Inteko, Yelena Baturina's construction company, is continuing its expansion with the acquisition of the St. Petersburg prefabricated housing maker DSK-3.
Inteko on Feb. 4 closed a deal to buy DSK-3, Inteko vice president Oleg Soloshchansky said. He declined to reveal how much was paid for the factory, which can produce about 100,000 square meters of residential housing per year.
Its capacity will rise to about 250,000 square meters per year after the completion of a 4 billion ruble ($136 million) upgrade, Soloshchansky said.
According to DSK-3's third-quarter report, 55.3 percent of the company's charter capital belonged to chief executive Alexander Yeremin, who owned 55.2 percent of DSK-3's ordinary shares. His son Andrei owned another 22.3 percent.
Alexander Yeremin could not be reached by telephone. The Yeremins' controlling stake was sold, a DSK-3 employee said. DSK-3 is currently completing ongoing projects, and it does not have any new ones in the pipeline, the employee said. It is operating at 50 percent capacity, producing material for unaffiliated companies.
In its current state, the factory — one of the largest companies in St. Petersburg — is not especially attractive, a local developer said. It is going through a difficult period, said Vyacheslav Semenyenko, chairman of the city's construction committee.
“I saw how Inteko bought the Rostov Large Panel Factory and introduced modern manufacturing processes to the ailing company,” said Sergei Kanayev, first deputy president of PIK Group. Five years ago, Baturina sold the Moscow DSK-3, with an output capacity of 500,000 square meters per year, to his company for $300 million.
Kanayev said the size of the St. Petersburg factory was optimal for the region, as there will always be enough orders to keep it working at capacity.
“The city needs panel housing, so the company can be expected to take on major mass-housing construction projects, an area in which Inteko has experience from other regions,” Semenyenko said.
Inteko is now actively searching for future construction sites, said Vadim Dogadailo, chief executive of Patriot, a company involved in Inteko affordable housing projects. In the suburbs of St. Petersburg there is a lot of potential territory suitable for economy-class housing, Kanayev said. The demand for paneling is rising, Kanayev added, with two factories owned by PIK Group working at full capacity.
Meanwhile, Inteko is refitting its Moscow DSK-7 panel factory, which manufactures prefabricated buildings for schools, kindergartens and garages. After the upgrades are completed, the factory will be completely focused on housing construction, said Dogadailo, of Patriot. He said the investment in the upgrade was estimated at $100 million.
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