The pipe industry is one of the export pillars of Ukraine's mining and metals sector, with more than a dozen specialised producers of welded and seamless pipes, including large-diameter pipe and special steel grades. As a valuation subject, a pipe plant is a metal-intensive business in which working capital — stocks of steel and finished pipe products — accounts for a substantial share of value alongside the real estate and rolling mills.
The Kanzas company provides independent valuations of pipe plants and steel businesses across Ukraine — as going concerns (integral property complexes), as equity stakes, as defined asset pools, or as inventory collateral — for owners, investors and lenders, both Ukrainian and international.
When a pipe plant valuation is required
- bank financing secured by the property complex or by working capital assets;
- periodic revaluation of collateral at the lender's request;
- revaluation of assets for financial reporting, including IFRS;
- acquisition or disposal of the enterprise or a share in its charter capital (M&A);
- attracting an investor, contribution of assets to charter capital;
- shareholder disputes and court proceedings;
- assessment of war damage;
- liquidation or restructuring scenarios.
What the valuation covers
Depending on the purpose, the subject may be the integral property complex as a whole, corporate rights in the operating company, or individual asset groups: production facilities (pipe rolling, pipe welding and finishing shops, steel and finished goods warehouses), technological equipment (rolling and welding mills, heat treatment, finishing and quality control lines), crane facilities, in-plant logistics and a railway spur, land plots or land-use rights, inventories of feedstock (billets, strip, rolled steel) and finished pipe products, and intangibles — international product certifications, trademarks and export contracts.
Value drivers include the product mix and technology (seamless, welded or large-diameter pipe), the cost structure typical of steelmaking — raw materials at roughly 45–50% of cost and energy at 30–40% — capacity utilisation, the degree of mill modernisation, and, for export-oriented producers, international certification and market access.
Valuation approaches
In line with Ukrainian national valuation standards and international practice, we apply the income approach (primarily discounted cash flow, reflecting the cyclicality of steel markets), the comparative (market) approach based on transactions involving similar steel and pipe businesses, and the asset-based approach, used in particular for collateral purposes and for plants operating below capacity.
Finished goods as collateral: a feature of steel industry lending
A distinctive feature of pipe production is the high value of working capital: steel and finished product inventories at a single plant can run to significant amounts. Lenders therefore finance steel producers not only against real estate but also against finished goods — collateral that requires regular independent revaluation reflecting current pipe market prices.
The Kanzas company has direct experience of exactly this structure: for several consecutive years we valued the finished pipe products of one of Ukraine's pipe plants for an international bank that financed the enterprise against its working capital. We also provide standalone inventory valuation and rolled steel valuation for collateral purposes.
How the engagement is carried out
The work begins with agreeing the purpose and scope and signing an engagement contract. A mandatory stage under Ukrainian valuation law is the valuer's site visit for personal inspection and identification of the subject assets. The valuer then analyses the documentation and the steel and pipe products market, performs the calculations and issues a valuation report that is fully valid for banks, courts and state authorities in Ukraine. Key documents include corporate and registration documents, three to five years of financial statements, fixed asset registers and equipment passports, title documents for real estate and land, data on the product mix and capacity utilisation, certification and export contracts, and inventory records.
Our experience
The Kanzas company has been valuing mining and metals enterprises for more than 20 years. Our track record includes valuations of major Ukrainian steel mills for bank financing purposes, including syndicated lending transactions worth hundreds of millions of US dollars involving several banks, and the multi-year revaluation of finished pipe products for an international bank. A steel mill and a pipe mill are also among our transfer pricing advisory clients. Our team includes appraisers holding international valuation certificates, and our reports are prepared to a standard that withstands scrutiny by banks, auditors and courts.
Questions and answers
Can you value only the equipment or a single shop? Yes. Rolling mills and technological lines can be valued separately as machinery and equipment, and an individual shop can be valued as real estate or as part of the integral property complex — we will recommend the optimal scope based on your purpose.
The bank requires an annual collateral revaluation — do you perform such work? Yes. Regular revaluation of collateral — both property complexes and finished goods — has been part of our banking practice for many years.
The plant has been damaged by military action — can you assess the losses? Yes. War damage assessment for enterprises is a separate practice area of ours, including lost profit calculations.
How much does a pipe plant valuation cost? The fee depends on the scale of the enterprise, the asset composition, the purpose of the valuation and the completeness of the documentation. After a short initial consultation we will quote a firm price and delivery timeline.
We plan the site inspection around your production schedule and treat every client's task with speed and attention. To discuss your project, email us or message us via your preferred messenger.
