Ukraine: long term agreement with the steel industry leader

Ukraine is a key developing economy with a population of 46 million and with an attractive potential for developing an industrial gases business. It ranks 5^th worldwide in terms of iron-ore reserves and metallurgy is one of Ukraine's most important and dynamic industrial sectors.

Air Liquide has just signed a long-term contract with EMZ, a subsidiary of Metinvest – the Ukrainian steel industry leader – to supply industrial gases to its iron and steel plant based in Yenakiyevo (Donetsk Oblast), South East of Ukraine.

Air Liquide will invest in a new state-of-the-art Air Separation Unit (ASU) with a production capacity of 1,700 tonnes per day of oxygen, nitrogen and argon. The ASU will be designed, built and operated by Air Liquide; the commissioning is planned mid-2014. Air Liquide will also supply liquid gases to other industries in the country.

Metinvest is a major steel group fully integrated vertically from iron-ore to steel and is the recognized mining and steel industry leader in Ukraine. It is already the 5^th largest iron-ore producer in the world, and produces 14 million tons per year of crude steel. The Group comprises mining and steel production facilities located in Ukraine, in Europe and the USA and has a sales network covering all key global markets.

The overall Air Liquide investment is around €100 million and will be financed with the support of the EBRD (European Bank for Reconstruction and Development). It is the first time that a Ukrainian steel manufacturer has outsourced its industrial gases needs.

Igor Syry, CEO of Metinvest, said: “This project is one of the important steps in the implementation of the strategic development of Metinvest. In selecting Air Liquide as our partner, the world leader in the industrial gas market, we will benefit from their state of the art technologies and operational standards in environmental and safety performance. Metinvest will provide all the necessary assistance to help our partner grow and establish a sustainable business here in Ukraine. It is my belief that the success of this project will serve as a good example in the industrial development of Ukraine.”

Guy Salzgeber, Vice President North and Central Europe and a member of the Air Liquide Executive Committee, commented: “We are greatly honored that Metinvest has chosen Air Liquide as its long term partner for this first outsourcing of their industrial gases. In addition to the investment of the new Air Separation Unit for Metinvest, Air Liquide plans to build up in Ukraine high level technical and operating expertise to support its long term development in this important market for industrial gases. This success in Ukraine illustrates our increasing development in this zone of Europe. Developing economies are one of the growth drivers of the Group.”