Novolipetsk to spend $4 billion to boost Russian steel output
Novolipetsk to spend $4 billion to boost Russian steel output. OAO Novolipetsk Steel, Russia’s largest steelmaker by market value, plans to spend more than $4 billion boosting output over the next three years as global demand recovers, Chief Executive Officer Alexey Lapshin said. The biggest outlays will be on accelerating construction of another blast furnace at its main factory in Lipetsk and a mini- mill in the Kaluga region, Lapshin said by phone. The company this year may also buy the half of a venture with Switzerland’s Duferco Group that it doesn’t already own, he said. “An upgrade at our main Lipetsk site will not only boost our capacities but also allow us to produce new grades of steel,” Lapshin said April 2. “It’ll give us access to new markets and allow us to carve out new niches in sectors such as high-quality sheet for automakers, where we are already present.” Novolipetsk, which aims to boost output 40 percent to more than 17 million tons in 2012, has been producing at capacity since May of last year, even as demand in Russia, Europe and the U.S. fell by more than a third, Lapshin said. The steelmaker is one of the lowest-cost producers of slabs in the world, according to Troika Dialog. “The money Novolipetsk is laying out is significant, but justified,” said Sergey Donskoy, a metals analyst at Moscow- based Troika. “With their cost levels, they can sell in any market.” Lapshin said Novolipetsk is expediting construction of blast furnace No. 7 at Lipetsk to complete it by mid-2011, a half a year earlier than originally planned. The new furnace will add at least 2 million tons of capacity, with another 3 million tons coming from other upgrades at Lipetsk and a new mill in the Kaluga region, he said. Novolipetsk is Russia’s third-largest steelmaker by volume, after OAO Severstal and Evraz Group SA. The company is controlled by its billionaire chairman, Vladimir Lisin, who is ranked by Forbes magazine as Russia’s richest man, with an estimated fortune of $15.8 billion. Novolipetsk’s market value has more than doubled in the past year to about $21 billion.
