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ZSMK

Zapsib is the largest steel mill in the Siberian region and the eastern-most steel mill in the Russian Federation. It occupies an area of over 3,000 hectares and is located 25 kilometres from the city of Novokuznetsk, in the Kemerovo region. In 2007, Zapsib produced 5.3 million tonnes of pig iron, 6.5 million tonnes of steel and 5.8 million tonnes of rolled products.

Facilities

Zapsib is an integrated steel plant. It consists of coke-chemical production, sinter production, three blast furnaces, steel making facilities, a blooming plant, a continuous casting machine and four rolling mills.

Coke production. Zapsib operates seven coke oven batteries, six of which are currently operational. In December 2005, Evraz commissioned reconstructed coke battery No. 1 with an annual capacity of 750,000 tonnes per year. This coke battery meets the latest industry standards for dustless coke loading and provides almost complete collection of waste and emissions. In 2007, Zapsib produced 3.82 million tones of coke, as compared to 4.04 million tonnes in 2006. The decrease in coke production is due to the temporary closure of blast furnace No.1 for relining. Zapsib also operates coke by-products production facilities.

Iron production. To produce steel, Zapsib uses liquid blast furnace crude iron produced at its three blast furnaces. From 2004 to 2006, Zapsib reconstructed and re-commissioned blast furnace No. 2. Blast furnace No. 1 was relined in 2007. In 2007, Zapsib produced 5.25 million tonnes of pig iron, as compared to 5.95 million tonnes in 2006, which decrease is largely attributable to the relining of blast furnace No. 1. Zapsib also operates a three strand sinter plant.

Steel production. Zapsib produces steel in two oxygen converter plants with five oxygen converters with total annual design capacity of 8 million tonnes as well as in a small electric arc furnace.

Continuous casting machines. Zapsib operates one eight strand continuous casting machine which produces square billets. In 2007, Zapsib cast 1.21 million tonnes of billets, as compared to 1.15 million tonnes in 2006. A two-strand continuous slab casting machine was commissioned in November 2006.

Blooming plant. Zapsib operates a blooming plant which in 2007 produced 3.54 million tonnes of slabs and billets, as compared to 3.74 million tonnes in 2006.

Rolling mills. Zapsib operates four rolling mills, consisting of three rolled steel mills and one wire mill.

Products

Zapsib concentrates its production on long products for the construction and engineering sectors, iron and steel casting, coke by-products, low hardenability steel wire cord, cold-resistant rebar (semi-finished products) and welding wire. In 2007, Zapsib produced 5.25 million tonnes of pig iron, compared to 5.95 million tonnes in 2006 and 4.57 million tonnes in 2005; 6.54 million tonnes of steel, compared to 7.32 million tonnes in 2006 and 5.68 million tonnes in 2005; and 5.80 million tonnes of rolled products, compared to 6.62 million tonnes in 2006 and 5.03 million tonnes in 2005. The decrease in steel production levels from 2006 to 2007 is largely attributable to the relining of blast furnace No. 1. The increase in steel production levels from 2005 to 2006 is largely attributable to the reconstruction and recommissioning of blast furnace No. 2 and the reconstruction and replacement of ingot casting by continuous casting.

Quality control

Zapsib operates a quality assurance system certified under ISO-9002, which it originally received in 1994 and renewed in 1997. Zapsib has also received a Lloyd's Register Quality Assurance Certificate of conformity to ISO 9001:2000, EN ISO 9001:2000 and BS EN ISO 9001:2000.

History

Construction of the plant began in 1957, and production commenced in 1964. The first rolled products at Zapsib were manufactured in 1965; the converter shop (the first in the Soviet Union) was commissioned in 1968; and the blooming shop and continuous billet mill became operational in 1969 and 1970, respectively. During the 1970s, Zapsib's production facilities were further extended by the commissioning of a new blast furnace, coke-oven battery, oxygen converter facilities shop and a wire-drawing shop for the metalware division. Zapsib was privatised and transformed into an open joint stock company under Russian law in 1992.

In 1996, prior to its acquisition by Evraz, due to poor financial management Zapsib failed to make principal payments on some of its debt obligations and bankruptcy proceedings were instituted against Zapsib. In November 2001, Zapsib and its creditors concluded a settlement agreement that rescheduled through 2006 Zapsib's trade debt payables and its tax, pension and social fund liabilities through 2006. In December 2004, Zapsib prepaid most of the amounts outstanding under the settlement agreement and rescheduled the remaining amounts outstanding from 2006 through 2009.

In October 2007, following a mandatory buyout procedure, Evraz became the sole shareholder in Zapsib.

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