NLMK Group, an international steel company with assets in Russia, the USA and the EU, has successfully passed an audit at its Lipetsk site for compliance with the criteria of the Total Toyota Production System (Ò-TPS), one of the most efficient production process management systems in the world.

The goal of the audit was to assess the efficiency of NLMK’s Production System (NLMK PS) and to obtain recommendations for its further development.

NLMK Group has been implementing the NLMK PS across its companies since 2013. The system includes a wide range of practical tools and methods that provide for increased efficiency of production and business processes. In 2013-2014, implementation of these tools and methods delivered a $500 million gain to NLMK Group’s EBITDA.

NLMK PS was audited for compliance with T-TPS criteria by leading experts from Toyota Engineering Corporation and TPS Certificate Institute (Japan). The auditors assessed NLMK’s blast furnace, steelmaking and rolling operations; the use of NLMK PS tools; procurement, R&M, training and OHS processes.

Auditors noted that NLMK’s Production System is more advanced than the average standard at global steelmaking companies. NLMK operations were assessed as being in line with the best European and American steelmaking companies.

Yulia Venza, NLMK Director for Operational Efficiency, said:

“The experts had a high opinion of NLMK’s use of A3 instruments for problem-solving; as well as of our level of OHS compliance. Toyota Engineering Corporation experts made a special note of the efficiency of our efforts to achieve our objectives through optimization programmes. The auditors indicated how to further develop the system in order to reach the level of the leaders, such as Japanese companies, with increased staff involvement in the continuous improvement process. We will include these recommendations into NLMK’s Production System Development Programme for 2016-2017.”

NLMK Production System in brief

NLMK Production System (NLMK PS) is a methodology developed by NLMK Group experts that includes a wide range of both unique and global production practices aimed at enhancing the efficiency of key operational, technological and business processes. It’s a continuous self-maintained process of searching for and implementing improvements. Full-scale systematic implementation of the system at NLMK began in 2013.

NLMK PS tools serve as the basis for operational efficiency programmes. In 2013-2014, these programmes resulted in gains of around $500 million. In 9M 2015, gains totaled $163 million. NLMK Production System turned the Group into one of the most efficient steel companies in the world.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world.  NLMK’s metal products are used in various industries, from construction and engineering to the manufacture of power-generating equipment and offshore wind turbines.

NLMK's production assets are located in Russia, Europe, and the United States. The Company’s liquid steel production capacity is over 17 million tonnes per year, of which about 16 million tonnes are produced in Russia.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The company generated $8.0 billion in revenue; $1.948 billion in EBITDA; and a net profit of $967 million in 2015. Net Debt/EBITDA is 0.56.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI). The company has a BBB- credit rating.

For more information about NLMK Group, please visit www.nlmk.com

About Novolipetsk (NLMK’s main production site in Lipetsk)

Novolipetsk is the main production site of NLMK Group, Russia’s leading manufacturer of steel and high value added rolled products, and one of the most efficient steelmaking companies in the world. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA.

The steel production volume of the Lipetsk site is approximately 18% of all steel produced in Russia, and approximately 80% of all steel products produced by NLMK Group. Novolipetsk’s high-quality steel products are used in various strategically important industries, from construction and engineering to the manufacture of power-generating equipment and large-diameter pipes. Novolipetsk produced 12.9 million tonnes in 2015. This represents an all-time high over the 80 years of NLMK’s history. This record performance was supported by productivity improvements throughout the value chain of the site. With capacities running at 100%, production grew by 2.4% compared to 2014.