Metinvest to sell Luhansk Pipe Plants products in Russia

Metinvest (METINV) plans to sell products from Luhansk Pipe Plant to Russian customers through its own distribution channel, Metinvest Eurasia, starting from mid-February, Metal Courier reported yesterday. Previously, Luhansk Pipe Plant sold directly to customers in Russia.

Roman Topolyuk: The sales of Luhansk Pipe Plant’s products will strengthen Metinvest’s positions in welded water and gas tube segments. Moreover, we believe this might be a sign that Metinvest holds equity in the enterprise or plans to purchase a stake. In 2011, Metinvest indirectly acquired a 25% interest in Zaporizhstal (ZPST UK) and options to increase its stake from Industrial Group; Zaporizhstal was affiliated with Luhansk Pipe Plant. If Metinvest acquires Luhansk Pipe Plant, it would have a vertically integrated production chain, which includes the sale semi-finished products (steel strips) from Zaporizhstal and MMK Illicha Steel (MMKI UK), production of finished pipes at Luhansk Pipe Plant and final sales to the market.