NLMK.L Regulatory News (NLMK)

2 August 2011

Press-release

NLMK creates US and European business divisions

Following the acquisition of the rolling business of Steel Invest and Finance (formerly a joint venture between NLMK and Duferco Group) on July 1, 2011, NLMK announces the creation of its new business divisions - NLMK Europe and NLMK USA.

NLMK is also pleased to announce the new management structure of its international operations. Mr Horacio Malfatto, formerly Chief Executive Officer of Steel Invest and Finance, has been appointed Chief Executive Officer of NLMK Europe. NLMK Europe Strip Products, a business unit combining European flat strip operations, will be headed by Mr Ben de Vos, formerly a Director of La Louvière plant. Mr Igor Sarkits, formerly a Director of DanSteel, has been appointed CEO of NLMK Europe Plate Products. Mr Paul Fiore will continue as President & COO of all USA production companies. Mr Robert Miller has been appointed to the position of President, NLMK USA, responsible for strategic planning and procurement, finance, IT, sales and marketing.

NLMK Europe is a manufacturer of innovative flat products combining all of NLMK Group's European production and distribution facilities. The division employs 3 thousand people at six production sites specialized in hot rolling (including thick plates manufacturing), cold rolling and coating (galvanizing and pre-painting) and a network of steel processing and distribution units in close proximity to the end users.

NLMK's industrial model is unique for Europe and is based on the efficient supply of semi-finished products from Russia to flexible high quality European processing facilities, close to key customers. NLMK has successfully implemented this model at DanSteel, a Danish plate producer, where it has been applied since 2002.

NLMK Europe comprises two business units, Strip Products and Plate Products.

Strip Products unit has an annual production capacity of 2.6 million tonnes at three production sites, NLMK La Louvière, NLMK Coating, NLMK Strasbourg, and a network of service centres.

Plate Product unit has an annual production capacity of 1.93 million tonnes at three production sites, NLMK Clabecq, NLMK Verona, NLMK DanSteel. The synergies between the three facilities allow NLMK to offer its clients full scope of products ranging from very thin/narrow to very thick/wide plates, as well as tool steel.

NLMK USA has a diversified base of flat steel producing assets comprising three production sites at NLMK Indiana, NLMK Pennsylvania (formerly, Duferco Farrell) and Sharon Coating, manufacturing slabs, hot-rolled, cold-rolled and galvanized products. It has an electric arc furnace (EAF) steelmaking capacity of approximately 730 thousand metric tonnes and hot-rolling capacity of 2.7 million tonnes. The new division brings synergies through a common distribution structure offering a wide range of steel products to the construction, pipe and tubes and machinery sectors in the United States.

The creation of new divisions was followed by the renaming of the entities previously forming part of Steel Invest and Finance.

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