What is NLMK?
NLMK is one of the world's leading producers of steel and one of Russia's largest steel companies, with key production assets located in Russia, the EU and the US. NLMK companies specialize in flat and long steel products.
NLMK is a vertically integrated group controlling the entire production and sales chain from mining to delivering finished products to end-users. The Group's optimal structure, wide product range, flexible sales policy, and modern production facilities help optimize the impact of negative market trends and ensure a strong financial performance.
Is NLMK self-sufficient in raw materials?
Yes, NLMK Group is self-sufficient in the main raw materials and resources for steel production:
What is NLMK's strategy?
NLMK’s strategy is based on maintaining competitive advantage in low-cost production, advancing its strategy of increased vertical integration, implementing further technical upgrading of production assets, strengthening the company’s market leadership in flat steel products in its core markets, expanding sales of high-value-added products and pursuing strategic acquisition opportunities.
In February 2014 NLMK published its strategy till 2017.
More detailed information about Strategy 2017 is available in presentation.
What are NLMK's competitive strengths?
NLMK benefits from the following principal competitive strengths:
What is NLMK's latest M&A?
NLMK is proceeding with the restructuring of its European assets to further improve efficiency and optimize costs with an investment by SOGEPA (Société Wallonne de Gestion et de Participations S.A.), a Belgian state-owned company, in NLMK Europe.
In a further phase of restructuring announced today, SOGEPA has acquired a 20.5% stake in NLMK Belgium Holdings S.A. (NBH), which comprises NLMK Europe’s operating and trading companies, excluding NLMK Dansteel, for a purchase price of EUR 91.1 million.
What is NLMK's sales structure?
In 2015, Group sales reached a record 15.9 m t (+5% yoy). Supported by stable demand in external markets, semi-finished product deliveries increased by 24% yoy, mainly on the back of the increase in export sales of commercial pig iron (+159% yoy) and slabs (+18% yoy) to end consumers. The decrease in finished product shipments (-4% yoy) was associated largely with the fall in steel consumption in the Russian market and the weakening in demand in the USA, where a significant part of finished products is sold.
Local markets, i.e. Russia (39% of total sales), the EU (22%), and North America (15%), where finished products are manufactured, account for the bulk of sales. A significant share of exports goes to the Middle East (including Turkey) (9% of total sales), and South East Asia (4%).
In 2015, NLMK’s wide sales geography allowed the company to respond flexibly to the local changes in demand and to promptly redirect its deliveries to the most stable markets.
Decrease of NLMK sales in the Russian market by 6% year-on-year (to 6.2 million tonnes) was balanced by increased sales in EU (+21% yoy), the Middle East and Turkey (+39% yoy), and South East Asia (+37%).
Where are NLMK's companies?
NLMK enjoys a favourable geographic position. Our production capacities are strategically located in regions with a well-developed transport infrastructure. Our main steelmaking and rolling facility is located in Lipetsk, in the centre of European Russia. Our suppliers of iron ore are in close proximity to the main production site in Lipetsk. Two export ports (on the Black Sea and the Baltic Sea) are easily accessible. Most of our Russian consumers are within 1,000 km of our main production site which helps to minimise logistics costs.
The Company's iron ore supplier Stoilensky is located in the Kursk Magnetic Anomaly (KMA), the world's largest iron ore deposit, only 350 km from the main steel-making facilities of the Company, minimising iron ore delivery costs. Altai-Koks Corp., one of Russia's largest and most efficient coke producers, is located close to major coal deposits in the Kuznetsk Coal Basin. VIZ-Stal, an electrical steel producer, and the production facilities of the Long Products Division (NLMK Long Products), acquired in late 2007, are located in the Urals Region of Russia. International operations of the Group are represented by NLMK Europe and NLMK USA divisions with about 7m tpa of flat steel capacity.
NLMK Europe comprises two business units, Strip Products and Plate Products. Strip Products (Associated companies) unit has an annual production capacity of 1.7 million tonnes with three production sites, NLMK La Louvière, NLMK Coating, NLMK Strasbourg, and a network of service centres. The products are sold predominantly to the manufacturing sector including automotive segment. Plate Product unit has an annual production capacity of 1.93 million tonnes with three production sites, NLMK Clabecq (Associated company), NLMK Verona (Associated company), NLMK DanSteel offering a full range of plates. The products are sold to the manufacturing and energy sectors.
NLMK USA has a diversified base of flat steel producing assets comprising three production sites at NLMK Indiana, NLMK Pennsylvania (formerly, Duferco Farrell) and NLMK Sharon Coating, manufacturing slabs, hot-rolled, cold-rolled and galvanized products. It has an electric arc furnace (EAF) steelmaking capacity of approximately 0.77, million tonnes and hot-rolling capacity of 2.9 million tonnes.
What are NLMK's main financial figures?
NLMK Group is one of the most financially and operationally efficient steel companies in the world. In 2015 the Company reported an EBITDA margin of 24% and consolidated revenue of $8 billion. The average EBITDA margin over a four-year cycle amounted to about 20%.