News

11 September 2015

NLMK Group companies recognized leaders in labour productivity in their regions

NLMK Group companies recognized leaders in labour productivity in their regions
Three companies of NLMK Group, Russia’s top steel-producing company and one of the most efficient steel companies in the world, have been recognized as leaders in labour productivity in their respective regions. This was announced by the organisers of the first Russian ‘Labour Productivity: Industry Leaders 2015’ award.

To compile the rating, the Russian Productivity Center analyzed data from 5,000 industrial companies with a total revenue in excess of 55% of Russia’s GDP; and a total of 5.5 million employees.

NLMK Group companies recorded the best results in their respective regions:
  • NLMK Kaluga (Kaluga Region): labour productivity – 12.64 million rubles per employee per year;
  • Novolipetsk (Lipetsk Region): labour productivity – 9.15 million rubles per employee per;
  • Altai-Koks (Altai Territory): labour productivity – 7.83 million rubles per employee per.
Productivity accomplishments are the result of the implementation of the NLMK Production System that includes a set of work tools; a system for setting and cascading targets; a motivational system; and a unique database that forms the basis for NLMK’s operational efficiency programmes.

In 2014, gains from operational efficiency programmes at Novolipetsk alone totalled around 7 billion rubles. The Group as a whole achieved in excess of 11.5 billion rubles.

About NLMK Production System

Work on the creation of NLMK’s Production System began in 2009 with analysis of other production systems that were successfully functioning around the world at the time, including Toyota’s Lean Manufacturing, Motorola’s Six Sigma, and others.

Using the selected systems and own insights as a basis, the NLMK Production System was established to include a set of work tools; a system for setting and cascading targets; a motivational system; and a unique database that forms the basis for NLMK’s operational efficiency programmes.

NLMK Production System is universal. It enables full use of production reserves, production process improvements; and minimizes losses across the process chain, from mining to delivering finished products to clients; thus ensuring additional profit.

NLMK Production System covers not only the key operations; but also the company’s functional areas, such as logistics, energy efficiency, occupational health and safety, etc.

In 2014, over 400 employees undertook training in Lean Manufacturing, including with the participation of experts from Toyota Engineering Corporation.

NLMK Production System currently covers the Group’s key companies: Novolipetsk, VIZ-Steel, Stoilensky, Altai-Koks, NSMMZ, and NLMK Kaluga. The Group’s international companies, and particularly NLMK Pennsylvania (USA) are taking an active part in implementing new approaches. Further expansion of the principles and tools of NLMK Production System in key processes at NLMK Group companies worldwide is planned for 2015.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK’s metal products are used in various industries, from construction and engineering to the manufacture of power-generating equipment and offshore wind turbines.

NLMK's production assets are located in Russia, Europe, and the United States. The Company’s liquid steel production capacity is over 17 million tonnes per year, of which about 16 million tonnes are produced in Russia.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The company generated $4.4 billion in revenue; $1.1 billion in EBITDA; and a net profit of $491 million in H1 2015.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI).

About Novolipetsk (NLMK’s main production site in Lipetsk)

Novolipetsk is the main production site of NLMK Group, Russia’s leading manufacturer of steel and high value added rolled products, and one of the most efficient steelmaking companies in the world. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA. The steel production volume of the Lipetsk site is approximately 18% of all steel produced in Russia, and approximately 80% of all steel products produced by NLMK Group.

Novolipetsk’s high-quality steel products are used in various strategically important industries, from construction and engineering to the manufacture of power-generating equipment and large-diameter pipes. Novolipetsk produced 12.56 million tonnes in 2014. This represents an all-time high over the 80 years of NLMK’s history. This record performance was supported by productivity improvements throughout the value chain of the site. With capacities running at 100%, production grew by 1.3% compared to 2013.

About NLMK Kaluga

NLMK Kaluga is a next-generation EAF mill, part of NLMK Group’s Long Products Division. The opening of NLMK Kaluga in July 2013, was recognized as the most important event of the year in Russian steelmaking by the Metal-Expo 2013 international exhibition, held in Moscow.

Investment in the construction of the plant totaled more than RUB 38 billion, of which around RUB 7.5 billion was spent on environmental protection measures.

NLMK Kaluga’s steelmaking and long product capacities are 1.5 million tonnes and 0.9 million tonnes per annum, respectively. The facility is uniquely equipped in Russia to produce the widest range of premium-grade long products for use in construction.

The mill outperforms similar Russian companies in terms of efficiency. Electricity consumption per tonne of finished product at the mill is 10% lower than the Russian average; natural gas consumption is 18% lower; and raw material usage efficiency is 4% higher.

The launch of NLMK Kaluga has created 1,250 new, qualified jobs at the mill and 600 jobs in the service sector, and has provided work for related businesses in Kaluga Region.

During the time it has operated, NLMK Kaluga has mastered 15 new types of long products. NLMK Kaluga’s current product mix includes #10, 12, 14, 16, 18, 20, 22 and 25 rebar and sections: 25х4, 75х6, 63х5, 63х6, 100х7, 90х6 and 90х7 angles. The Company plans to expand its offering to include 50х5 and 100х9 angles by the end of the year.
About Altai-Koks

Altai-Koks is the largest coke and chemicals company in Russia. It also manufactures a wide range of chemical products. Its design production capacity is 4.4 million coke (dry weight) per year. Altai-Koks has been part of NLMK Group from 2006.