Swedish steelmaker SSAB is to divest its Ruukki Construction’s business operations in Russia (OOO Ruukki Rus) and form a joint stock company with OOO Salavatneftemash, called Salavatneftemash. The transaction is expected to be completed in Q4 2018 and will be subject to the approval of the Russian competition authority. The transaction excludes the right to the Ruukki brand.
Sami Eronen, president of Ruuki Construction, said that his company’s strategy was to achieve profitable growth in the residential roofing and building components markets and grow share in its current main market areas. He said that Ruuki wanted to improve profitability in the building systems arena by developing its projects and product portfolio. He also said that Ruuki was considering the discontinuation of 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,” he said.
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. According to SSAB, the divestment will have no significant impact on Ruukki Construction’s earnings.
The company’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, although Ruukki Construction will withdraw from local roofing business operations in Russia.
Ruukki Construction’s business operations in Russia employ some 630 people. Except for around 45 employees in the roofing business, 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.