Russian steelmaker NLMK Group has announced that, with the implementation of its large-scale operational efficiency program, called Strategy 2017, it generated a structural net gain of $477 million per year in 2014-2015. In the given period, over 85 percent of the company’s savings came from operational efficiency programs that did not require any capital outlay, while the remaining 15 percent came from investment projects.
As a result of the mentioned projects, in 2015 the productivity of steelmaking equipment at the Lipetsk site increased by 300,000 mt year on year and the production capacity of the hot strip mill rose from 5.9 million mt in the previous year to six million mt, among other improvements. Meanwhile, in the current year NLMK Group plans to complete the construction of its Stoilensky pelletizing plant, with the launch scheduled for the second half of the current year. This will provide an annual effect on NLMK Group’s operating performance in excess of $180 million, which is planned to be fully achieved in 2017.
In addition, by 2018 NLMK Group’s iron ore concentrate output capacity will increase by 1.6 million mt from the 2015 level, including a rise of 600,000 mt in 2016. As a result, iron ore concentrate production capacity will reach 17.3 million mt by 2018. The company expects that in 2016 and 2017 more of the gains will be created by investment projects and commercial strategy programs.