July 10, 2020

Severstal increases stake in CWHE joint venture

PAO Severstal announces it has closed a deal to increase its shareholding in its joint venture with Germany's Linde GmbH for the production of coil-wound heat exchangers (CWHE) for use in medium-scale and large-scale LNG plants. Following the completion of the transaction, Severstal will have a 50% stake in the joint venture.

The joint venture was established in June 2017 under a scheme to localise production of CWHE in Russia. In 2019, as previously announced, Severstal signed an agreement to purchase a 26% stake in the joint venture with Linde.

Increasing its stake reflects one of the key priorities of Severstal's updated strategy – guaranteeing superior customer experience by providing high-tech customized solutions to the energy industry.

Alexander Shevelev, CEO of Severstal, commented:

"Increasing our share in the joint venture was a logical step towards increasing our presence in the dynamically developing market of LNG production, storage and transportation. Heat exchangers are not assembled on a production line, but are exclusively made to order. The key advantage of this is the ability to develop unique engineering solutions for specific projects. This allows us to consider all the nuances of technological processes at a customer's plant and, as a result, maintain close contact with our partners at each stage of the project implementation. At the moment, the JV’s order capacity is approaching 100%, and there is potential to build additional capacity. In October 2019, the joint venture received its first export order, which is due for delivery in 2020."