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Business news, 26.11.2010 03:41

Russia steelmaker MMK opens 250,000 mt/year, $129 mil service center

Russian steelmaker Magnitogorsk Iron & Steel

Russian steelmaker Magnitogorsk Iron & Steel 22/11/2010 commissioned the first stage of a new steel service center at St Petersburg at an investment of Rb4.02 billion ($129 million), the company said in a statement 22/11/2010.

The 250,000 mt/year St Petersburg facility will supply prefabricated sheets and stamped products along with pressed-and-welded components to international automakers with plants in operation or under construction in Russia, including Ford, General Motors, Nissan, Hyundai and Renault.

The plant will also supply domestically and globally to appliance manufacturers such as Bosch und Siemens Hausgerate, Indesit and others, MMK said.

The plant will process cold-rolled auto sheets shipped from MMK's Mill 2000, which is currently under construction, MMK Chairman Victor Rashnikov said in the statement.

The facility is owned and run by Intercos-IV, in which MMK acquired a 75% stake in 2007. Construction of the project's second stage is expected to start in 2011. MMK, KAMAZ TO BUILD TATARSTAN PLANT

Additionally, MMK 22/11/2010 signed a memorandum of understanding with Russian heavy truck manufacturer Kamaz, involving the construction of a steel service center capable of processing 170,000 mt/year of hot-rolled steel in Naberezhniye Chelny, in the region of Tatarstan.

The new facility to be commissioned in 2012 will be owned by MMK and KAMAZ on a parity basis (50% each). Investment in the project will exceed Ruble 1 billion, MMK said.

"Production of auto sheets meeting international quality standards is one of the strategic goals pursued by MMK," Rashnikov said. "The new production facility will supply Kamaz with the necessary assortment of high-quality rolled stock."

The truck manufacturer will be a major but not the sole customer of the metal service center, he added, citing automakers, the construction sector, bridge-engineering and machine-building companies as potential customers.

Kamaz ranks 13th among heavy truck manufacturers and holds eighth place in the world in diesel engine production, according to the statement.

In 2009, MMK produced 9.6 million mt of crude steel and 8.8 million mt of commercial steel products and generated $5.08 billion in revenue.

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