We are the third-largest single-site steel plant in Russia and our production facilities are among the country’s most technologically advanced.
Our suppliers of iron ore concentrate are approximately 350 km from Lipetsk; our production facilities are close to the major steel-consuming regions in the centre of European Russia and the Volga region; our relative proximity to the Baltic and Black Sea ports and our main customers in Russia, most of which are within 1,500km of Lipetsk, helps to reduce the costs of transporting our products.
Vertically integrated
Vertical integration is a key element in controlling our access to raw materials and energy and in reducing our production costs.
In 2004, we acquired approximately 97% of Stoilensky GOK, Russia’s third-largest iron ore producer which supplies substantially all our iron ore concentrate requirements. We also supplied 43% of our electricity needs internally in 2007, and acquired a controlling stake in the principal operator of Russia’s fifth-largest sea port, the Black Sea port of Tuapse.
Within the framework of our strategy, in 2006 we acquired a 94% interest in coke producer JSC "Altai-koks", a leading coke-chemical plant, that enables NLMK to fully supply its needs in coke and take leading positions in coke production and processing in domestic market.
In January 2006 we acquired a 100% stake of Danish steelmaker DanSteel A/S for USD104 mln. Overall annual production capacity of DanSteel A/S is approximately 500 thousand tonnes of hot-rolled steel heavy plate.
In August 2006 we acquired a 100% stake in VIZ Stal, the second-largest Russian electrical steel producer. VIZ Stal produces cold-rolled electrical steel sheet, and has a 56% share of the Russian grain-oriented steel market and about 11% of the world market. VIZ Stal’s annual production capacity is approximately 200,000 tonnes of electrical steel.
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