Business analyst unconcerned about Evraz ownership change

Business analyst Paul Martin is not worried about the new change in ownership for the Evraz steel mill in Regina.

“I think this has less to do with business and more to do with politics at this point,” Martin told Saskatchewan Afternoon.

Martin said shedding the Russian ownership of Evraz can make way for a North American company to buy the company for a more central ownership.

“If it’s no longer owned by Russian interests, it’s probably good for everybody,” he said.

Britain sanctioned Evraz after Russia attacked Ukraine in February, but it was still allowed to continue doing business with North American subsidiaries.

“I see this as a move of stability rather than instability because owners really don’t change the product mix, but they can change the nuance around the company,” said Martin.

Martin said the question people should be asking is what business model the new ownership will adopt.

“The buyers at that time were paid for the assets of North America so it broke up the company,” said Martin.

The Russian steelmaker sold other assets when it was first bought, but it continued to manufacture pipelines. However, new ownership may result in a shift in direction.

“If there is no future for pipelines, you have to figure out what are you going to do next,” Martin said.

Martin said he is not worried about a switch in ownership.

“It’s not the first time we’ve seen these assets being sold, and the last time it changed at the Regina operation, nothing changed,” he said. “I suspect that’s what was going to happen again.”

A large number of employee layoffs occurred in June, but Martin suspects many of those people will return to work soon.

Martin said he thinks the Evraz steel operation will attract potential business opportunities, whether those be for another steel company or a buyer looking to upsell.

After a deal is done, Martin said the only thing that is going to be different is the “stigma of Russian ownership.”