Annual Report 2010 - Magnitogorsk Iron & Steel Works

NEW TRACKSMMK’s Missionand StrategyMMK’s missionis to produce and sell high quality steel products that meet the current andfuture requirements and expectations of our customers for the purpose of earning sufficientprofit to secure the Company’s position as a global leader.The principal strategic goal of MMKis to maintain its long-term competitive position on theglobal steel markets.To attain this goal, MMK is taking the following steps:1. Expansion into new markets;2. Diversification into new product lines;3. Cost reduction;4. Securing supplies of raw materials and power resources.EXPANSION INTO NEW MARKETSIncreased Sales of Hot Rolled ProductsThe Company continues to modernize the 2,500mm Hot Rolling Mill, which willincrease its capacity to 5.5 mtpy of products in a wider range of sizes (1.5-25.0 mmthick instead of 1.8-14.0 mm, and 1,000-2,350 mm wide), and in coils of up to 40tonnes(instead of the current 25 tonnes).In July 2010, a new, state-of-the-art cut-to-length line was put into operation, whichis designed to cut hot rolled strip 5-25 mm thick and 1,000-2,350 mm wide woundinto coils, into sheets 3 to 24 m long. The capacity of this line is 1.125 mtpy.Stronger Presence in the Central Region of RussiaOn November 22, 2010, ZAO Intercos-IV, a company of the MMK Group, commissioneda steel service centre in St.Petersburg with a design capacity of 250,000 tonnes ofsheet blanks to produce stamped parts for the automotive sector and white goodsmanufacturers.Promoting Relations with Key CustomersIn November, 2010, OJSC MMK signed a memorandum with OJSC KAMAZ regardingconstruction of a steel service centre in the city of NaberezhniyeChelny (whereKamaz’s main truck manufacturing facilities are located). The centre will be equippedwith a shot blasting machine, the first of its kind in Russia. It is scheduled to go on22