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MMK

September 6, 2007

MMK will build a plant in Saint Petersburg

Today Valentina Matvienko, Governor of St.Petersburg, and Victor Rashnikov, President of the MMK Managing Company, signed an Investment Agreement.

According to the document, by 2010 OJKSC MMK intends to build a stamping plant and a service center in St.Peterburg.

Investments in the construction of the stamping plant will total RUB 3 bn.

"At the initial stage, up to 2010, it is expected that that the plant will process a total of 125,000 MT of steel per year. Further on the capacity may be expanded to 300,000 tpy. This project is in line with the strategic priorities of our Company as it will allow to strengthen our presence in the North-West Region, add more value to our products and ensure maximum satisfaction of the customers' needs", said Mr.Rashnikov, who is also Chairman of the Board of Directors of OJSC MMK.

Products of the new plant which will comprise steel sheet blanks, stamped panels, and stamped and welded parts, are intended for the manufacturing of car bodies at the assembly plants of such companies as Ford, Toyota, General Motors, Nissan, etc. which are already in operation or under construction in Russia, and also as components for white goods manufactured in Russia or abroad at the plants of Bosch-Siemens, Electrolux, and others. Products of the new service center will target the construction sector, mechanical engineering, ship-building and other industries in Saint Petersburg and the Leningrad Region. Direct supplies of high quality sheet steel from the Magnitogorsk Iron and Steel Works and their processing at the plant and the service center will provide the synergy required to meet the requirements of steel consumers in the best possible way.

For reference:

The Magnitogorsk Iron and Steel Works OJSC ranks 20th among the world's largest steel producers (according to IISI) and is one of the leaders of Russia's steel industry (according to Chermet data).

The Company is a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel.  MMK turns out a broad range of steel products with a predominant share of value added goods.

In 2006 the Company produced 12.5 m tonnes of crude steel, and 11.3 m tonnes of commercial products. Sales under US GAAP amounted to USD 6.4 bn, with net profit standing at USD 1.4 bn.

Cold Rolling Complex Project:  In July of 2007 OJSC MMK signed a contract with the famous German equipment manufacturer SMS-Demag for delivery of equipment for the construction of a state-of-the-art cold rolling complex at MMK. The complex will use the best available technology to produce high quality cold rolled and galvanized steel sheet for manufacture of interior and exterior car body components as well as for production of white goods and the construction sector.

The process equipment of the new cold rolling shop (LPTs 11) will include a continuous hydrochloric acid turbulent pickling line coupled with a 5-stand cold rolling tandem mill with a capacity of 2.1 Mtpy, a 450,000 tpy continuous hot-dip galvanizing line, a 650,000 tpy combined continuous annealing/hot dip galvanizing line, a roll shop with roll grinding and surface texturing machines, a strip inspection and slitting line, packing lines for cold rolled full hard and galvanized coils. The project will take 36 months to complete, meaning that in July of 2010 the new shop is scheduled to go on stream.

ZAO Intercos-IV. This August MMK acquired a 75% stake in the St.Petersburg-based company ZAO Intercos-IV, which is in line with MMK’s strategic plans of becoming a supplier for the automotive industry. ZAO Intercos-IV., a company set up in St.Petersburg in 1992, is a manufacturer of large-size stamping dies weighing up to 70 tons and stampings for the automotive and white goods sector,  with an extensive clients' base, expertise, required equipment and proven process know-how.

The transaction will secure MMK’s presence on the steel markets of Russia’s North West and make it a prominent supplier of dies and stampings for international companies operating in Russia.

 

 

 

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