23 May 2007

NLMK signs equipment supply agreement with Andritz AG

Novolipetsk Steel (NLMK) and the Austrian company Andritz AG will today sign an equipment supply agreement in Vienna. The total value of the agreement is approximately EUR 90 million.

Andritz AG will supply NLMK Group with two new rolling mills to modernise the company’s electrical steel production facilities:

- a grain- and non-grain-oriented steel rolling mill at the major production site in Lipetsk
- a reversing grain-oriented steel-rolling mill at VIZ-Stal production platform

The purchased state-of-the-art equipment will enable production of new high-technology specialty steels.

The agreement also provides for hot-dip galvanizing line at the company’s major production site in Lipetsk. The new line will produce 300,000 tonnes of zinc-coated rolled steel products with the possibility of processing them further into pre-painted steel. The Russian market has demonstrated strong demand for zinc-coated rolled steel products.

The new equipment will be installed throughout 2008 and 2009 as a part of the 2nd Phase of the Technical Upgrading Programme.

Technical Upgrading Programme of Novolipetsk Steel (NLMK) is being implemented in line with the company’s strategy to become one of the most efficient producers of steel and rolled products.

The Programme’s 2nd Phase, which is already underway, will last until 2011. The key goals of the Programme are:

- To increase crude steel production from 9 million tonnes per year to 12.4 million tonnes per year.
- To achieve 100% self-sufficiency in major raw materials.
- To increase production of finished flat steel products from 5 to 9.5 million tonnes through the modernisation of existing rolling facilities and the acquisition of new rolling assets.

Total investment into the 2nd Phase of the Technical Upgrading Programme will amount to over USD4.0 billion by 2011.

For more information about Novolipetsk Steel, visit:

Andritz AG develops high-tech production systems and industrial process solutions for various standard and highly specialized products. Company specializes in engineering and production of machine building turnkey lines, reconstruction and modernisation production facilities and provision of a full scale warranty service. Andritz AG is a reliable partner of Novolipetsk Steel it has successfully implemented a range of projects to include reconstruction of a continuous annealing and insulating coating line at continuous galvanizing unit, and commissioning of a number of other facilities.

For more information about Andritz AG, visit: