Strategic Partnership

6 Feb 2007 09:00

OAO TMK06 February 2007 February 6, 2007 TMK and SMS Group sign Strategic Partnership Agreement OAO TMK (TMK), one of the world's largest oil and gas pipe producers, and SMSGroup (Germany), one of the world's leading manufacturer of metallurgical andpipe-rolling equipment, have signed an agreement on strategic cooperationthrough to 2015. The strategic partnership foresees coordination of long-term joint activities todevelop and implement SMS Group's best technologies and equipment for theproduction of steel and seamless steel pipes at TMK's mills. During the signing meeting, Chairman of the Board of Directors of OAO TMKDmitriy Pumpyanskiy and SMS Group President Heinrich Weiss expressedsatisfaction with the results of their joint efforts. TMK is implementing a $1.2billion Strategic Investment Program to be completed by 2010 that will implementthe most advanced technologies and increase the output of high-tech pipeproducts. The share of already launched projects involving SMS Group's equipmentin TMK's Strategic Investment Program exceeds 50%. In 2006, TMK and SMS Group signed agreements for the delivery of a pipe rollingmill with a Premium Quality Finishing (PQF) line for Taganrog MetallurgicalWorks (Tagmet, a part of TMK) and an electric arc furnace for Seversky PipePlant (SPP, also a part of TMK). The basic engineering of the projects has beencompleted. The new pipe rolling mill will allow Tagmet to increase production capacity,expand its range and increase the quality of its products. The new mill is to belaunched in the first half of 2008 and will be capable of producing 600,000tonnes of pipes per year. Pipes for oil and gas (casing, tubing, drilling pipes)as well as seamless pipes for engineering shall be produced in accordance withinternational standards. The electric arc furnace for Seversky Pipe Plant will be capable of producing990,000 tonnes of steel per year and is to be launched in late 2007. Theinstallation of the furnace will culminate in the creation of a modernsteel-producing complex for Seversky Pipe Plant, to complement already launchedladle furnace and a continuous casting machine. In the agreement, TMK and SMS also express their intention to create a jointventure on the basis of Seversky Pipe Plant that will manage service and repairfor equipment used in the production of steel and seamless pipes. This will beto the highest standings of advanced manufacturing technologies and best worldpractices. TMK and SMS Group have been in close cooperation since 2001. The mutual projectsundertaken include stretch-reducing mill and threading lines at TaganrogMetallurgical Works, upsetting press machines at Taganrog Metallurgical Worksand Sinarsky Pipe Plant, and continuous casting machines at Volzhsky Pipe Plant,Taganrog Metallurgical Works and Seversky Pipe Plant. OAO TMK (www.tmk-group.com) Founded in 2001, TMK (LSE: TMKS) is the largest pipe producer in Russia and oneof the three global market leaders. TMK GDRs and common shares are traded on theLondon Stock Exchange and Russian Trading System. In 2006 the total volume of pipes shipped reached over 3 million tonnes. TMKsupplies pipes to companies in more than 60 countries. TMK production facilities are located in Russia and Romania: • Volzhsky Pipe Plant • Seversky Pipe Plant • Taganrog Metallurgical Works • Sinarsky Pipe Plant • SC TMK-ARTROM SA • SC TMK-Resita SA • Orsk Engineering Plant SMS Group (www.sms-group.com) SMS GmbH is the holding for a group of companies internationally active in plantconstruction and mechanical engineering relating to the processing of steel,non-ferrous metals and plastics. The group is divided on the one hand into theBusiness Areas SMS Demag and SMS Meer under SMS metallurgy and, on the otherhand, into the Business Area SMS Plastics Technology. In the 2006 some 9,250employees worldwide generated a turnover over EUR 3,0 bn. TMK's PR Department: Tel: +7 (495) 775-7600Fax: +7 (495) 775-7601E-mail: pr@tmk-group.com This information is provided by RNS The company news service from the London Stock Exchange