Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced that in 2015 it cut production costs by $135 million by implementing programs to improve operational efficiency. As a result of the initiatives, MMK reduced the cost of sales of its finished products by nearly three percent.
MMK stated that in 2015, by implementing energy efficiency measures and adopting low-cost, high-efficiency investment projects, the company cut spending on fuel and energy resources by $30 million. In addition, efficient maintenance of technological processes helped to reduce consumption of raw materials by $50 million and administrative and technical measures to lower equipment repair and maintenance costs led to savings of $19 million, and another $36 million was saved by optimizing management costs in the given year.
For the current year, MMK has also developed cost-cutting programs as part of ongoing improvements at all its units.
MMK’s chief executive officer Pavel Shilyaev stated that the company’s plans include the introduction of automated systems to optimize the composition of coal charge, iron ore, and steelmaking formulas which will help it optimize procurement of raw materials and ferroalloys. According to Mr. Shilyaev, MMK aims to achieve a goal of cutting costs by 2-3 percent per year and this will strengthen its competitive edge in the metals market.