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4 June 2015

NLMK Group launches project to construct new HDG line at Novolipetsk

NLMK Group (LSE: NLMK), the largest steel producer in Russia and one of the most efficient steel companies in the world, has signed an agreement with the Italian company Tenova for basic engineering and delivery of process equipment for the construction of a fifth Continuous Hot Dip Galvanizing Line (HDG-5) at NLMK’s Lipetsk production site.

HDG-5 will have a capacity 450,000 tonnes of 0.3 – 2.0 mm thick and 900 – 1500 mm wide high-quality cold-rolled galvanized steel per year for use in the construction sector and by car and “white goods” manufacturers. Hot-testing is planned for H1 2017.

Konstantin Lagutin, NLMK Group’s Vice President for Investment Projects, said: “This Strategy 2017 project will enable NLMK Group to consolidate its leadership position in the Russian coated steel market, with total galvanizing capacity at the Lipetsk site exceeding 1.7 million tonnes per year. Consistent development of NLMK’s rolling capacities will increase our market offering of Russian-made high-quality steel, reducing the dependence of Russian consumers on imports and increasing sales efficiency through growth of high-value added (HVA) product share.”

There are currently four continuous hot-dip galvanizing (HDG) lines in operation at the Lipetsk site with a total capacity of 1.175 million tonnes per year; and three pre-painting lines with a total capacity of 580,000 tonnes. NLMK is planning to reconstruct HDG-1 in 2015 which will increase HDG steel production up by 120,000 tonnes per year as early as 2016.

NLMK is the leading producer of hot-dip galvanized steel in Russia with over 21% market share in domestic production. The Company produces hot-dip galvanized steel with a width of up to 1800 mm and thickness ranging from 0.4 mm to 4 mm. Hot-dip galvanized steel produced by NLMK is used to manufacture roll-formed shapes, steel structures for construction and components for automotive and “white goods”.

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 $10.9 billion in revenue; $1.5 billion in EBITDA in 2013.

The Group’s vertical integration allows for control of the entire production chain, from mining to final processing and delivery to our customers.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The company generated $10.4 billion in revenue; $2.4 billion in EBITDA; and a net profit of $845 million in 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).