MMK cuts costs and increases liquidity

To overcome the consequences of the crisis the company has devised a crisis management program aimed at increasing liquidity and cutting costs. It introduces strict control and saving in the use of all kinds of resources, decreases consumption rates for raw materials and auxiliaries, increases utilization of internally generated electricity and raw materials, reduces raw materials purchases, optimizes iron ore, coal and scrap stocks.

The Company has negotiated decreased raw material prices for this year: 70% decrease for scrap, 30% decrease for ferroalloys. Negotiations with most coal producers resulted in a 30% decrease in the price of coking coal concentrate.

According to MMK Chairman Victor Rashnikov, supportive measures taken by the government, cost controls within  the company and renegotiated raw material prices will strengthen MMK’s position in the current environment. “I believe there will be some revival in the second quarter of next year, and the steel market may start to recover in the summer“, said Mr Rashnikov at a recent meeting with the press. “Russia's economy today is quite different from what it was ten years ago and there is no reason for it to freeze up for long. MMK’s position will also stabilize. We have gone through much tougher times, for example, at the beginning of 1990s, when equipment depreciation reached critical levels. We now have a solid technical base, modern equipment and state of the art technologies. We have become more mobile and can now quickly boost production output to 1m ton per month”.