24 February 2011 NLMK Group

NLMK and AvtoVAZ sign long-term contract

NLMK and AvtoVAZ, a leading Russian car manufacturer, have signed a one-year contract to supply cold-rolled and galvanized steel.

Under the agreement, NLMK will deliver a total 180,000 tonnes of cold-rolled steel including 36,000 tonnes of galvanized steel, with enhanced mechanical properties for the production of AvtoVAZ car body parts over the next twelve months. The steel grade mix has been determined by a demand for reduced weight, increased strength and finished product reliability and accounts for the manufacturer’s specific technical requirements.

The companies have successfully developed a pricing scheme for steel based on applicable market indicators. Prices will be determined using a formula reflecting pricing dynamics in the international steel market. Steel deliveries to the car manufacturer will commence in April.

NLMK and AvtoVAZ have previously worked together successfully. Both NLMK and AvtoVAZ anticipate that this twelve month contract will mark a new step in the collaboration between the companies, which are both leaders in their respective fields.

For reference

About NLMK
NLMK is one of the world’s leading producers of steel. In 2010 it produced 11.5 mln tonnes. The Company manufactures a wide range of steel products including slabs and billets, hot-rolled, cold-rolled steel, plates, pre-painted, galvanized, electrical steel and other HVA goods, as well as a wide range of long products including rebar, wire rod and metalware. NLMK delivers its products to the customers in over 70 countries worldwide. The Company employed some 59,000 people in Russia, Europe and the US in 2010. NLMK shares are traded in Russia on RTS and MICEX, and GDRs – on the London Stock Exchange.

About AvtoVAZ
AvtoVAZ is an equal partner within the RENAULT-NISSAN alliance. It is the manufacturer of LADA cars, the best-known and the most popular brand in Russia. AvtoVAZ produces 14 models in 5 basic LADA families that take first places in sales ratings. AvtoVAZ’s share of the Russian market is around 30%. A crisis management program allowed AvtoVAZ to grow domestic and export sales by 48.9% in 2010 year-on-year, selling 637,000 LADAs and car kits.