July 25, 2008

OMK Vyksa pipe output in February down by 20% YoY

It is reported that of United Metallurgical Company’s Vyksa Steel Works reviewed its performance in February 2008.

In February 2008, the plant produced 123,576 tonnes of various pipe grades down by 20.3% YoY as compared with February 2007. The output of large diameter pipes was 60,627 tonnes down by 31% YoY as compared with the corresponding period of 2007.

Since the beginning of the year Vyksa has produced 226,455 tonnes of pipes down by 26.2% less than in January and February of 2007. 109,420 tonnes of LDP was produced in January and February down by 36.5% YoY in the corresponding period of last year.

In February, VSW railroad wheel rolling facility produced 67,890 railroad wheels up by 6.5% YoY as compared with the corresponding period of 2007. Since the beginning of the year VSW has produced 141,000 wheels up by 12.6% YoY as compared with January and February of 2007.

According to Mr Vladimir Markin president of OMK President, the current reduced demand for large diameter pipes and medium diameter oil and gas pipes is due to the completed deliveries for a number of major main pipeline projects and the projects postponed by Gazprom as well as to the fact that oil and gas companies have yet to hold tenders for oil and gas pipe supplies for the current year. Additionally, this year will see a number of major project launched in which OMK intends to participate, including the second stage of the Baltic Pipeline System, Nord Stream and some others.

United Metallurgical Company is one of Russia's largest producers of pipes, railroad wheels, and other metal products for energy, transport, and industrial companies. OMK comprises six largest enterprises in the metallurgical sector.