Chinese Shandong Baikal Group will invest RUR 429 million in a pre-painted cold rolled steel coils factory in Tatarstan

Chinese Shandong Baikal Group will invest RUR 429 million in a construction of a prepainted cold rolled steel coils factory. The project was approved by the governmental commission for reviewing applications for concluding an agreement on operating in the territory of advanced social and economic growth (TOSER) "Nijnekamsk". The project is run by Kamastal LLC, that will build a factory, which will paint rolled steel coils and apply polymer coatings to it, as well as produce finished products.

The design capacity of the plant is not less than 50 thousand tons per year. It is expected that Zibo Chuangcai International Trading (Shandong, PRC) will be the main raw material supplier. NLMK JSC (MOEX:NLMK) (Lipetsk), MMK JSC (Magnitogorsk), Severstal JSC (MOEX:CHMF) (Cherepovetsk) are considered as potential suppliers when the plant will reach its design capacity. 34.6 thousand tons of rolled steel will be supplied from China, while 14.8 thousand tons of steel will be supplied by Russian suppliers.

The investment phase of the projects is to be completed by mid-2019. The enterprise's revenue is planned at RUR 2.76 billion per year (since 2020), and net profit is planned at RUR 70-90 million. The payback period for the project is about five years.

The resident company is planning to obtain RUR 92 million of benefits from taxes, payed to the budget of Tatarstan, for the entire implementation period of the project until 2027. For the same period, the company's taxes to the republic's budget will amount to over RUR 97 million.

The planned sales regions are Russia, Belarus, Ukraine and Kazakhstan. The products can be used as building materials (corrugated board, metal tile, metal siding), in machine building: for housings and parts, home appliances.

The capacity of the Russian market of polymer coated rolled steel products is estimated as 2 million tons per year. The company expects to take a 2% stake.

TOSER "Nijnekamsk" was founded in 2017 by the decree of the Government of the Russian Federation for the period of 10 years. During this period, it is planned to create at least 3 thousand jobs and attract at least 20 resident companies with an investment volume of at least RUR 7.5 billion. Reduced income tax, exemption from property tax and land tax, reduced insurance premium rates are provided for residents of TOSER.