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26 August 2014

NLMK Kaluga produces millionth tonne of steel

NLMK Kaluga, a new generation EAF plant (part of NLMK Long Products) that manufactures a wide range of long products used in construction, has produced its millionth tonne of steel.

The launch of NLMK Kaluga in July 2013 became the Event of the Year for the Russian ferrous metallurgy. The project is based on the mini-mill concept of locating EAF steelmaking and rolling operations in close proximity to sources of raw materials and consumers of finished goods.

NLMK Kaluga is located on the territory of the Vorsino industrial park in the Kaluga region near Moscow, the largest construction market in Russia. Overall, in 2013, the Central Region of Russia accounted for approximately 30% of long steel consumption in Russia, and only 9% of its production.

NLMK Kaluga is a leader among EAF mills in terms of productivity, energy efficiency and environmental friendliness. The site’s technological process employs innovative solutions that ensure high resource usage efficiency; high quality output; and high standards of technical and environmental safety.

Alexander Burayev, NLMK Group Director for Long Products and Metalware, said:

“Today is an important milestone for NLMK Kaluga – its millionth tonne of steel. Thanks to its responsible and highly qualified personnel, the Company has been able to meet targets in a short period of time. This is a testimony to the efficient work of each and every employee, and the alignment of all business processes. The launch of NLMK Kaluga has allowed us to reduce the shortage of long product production in the Central Federal District and to secure a supply of high-quality in-demand steel products to Moscow, the Moscow region and other parts of Central Russia.”

About NLMK Kaluga

NLMK Kaluga is a next-generation EAF mill, part of NLMK Group’s Long Products Division. The opening of NLMK Kaluga in July 2013, was recognized as the most important event of the year in Russian steelmaking by the Metal-Expo 2013 international exhibition, held in Moscow.

Investment in the construction of the plant totalled more than RUB 38 billion, of which around RUB 7.5 billion was spent on environmental protection measures.

The plant is located in the Vorsino industrial park in Kaluga region, which has 33 companies among its residents. The plant is 73 km away from Moscow by road, and a little over 90 km by rail.

The plant is located in the centre of Russia’s largest long steel consuming region, the Central Federal District. The region accounts for approximately 30% of long steel consumption in Russia, and only 9% of its production. The region benefits from a surplus of scrap, NLMK Kaluga’s key feedstock material, which accounts for 2.7 million tonnes per year. Scrap is supplied by NLMK Group’s in-house scrap collecting network, Vtorchermet NLMK.

NLMK Kaluga’s steelmaking and long product capacities are 1.5 million tonnes and 0.9 million tonnes per annum, respectively. The facility is uniquely equipped in Russia to produce the widest range of premium-grade long products for use in construction.

The launch of NLMK Kaluga has helped to tackle the current shortage of steel facing the Central Federal District, and has provided high-quality, in-demand steel products to the construction industry in Moscow, Moscow Region, and the wider Federal District.

The mill outperforms similar Russian companies in terms of efficiency. Electricity consumption per tonne of finished product at the mill is 10% lower than the Russian average; natural gas consumption is 18% lower; and raw material usage efficiency is 4% higher.

NLMK Kaluga is equipped with the best environmental technologies. The mill’s purification systems trap more than 99% of atmospheric pollutants, which is several times better than the Russian average. The closed-loop water cycle completely eliminates any waste water discharge and significantly reduces water consumption when compared to similar systems. Production waste is recycled into inert materials used for applications such as road construction.

The launch of NLMK Kaluga has created 1,250 new, qualified jobs at the mill and 600 jobs in the service sector, and has provided work for related businesses in Kaluga Region.

About NLMK Long Products

NLMK Long Products (part of NLMK Group), is the leading manufacturer of long products and metalware in the Russian market.

NLMK Long Products companies make up an integrated production chain from the collection and processing of ferrous scrap to the manufacture of HVA steel products – rebar, wire rod and metalware.

NLMK Long Products key companies are NSMMZ (EAF steelmaking and long products) and NLMK Metalware (metalware) located in the Sverdlovsk region, and NLMK Kaluga (EAF steelmaking, rebar and sections) located in the Kaluga region.

Raw materials are provided by Vtorchermet NLMK – one of the largest associations of scrap-collecting companies in Russia operating in different regions across the country.

Long Products Division’s production facilities produce 3.7 million tonnes per year of liquid steel; 2.9 million tonnes per year of rebar and wirerod, that is both sold to the market and reprocessed at the company’s in-house metalware operations with a capacity of 0.5 million tonnes per year.

In H1 2014, NLMK’s Long Products Division produced 1.377 million tonnes of steel, 47% up on the same period a year earlier. Steel product sales grew by 55% to 1.392 million tonnes from 0.9 million tonnes. For instance, rebar sales increased by 43.5% to almost 1 million tonnes.

About NLMK Group

NLMK Group is one of the leading steelmakers in the world, and the largest steel producer in Russia.

NLMK’s production facilities are located in Russia, Europe and the USA. The Company’s crude steel capacity is over 17 million tonnes per year, of which approximately 16 million tonnes are located in Russia. NLMK has modern production capacities that are on par with leading international manufacturers in terms of technology.

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

The Group produces a wide range of flat and long steel products. NLMK is the world-leading supplier of slabs and transformer steel, and the largest Russian supplier of HVA products, including pre-painted steel, galvanized steel and electrical steel, as well as long products.

The Company has a diversified sales topography, delivering products to over 70 countries around the world.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The Company generated $10.9 billion in revenue and $1.5 billion in EBITDA in 2013.

NLMK is the only steelmaker in Russia with an investment grade credit rating from international rating agencies. It is included in the TOP10 for corporate governance and transparency among Russian public companies by international rating companies.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker “NLMK”) and its global depositary shares on the London Stock Exchange (ticker “NLMK:LI”).