Novolipetsk Steel
Encyclopedia
Novolipetsk Steel or NLMK, is one of the four largest steel
companies in Russia with sales of more than US$11.7 billion in 2008 and 9.2 million tonnes of steel output. NLMK's share of domestic crude steel production was about 13% in 2007. It primary produces flat steel products, semi-finished steel products and electrical steels. NLMK also produces specialty coated steels, plus high-ductility and micro-alloyed steels. It is a global slab and grain-oriented steel market leader, with c.13% and 20% global market shares, respectively.
Currently Novolipetsk Steel (NLMK) is one of the world's most profitable steel companies per tonne of production and by far the most profitable steel-making company in Russia with a 2007 EBITDA
margin of 44%.
NLMK's assets are technically advanced and on par with its global peers. NLMK is fully self-sufficient in iron-ore through its 97% stake in Stoilensky GOK, Russia's 3rd-largest iron ore producer.
On December 15, 2005 the company listed 42 million (8.3% of the total number of shares) of its Global Depositary Shares (GDSs) on the London Stock Exchange
. Each GDS represents 10 ordinary shares.
In June 2006 NLMK altered its dividend policy
and increased its target payout ratio from 15% to 20% of its net income under US GAAP. The company pursues the goal of bringing its total dividends over five-year period to 30%.
In 1931, Novolipetsk Iron and Steel began construction of a plant on the site of the iron ore mine. Prospering down through the decades, Novolipetsk became a joint stock company in 1992 and then in 1993 began the process of privatization by distributing company shares to its employees. The company seems to be acquisitive; see list of Related organizations. In 1998, Vladimir Lisin
became the chairman. The manufacturing site in Lipetsk covers 27 square kilometers.
Less than half of NLMK's output of steel is sold in Russia.
The company's primary source of iron ore is now Stoilensky GOK
, a company which is 350 km from the mills at Lipetsk.
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
companies in Russia with sales of more than US$11.7 billion in 2008 and 9.2 million tonnes of steel output. NLMK's share of domestic crude steel production was about 13% in 2007. It primary produces flat steel products, semi-finished steel products and electrical steels. NLMK also produces specialty coated steels, plus high-ductility and micro-alloyed steels. It is a global slab and grain-oriented steel market leader, with c.13% and 20% global market shares, respectively.
Currently Novolipetsk Steel (NLMK) is one of the world's most profitable steel companies per tonne of production and by far the most profitable steel-making company in Russia with a 2007 EBITDA
EBITDA
EBITDA is an acronym for earnings before interest, taxes, depreciation, and amortization. It is a non-GAAP metric that is measured exactly as stated. All interest, tax, depreciation and amortization entries in the income statement are reversed out from the bottom-line net income...
margin of 44%.
NLMK's assets are technically advanced and on par with its global peers. NLMK is fully self-sufficient in iron-ore through its 97% stake in Stoilensky GOK, Russia's 3rd-largest iron ore producer.
On December 15, 2005 the company listed 42 million (8.3% of the total number of shares) of its Global Depositary Shares (GDSs) on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
. Each GDS represents 10 ordinary shares.
In June 2006 NLMK altered its dividend policy
Dividend policy
Dividend policy is concerned with taking a decision regarding paying cash dividend in the present or paying an increased dividend at a later stage. The firm could also pay in the form of stock dividends which unlike cash dividends do not provide liquidity to the investors, however, it ensures...
and increased its target payout ratio from 15% to 20% of its net income under US GAAP. The company pursues the goal of bringing its total dividends over five-year period to 30%.
History
Historically, the Lipetsk area in central Russia has substantial iron ore deposits. In 1702, Peter the Great ordered the construction of an iron foundry there.In 1931, Novolipetsk Iron and Steel began construction of a plant on the site of the iron ore mine. Prospering down through the decades, Novolipetsk became a joint stock company in 1992 and then in 1993 began the process of privatization by distributing company shares to its employees. The company seems to be acquisitive; see list of Related organizations. In 1998, Vladimir Lisin
Vladimir Lisin
Vladimir Lisin is a Russian steel tycoon. He is considered by Forbes magazine to be the richest man in Russia and 14th richest in the world. His estimated net worth is $24 billion.-Background:...
became the chairman. The manufacturing site in Lipetsk covers 27 square kilometers.
Less than half of NLMK's output of steel is sold in Russia.
The company's primary source of iron ore is now Stoilensky GOK
Stoilensky GOK
OJSC Stoilensky GOK is an iron ore company in Russia. Its main facility, the Stoilensky Mining and Beneficiation Plant , is located in Stary Oskol, in the Belgorod region...
, a company which is 350 km from the mills at Lipetsk.
Acquisitions
NLMK's global M&A activity has been focused on assets which the company could affectively leverage for processing its low cost slabs into high value added products in its key export markets. The largest of NLMK's acquisitions was a 50% stake in a Joint Venture with Duferco Group in December 2006. The JV includes one steel plant and five rolling mills in Western Europe and USA. The joint venture also includes service and distribution facilities located in Europe.- OJSC DolomiteOJSC DolomiteOJSC Dolomite forms part of the Russian metallurgical complex, being the only producer of metallurgical dolomite in Central Black Soil Region. The company mines 55% of the total amount of dolomite produced in Russia and 43% in CIS....
, miner and processor of metallurgical dolomiteDolomiteDolomite is a carbonate mineral composed of calcium magnesium carbonate CaMg2. The term is also used to describe the sedimentary carbonate rock dolostone....
, acquired in 1997.
- OJSC Stagdok, miner and processor of fluxing limestoneLimestoneLimestone is a sedimentary rock composed largely of the minerals calcite and aragonite, which are different crystal forms of calcium carbonate . Many limestones are composed from skeletal fragments of marine organisms such as coral or foraminifera....
, acquired in 1999.
- OJSC Stoilensky GOK, iron ore supplier, acquired in 2004 (97%).
- OJSC TMTP, operator of Black SeaBlack SeaThe Black Sea is bounded by Europe, Anatolia and the Caucasus and is ultimately connected to the Atlantic Ocean via the Mediterranean and the Aegean seas and various straits. The Bosphorus strait connects it to the Sea of Marmara, and the strait of the Dardanelles connects that sea to the Aegean...
port TuapseTuapseTuapse is a town in Krasnodar Krai, Russia, situated on the northeast shore of the Black Sea, south of Gelendzhik and north of Sochi. It serves as the administrative center of Tuapsinsky District, although administratively it is separate from it...
, acquired in 2004 (controlling interest).
- License for the large coking coalCoalCoal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
deposit Zhernovskoie 1 in the Kuzbass region of Russia, acquired at State auction in 2005.
- DanSteel A/S, Danish steel rolling company, acquired in 2006.
- The OJSC Altai-koksOJSC Altai-koksOpen Joint-Stock Company Altai-Koks is one of the largest Russian producers of coke and by-products. One of the most technically and technologically advanced companies, it produces coke and a wide range of chemical products. The company has a 10% share of overall Russian coke production.-Geography...
acquired in 2006.
- VIZ Stal, the second-largest Russian electrical steelElectrical steelElectrical steel, also called lamination steel, silicon electrical steel, silicon steel, relay steel or transformer steel, is specialty steel tailored to produce certain magnetic properties, such as a small hysteresis area and high permeability.The material is usually manufactured in the form of...
producer, acquired in 2006.
External links
- Official site - English language version