OREANDA-NEWS. November 22, 2010. Victor Rashnikov, MMK Chairman of the Board, and Sergey Kogogin, Director General of KAMAZ, have signed a Memorandum today providing for construction of a metal service center in Naberezhniye Chelny.

According to the Memorandum, the new facility to be commissioned in 2012 will be owned by MMK and KAMAZ on a parity (50-50) basis. Overall investments into the project will exceed 1 bn rubles. When commissioned, the center’s processing capacity will reach 170,000 mtpy of hot-rolled steel.

Speaking on the project’s perspectives, Rashnikov stated that “production of auto sheets meeting international quality standards is one of the strategic goals pursued by MMK. The new production facility will supply KAMAZ with the necessary assortment of high-quality rolled stock.” According to Rashnikov, KAMAZ will be a major but not the sole customer of the metal service center as, in addition to KAMAZ and its affiliates, the center is planning to ship its products to other car makers, construction sector players, bridge-engineering and machine-building companies.

Sergey Kogogin, Director General of OJSC KAMAZ, said: “We consider today’s signing with MMK as a significant step towards stabilization of the Russian metals market as a whole and the automotive steel market in particular. KAMAZ has been always speaking in favor of cooperation with steelmakers on a stable, transparent, long-term and mutually advantageous basis. We are happy that our ideas have started to materialize. We welcome our Magnitogorsk partners whose up-to-date projects have been unfolding at MMK and in other regions of Russia. Their efforts are aimed at manufacturing high-quality products meeting international standards and designed for domestic carmakers. We hope that other iron-and-steel industry players in this country will also contribute to increased stability in the automotive metals market.”

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The Open Joint Stock Company MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. MMK realizes MMK-Atakas project in Turkey with annual capacity of 2.3 mln tons of flat steel. In 2009 the company produced 9.6 mln tons of crude steel and 8.8 mln tons of commercial steel products. MMK Group revenue in 2009 stood at USD 5.081 bn, EBITDA at USD 1.285 bn, profit for the period - USD 219 mln.

KAMAZ Group is the largest automotive corporation in Russia. OJSC KAMAZ ranks 13th among the world’s leading heavy truck manufacturers and is number 8 among the world’s diesel engine producers. The process chain group includes 14 key automotive plants. The Group includes over 150 subsidiaries in Russia, the CIS and the far abroad. KAMAZ has recently established four joint ventures with the leading foreign producers of auto components, namely ZF KAMA (transmissions), CUMMINS KAMA (engines), KNORR BREMSE (braking systems), and Federal Mogul Naberezniye Chelny (cylinder-piston parts). For 10 months of 2010, OJSC KAMAZ produced almost 28,000 SKD kits and captured 50 percent share of the Russian market of heavy trucks (over 16 t GVW). OJSC KAMAZ and its subsidiaries employ over 50,000 people.