OREANDA-NEWS. November 26, 2010. VTB-Leasing of Russia buys out the entire output of Kremenchug Steel Foundry, the only producer of car castings in Ukraine,  Mr. Eugeniy Hvorost, one of the top managers of Kriukiv plant announced on Nov 25.

Millennium Capital considers the news as NEGATIVE for KVBZ. The plant is underutilized due to shortage of castings. Due to this shortage, two out of the plant’s four workshops have been idle. The plant could additionally get USD  1.3bn (app. 150 cars) per month in revenues if VTB-Leasing would increase casting supplies to KVBZ. Meanwhile, the Russian company provides castings only for cars (700 units per month) it has ordered from KVBZ. The latter does not purchase import castings because of high prices. At the same time, we see the news as neutral for Stakhanov Railcar (SVGZ UK). As reported in September, VTB-Leasing had intended to buy the entire output of SVGZ in 2011. The management of VTB-Leasing also expressed interest in an acquisition of SVGZ.