06 November ‘18

MMK management systems’ effectiveness confirmed by audit

The audit conducted by external auditors from the international certification body TUV NORD CERT covered both the structural and functional divisions of MMK and the key entities of the Group involved in the production processes of the plant and suppliers of its products and services. Among these companies were 'MMK Metiz', 'United Service Company', 'Ogneupor', 'Building Complex', 'Mehanoremontny Complex', 'Magnitogorsk Cement-Refactory Plant', 'Slakteris', 'Remput', 'MMK-InformServis', 'Profit' and 'Magnitogorsk Plant of Rolling Rolls'.

The QMS processes were tested in 12 MMK Group’s companies from July through September 2018. For the first time (including in the Russian metallurgical industry), all organisations underwent a simultaneous audit of all key management systems: QMS - for compliance with the requirements of ISO 9001: 2015; EMS - for compliance with ISO 14001:2015; ILSMS - for compliance with the requirements of the international standard OHSAS 18001:2007. Moreover, the companies involved in producing parts for the automotive industry, were audited for the first time according to the international standard IATF 16949:2016 for the automotive industry and its suppliers. This standard, introduced in 2016, replaced the ISO/TS 16949 technical specification which had been in force since 1999. The new standard has a strict customer orientation and includes a number of consolidated specific requirements of leading Western automakers; this is of great importance to MMK, as a leading supplier of metal products for the Russian automotive industry, as well as for international automakers working in Russia.

According to the results of the audit, no nonconformities were found. TUV NORD CERT experts recommended issuing MMK with IATF 16949 and OHSAS 18001 certificates of conformity and ISO 9001, ISO 14001 certificates of conformity. In addition, MMK expanded the scope of EMS certification to include blast-furnace production in the audit for this particular standard for the first time. TUV NORD CERT experts also carried out an audit of its ILSMS for the first time. This was due to the centralisation by MMK Group of the functions that manage management systems. Moreover, the entities 'Profit' and 'Mtsoz' successfully held their first EMS audit for the 2015 version of standard 14001. For 'Profit', this was the first audit of the environmental management systems in the history of the company, and, according to Anton Yarushin, the chief auditor of TUV NORD CERT, it performed well.

In general, the auditors noted the productivity and efficiency of management systems at MMK and all entities of the Group. They highlighted positive changes related to MMK's environmental activities. The auditors noted that major investments in the implementation of environmental programmes had made these positive changes especially visible. The high quality of internal audits was also noted among other positive aspects of the systems’ functions. These internal informal audits are extremely complex and provide a lot of useful information for managers to further improve processes and improve the efficiency of departments. Another strength continually praised by external auditors are the skills, competence and engagement of employees. The use of risk management elements formed within the framework of MMK Group's comprehensive risk management system was also highly commended.

The unified group certification at MMK was the result of many years of focused work on the centralisation of management systems within the Group. Following this work, uniform requirements were developed and distributed for major processes that are mandatory for MMK and all entities of the Group; a uniform method for conducting system audits was applied; during internal audits monitoring of the main processes of the systems functioning in MMK Group was provided. The audits focused on the plant's quality system, which combines the functions that manage management systems.

As noted by Pavel Shilyaev, CEO of MMK, such a unified approach with common and uniform standards, allowed MMK Group to improve the quality of its management systems, reduce the amount of paper work, regulate the basic requirements of the systems, reduce costs and improve the efficiency of the Company's business processes.

About MMK
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2017, the company produced 12.9 million tonnes of crude steel and 11.6 million tonnes of commercial steel products. MMK Group had sales in 2017 of USD 7,546 million and EBITDA of USD 2,032 million.

Investor contacts:
Andrey Serov
tel.: +7 (3519) 24-52-97
E-mail: serov.ae@mmk.ru

Media contacts:
Dmitry Kuchumov
tel.: +7 (499) 238-26-13
E-mail: kuchumov.do@mmk.ru

Dmitry Bulin
tel.: +7 (499) 238-26-13
E-mail: bulin.dn@mmk.ru

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