Kryvorizhstal

Kryvorizhstal ( _uk. Криворіжсталь, _ru. Криворожсталь; officially Arcelor Mittal Steel Kryvyi Rih) is a large integrated steel company located in the Ukrainian city of Kryvyi Rih. Bought in 2005 by Mittal Steel, the company is one of the most important businesses in Ukraine and a globally-important steel producer. Particularly, it is the largest steel manufacturer in Ukraine and largest manufacturer of both reinforcing bar and wire rod in the former Soviet Union. The company also produces processed iron ore concentrates for both own use and market.

In 2004, Kryvorizhstal produced about 7.08 million tonnes of crude steel. As of 2005, the company employed about 57,000 people. Arcelor Mittal Kriviy Rih raised commercial roll production to 7.1 million tonnes in 2007. The company controls around a fifth of Ukraine's steel market.

Names

* Official names:
** Ukrainian: Відкрите акціонерне товариство "Міттал Стіл Кривий Ріг" (ВАТ "Міттал Стіл Кривий Ріг")
** English: Mittal Steel Kryvyi Rih Joint Stock Company (Mittal Steel Kryvyi Rih JSC)
* Former official names:
** Ukrainian: Відкрите акціонерне товариство "Криворізький гірничо-металургійний комбінат "Криворіжсталь" (ВАТ КГМК "Криворіжсталь")
** English: Kryvorizhstal Mining and Metallurgy Kombinat JSC (KGMK Kryvorizhstal JSC)

tructure

Located fully in Kryvyi Rih, Kryvorizhstal is the largest and most up-to date steel company in the Kryvbas region (as well as in the whole Ukraine). It was built as an integrated mining and metallurgy plant ( _uk. комбінат, "kombinat"), comprising of:
* iron ore mines
* ore processing factories
* coke-processing, oxygen and other auxiliary metallurgical facilities
* metal fusion workshops of different types
* metal-rolling workshops

Company's iron ore needs are satisfied by both its own processing and the supply by other ore companies of Kryvyi Rih. Instead, Kryvorizhstal sells part of its processed ore on the market.

History

oviet times

Kryvorizhstal (as it is historically named) is the newest steel industry in Ukraine. It was built by the Soviet government in the middle of 20th century, exclusively for exploiting of the newly-discovered Kryvorizkyi Basin ore deposits.

Privatization

Kryvorizhstal became internationally known when it was privatized in June 2004 for a sum of USD800 million, against a government-set reserve price of USD714 million, to a consortium called Investment-Metallurgical Union. This consortium was made up of Rinat Akhmetov's SCM and Interpipe Group, controlled by then-President Kuchma's son-in-law Viktor Pinchuk. Offers exceeding USD1 billion from foreign investors were rejected on a technicality. The deal has been widely criticized by the opposition and abroad as an example of corruption and state property mismanagement.

By initiative of the new President Viktor Yushchenko, the privatization deal was dismissed by the court in June 2005, in order to sell the company again in a fair auction. Mittal Steel acquired the 93.02 percent stake in Kryvorizhstal on October 24, 2005, for 24.2 billion hryvni (USD 4.81 billion). This price was more than twice the starting price and far exceeded analyst predictions of USD 3 billion, making it the largest privatization deal in the former Soviet Union, and arguably in the world.

The bidding process was broadcast live on Ukrainian television, while President, Prime Minister Yekhanurov and former Prime Minister Tymoshenko were following the process from the next room.

However, there were some conditional commitmets for sale the agreement that had to be fulfilled by Mittal Steel, such as technical and environmental improvements to the installation (upgrading the coking plants and desulfurisation), as well as social improvements (the allocation of funds to improve social and living conditions of workers at 0.5% of the sum of the sold products per year). On 14 July 2008, the Ukrainian Property Fund has sent the Ukrainian government a letter informing it about several investment commitments that were not fulfilled in 2007 by Mittal Steel Germany GmbH and asks the International Commercial Arbitration Court to decide on the annulment of this agreement [http://www.redorbit.com/news/business/1477820/ukraine_to_protest_mittal_steel_agreement_on_purchase_of_kryvorizhstal/ ] .

The steel plant's name was changed from Mittal Steel Kryviy Rih to Arcelor Mittal Kryviy Rih in June 2007.

References

1. http://www.redorbit.com/news/business/1477820/ukraine_to_protest_mittal_steel_agreement_on_purchase_of_kryvorizhstal/

ee also

* List of steel producers