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14 April 2014

NLMK improves logistics of electrical steel

NLMK Group (LSE:NLMK), a leading producer and exporter of steel products in Russia, is growing the share of container deliveries of transformer steel coils in its total export supplies of this product.

NLMK has launched a pilot project to develop a new system of logistics at its main production site in Lipetsk: electrical steel coils will now be delivered in multi-tonnage containers. This will halve the costs of their transportation.

As part of the project, NLMK has already successfully completed the delivery of dynamo steel to Tunisia through the port of Novorossiysk. Steel coils were loaded into the containers to be transported via railway to the port directly at NLMK’s production site. In 2014, NLMK plans to ship over 4,000 tonnes in containers from the Lipetsk site.

Previously, NLMK Group exported transformer steel coils in multi-tonnage containers only from its site in Yekaterinburg, VIZ-Steel. Monthly container deliveries from VIZ-Steel are 2,400 tonnes (16% of total deliveries) and growing.

Sergei Likharev, Acting Vice President for Logistics, said:

“The proposed arrangement and the new, more convenient organizational structure for logistics are aimed at improving the quality of service for our consumers. Our key goal is to further improve the operational and commercial efficiency of our logistics, to achieve maximum synergies, and ultimately improve the efficiency of the entire company.”

Compared to the use of railway cars, multi-tonnage containers allow halving transportation costs; using intermodal transportation without additional transshipment operations at the pre-port container terminal and the ports of destination; and minimizing the risk of damage in the process of transporting and handling the goods.

About NLMK Group

NLMK Group is a vertically integrated steel company and Russia’s leading steel maker and manufacturer of rolled products with high added value. 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 US$ 10.9 billion in revenue, and EBITDA of US$ 1.5 billion in 2013.

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).