Ferrexpo: Ironstone Will Conquer the World
2017, Iron Ore
Ferrexpo is the company that specializes in the production and export of iron ore pellets. It is worth to note that it is the largest exporter of pellets in the CIS. The main asset of the company is located in Ukraine – Poltava Mining and Processing Plant.
However, the headquarters of the company are registered in Switzerland. Therefore, it is not surprising that Ferrexpo Plc unites the Swiss group Ferrexpo A.G. and its affiliated companies.
Offices of the company which are engaged in sales and logistics are located in Dubai, Kiev, Shanghai, Singapore. The company's main customers are located in Eastern, Central, and Western Europe, as well as in China and Japan. Such an international cooperation is related to a high-quality product that is manufactured by Poltava Mining and Processing Plant and efficient services that are provided by the company as well.
In 2017, the company produced 10.4 million tons of iron ore pellets. The main consumers of the products are steel companies from Austria, Slovakia, the Czech Republic, Germany and other European countries, as well as Japan, Taiwan, South Korea and China. Owing to producing about 10 million tons of pellets per year the company is able to deliver its products to many countries on a large scale.
Ferrexpo also started engineering of a program that will help to develop and increase the capacity of each of the company's four operating lines for the pellet production, from a total of 12 million tonnes/year to more than 20 million tonnes.
It is worth to admit that since the company’s foundation the value of Ferrexpo shares soared 99% on the London Stock Exchange. The company's capitalization in this case increased by almost $ 300 million. Such growth cannot be explained by global changes in the market, it is the merit of the company itself.
Ferrexpo intends to focus on investments in the company's processing facilities. The main goal is to increase the output of iron ore concentrate and pellets. According to Ingrid McMahon, manager of investor relations and communications, the company intends to increase the production of concentrate. Such an act will affect the production of pellets from the current 11.2 million tons to 12 million tons. It is planned to invest about $ 50 million during 2018 and its implementation is forecasted to happen in 2019.
As for sales, according to the company's annual report on the London Stock Exchange, the share of sales of pellets in tons to Central Europe is the largest one – it consists of 49%.
The share of sales in Western Europe is up to 15%, in Northeast Asia – 16%, in China and South-East Asia – 12%. The share of pellets supplied to Turkey increased is up to 8%.
BlackRock Inc. – the world's largest asset management company that is situated in the USA has concentrated 5.68% of shares in the company Ferrexpo. Such a cooperation took place in 2017, as a result, the number of Ferrexpo shares owned by BlackRock grew to 33 million 472,787 thousand units.
Another major shareholder of the company was TT International with a headquarter situated in London. It increased its stake in Ferrexpo from 463,208 thousand pieces to 21 million 482,970 thousand pieces. It is equal to 3.65% of the authorized capital.
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