22 May 2017

NLMK Group to supply raw materials to EUROCEMENT group

NLMK Group, an international steel company with facilities in Russia, the USA, and the EU, has signed a five-year contract for the supply of raw materials to the production facilities of EUROCEMENT group, Russia's leading manufacturer of construction materials.

The contract, which runs until the end of 2022, covers an annual supply of up to 5 million tonnes of raw materials to seven EUROCEMENT Group companies. The raw materials that will be supplied include iron-containing additives and granulated slag from NLMK Lipetsk, chalk and clay from Stoilensky in Belgorod region and limestone screenings from Stagdok in Lipetsk region.

These by-products from NLMK Group’s operations will be used as primary feedstock and additives for cement production at EUROCEMENT group’s facilities. By-products supplied from Stoilensky will fully satisfy Oskolcement’s demand for chalk, while Stagdok will supply the limestone that Lipetsk Cement requires.

Ilya Guschin, NLMK Group’s VP for Sales, said:

“NLMK Group has been working with EUROCEMENT group for several years, on short-term contracts. This new long-term agreement has taken our partnership to a new level: it will make our relationship more open and structured, simplify clearing and settlement and reduce the risk of changes in the market impacting the supply of materials. We are delighted to have a partner as reliable as EUROCEMENT group and will work to develop our relationship even further.”

Mikhail Skorokhod, President of EUROCEMENT group, said: “NLMK Group has proved itself to be a reliable partner, which guarantees stable and timely deliveries to our Group’s facilities. This long-term foundation to our relationship with NLMK opens new horizons for us, ensuring an uninterrupted supply of raw materials for cement production by our plants on extremely favourable terms. The new agreement allows us to continue the implementation of our cost-cutting programme and will bolster the efficiency of our business”.

Technical specialists at NLMK Group and EUROCEMENT group are exploring new ways to utilize fine steelmaking slag in the construction industry, such as the possible substitution of limestone with slag in the production of clinker, an intermediate product in cement production.

About EUROCEMENT group

EUROCEMENT group is one of the five largest cement producers in the world, with a total of 19 cement plants in Russia, Ukraine and Uzbekistan, as well as plants that manufacture concrete and reinforced concrete, and quarries for the mining of aggregates.  EUROCEMENT group companies have a combined production capacity of over 53 million tonnes of cement and more than 11 million m³ of concrete, with reserves amounting to over 5.5 billion tonnes. More than 300 million people are consumers of EUROCEMENT group products. EUROCEMENT group's output enables the construction of up to 100 million m² of residential housing and 70 million m² of industrial facilities, and the laying of 20,000 km of road.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world.

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

NLMK operates production facilities in Russia, Europe and the United States. The company’s steel production capacity exceeds 17 million tonnes per year.

NLMK has the most competitive cash cost among global manufacturers and one of the highest profitability levels in the industry. In FY2016, the Company generated $7.64 billion in revenue and $1.94 billion in EBITDA. As of 31 December 2016, Net debt/EBITDA stood at 0.36х. The company has an investment grade credit rating from S&P and Fitch.

NLMK’s ordinary shares with a 16% free-float are traded on the Moscow Stock Exchange (ticker "NLMK") and its global depositary shares are traded on the London Stock Exchange (ticker "NLMK:LI"). For more details on NLMK shareholder capital, please follow the link.

NLMK Group received Steel Industry Leadership Award at the prestigious 2016 Platts Global Metals Awards held by S&P Global Platts, a leading international industry analytical periodical.