Nordic and US-based steel company SSAB has agreed to sell Ruukki Construction’s business operations in Russia - Ruukki Rus - to open joint stock company Salavatneftemash.
The transaction is expected to complete in the fourth quarter of this year, and is subject to the approval of the Russian competition authority. SSAB said the transaction excluded the right to the Ruukki brand.
Sami Eronen, president of Ruukki Construction, said the company’s strategy was to achieve profitable growth in the residential roofing and building components businesses, and to grow market share in its current main market areas.
He said that in the building systems sector, the company wanted to improve profitability further by developing its project and product portfolio.
“We have been exploring opportunities to discontinue Ruukki Construction’s local business operations in Russia,” he said. “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.”
He added that the Russian business was completely independent, and that the transaction would therefore have no implications for its operations in other countries.
Ruukki’s business operations in Russia that are now being divested had sales of approximately SEK400 million (€38.64 million) in 2017. This was said to compare to Ruukki Construction’s overall sales of around SEK5.8 billion (€560.25 million) during the same period.
The company stressed that the divestment would have no significant impact on Ruukki Construction’s earnings.
Ruukki Construction’s business operations in Russia largely consist of building frame and envelope structures, with logistics, agricultural, industrial and commercial construction as its most important customer segments in Russia.
The transaction now being completed excludes residential roofing products. However, Ruukki Construction will withdraw from 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, 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.