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CMI: new strategy approved

«Magnitogorsk metallurgical combine» approved a new development strategy. The period of its validity — until 2025. The investment program, developed as part of the strategy involves investing at 4−6 bln. USD. The volume of steel production is not planned to increase. The program includes modernization of production. The main goal — to reduce production costs. It is assumed that it will be 10−20 USD / ton. The most important task is the domestic market. Sales volumes should increase to 84%. It is expected that with the norms of MMK's dividend policy will be determined until the spring of 2016. With this new level of payments is set.

For 10 years, every year MMK involves spending about 400−600 mln. USD. Naturally, this will be taken into account the current exchange rate. Of the allocated funds of about 250 million. USDbudet go on maintaining working capacity. Prior to the adoption of a new strategy CAPEX MMK placed unevenly. In 2007−2011, fluctuations ranged from 700 million. USDdo 2.2 billion. USDv year. Now the company has planned the progressive investment. This investment will not exceed the amounts of operating profit. The most significant investment projects include a new sinter plant, blast furnace, coke battery. As a result, the cost of production of slabs will fall by 10−20 USD / tonne. The cost of the sinter plant will be 15−18 bln. RUB. Before the devaluation of the value of RUB coke battery reaches 15−18 billion RUB, blast furnaces -. About 28 billion RUB… Projects in the current environment will be repaid in 5−7 years.

The implementation of the company's products in 2025 is expected to increase from 76% to 84% available. Capacity share in the Russian company plans to hire by import substitution (coated) in the construction sector. MMK also expects to increase supplies to the automotive industry and the increase in demand from machine builders and pipe manufacturers.

As part of the strategy of the company it does not provide for major acquisitions. However, there is the possibility of considering the acquisition of coal assets. MMK interested in coal grade «K». All also planned integration into iron ore assets. The company said the possibility of selling Turkish MMK Metallurji plant. Its production annual capacity of 2.3 mln. Tons of steel. MMK assessment will cost 1.5−2 billion. USD. While the proposals do not exceed 1 billion. USD.

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