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Annual Report & Accounts 2012

Products and uses

The Group’s integrated production model enables it to offer its customers a diversified portfolio of high-quality products while, at the same time, being responsive to changes in market conditions.

Steel is of vital importance to us all

It is all around us: outdoors, indoors, at work and at play. Steel plays an important role in the modern world and is an integral part of our everyday lives, providing us with food and shelter, transforming our working days, enriching our leisure time and making it easier and safer for us to get around. Even when it has been repeatedly processed, steel retains its original properties and can be used again and again to improve our quality of life.

Strong and durable, steel adapts in line with progress. New technologies mean that the properties and types of steel can be varied according to customer requirements.

Construction, service centres, and steel processing

Sales in Russia
(mt)

3.93

Share of
Russian sales

81%

Automotive

Sales in Russia (mt)

0.25

Share of
Russian sales

5%

White goods

Sales in Russia (mt)

0.07

Share of
Russian sales

1%

Machine building

Sales in Russia (mt)

0.11

Share of
Russian sales

2%

Tube & pipe

Sales in Russia (mt)

0.29

Share of
Russian sales

6%

Electrical and instrument engineering

Sales in Russia (mt)

0.10

Share of
Russian sales

2%

Others

Sales in Russia (mt)

0.12

Share of
Russian sales

3%

NLMK is a leading international steelmaker. Our steel is used in many different industries for a variety of products:

Construction, including infrastructure construction – supporting structures and facing materials, reinforced concrete structures, roof tiles, air conditioning systems; railway infrastructure, highway construction, bridges, etc.

Automotive manufacturing – body panels and parts for cars and commercial vehicles.

Pipes – pipelines, large-diameter pipes for the oil and gas industry, water and gas pipes.

Machine building – mining equipment, agricultural and construction (yellow) machinery, lifting and transport equipment, railway engineering, shipbuilding, wind power engineering, heating and power plants and offshore drilling platforms.

Electrical equipment and instrument making – transformers, electric motors, and generators.White goods – gas and electric ovens, washing machines, refrigerators, dishwashers, extractor fans, household boilers, etc.

High Value Added products

NLMK is a leading provider of high-quality steel products in key sales markets. Our range of high value added products includes cold-rolled steel, galvanized steel, pre-painted steel, electrical steel (transformer and dynamo), a wide range of thick plates and metalware. The Group is consistently growing its portfolio of value added products through organic expansion as well as through the acquisition of rolling assets with direct access to key market segments.

In 2012, we increased sales of value added products by 20% (to 5.4 mt) compared with 2011, while their share in the total portfolio of sales increased to 36% (up 1 p. p. year-on-year). This was possible due to the consolidation of rolling assets in the Company’s key export markets in mid-2011, as well as to the increased sales of high-margin finished steel produced by Novolipetsk.

Sales breakdown by product in 2012

Metalware

Long products

Billets

Dynamo steel

Transformer steel

Pre-painted steel

Galvanised steel

Cold-rolled steel

Hot-rolled thick plates

Hot-rolled coils

Slabs

Pig iron

Download graph
Steel sales: high value added/ordinary products (mt)

Ordinary products

High value added products

Share of high value added products in sales portfolio, rhs

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Diversification of sales by industry in 2012

Construction

Machinery and transport

Other

Download graph

 

Flat steel

Flat steel is most widely used in sectors such as construction, electrical equipment, machine building (including automotive), energy, shipbuilding, and pipe manufacture.

Products

Hot-rolled steel is used mainly in the production of steel structures, guardrails, ship hulls, machine casings, road-building machinery components, pressure vessels, and building structures.

% of Russian output*

16%

* W/o hot-rolled thick plates

Hot-rolled thick plates are used in the manufacture of pipes, pressure vessels, ship hulls, and bedplates for wind turbines and compressors, as well as in the construction of bridges.

% of European output

11%

Cold-rolled steel is used widely in the production of body parts for machines and equipment, load-bearing structures, pipes, lighting masts, and agricultural equipment.

% of Russian output

29%

Galvanized steel is used in the production of machine body parts, roofing materials, and load-bearing structures in hostile environments.

% of Russian output

24%

Pre-painted steel is used in construction for the production of roofing and finishing materials, and casings for consumer and white goods (household appliances).

% of Russian output

40%

Transformer (grain oriented) steel is used in the electrical industry for the manufacture of transformer cores and fixed components for electrical equipment.

% of Russian output

100%

% of international Market

9%

Dynamo (non grain oriented)steel is used for the production of electrical equipment, such as components for electric motors and generators.

% of Russian output

57%

Long steel

Long steel is used primarily in construction and infrastructure projects, which account
for over two thirds of the total consumption of this type of product. Long products are also
widely used in machine building.

Products

Rebar is used in the construction of reinforced concrete structures for road and building construction, as well as in the manufacture of parts for machinery.

% of Russian output

19%

Wire rod is drawn into wire and used mainly in construction, as well as in transport machine building (steel cords).

% of Russian output

4%

Metalware products are primarily used in the construction sector (fasteners, nails, mesh), as well as in transport machine building.

% of Russian output

18%