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Business news, 06.09.2007 14:32

Magnitogorsky Plays Part With $117Mln Auto Plant

turbine Magnitogorsky Metal Plant will invest three billion rubles ($116.8 million) into a new production complex in St. Petersburg, the Committee for Economic Development, Industrial Policy and Trade said Thursday in a statement. The company will invest into a service center and a plant for the production of standard metal details.

“Realization of this project is in accordance with the company’s strategy. About three billion rubles will be invested into construction of the plant. Due to begin operations in 2010, the site will have an initial processing capacity of 125,000 tons of metal a year. In the long term production volume could increase to 300,000 tons a year,” Rafkat Takhautdinov, vice president for strategic development at Magnitogorsky Metal Plant, was cited in the statement as saying.

Magnitogorsky Metal Plant is one of the largest ferrous metallurgy enterprises in Russia occupying 20 percent of the national market.

Last year the company produced 12.5 million tons of steel and 11.3 million tons of metal.

Magnitogorsky Metal Plant sales last year amounted to $6.4 billion according to a US GAAP report. About 50 percent of products were exported. Net profit was reported at $1.4 billion.

Recently Magnitogorsky Metal Plant acquired 75 percent of a St. Petersburg-based company, Interkos-IV, which produces large-size metal details, press molds of up to 70 tons and standard metal details for automotive companies and producers of household appliances.

The company was acquired to maintain Magnitogorsky Metal Plant’s position as supplier for automotive companies in St. Petersburg as well as provide it with a share in the Northwest market.

The latest move will increase Magnitogorsky Metal Plant’s production capacity in the Northwest.

“To base this project in St. Petersburg is logical given the investment projects planned by world automotive giants like Toyota, Nissan, General Motors and Suzuki. It will help to create a cluster of car components and details producers in the city,” said Sergei Fiveisky, deputy chairman of the Committee for Economic Development, Industrial Policy and Trade.

Construction of the plant will be a step towards the concentration of car production companies in the city.

“Besides being a modern production complex, this plant will create additional jobs and provide additional revenue for the local budget,” Fiveisky said.

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