March, 31. 2006
Rautaruukki to acquire leading russian steel constructor ventall
Rautaruukki Corporation is strengthening its position in the strongly growing Russian construction market and has reached agreement on the purchase of the leading Russian steel constructor OOO Ventall from the company's operative management. Ventall designs and supplies steel frame structures and sandwich elements used in wall and roofing structures for the Russian market. The price for the shares is EUR 97.5 million. The agreement includes a possible supplement to the price, a maximum of EUR 27.5 million, that depends on the financial performance in 2006 and will be paid only if profitability improves significantly from the 2005 level. As part of the transaction Rautaruukki will take over the company's interest-bearing debts of EUR 3 million. The transaction still requires the approval of competition authorities. The transaction is expected to be finalised in May 2006.
Ventall is the leading steel constructor in Russia, located in Obninsk in the Kaluga region, some 100 kilometres south of Moscow. The company had 1238 employees at the end of 2005. Ventall had net sales in 2005 of some EUR 70 million and an operating profit of EUR 15.5 million. Ventall has completed most of a EUR 30 million expansion programme that will triple its production capacity and enable significant growth in net sales, which are forecast to be some EUR 110 million in 2006.
"The purchase of Ventall is a strategically important step for Ruukki in expanding our solutions business. The acquisitions of PPTH in Finland and Steel- Mont in Slovakia have strengthened our knowhow in steel construction and we are now obtaining a share in the growing construction market in Russia," states President & CEO Sakari Tamminen.
Ruukki's goal is to be one of the leading suppliers of metal-based construction solutions in the Nordic countries, central eastern Europe, Russia and Ukraine. Ruukki estimates that commercial construction will increase considerably in the next few years in Russia. Ruukki values the steel construction market in Russia at about EUR 700 million, with Ventall having about 7 per cent of the market. Ventall has a 15 per cent market share in sandwich elements. Ruukki's net sales in Russia totalled some EUR 70 million in 2005. The purchase of Ventall will more than double the net sales.
"Ventall has a strong market position in Russia and modern production technology. Ruukki's and Ventall's design expertise in steel structures and complementary construction components significantly increase our service capabilities in key customer segments in Russia and will also support our growth in Ukraine," says Saku Sipola, President of Ruukki Construction.
About Rautaruukki Corporation:
Ruukki supplies metal-based components, systems and integrated systems to the construction and mechanical engineering industries. The company has a wide selection of metal products and services. Ruukki has operations in 23 countries and employs 12,000 people. Net sales in 2005 totalled EUR 3.7 billion. The company's share is quoted on the Helsinki Exchanges (Rautaruukki Corporation: RTRKS). The Corporation has used the marketing name Ruukki since 2004.
For further information:
Mr. Sakari Tamminen, President & CEO, tel. +358 20 592 9075
Mr. Mikko Hietanen, CFO, tel. +358 20 592 9030
Mr. Saku Sipola, President, Ruukki Construction, tel. +358 20 592 8979
Taina Kyllönen VP, Corporate Communications
Helsinki Stock Exchange
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