Evraz, one of Russia’s largest metallurgical holdings and the country’s largest rails’producer, owned by Alexander Abramov, a former scientist who became an industrial magnate, is expanding in the global rails’ market through the start of exports to Latin America and the Middle East states.

According to Mary Starovoit, an official spokesman of Evraz, according to the company’s plans next year the volume of supplies to Latin America and the Middle East will account for 10% of Evraz’s total rails’ production, while in the middle term, the share of exports here will rise to 20-30%.

In the case of Latin America, there is a possibility that Brazil will become one of the largest sale markets for Evraz for the next several year. As part of these plans, Evraz had  participated in a tender for the supply of rails for the Brazilian state-owned Valec railway company.

According to data of the Russian Federal Customs Service, this year total volume of rails’ supplies from Russia to Brazil amounted to 581.7 tonnes, valued at $ 1.2 million.

At the same time there is also a possibility of significant increase of rails’ supplies by Evraz, as part of the existing foreign contracts with the Russian railway monopoly RZD. According to Sergei Pavlov, General Director of RZD International, RZD’s subsidiary, that oversees implementation of foreign projects of the company, the company will soon begin construction of railways in Iran, and will also participate in the tender for the construction and electrification of railways in Brazil. This will require a significant volume of rails’ supplies.

In addition to Iran and Brazil, there is also a possibility that the supplies of Evraz rails could be also started to Saudi Arabia. The production of the majority of Evraz rails, designed for exports ,currently takes place at the capacities of the company’s domestic plant in Novokuznetsk, a city in Kemerovo Oblast in south-western Siberia. The volume of investments in the development of the plant since 2006 has reached US$600 million. 

According to analysts of the Russian Ministry of Industry and Trade, the expansion in foreign markets is very important for Evraz, taking into account that their volumes of supplies to the domestic market and to particular to national railway monopoly RZD since the beginning of the current year have significantly decreased, which became mainly due to suspension of the number of projects in the field of high-speed lines in Russia, due to lack of state funding.

According to the contract, signed between Evraz and RZD in 2012 and valued at 90 billion rubles (US$2,5 billion) for the supply of rails until 2017, the first batch of rails under the DT370 and DT350 SS IC brand for high-speed lines should be delivered in 2013, however the supplies were started just several months ago. Prior to 2012, RZD mainly purchased hundred-meter rails from the Austrian Voestalpine Schienen company.

At the same time, in addition to Novokuznetsk plant, the supplies of rails is expected to be started from another factory of Evraz in Russia, and in particular the Nizhny Tagil Metallurgical plant, and the production facility in the US (Evraz North America), which the company acquired in January 2007 for $ 2.3 billion from Oregon Steel Mills.

In addition to Evraz , the local Mechel, one of Russia’s leading mining and metals companies remains another leading producer of rails, and currently accounts for about 2% of the market. At present the company, which is headed by Igor Zyuzin a Russian businessman, with a personal fortune of US$ 3 billion, is completing certification of its rails by RZD and will be able to start supplies already in the near future.

This is the first case of supplies of rails from Russia to foreign market, except the supply of an experimental batch of rails for the certification of the German Deutsche Bahn.