OREANDA-NEWS. June 15, 2011. "United Metallurgical Company started the implementation of its Import Substitution Strategy in 2003, when it was the first in Russia to decide on the construction of a line for the production of main pipes of 1,420 mm in diameter," said OMK Director for Marketing Ilya Kolomeyets at the 9th Metallurgy Summit in Moscow today. In those years, according to Mr. Kolomeyets, Russian pipe companies satisfied less than 40% of the domestic market demand for pipes. "Neither Gazprom nor oil companies guaranteed that they would buy these products in the future," said Ilya Kolomeyets. "That certainly was a risky move. However, OMK decided to build the facilities. Eventually, in 2005, the Vyksa team constructed Russia's first and the most modern large-diameter pipe production line."

Over the past seven years, about USD 10 billion were invested by Russian pipe companies to renew their fixed assets, including more than USD 4 billion invested by OMK to build new facilities and modernize existing ones. Unit investments in the pipe industry are among the highest in the real economy and reach USD 200 a tonne of finished product.

"Large-scale investment in the development of production enabled OMK to produce pipes that exceed in quality most foreign pipes of similar types," emphasized the OMK Director for Marketing. "This also enabled the Company to participate in such most challenging and responsible modern projects as Nord Stream, Bovanenkovo–Ukhta, ESPO, and others. We consider our experience in supplying pipes for offshore projects to be our indubitable success and advantage. We are proud that we became Russia's first company to supply large-diameter pipes produced in accordance with DNV standard. Those were OMK pipes that were used to construct the "Olympic" gas pipeline, Dzhubga–Lazarevskoye–Sochi, which was ceremonially put into operation yesterday."

The next step in the implementation of the Import Substitution Strategy, according to Ilya Kolomeyets, will be the putting into operation of Mill 5000, the facility designed to produce wide thick sheets for the production of large-diameter pipes. "That will be Russia's third Mill 5000 (earlier, similar facilities were put into operation by Severstal and Magnitogorsk Iron and Steel Works)," continued Mr. Kolomeyets. "At present, however, we still have to buy about 30–40% of sheets abroad. When Mill 5000 is put into operation in Vyksa, our Company will be able to produce high quality wide sheets exclusively for the pipe industry. The facility was initially designed to manufacture sheets for pipe companies and this is the main distinguishing feature of the OMK mill. When Mill 5000 is put into operation, Russian wide sheet facilities (600 thousand tonnes produced by Severstal, 1.5 million tonnes by Magnitogorsk Iron and Steel Works, 1.5 million tonnes by OMK) will fully cover domestic pipe companies' need for this product. The launch of Mill 5000 will enable OMK to control its costs, product quality, and production period. The Government and the Russian regions will receive more in taxes, while customers will get high quality domestic products."