Končar founded a new company to acquire Željezara Sisak

Danko Končar has taken a new step towards acquiring Željezara Sisak. Afarak Steel d.o.o. has been established in Zagreb, a company through which the acquisition of the Sisak plant is to be realized.

The director of the newly established company is Nenad Končar, the son of Danko Končar, who is operationally leading the process, while the sole founder is Afarak Holdings Ltd.

– The establishment of Afarak Steel is a concrete step in realizing what we announced at the beginning of summer – emphasizes Danko Končar, adding that the deal still needs to be formalized, but that preparations are continuously underway.

The next step is to formalize the agreement with the Italian group Danieli, which, according to information from Končar’s team, is expected in the next few weeks. This marks a further step in the project compared to August, when Končar told Lider that the registration of the new company was still awaited before signing the contract with Danieli.

Investment increased to 350 million euros

While initial announcements spoke of a project worth around 200 million euros, the total value, along with all necessary resources and related costs, is now estimated at nearly 350 million euros.

Lider previously reported that the acquisition alone should cost around 50 million euros, while the rest of the investment would go towards renovating the existing plant, a new production line, a hall, a transformer station, and an energy project.

The plan is to restore production and develop capacities for construction steel, which would allow Sisak to supply the domestic construction and infrastructure sector, as well as the European market.

An important part of the project relates to reducing high electricity costs. Končar previously announced an investment of around 150 million euros in its own energy system with 100 MW of solar capacity and a 500 MWh battery storage, aiming to reduce the monthly electricity cost from around 2.2 million euros to approximately one million.

Possible IPO after production launch

Končar also announced to Lider the potential for the company to go public after production begins. He estimated that the company’s value could reach between 600 and 800 million euros, while total investments in the Sisak complex could reach up to one billion euros in the long term.

For now, the key next step is to finalize the agreement with Danieli and prepare for the restoration of production.

In a new statement, Končar emphasizes that the project should create jobs for engineers and other specialists and involve domestic suppliers. The project is also linked to the reindustrialization of Croatia and the importance of domestic steel production for residential construction, transportation, and energy infrastructure.

– We consider reindustrialization an important development priority and support the government’s efforts in this direction. Concrete investments can contribute to achieving these goals through production, employment, and the development of domestic suppliers. The government and relevant ministries play an important role in creating a stable and encouraging framework for such projects, and we want to contribute with our experience and industrial knowledge – stated Končar.