Swedish steel company SSAB has agreed to divest its Ruukki Construction’s business operations in Russia to the Salavatneftemash Open Joint Stock Company, SteelTimesInt reports.
The transaction is expected to complete in the fourth quarter of this year and is subject to the approval of the Russian anti-monopoly authority. The transaction excludes the right to the Ruukki brand, the company said.
“We have been exploring opportunities to discontinue Ruukki Construction’s local business operations in Russia. Our business in Russia has decreased and the outlook is fairly unclear. Having found a suitable buyer, we can now go ahead with the transaction. The Russian business is completely independent and the transaction will therefore have no implications for our operations in other countries,” says Sami Eronen, President of Ruukki Construction.
Ruukki’s business operations in Russia now being divested had sales of approximately SEK 400 million in 2017. This compares to Ruukki Construction’s total sales of around SEK 5.8 billion during the same period. The divestment will have no significant impact on Ruukki Construction’s earnings.
Ruukki Construction’s business operations in Russia largely consist of building frame and envelope structures. Logistics, agricultural, industrial and commercial construction are Ruukki Construction’s most important customer segments in Russia.
The transaction now being completed excludes residential roofing products. However, in the same context Ruukki Construction will withdraw from the local roofing business operations in Russia.
Ruukki Construction’s business operations in Russia employ a total of some 630 people. Except for around 45 employees in the roofing business, all the employees will transfer under the transaction. The production facilities being transferred in the transaction are located in Obninsk and Balabanova in the Kaluga region. Ruukki Construction has a total of around 2,500 employees.