OREANDA-NEWS. November 30, 2007. Industrial Union of Donbass (IUD) is actively re-enforcing its positions in the Polish market. As soon as Sergei Taruta and Vitaliy Gaiduk, the IUD owners, finalized the acquisition of Stocznia Gdanska, they devised the plans on the IPO of ISD Polska, a Polish arm of IUD, on the Warsaw Stock Exchange. According to Ludvik Sobolewski, executive director of the Warsaw SE, ISD Polska is going to carry out its IPO on the Warsaw SE in 2008. The company estimates its total capitalization at 1 bn zloty ($402.7 mn).

Stocznia Gdanska shipyard for IUD like the project with Huta Czestochowa – is, first and foremost, a promotion of its products in the EU markets. And this second "Polish project" is a logical continuation of the first one. Long since the shipyard has been purchasing steel plates from Huta, being one of the main consumers of this steelmaker. Therefore, an acquisition of one of the largest Polish shipyards may become very lucrative for IUD.

It looks like all Polish projects of IUD become a kind of a base for the corporation positioning as a transnational one. Therefore, they are announcing about the IPO on the stock exchange. However, unlike Rinat Akhmetov, who structured his business in preparation for the IPO, IUD is not ready for its IPO in London or New-York. Nevertheless, they well may borrow funds in the Polish market, like it was done by Astrata and Kernel. Many experts believe it is the easiest way for subsequent entering the EU markets, as quotations in Warsaw allow including shares into the listings of any other stock exchanges on the EU territory.

At that, the company with similar foreign assets could hardly be called a transnational one. Even in the Polish steel market the key player is Mittal Steel Poland (Katowice, Sendzimira, Florian, Cedler steelmakers), controlling up to 70% of the industry. At the beginning of 2005, the market value of the Polish assets owned by Mittal Steel was estimated at $1.9 bn, and in view of the metallurgy assets value increase across the whole world, its worth now increased twofold as minimum.

Another thing is to build a Polish vertically-integrated holding, including metal traders (which already exist) and consumers (the shipyard mentioned above). By the fact, it is not excluded that IUD will return to the acquisition of one more shipyard in Poland – Stocznia Gdynia. The enterprise, despite its debt amounting to $260 mn, is rather attractive one. Its portfolio of orders for the years to come reaches $1.5 bn. Besides, this ship yard also is technologically dependent on Huta Czestochowa. Due to this, part of investments will be spent for output increase and broadening the range of products, used for metal structures production. Some efforts to build the Polish holding were undertaken in February 2005, when IUD purchased from Ropczyce a 50% stake in refractory company (Chrzanowskie Zaklady Materialow Ogniotrwalych S. A).

For operations in the Polish metallurgy market IUD established a joint-venture with the local company – Zlomrex, under the name of Industrial Metallurgical Company, where IUD owns 75%-1 share, and Zlomrex – 25%+1 share. But the story does not end here: ahead is the fight for acquisition of Stalexport SA (Polish steel distributor), among the pretenders to which are Zlomrex, and Mittal Steel Poland – an ancient competitor to IUD. The development of the metal trade business has certain sense in terms of interest lobbying. Polish Union of Distributors of Steel (PUDS) participates in activities of similar all-European structure – Eurometal, which may facilitate the promotion of products to the EU markets.