Magnitogorsk Iron & Steel Works (MMK) Strengthens Foothold on Domestic Market
In 2010, the share of the company’s shipments to the domestic market boosted to 69% of the MMK total metal products sales
“Given the geographical proximity and favorable growth perspectives, we see domestic marketplace as strategically important and a top priority market,” said Victor Rashnikov, MMK Chairman of the Board, commenting on the fact that the company has been increasingly selling its products inside Russia in the most recent years.
In 1999, MMK sold 36% of its total output domestically (with as much as 64% distributed globally). In 2005, local sales outscored MMK’s exports for the first time. The year 2008 witnessed 7.2 mln tons in MMK’s domestic sales (65% of the gross shipments). In 2009 the global economic downturn resulted in a slight increase of the MMK export share compared to local sales. In 2010, MMK’s distribution in Russia and CIS increased to exceed 7 mln tons (44% up from 2009).
In 2010, MMK was steadily growing its monthly local shipments reaching a maximum of 671,000 tons in September. Last year the share of the company’s shipments to the domestic market grew to almost 69% of the total sales demonstrating the highest ratio in the past fifteen years. Subsequently, MMK’s international export share in 2010 went down to 31.2 % (compared to 44.1% in 2009).
Traditionally, MMK’s key domestic customers represent pipemaking sector (accounted for 34 % of the MMK local sales in 2010), machine-building industry (13%), construction and engineering sector (11%) and metalware manufacturing (9%).
MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. MMK realizes MMK-Atakas project in Turkey with annual capacity of 2.3 mln tons of flat steel. In 2010, the MMK Group produced 11.4 mln tons of crude steel and 10.4 mln tons of commercial steel products. MMK Group revenue in 2009 stood at USD 5.081 bn, EBITDA at USD 1.285 bn, profit for the period - USD 219 mln.
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