General presentation of the Evraz Company:
Let us now continue with some information about the Evraz Company which will enable you to better know and understand the different activities of this company and its sources of revenue. Here therefore is a detailed presentation of the company.
The Evraz Group is a Russian company specialised in the steel industry sector. It is in fact one of the major companies from this country that specialises in this sector.
To better understand the activities of this company it is possible to divide them into sectors depending on the turnover generated and how the company achieves this:
- Firstly, the manufacture of steel products represents the major part of this group’s activities and enables it to achieve nearly 80.3% of its turnover. This particularly concerns construction related products, flat steel, tubular products and others.
- The Evraz Group also exercises coal production activities which enable the company to generate 16.4% of its turnover.
- Finally, the remainder of its turnover, around 3.3%, is from related activities.
It can also be advantageous to understand the geographical distribution of the activities and income of this company. At present, the Evraz Group achieves around 35.5% of its turnover from Russia. 3.4% is from Taiwan, 2.7% from Indonesia, and 1.8% is from Thailand. A larger amount of its turnover, 13.3% to be exact is from other Asian countries, 17.3% is from the United States, 9.1% is from Europe, 4.2% from Canada and 10.7% from other countries around the world.
Know the competition to Evraz’s shares:
We now offer you the opportunity to learn more about the competitors of Evraz in its activity sector as this group faces serious competition from major corporations that you should know about in detail before making any decisions regarding the strategy to adopt on this asset.
- U.S. Steel: This American company is also known under the name of the United Steel Corporation. It is a steel manufacturing company based in the United States that also undertakes major operations in Central Europe. This company was launched in 1901 by J P Morgan and Elbert H Gary following a merger of the Federal Steel Company and the Andrex Carnegie steelworks.
- ArcelorMittal: This French based international steel industry group is currently one of the largest steel manufacturers worldwide with a production of over 96 million tons in 2018. It is listed in the 156th position in the 2016 classification of the Fortune Global 500 Group which includes the largest companies worldwide. The group came into being following a takeover bid in 2006 by the Mittal Steel Company of the Arcelor Group which was financed by large international investors. Since 2009 the group launched a large disinvestment programme with the objective of reducing its interest rate with which it was financed close to the level of 9%. Arcelor Mittal currently employs around 198,500 employees of which over 41% are in Europe.
- Corus Group: This subsidiary of the Indian group Tata Steel is specialised in the steel industry and the production of aluminium. It was created by the merger of Koninklijke Hoogivens NV and British Steel Plc in 1999. Corus is also known under the name Tata Steel Europe.
- Hitachi Metals: Finally, the Japanese company, Hitachi Metals, is another major competitor of Evraz. This company also manufactures metal products and materials, electrical and technological components as well as functional components. As a company that produces speciality steel products, it manufactures and sells high quality specialty steel as well as industrial equipment and materials, various laminating rollers, parts for injection moulding machines, structural ceramic parts, structural steel parts, soft magnetic products and their applications. The magnetic products are related to the sale of magnets and ceramic products. Finally, the company also produces moulding products including special products and sells moulded parts for the automobile sector such as aluminium wheels, other aluminium parts and plumbing equipment. This company also manufactures metal wiring and functional items and is also active in the real estate and software sectors.
The strategic alliances implemented by the Evraz Group:
The Evraz Group certainly needs to face strong competition in its activity sector however it can also count on the support of its strategic allies. We will therefore take the time now to introduce you to several prime examples of partnerships implemented by this company over the last few years that have strongly influenced its growth:
- Enbridge: Firstly we will examine a partnership, or to be more precise a significant investment made by Evraz a few years ago. This was a significant investment in its Regina factory of around 200 million dollars together with a partnership with the Enbridge Company in the form of a research agreement relating to the pipelines. The investment had the objective of financing the installation of a new large diameter pipe manufacturing machine and an increase in production of nearly 100,000 tons. The group also planned to improve its steel production procedure with top of the range technological tools that would mainly enable it to produce larger and thicker aluminium parts. In this way Evraz would be capable of supplying the industrial liquid gas market for the Kemerovo region in western Siberia. The Air Liquide Group would thereby be responsible for the long term supply of oxygen, argon and nitrogen to Enraz.
- CGI: Another significant strategic partnership implemented by this company was that created with the CGI Company which is one of the leaders in the global IT and business procedure management sectors. The Evraz Group in fact chose this company with the objective of ensuring IT support services for its operations in North America for a number of years. It should be remembered that the CGI Group has enjoyed a long collaborative relationship with the Evraz Group through several projects since 1999 when it was just starting to produce delegated management services to companies. In accordance with this long standing relationship and its concurrent procedures, CGI will continue to provide the Evraz employees with IT support services for call centres throughout Canada, 24/7.
The advantages and strong points of the Evraz share price as a stock market asset:
We shall now examine together if the Evraz shares are truly advantageous with a summary of this company’s major advantages and disadvantages, its strengths and weaknesses.
Let us start this analysis with a summary of the various advantages of the Evraz Company and therefore the strong points of this share on the stock market with the following factors:
- Firstly we note the international expansion strategy of this company which has enabled it to develop throughout the world.
- The group is also one of the most competitive in this market due to a significant cost control strategy.
- It also implements numerous strategic partnerships that enable it to increase its growth.
- Finally, the financial health of this group is stable with a treasury flow that enables various investments.
The disadvantages and weak points of Evraz shares as a stock market asset:
Concerning the disadvantages of this share and therefore the weak points of this company we note the following:
- The increasingly high level of competition from other major companies worldwide.