1. Alexander Frolov Chairman and CEO
Evraz Group S.A.
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2. Evraz is the world leader in the railway products market
Railway products make up 15% in the Evraz product portfolio
◦ NTMK 931,000 tonnes
◦ NKMK 894,000 tonnes
◦ RMSM (Evraz Oregon Steel Mills, USA) 465,000 tonnes
Evraz accounts for 23% of the world rail products and produces 1.6 million tonnes of
rails, including:
◦ NTMK 380,000 tonnes
◦ NKMK 755,000 tonnes
◦ RMSM 465,000 tonnes
Russian Railways (RZhD) - the world’s largest consumer of rails, Evraz’s major customer
– buys about 700,000 tonnes, or 60% of rails produced by Evraz in Russia
◦ NTMK 193,000 tonnes
◦ NKMK 494,000 tonnes
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3. In 2007 Evraz implemented a number of projects to
improve its railway products quality
Wheel Mill at NTMK: Construction of a heating furnace and two final check lines
[САРЕХ of ~€45 million]
An ultrasonic check line at NTMK’s wheel mill [САРЕХ of ок. ~€8 million]
Rail vacuum treatment at NKMK’s EAF shop [САРЕХ of ~€20 million]
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4. In 2008-2009 Evraz will complete reconstruction of
NTMK’s wheel mill
Heat treatment shop: [САРЕХ of ~€107 million]
◦ Reheating furnaces, controlled cooling facilities, wheel drawing furnaces [December
2008]
◦ First phase (December 2008): wheel hardness 320 - 340 НВ, second stage [June 2009]
>360 НВ
◦ Capacity – 580,000 wheels p.a.
Wheels processing shop [САРЕХ of ~€27 million], 2009
◦ Finishing machine shop modernisation, capacity - 580,000 wheels p.a.
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5. In 2008-2011 Evraz is planning a large-scale
reconstruction of rail production
CAPEX - €500 million
Production volume:
NKMK – 750,000 tonnes
NTMK – 950,000 tonnes
Length - up to 25 m at NKMK and up to 100 m at NTMK (up to 50% of total
production)
Rail head thermohardening facility at NTMK
Process flowsheet: water descaling, wheel stamping, mangle tools, ultrasonic
controls, including dry ultrasonic control, drill-saws, finishing presses, a bolt hole
strengthening machine
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6. Rail prices in Russia still considerably lag behind world rail
prices
Rail price dynamics, Russia and the world
800,00 EUR / tonne
700,00
600,00
500,00
400,00
300,00
200,00 Austria
Italy
Russia, rails R-65 of category "Т1"
100,00 Russia, rails R-65 for low temperatures
Russia, rails R-65 for high-speed operations
0,00
2000 2001 2002 2003 2004 2005 2006 2007 2008
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7. Alignment of Russian and world rail prices shows the
dynamics of rail quality improvement
Price, Russia 1200
Mln tonnes, gross
Price, Italy
1
1100
30%
1000
0,8
900
0,6
800
0,4 700
Rail Price, Russia/Rail Price, Italy Ratio 600
0,2
Average Run, mln tonnes gross 500
0 400
2002 2003 2004 2005 2006 2007
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8. In conditions of growing world steel prices it is
necessary to stimulate production of high value-
added products
1 100 $ / tonne
1 000
900
800
700
?
600
500
400
300
200 Billets, export
Rails, Russia
100
Beams, Russia
-
2004 2005 2006 2007 2008F
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