14 December 2010 NLMK Group

NLMK upgrades its transformer steel production

VIZ-Stal LLC, a Yekaterinburg based subsidiary of NLMK, has successfully completed the construction of eight high temperature annealing furnaces for transformer steel production. The facilities, which are expected to be launched in December, will improve the electromagnetic properties of transformer steel, including such parameters as grade, flatness, categorizing.

The project will also halve power consumption at this stage of the production process. The project, implemented as a part of NLMK’s Technical Upgrade Program, has a total value of RUR 940 million. It was performed in association with LOI Thermprocess (Germany).

Helmut Herzog, the Head of LOI’s Representative Office in CIS countries, noted; “The stages of the project scheduled for 2010 were completed ahead of schedule. In particular, successful partnering reduced the time for construction works almost by one month.

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VIZ-Stal LLC (an NLMK Group company) is a leading world producer of cold-rolled electrical steel and the largest producer of transformer steel in Russia. In 2007 the Company launched a Technical Upgrade Program for the period till 2015. It includes 10 investment projects on construction of new lines and reconstruction of existing ones, which will renew 50% of VIZ-Stal’s equipment. Reconstruction in the framework of the Technical Upgrade Program is aimed at mastering a new product type – high permeability steel – as well at improving product quality and increasing production efficiency. The total volume of NLMK’s investment into the technical upgrade amounted up to RUR 2.4 billion in 2007-2009. We estimate that VIZ-Stal’s technical upgrade will exceed RUR 640 million this year, an increase of 130% as compared to 2009.