Swedish steelmaker SSAB says that its acquisition of Finland’s Rautaruukki will lead to a reduction in its annual cost base by SEK1.4 billion ($194m) over 3 years. This was one of the main messages from the company’s Capital Markets Day held in Stockholm on 1 October. In addition to the cost synergies, SSAB expects to reduce net working capital and to avoid overlapping capital expenditure, Kallanish learns from the company.

As a result of its combination with Rautaruukki, SSAB will, over a three-year period, realize synergies reducing the annual cost base by SEK1.4bn. In addition to the cost synergies, SSAB expects to reduce net working capital by around SEK500 million and to avoid overlapping capital expenditure of SEK1.4bn, the steelmaker says.

SSAB’s target is to reduce the cost base by SEK 1.4 billion on an annual basis, with full run rate achieved in mid-2017. The synergies are estimated to amount to around SEK350m during 2015, around SEK800m in 2016, around SEK1,200m in 2017 and around SEK1,400m in 2018.