Stahl, a specialist Russian steel plant
located in Yekaterinburg, to support modernisation of the existing production
facilities, to restore a part of its original capacity, and to improve product
quality and energy efficiency.
In addition to its own financing of VIZ Stahl’s operations, Duferco has asked
the Bank to participate in upgrading production facilities, which will enable
the company to restore capacity and to improve product quality and energy
efficiency.
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Transition impact:
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Transition impact will be achieved through assisting Duferco in
post-privatisation restructuring based on a solid long-term business strategy.
The process has already resulted in increased transparency by the company and
improved management practices. The EBRD's participation in the company will
contribute to further strengthening of the company’s organisational and
financial transparency and corporate governance standards. New investment will
help the Russian company to enhance its reputation with prime international
customers and to improve its competitive position vis-à-vis other suppliers.
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The client:
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The investee company is one of only 15 producers worldwide of grain-oriented
steel used for transformers in power generation and distribution. The company
is controlled and managed by Duferco, a major steel trader and an important
European producer with a clear strategic view on the steel sector and proven
ability with acquiring and turning around steel plants.
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EBRD finance:
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US$ 5 million (€5.75 million) equity investment.
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Total project cost:
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US$ 5 million (€5.75 million).
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Environmental impact:
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This operation has been screened B/1, requiring an environmental audit of the
existing facilities and an environmental analysis of environmental impact
associated with the proposed development and the adequacy of mitigation
measures. The environmental audit of the existing facilities was carried out
by independent consultants according to terms of reference prepared by the
EBRD. It revealed that the separation of the Verkh Izetski Metallurgical Works
into several independent companies and the subsequent privatisation was
prepared carefully and that responsibilities are well-defined concerning usage
of the common sewage system and responsibilities for waste water and air
emissions monitoring. The company's air emission sources are operated in
compliance with the local prescribed limits. Due to the operation of a close
cycle of process water, the site has no problems with waste-water discharge
except for the discharge of storm water and excessive water from the cooling
cycle. An additional waste-water treatment facility will be built by the end
of 2003, in accordance with the agreement between VIZ Stahl and the State
Environmental Protection Committee of the Sverdlovsk Region.
At present, most hazardous material storage facilities are operated in
compliance with Russian and European Union standards. Waste management in the
company is well-organised and considerable attention is paid to waste
recycling. The company's occupational health and safety management is at a
very good level. The system of supervision and schedules for regular
monitoring of working conditions is implemented and is fully functional. The
company keeps an open working relationship with the controlling environmental
and health and safety authorities. Communications with the company's employees
and the general public are well-maintained through the company's newspapers.
Based on the findings of the environmental due diligence, an Environmental
Action Plan (EAP) has been developed to address the identified issues, which
would bring the company into compliance with Russian and EU/World Bank
standards.
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Technical
cooperation:
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None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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EBRD contact:
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Victoria Maisuradze, Operation Leader: maisurav@mos.ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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