OMK Publishes Annual Report for 2007

United Metallurgical Company has published its Annual Report. The year 2007 saw a breakthrough in OMK’s development: the Company produced 1,845,086 tn of various types of pipes, exceeding the 2006 figure by more than 10%. The Company manufactured 944,733 large-diameter pipes. In 2007, the VSW Wheel-Rolling Division produced 820,680 wheels, as compared with 805,379 in 2006.

 

The Company’s consolidated revenue in 2007 reached Rub 107,830 mln (Rub 81,418 mln in 2006), EBITDA was Rub 25,204 mln (Rub 19,750 mln in 2006), and net profit accounted for Rub 16,484 mln  (Rub 12,205 mln in 2006).

 

One of the Company’s high-priority and strategically important businesses is the production of large-diameter pipes (LDP). OMK is the leader in the LDP market and, according to the 2007 results, accounts for about 34% of sales in the Russian LDP market. OMK is the leader of the Russian railroad wheel market. Its market share in 2007 accounted for 68%. In this connection, OMK’s deliveries to the Russian market are ensured until 2009 with its long-term agreement with Russian Railways.

 

The Company managed to achieve such high production results due to its development in the key business segments and the successful implementation of its important investment projects. In 2007, its total investments in the production development and renovation accounted for Rub 21 bln.

 

"The year 2007 was very successful for United Metallurgical Company," said OMK President Vladimir Markin. "That was the year of records, anniversaries, and high commercial achievements. We marked the 250th anniversary of Vyksa Steel Works, the 15th anniversary of OMK, and the centenary of pipe production at VSW. According to the 2007 results, the Company produced 1.85 mln tn of pipes, including 1.7 mln tn manufactured at Vyksa Steel Works. That figure exceeded the USSR’s record set in 1988, when VSW, after the launch of Pipe Electric Welding Shop 5 in 1987, produced 1.6 mlon tn of pipes. Before 2007, that figure had remained not only the USSR’s but also VSW’s all-time high."

 

In 2008, OMK plans to launch Phase 1 of the Foundry and Rolling Facility (FRF) with a design capacity of 1.2 mln tn and the possibility to increase output up to 1.5 mln tn. The FRF will make it possible to manufacture hot-rolled steel coils with special properties for the production of small- and medium-diameter single-seam welded pipes. The launch of the FRF and the attainment of its designed capacity will complete the vertical integration in the medium-diameter pipe segment.

 

 To create vertical integration in the large-diameter pipe segment, the Company will continue, in 2008, preparations for implementing its plate-mill construction project (Mill 5000) in the Vyksa District.