Russia's major Vyksa, Germany's ING Bank ink $19.7-mln loan deal

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MOSCOW, September 6 (RIA Novosti) - Vyksa Steel Works [RTS: VSMZ] said Wednesday it signed a loan deal worth 15.34 million euros ($19.7 mln) with Germany's ING Bank.

The world's largest producer of train wheels and Russia's largest manufacturer of pipes said in a statement a 9-year credit line, secured by Germany's export credit insurer Hermes, would be used to finance the purchase of SMS Meer's equipment for a new production facility to weld pipes of a 219mm (8.62-inch) and 530mm (20.87-inch) diameter.

The new facility is part of a major project of the United Metallurgical Company (OMK), Vyksa's holding company, to build a large casting and rolling enterprise (CRC) in Nizhny Novgorod Region's Vyksa District on the Volga River.

The Nizhny Novgorod CRC, which has been under construction since June 2005, will produce high-quality hot-rolled stock for small- and medium-diameter steel pipes. The first stage of the works, with an annual capacity of 1.2 million metric tons of pipes, and $600 million worth of investment, will be commissioned in late 2007.

In 2005, OMK products accounted for 17% of domestic pipe consumption, including 22% of large-diameter pipes, over 60% of railroad wheels and over 70% of automobile springs. OMK enterprises manufactured around one million tons of assorted pipes, as well as over 400,000 tons of rolled metal and 800,000 railroad wheels. The company garnered more than $2 billion in revenues in 2005.

Among the major consumers of OMK pipes are Russian and foreign companies, including Gazprom, LUKOIL, Transneft, Surgutneftegaz, Rosneft, ExxonMobil and Royal Dutch/Shell. The company supplies products to 20 countries.

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