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The history of United Metallurgical Company is the history of revival of a large group of iron-and-steel enterprises, which in time coincided with the period of this country's entering a new stage of economic and historic development.
The year of the Company's establishment – 1992 – was marked with several major events such as the launch of an economic reform in this country, the end of the cold war, the signing of important political documents governing the relations between Russia and the CIS countries, and the recognition of Russia as an independent state by the majority of nations. The creative spirit of that period affected the start of OMK. United Metallurgical Company began its activity with the construction of a ferrotitanium plant using borrowed funds. That was a successful beginning and the investment was recovered in less than a year. The Company's founders, including current OMK Chairman of the Board of Directors Anatoly Sedykh, used the earned profit for business development. This "investment in development" principle remains the basis of OMK's operations.
During 16 years, the Company integrated many well-known enterprises involved in Russia's metallurgical industry, including the Vyksa Steel Works, Almetyevsk Pipe Plant, the Chusovoy Metallurgical Works Shchelkovo Metallurgical Works, Gubakhinsky Coke, and Trubodetal (a pipe plant in Chelyabinsk). Many of these got a second breath when they became part of OMK.
For instance, the Vyksa Steel Works – one of Russia's oldest metallurgical enterprise –was basically on the verge of a shutdown in the late 1990s, its enormous potential notwithstanding. When it became part of OMK in 1999, its management and production systems were fully restructured. In the ensuing years, hefty financial funds were invested in VSW's production development. Today, VSW is a leader in Russia's pipe and railroad wheel market.
The Shchelkovo Metallurgical Works became part of OMK in 2000 when it was nearly a bankrupt. According to the administrator, the Works' automation system and equipment were depreciated 100% and 50% respectively. Its buildings required a complete renovation. Due to the major investment program implemented by OMK, SMW turned into a unique enterprise. It produces precision bands for picture tube aperture masks. There are only two enterprises in the world – in Germany and Japan – which manufacture similar products.
In 2001, Gubakhinsky Coke became part of OMK. The history of this plant exemplifies two total different approaches to business. The plant, build in 1936, was restructured in the 1990s. A new coke-oven battery was commissioned in 1990. Then, however, there were no more public investments in the plant, and by the end of the 20th century, having changed hands several times during a decade, Gubakhinsky Coke was almost brought to a standstill. Due to misuse, both the battery and shop floor production were ruined. OMK invested almost $15 mln in the reconstruction of the plant in Gubakha. The technological workshops of the chemical division were modernized. February 2002 saw the commissioning of Coke-Oven Battery No. 2 BIS with the capacity of 650 thsd tonnes of dry coke per year. In recent 16 years, this has been the first new battery in Russia that meets the highest technical requirements. In 2006, the reconstruction of Coke-Oven Battery No. 1 was completed and the plant for ammonia removal from coke was built.
In 2002, the Almetyevsk Pipe Plant integrated into OMK. This plant is one of the main suppliers for the fuel-and-energy companies operating in the Mid-Volga Region. The integration with APP opened new avenues for OMK in this region.
In 2005, OMK merged with Chelyabinsk-based Trubodetal, one of Russia's and FSU's largest companies producing fittings for 57-1420mm low-alloy steel pipelines. This plant is the key supplier for the construction of oil and gas transport lines and trunk pipelines. The necessity for this merger became obvious when OMK signed its first contract for the supply of large-diameter pipes for the Nord Stream. This alliance also help the OMK Pipe Division to offer its customers integrated solutions related to the construction of trunk pipelines.
In April 2005, the Vyksa Steel Works launched a line for manufacturing large-diameter (1420 mm) single-seam thick-walled (48 mm) longitudinal pipes for the pressure of up to 250 atm with external anticorrosive and internal smooth coatings. Pipes with these unique characteristics had never been produced in Russia or CIS before. In November 2005, OMK began to produce large-diameter pipes (1420 mm) for the pressure of more than 100 atm with the wall thickness of 21 mm for the construction of land-based sections of the North European Gas Pipeline under its 110,000-tonne contract with Gazprom.
In June 2005, OMK launched the construction of Casting and Rolling Complex (CRC) in the Nizhni Novgorod Region. The OMK CRC will will manufacture rolled products with special properties for the production of medium-diameter welded single-seam pipes. CRC Phase One with the capacity of 1.5 million tonnes was put into operation in October 2008, making it possible for Vyksa Steel Works and Almetyevsk Pipe Plant to use blanks of OMK's own production and, thus, complete the self-reliance cycle. OMK's total investment in the launch of CRC Phase One and Phase Two accounted for $1.2 billion and $600 million respectively.
In May 2007, began the construction of its Mill 5000 steelmaking facility. By 2010, Mill 5000 will enable Russia to solve the issue of import substitution for high quality broad plates designed for pipe production, the nuclear industry, shipbuilding, and the military-industrial sector. The launch of Mill 5000 will enable OMK to significantly increase the production of large-diameter pipes (LDP). These pipes are supplied for the construction of cross-country and subsea oil and gas pipelines. The launch of the new facilities will increase OMK’s LDP production from 850 thousand tonnes in 2006 (41% of Russia's total market of 1.5 million tonnes) up to 2 million tonnes in 2010.
In June 2008, Vyksa Steel Works completed the Joint Project for Rehabilitation of the LDP Electric Pipe-Welding Facilities. As a result of the modernization, the pipe production capacity was increased from 1.6 million tonnes of pipes a year to 2 million tonnes, the application of external corrosion-resistant coating went up from 1 to 2 million tonnes a year, while the capacity for application of internal corrosion-resistant coating was increased from 400 thousand tonnes a year to 800 thousand tonnes. Vyksa Steel Works has become the world’s largest LDP manufacturer. VSW is capable of filling orders of any level of sophistication within brief timeframes and can meet oil and gas companies' ever-increasing requirements for pipe quality and assortment.
In October 2008, OMK put into operation its Casting and Rolling Complex (CRC), constructed in the Vyksa District of the Nizhni Novgorod Region. CRC Phase One enabled the Company to provide high quality hot-rolled steel coils to the electric pipe-welding workshops of Vyksa Steel Works and Almetyevsk Pipe Plant for the manufacture of small- and medium-diameter pipes produced to international standards. CRC also produces high-quality rolled products for the automotive industry, shipbuilding, railway cars, tank-cars, and other types of rolling-stock used by Russian Railways.
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