NLMK use a new logistic model

NLMK Group reduced costs by more than 80 million rubles in 2014 through a new logistic model for electrical steel produced at the Novolipetsk site and at VIZ-Steel (the Urals).

Previously, goods were shipped from the plant by road or railway to a container terminal; where they were loaded into containers; and then unloaded at the port of entry. Since the changes were introduced, dynamo and transformer steel coils are loaded into multi-tonnage containers directly on-site at both Novolipetsk and at VIZ-Steel.

This new logistic model has facilitated a 10-15% reduction of transport costs to a number of key destinations.

NLMK Group Vice President for Logistics Sergey Likharev said: “We began introducing the new delivery model at VIZ-Steel in 2013; and at Novolipetsk in 2014, as part of our programme to increase the efficiency of production and business processes. The new model has enabled us to not only reduce the cost of transportation; but also to reduce the possibility of coils being damaged during transportation and handling. We increase the commercial efficiency of our logistics, and simultaneously improve the quality of service our customers receive.”

In 2014, VIZ-Steel dispatched 49,000 tonnes of coils in containers (28% of total deliveries); and Novolipetsk dispatched 5,400 tonnes (1.7% of total electrical steel deliveries). The key destinations were South East Asia, the Middle East and the Americas.

NLMK Group plans to expand both the geography and the volume of its container deliveries in 2015. VIZ-Steel will increase container shipments by 150% to reach 6,000 tonnes per month; whilst Novolipetsk will increase container shipments by 330% to 1,500 tonnes per month.