VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Magnitogorsk Iron and Steel Works
The Magnitogorsk Iron and Steel Works open joint-stock company (MMK) is one of the largest enterprises of the Russian steel sector, accounting for about 20% of all steel products sold on the Russian market.
The company is a major steel smelter encompassing the entire steel production chain, from preparation of iron ore to deep processing of ferrous metals. MMK turns out the broadest range of steel products among steel making plants in Russia and the CIS, and leads on the Russian market in many types of products.
MMK's steel output more than doubled from 1996 to 2007. In 2007, the company reached the peak of its production in more than 75 years of its history, turning out 12.2 million metric tons of commercial products. In 2008, MMK produced 11.957 million metric tons of crude steel, and 10.911 million metric tons of commercial products.
MMK's 2008 revenue calculated to Russian Accounting Standards (RAS) amounted to 226 billion roubles, its operating profit was 54 billion roubles, and net profit 10 billion roubles.
It exports a considerable part of its output to many countries, and the Urals and the Volga area are its largest domestic markets.
MMK's key consumers in Russia are pipe making and engineering companies, which account for 50% of the mill's domestic sales.
In the past decade, nearly all of MMK's main production divisions have been revamped and many new high-capacity facilities installed, among them a two-stand reversing cold rolling mill (2002), Russia's two largest hot-dip galvanising lines (2002, 2008), a colour coating line (2004), two super-powerful electric arc furnaces with an annual capacity of 2 million metric tons each (2006), three cutting edge fully automated long products mills with the combined capacity of over 2 million metric tons of long products (2005-2006), and many others.
In 1996-2008, the company invested over $5.5 billion in its modernisation.
The company's top priority project, the 5,000-mm Plate Mill, with an annual capacity of some 1.5 million tons of X120 heavy-gauge plate for the oil and gas sector (large-diameter pipes), ship and bridge building, and heavy engineering, is scheduled to go on stream in July 2009. In addition to the 5,000-mm Plate Mill, MMK management plans to complete the projects of the #6 continuous caster, #2 colour coating line and a secondary steel treatment unit in 2009.
MMK's investment programme is focused on expanding the range of its goods, including those that are currently in short supply in Russia, and increasing the share of high-conversion goods to satisfy the domestic demand.
The company was one of the first in Russia's steel sector to draft an anti-crisis package. Such measures as negotiating price reductions for raw materials and saving of all kinds of resources have allowed the mill to cut on production costs and repay some of its debts.
Other anti-crisis measures that helped improve the company's operation include increased use of own raw materials and secondary resources, cuts in the purchase and streamlining of available stock of iron ore, coal and scrap metal, and reduction of capital expenditure on several other items.
Despite the crisis, the company's management has not abandoned its social programmes. Its 2008 wage fund was estimated at 8.18 billion roubles, with an average monthly wage of 27,793, which is 12.1% higher than in 2007. MMK has reaffirmed its commitment to the workforce's social guarantees and benefits.
No. 2 Colour Coating Line
Tentative cost of the project - 2.3 billion roubles
Financed from MMK's own funds
A contract with Italian engineering and equipment manufacturing company FATA Hunter for the supply of equipment for the line was signed in July 2007.
Annual capacity - 200,000 metric tons
General designer - Magnitogorsk Gipromez
In view of the complicated global economic situation and falling production, the Magnitogorsk Iron and Steel Works (MMK) suspended the assembly of the second coating line in the autumn of 2008. However, in late February 2009 specialists of the general contractor, Prokatmontazh, returned to the site and in April they were already assembling the line's technological equipment.
MMK commissioned its first coating line with a capacity of 200,000 metric tons a year in July 2004. It was designed by Austria's FAI and has been working to capacity even despite the global economic downturn.
The second coating line is better than the first one in that it has a plate stretcher that sets plate thickness to the customer's specifications. To ensure environmental safety, the line has a solvent regeneration system that allows utilising waste after the use of solvents to clean tubes and rolls before switching to a new colour.
The new line also has hot and cold laminators, with the hot one used to make decorative designs on metal, and the cold one to coat the finished goods to prevent their damage during transportation or further machining.
The Russian market of coated rolled stock has been growing fast, from 470,000 metric tons in 2004 to 846,000 tons in 2006. Given stable economic development, demand for this type of goods will grow substantially.
Construction is the largest consumer of coated metal goods in Russia (70% of the total). The manufacturing of sandwich panels has been growing fast.
Some 10% of output is supplied to the manufacturers of household and trading equipment and furniture. The automotive industry is so far buying small amounts of coated metal goods, but their use in the production of household equipment may grow in the long run.
However, no major changes are expected in the structure of consumption of coated metal goods until 2016.
The consumption of coated metal goods is to grow to 1.3 million tonnes by 2010 and 2 million tonnes by 2016.
The largest consumers of coated metal goods are located in the Central, the Urals, the Volga and the North Caucasus federal districts. These districts, and especially the Central and the Urals federal districts, hold the biggest promise for MMK.
The Magnitogorsk Iron and Steel Works is located in the Urals Federal District, and has set up a metal services centre in Shchelkovo near Moscow to expand its marketing opportunities in the Central Federal District.
