U.S. investor to become majority owner of Galvex

  • 2004-05-27
  • From wire reports
TALLINN - Daniel Bain, a U.S. citizen who has so far brought the largest amount of foreign investment into Estonia, will soon become majority owner of the Galvex galvanized steel facility and is planning to invest another 1 billion kroons (64 million euros) into the company.

In the deal, which will be signed in the United States, Bain will acquire the shares of another founder of Galvex, Barry Bernstein and his family, the daily Postimees reported this week.
Bain will ultimately control 90 percent, instead of his current 45 percent, of the more than 2.7 billion kroon galvanizing facility in Muuga Port. European financial investors will control the remaining 10 percent.
After acquisition, Bain is planning to invest 400 million kroons into warehouses and 650-700 million kroons into building an annealing line and painting facility.
Patrick Queen of Scotland, the managing director of Galvex, said that the facility has so far been operations without problems this year.
"If last year there were problems with transport because of the ice and some ruptures during the testing phase, than everything has been running smoothly this year," he told the paper.
If Galvex produced a total of 215,000 tons galvanized steel last year, then this year's output during four months was the same amount.
"The total output should be more than 400,000 tons this year," Queen said.
Approximately 90 percent of the galvanized steel is exported and sold in about 70 countries. The company imports most of its raw material from Russia.
Queen said that output capacity would grow to about half a million tons over the next few years, and he estimated that despite last year's setbacks the company would re-earn its investments in six or seven years.
The yearly turnover of the facility is 4 billion - 4.5 billion kroons.