Sunday, July 15, 2018

EVRAZ opens new production facility to expand international reach

Last week, leading Russian metallurgical company EVRAZ opened a new production facility in Russia to better compete in the railway markets in Latin America, the Middle East and Europe.

EVRAZ announced its intention to be more competitive in those markets during the ninth International Strategic Partnership 1520 business forum in Sochi, The Moscow Times reports.

"The market is changing," EVRAZ Deputy President Ilya Shirokobrod, according to The Moscow Times. "Customers require rails that can withstand higher speeds and bigger loads, so modernizing production was necessary."

This year, EVRAZ has spent $600 million on fully rebuilding a separate facility in the western Siberian city of Novokuznetsk which is designated to be a full-time rail production plant.

The Novokuznetsk facility has an estimated production capacity of 950,000 tons of rails per year, which is roughly equivalent to Russia's annual rail demand, The Moscow Times reports.

EVRAZ's new facility is expected to contribute 10 percent of the company's total rail exports throughout the rest of 2014, and increase to 30 percent over the course of the next two or three years.

Rails produced in the new facility are primarily earmarked for the Latin American, Middle Eastern and European markets, according to The Moscow Times.

The company has identified Germany as its biggest potential European market. Currently, Germany purchases approximately 250,000 tons of rails each year. EVRAZ has entered talks with German state rail operator Deutsche Bahn to strike a production deal.

"Our rails are now passing Deutsche Bahn's certification procedure," Shirokobrod said, The Moscow Times reports. "We are currently manufacturing the first batch to best tested according to working conditions in Germany."

Meanwhile, EVRAZ is also positioning itself to meet the increasing annual needs of the United States' rail market. In a separate facility, the company currently produces 500,000 tons of rails per year.

EVRAZ has invested $34 million this year up its production of U.S.-bound rails by nine percent, according to The Moscow Times.