KORTRIJK, Belgium (Jan. 23, 2008) — Independent steel products maker N.V. Bekaert S.A. plans to build a steel cord plant in Russia over the coming six years, with initial production expected in 2010.
Bekaert has budgeted $140 million for the project, to be located in the Lipetsk special economic zone about 240 miles south of Moscow and 60 miles north of Voronezh.
The announcement follows by four months the cessation of takeover/merger talks with Russian steel cord producer UralKord.
Bekaert said the project is in response to rising local demand for tire reinforcements generated by Russia's rapid economic growth. Bekaert said the Lipetsk region has good logistics, good access to energy supplies and a skilled labor force.
Bekaert said the investment will take place in phases through 2013. The first phase is scheduled to enter production in 2010. Bekaert did not say when it expects to break ground on the factory.
Bekaert supplies its customers in Russia from plants in Central Europe.
“Expanding our position in Russia is entirely consistent with Bekaert's strategy of sustainable profitable growth,” said Bekaert Chairman Paul Buysse. “The decision to set up our own production platform in Russia is proof of Bekaert's faith in the long-term potential of this country. Local production will enable Bekaert effectively to meet the rapidly growing demand for top-quality products.”