FAQ

NLMK Group is a vertically integrated steelmaking company and Russia’s largest steel producer of steel products.

NLMK Group’s steel products are used in various industries, from construction and machine building to the manufacturing of power-generation equipment and offshore wind turbines.

NLMK operates production facilities in Russia, Europe and the United States. The Company’s steel production capacity exceeds 14.5 million tonnes per year.

NLMK Group is one of the most financially and operationally efficient steel companies in the world. In 2016, the Company reported an EBITDA margin of 25% and consolidated revenue of $7.6 billion. The average EBITDA margin over a four-year cycle amounted to about 22%.

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 6m 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 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 1.8 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 0.8 million tonnes and rolling capacities of 2.9 million tonnes, which produce slabs, hot-rolled, cold-rolled and galvanized flat products.

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.

NLMK benefits from the following principal competitive strengths:

• We are a leading Russian steel producer with a strong position in domestic and export markets;
• World class assets with a competitive cash cost;
• Efficient vertical integration with access to raw materials and transport infrastructure;
• Business with high profitability twice higher than industry average
• Diversified portfolio by product and geography;
• Low debt leverage and stable generation of significant free cash flow providing financial flexibility;
• Experienced management team with proven track record;
• Commitment to international environmental and occupational health and safety standards.

Yes, NLMK Group is self-sufficient in the main raw materials and resources for steel production:

• 90% iron ore concentrate
• 100% pellets
• >100% coke
• 75% scrap
• 55% electric energy (Lipetsk site)