OREANDA-NEWS. OMZ (Uralmash-Izhora Group) (RTS: OMZZ; LSE: OMZD; OTC: UHMVY) released a summary of remarks by Alexei Matveyev, Chairman of the Board, and Evgeny Sergeyev, General Director, to a media breakfast in which they outlined the company’s preparations for participation in the Russian government’s new nuclear industry development program.

According to the press service of OMZ, Matveyev outlined the company’s strategy of business development through expansion of the company’s core assets, business diversification, and formation of alliances with various companies leading in their sectors.

Mr. Sergeyev discussed certain key OMZ businesses, including machine building for the nuclear energy sector, oil and gas projects, mining equipment, special steels production, and industrial services. He also spoke about the company’s non-core businesses. He added that currently the company is at a new stage of its evolution, and despite some inevitable complications connected with the changes this represents a new development opportunity.

Mr. Sergeyev outlined the background behind OMZ’s decision to launch the production of certain products critical to the nuclear power generating industry, referred to collectively as universal semi-finished products with long production cycle. In part, this was an opportunistic decision arising from a lack of orders in its OMZ-NPPEQ division, Mr Sergeyev said. These products can be used to make equipment for Russian and foreign nuclear power plants. At the moment OMZ is at the pre-production stage, with a full launch anticipated late this year.

Based on current prices, the company believes a single contract to supply equipment for a nuclear power unit with 1,000 Megawatt capacity will mean Izhorskiye Zavody orders valued at US$120 million. Launch of the new specialty will allow OMZ to begin implementation of the Federal Program “Development of Russia’s Nuclear Energy Industrial Complex for 2007-2015.”

Mr. Matveyev added that OMZ is engaged in other serious preparations for the Federal Program, with Gazprombank as the company’s strategic financial partner and financial consultant in this process. He offered as an example of the collaboration Gazprombank’s support for the construction and financing of a 120-ton smelting furnace for special steels at the company’s OMZ-SpecStal division.

Mr. Sergeyev said that production of special steels is now one of OMZ’s more effective and profitable businesses. The company plans to form a special business unit responsible for casting production.

OMZ-Mining Equipment and Technologies will be expanding its already diverse range of the products and concentrating on further development of its industrial services.

Mr. Sergeyev paid special attention to OMZ’s oil and gas business which is being actively developed currently. “This is a young business at OMZ, but we already have some references,” he said. “For instance, OMZ-Oil and Gas Projects (Izhorskiye Zavody) is one of the largest Russian producers of storage equipment and technological installations for the oil and gas industry. In 2006 OMZ supplied spherical gas holders designed for the storage of long distillate of light hydrocarbons (LDLH) to Surgutneftegaz and Kazanorgsintez. In October 2006 the company concluded a contract with Tolkynneftegaz, Kazakhstan for the supply and assembly of similar equipment. The contract’s value is more than RUR130 million.”