MMK: new growth strategy calls for 40% hike in investments

The BoD of Magnitogorsk Metallurgical Plant, has approved a new long-term rollout strategy for 2007-2013. In line with the plan, total investments that MMK intends to allocate to implementing new projects over this period will amount to $5.596 bln, which is almost 40% more than the earlier proposed figure of $4.038 bln.

The company’s main strategic target is to improve production efficiency in Russia, which implies not only scaling up output, but also upgrading product quality. Specifically, MMK intends to become a key player in the manufacture of flat-rolled sheets for use in the auto industry. To this end, the company is to expand the capacity of its galvanized steel and PPGI sections. Another of MMK’s major projects is the installation of a 5000 mill for producing plates used to make LDP, the main component in trunk pipelines. Hardware production is expected to double on current levels and total 1 mln t by year-end 2013.

MMK’s Turkish project, which envisages construction of a plant producing and processing hot- and cold-rolled sheet, will require investments of around $1.1 bln and  based on the company’s plans, the payback period will not exceed 5-6 years. Design capacity of the new plant is 2.6 mln t.