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Editor in chief: Angelo Scorza
11/03/19 11:48

Outgoing Federacciai president Gozzi concluded a deal in India and launched a new initiative in Brescia

The agreement with JSW Steel was renewed for 5 years by Duferco which, having closed 2018 with significant profits, launched the turbogas station project in Nave

The multiannual agreement between Swiss Duferco and Indian JSW was renewed for 5 more years.

This was confirmed to Ship2Shore by DPH Luxembourg managing director Tonino Gozzi, nephew of the founder (1979) and current chairman Bruno Bolfo.

According to Reuters press agency’s unconfirmed revelations, in the next five years the Indian steelworks will produce approximately 1 million tons of special steels, at a total estimated price of some 700 million dollars, on behalf of the Lugano-based trading company.

The supply agreement, providing for advance payment and entered into force on February the 27th, was signed by Duferco International Trading (DITH) and JSW Steel. This was the largest financial transaction ever concluded in India in this sector. In fact, Advance Payment and Supply Agreements (APSA) are common in oil and refined products trading, but not in the steel industry.

This win-win strategy can be summarized as follows: the agreement allows JSW to have immediate liquidity to support its development plans, while granting Duferco a constant, wide and varied supply at a fixed price in order to provide its customers with constant and regular supplies, regardless of market fluctuations.

This deal of the 13 years old Lugano-Mumbai partnership was financed by several banking pools: BNP Paribas, Citibank, Credit Suisse, ING, Mashreqbank, Natixis, Société générale and Standard Chartered Bank.

In 2006, the cash-for-steel agreement between Switzerland and India provided for volumes amounting to 150 million dollars, while in 2019 the amount tripled.

“This structured long-term trade finance transaction is an important agreement to diversify our supply sources, and it enables us to raise funds at competitive rates, while assuring an additional volume of sales in export markets, thanks to the widespread trade global network of the Duferco Group Companies”, observed JSW Steel Joint Managing Director Seshagiri Rao, whose counterpart, Duferco Trading CEO Matthew De Morgan, declared to be “happy to have concluded such a significant structured trade finance transaction, which confirms our confidence in silver trading sustainability, as well as in the skills and reliability of our long-term partner. We are pleased to manage the exportation of JSW Steel quality steel products to our wide network of international customers”.

On his part, Gozzi confirmed the main terms of the transaction, focusing on the financial statements figures of his group. At the end of May, the 65-years old entrepreneur will leave his presidential office at Federacciai as the new president for the two-year period 2018-2019 will be Acciaierie Venete 55-years old chairman and managing director Alessandro Banzato.

“In 2018 Luxembourg-based Duferco Participations Holding (DPH) turnover amounted to some 10 billion USD, 1.5 of which were earned in Italy and 8 resulted from the energy sector. In particular, the gas segment witnessed a significant growth amounting to 8.5 billion USD. As concerns shipping, the division specialized in steel products and bulk cargoes transport Nova Marine Carriers – the 50-50 joint venture with the shipping family Romeo – recorded sales for 300 million USD, transporting 7 million tons”, DPH leader explained. “Outside the scope of our Corporation, with regards to trading activities, DITH – our 27% subsidiary controlled by Chinese interests (Hebei 51%) – achieved a 7 billion USD turnover, which is not consolidated in the group’s financial statements”.

In 2018, DPH achieved 62 million USD profits, witnessing a significant increase compared to the figures recorded in the two previous years: it tripled its 2016 21 million USD profits which, in turn, had been doubled with 43 million USD in 2017.

“We are an increasingly international company as only 10% of our activities are carried out in Italy. We are proud of the significant turnovers and results achieved on an international level. Our group was founded by Bruno Bolfo in 1979, in Brazil, from whence it rapidly expanded to the US, reaching Switzerland at the end of the eighties, and heading towards Luxembourg, where it is currently headquartered. Besides Luxembourg and Lugano, we have branches in Marcinelle (Belgium) and in San Zeno sul Naviglio (Brescia)”, Gozzi concluded.

In fact, Duferco Energy is planning to establish a natural gas powered station to produce electricity at Stefana Spa’s former rolling mill in Nave (Brescia), taken over by Duferco Sviluppo a few years ago. This new power station will be powered by 2 gas turbines, and its electrical output will be managed by the company Terna – Rete Elettrica Nazionale, one of the operators managing electricity supply networks in Italy.

The project, approved within the SEN (National Energy System) framework and being the first of its kind in Italy, amounts to some 50 million euro investments. In the past months, the group started the complex procedures to obtain all the necessary authorizations, including environmental ones, in order to create the plant to produce electricity for the distributor.

The station will be built above ground, replacing part of an existing warehouse at the centre of the plant, and it will function through two LNG powered independent turbines featuring a Wet Low Emission combustion system in order to reduce nitrogen oxides harmful emissions, and with abatement systems reducing polluting emissions by over 50% compared to the limitations provided for by the regulations in force. Turbines will be cooled using water originating from three of the existing wells inside the plant. The station will be functioning only between 400 to 800 hours per year in order to cover possible unbalances between electricity demand and supply.

Therefore, this sustainable project complies with all the requirements in terms of safety and respect of the environment and the territory. However, consistently with the Italian increasingly widespread NYMBY syndrome, and with the support of environmental associations, local communities protested against Duferco’s plant, while the Municipality of Nave is available to evaluate the project.

Angelo Scorza 


TAG : Trading