News

2 February 2015

NLMK outsources maintenance of steelmaking operations with SMS group

NLMK Group (LSE: NLMK), Russia’s leading manufacturer of steel and one of the most efficient steel companies in the world, has signed a contract with SMS group for full time service of key process equipment at the Basic Oxygen Furnace (BOF) Shops at Novolipetsk, its main production site in Lipetsk.

Outsourcing of maintenance of steelmaking operations at such a scale is implemented in Russia for the first time; with productivity of Lipetsk site BOF Shops exceeding 12.5 million tonnes per year.

The project will promote the implementation of the most advanced industrial technologies in Russia and the localization of modern European operations to ensure the maintenance of steelmaking equipment.

As part of a five-year contract, SMS group experts will ensure the maintenance and repair of all nine continuous casting machines and secondary metallurgy treatment equipment.

For the duration of the contract, 274 NLMK workers that were responsible for the maintenance of steelmaking equipment, will be taken on board by SMS group’s Russian subsidiary. SMS group will additionally bring in 34 highly qualified experts to implement structural changes to operational practice; supply managements; planning and coordination; and engineering.

Yuri Larin, NLMK Group Vice President, Technology Development & Operational Efficiency, said:

“The key goals of our joint projects are to enhance the efficiency of NLMK’s steelmaking operations by growing stability and productivity; to reduce maintenance costs; and to improve product quality. These goals will be achieved through introducing changes to the maintenance process using SMS group’s advanced technologies and localizing steelmaking equipment M&R operations. Cooperation with SMS group is yet another important step for us towards achieving our key Strategy 2017 goal: improving the operational efficiency of all production stages.”

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 rolled products. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA.

Steel production volume of the Lipetsk site is in excess of 12 million tonnes per year, or 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 in Russia and abroad.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK’s high-quality 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. The Company generated $5.4 billion in revenue, $1.1 billion in EBITDA, and $332 million in net profit in H1 2014.

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

For more information about NLMK Group, please visit www.nlmk.com.

About SMS group

SMS group is a global player in plant and machinery construction for processing steel and NF metals. The company employs over 13,800 people around the world. Its sales volume is approximately EUR 3.5 billion.

SMS group has 10 service centers in Russian and the CIS, employing over 700 people. Services provided include a wide range of SMS Group resources, local employees, and access to technologies from SMS group companies around the world.