CAPEX

By 2012, we had largely implemented our Strategic Investment Programme aimed at boosting OCTG seamless pipe production in Russia, line pipe production capacities and overall performance efficiency.

Since launch of the Strategic Investment Programme in 2004, TMK’s investments exceeded USD 3 billion; however, we are going to reduce our capital expenditures in the future

As a result, TMK increased its seamless pipe production capacity to 3.0 million tonnes and steelmaking capacity up to 3.4 million tonnes per annum by the end of 2012.

There are currently two major investment projects under way in Russia:

  • installation of an electric arc furnace at the Taganrog Metallurgical Plant with an annual capacity of up to 1,000 thousand tonnes of steel ant incremental capacity of 400 thousand tonnes of steel per annum. The project is scheduled for completion in 2013, and will contribute to production growth and absolute exclusion of open-hearth operations on our plants, and
  • installation of an FQM mill at the Seversky Pipe Plant with an annual capacity of up to 600 thousand tonnes of seamless pipes and incremental capacity of 250 thousand tonnes per annum. The project is scheduled for completion in 2014.

Our Strategic Investment Programme in the USA focuses on improvement of premium products production capacities

TMK is currently implementing two investment projects in the USA:

  • expansion of threading capacities for premium connections that will enhance the our capacity by 230 thousand tonnes. The project is scheduled for completion by 2017;
  • expansion of heat treatment capacity, i.e. thermal processing operations allowing to obtain materials with desired structures and properties. After the project is completed, heat treatment capacity is expected to grow by 280 thousand tonnes. The project is scheduled for completion by 2017.

In addition, we opened a research and development centre in Houston (Texas, USA) in the reporting year. The R&D Centre will focus on practical application of our scientific innovations, product testing, and certification.

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