Ukraine's Interpipe launches $700 mln steel mill

DNIPROPETROVSK, Ukraine, Oct 4 (Reuters) - Ukrainian pipe maker Interpipe will launch production from a $700 million steel mill by November that will fully meet its own steel needs and may even produce a surplus that the company will sell, Interpipe said on Thursday.

At the moment, Interpipe, which is controlled by billionaire industrialist Viktor Pinchuk, purchases steel from local or Russian producers to complement its own output.

The new facility, which started construction in 2007 in the city of Dnipropetrovsk, will produce 1.32 million tonnes of steel per year using an electric furnace from scrap metal generated by Interpipe's pipe- and railway-wheel-making facilities and also procured externally.

"The mill will be launched at the end of October or in early November," Interpipe Chief Executive Olexander Kirichko told reporters.

It will replace several open hearth furnaces still used by the firm that are less efficient and use expensive natural gas.

Interpipe plans to boost pipe sales to the European Union by 20 percent in the second half of this year compared with the first six months after the EU cut anti-dumping duties on its producers, Kirichko said.

Pinchuk, in turn, said Interpipe could branch out into steel exports as the new mill's capacity could be quickly increased to 2 million tonnes per year if there is sufficient demand.

"We will be able export high-quality steel," he said without elaborating on potential export volumes.

Interpipe, whose 2010 revenue stood at $1.3 billion, is one of the world's top ten producers of pipes and the third largest producer of railway wheels.

(Reporting by Olzhas Auyezov; editing by Keiron Henderson)

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