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October 2008, Uzbekistan Uzmetcombinat: STEEL production New markets, Steel production industry

Completed by Valeria Kotsur

[email protected]

© 2008 Investment Group «Sokrat». All rights protected.

Uzmetcombinat is the only steel production enterprise in Central Asia, whoseactivity is highly supported by the Government of Uzbekistan. The plant has an approved Modernization Program for 2007-2011 that aims to potentially increase the enterprise’s level of steel production to an estimated figure of 750 thsd metric tons per year from its current level of 650 thsd metric tons per year. Executive summary

• The steel products sector in Uzbekistan has only one producer- Uzmetcombinat, an enterprise with a full production process. Steel production on the plant is carried out in two facilities: an electric melting furnace and an open-hearth shop.

• The enterprise focuses mainly on hot rolled steel. Its auxiliary production includes rolled products from copper and its alloys, electrodes and other products.

• The plant now is going through the modernization process. The approved Program includes 9 investment projects whose total cost amounts to USD 49 mln. Uzmetcombinat intends to cover all investments with its own financial capacities, directing 60% of planned investments toward modernization.

• In 2008, the company decided to increase the volume of its charter capital by issuing common and preferred shares. Thus, the amount of common shares increased from 3,258,856 to 39,106,272 with a par value of UZS 800 and the amount of preferred units rose from 75,535 to 906,420. All minority shareholders can easily purchase new shares.

• Lower production costs will continue to support prices for Uzbek steel on a lower level compared to world prices, providing the opportunity to compete with other steel producers in terms of quality and sales volume.

• We believe that the world financial crisis won’t hurt the financial position of Uzmetcombinat, as it has a low level of debt and finances all its expansion activity using its own means. Moreover, Uzmetcombinat supplies all its products to Central Asian countries, which are developing very fast. Therefore, the plants’ capacities will be fully utilized despite the global economic slowdown.

• We recommend BUYing shares in Uzmetcombinat. The valuation showed that Uzmetcombinat has an upside potential with a target price of USD 21.20.

Figure 2. Key ratios, USD thsd 2006 2007 2008F 2009F 2010F

Net Sales, USD mln 202 270 337 371 396Gross Income, USD mln 64 92 118 138 156EBITDA, USD mln 24 32 75 108 135EBIT, USD mln 24 32 71 103 129Net Income, USD mln 19 28 66 95 120Gross Margin 31.9% 34.0% 35.1% 37.3% 39.5%EBITDA Margin 12.1% 11.9% 22.3% 29.0% 34.0%Net Margin 9.6% 10.2% 19.5% 25.7% 30.4% Source: Company data, Sokrat calculations

BUY Price target, USD 21.20

Price (October 2008), USD 7.00

Upside 203%

Figure 1. Uzmetcombinat’s production of steel, thsd metric tons

617 645 670 680 690 697743

-50

50

150

250

350

450

550

650

750

2006 2007 2008F 2009F 2010F 2011F 2015F

Source: Company data, Sokrat calculations

Company data

Shares outstanding 39,106,272

Market cap., USD thsd 273,740

EV, USD thsd 273,000

BV, USD thsd 229,836 Par value per share, USD 0.60

Shareholders structure

State property 71.91%

Labor collective 10.00%

Free-float 18.09%

Uzmetcombinat: steel production October 2008


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Contents Uzmetcombinat Executive summary ……………………………………….…………………….…………………………………………. 1 Uzbekistan’s steel industry: current picture and future prospects………………….………………………………... 3 Uzmetcombinat – the only ferrous metal producer in Central Asia....…………….….……………………………… 3 Production process: fully integrated………………………………………………………….…………………………… 4 Products range…………………………………………………………………………….……………………..………… 5 Major suppliers of production materials………………………………………….……….…………………..…………… 7 Outlets and export facilities………………………………………………………….….………………………..…………… 7 Quality of production…………………………………………………………………..………………………..…… 8 Modernization program……………………………………………………………..………………………..…………… 8 Risks and Opportunities……………………………………………………………..………….….………….……………. 11 Shareholders structure…………………………………………………………….…..………….…………….…………….. 12 Operational and Financial model…………………………………………………………………...……………………… 13 Comparative Valuation…………………………………………………………….…………………..……………………... 19 Appendix



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Large area, strong position, huge facilities

Uzbekistan steel industry: current picture and future prospects Steel is a major contributor to the construction, shipbuilding, and automobile industries. With the rise in demand for steel in recent years, global production has increased dramatically as well. Indeed, from 2001-2006, worldwide steel production grew a reported 49%. With reference to Uzbekistan and the Central Asia Region, it’s important to note that Uzmetcombinat is the largest and has been the only enterprise of ferrous metallurgy in the country and also Central Asia for more than 60 years now. In 1994, Uzmetcombinat’s Executive Board decided to merge with two enterprises – Shirinsky Machine-building Factory and the self-supporting management of the "Vtorchermet" enterprises to become a joint-stock production company with a projected capacity of 750 thsd metric tons of steel per year. The construction of new technological lines, modernization of equipment, application of innovations, and ongoing reconstruction were among the priorities of the company’s management for the last few years. The company has improved the efficiency of its work and the quality of the goods it produces by putting a Continuous Casting Machine into operation, reconstructing a “300” Rolling Mill, and increasing the capacity of its ladles for casting steel. In 2007, the metallurgy complex accounted for nearly 6.5% of all cumulative investments in Uzbekistan, totalling USD 4.2 bln. According to official statistics, the volume of production in the ferrous metallurgy sector grew 12.7% in 2006-2007. In 2007, the stake of the ferrous metallurgy complex in the entire production sector increased to almost 2.4% (USD 345.7 mln). The main consumer of Uzmetcombinat steel is Kazakhstan, whose rapid economic growth is expected to underpin the demand for Uzmetcobinat steel as a cheaper and nearer resource for its construction, automobile and other economic sectors.

Uzmetcombinat – the only ferrous metal producer in Central Asia Now Uzbekistan is going through a wave of overall expansion. It seems appropriate that the construction boom and increase in the demand for steel are making Uzmetcombinat’s prospects brighter and brighter. Notably, Uzbekistan’s economic growth is internally driven. The country, as well as its corporate sector, does not have significant foreign borrowings and therefore, the current credit crunch will not hurt Uzbekistan and its economy. Regarding commodities, last year Uzbekistan exported gas at USD 100 per thsd cbm and now its plans to raise the price to USD 200 looks rather reasonable to us. The company’s labor collective amounts to nearly 10 thsd people. Most specialists are trained at universities and colleges in the Republic of Uzbekistan. With the purpose of training highly-skilled personnel on metallurgy, the company’s management concluded a contract with the Moscow Steel and Alloys Institute. The continuous professional training of personnel is carried out by the plant’s Educational Center. Figure 3. The number of the staff members

2005 2006 2007Production personnel, sellers 7394 7243 7438Administrative branch 1163 1204 1240Workers in a social sphere 1062 1065 1216Total: 9619 9512 9894Source: Company data



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In the three quarters of 2008, the plant produced 452 thsd metric tons of electric melting steel and 65 thsd metric tons of open-hearth steel

With the help of new technologies, the enterprise is looking forward to providing production using resources, produced in their own area, which covers 412 hectares, in order to lower costs and increase its capacities. The structure of Uzmetcombinat’s fixed assets is presented as follows: Figure 4. Fixed assets structure as for 01.01.2008 Fixed assets structure, thsd USD Original cost Depreciation Book value1. Buildings 44,887 17,540 27,3472. Construction 8,225 3,718 4,5073. Transfer units 797 730 674. Machinery and equipment:Power machinery and equipment 2,137 1,073 1,065Material-working machinery 55,935 32,915 23,050Laboratory equipment 641 306 335Computer engineering 699 268 430Other machinery and equipment 1,602 729 8745.Transport facilities 3,069 1,853 1,2166.Instruments 0.09 0.097.Production inventory and other means 138 84 548.Houseghold equipment 362 201 1619.Other fixed assets 65 8 57Total 118,558 59,424 59,164

Source: Company data

Production process: fully integrated Steel production is carried out in two separate facilities of the company:

• an electric melting furnace • an open-hearth shop

In June 2008, this Uzbek enterprise put two large industrial objects into operation for use in new production– wire and welding electrodes with an annual production of 6 thsd metric tons of wire and 500 thsd metric tons of electrodes respectively. The processing of oversize scrap metal is carried out at the shops in Vtorchermet, at feed scrap and charge metals bays located at the open-hearth shop. A baling press and hot cropping are used for processing oversize scrap metal. Processed standard-size scrap (class 1A, 2A, 3A in accordance with GOST 2787-75) is fed through the melting furnace shop. Most of the output is produced at the electric melting shop. For the first three quarters of 2008, the plant produced 452 thsd metric tons of electric melting steel and 65 thsd metric tons of open-hearth steel.

Figure 5. Production integration

electric melting shop 88%

open-hearth shop12%




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Uzmetcombinat presents a fully integrated production process

The electric melting furnace shop was put into commission in 1978. It consists of three arc steel-melting furnaces of the type AF-100UMK, with a 100 ton capacity, with a 80MW transformer and two furnaces with 60MW power transformers. The furnace treatment of steel is carried out at a comprehensive steel treatment unit of the ladle-furnace type. The casting of steel in billets is carried out by three four-strand continuous casting machines of the radial type. The billet’s cross-section is 250mm x 320mm. The open-hearth shop was put into commission in 1944. It consists of a furnace bay, one open-hearth furnace (the capacity of the furnace is 115 metric tons), a casting bay, a charge metals holding bay, a feed scrap bay, a warehouse for ingots, and a refractory. In 2003, Uzmetcombinat carried out the production of consumer goods (steel enameled ware). However, most of the enterprise’s production is still comprised of rolled-metal products. Other company’s facilities include:

1. A shop for the “production of non-ferrous metals” with a total capacity of 4000 metric tons per year, which was put into commission in 2006-2007. The technology for melting copper, its alloys, and rolling products was developed.

2. The steel-wire shop, which was put into commission in 2007, with a rolling capacity of 6,000 metric tons per year. In this shop, binding wire is manufactured in accordance with GOST3282-74 “Low-carbon steel wire for general purpose”, with a diameter of 6.5 mm (for industrial needs) and a diameter of 2.0-4.2 mm (for the production of metal-ware).

3. A bay for the production of welding electrodes, which was also put into commission in 2007, with a total capacity of 500 metric tons per year. The usage of the cleanest cathodic materials has made it possible to lower the content of products’ impurities to less than 0,05%.

4. Auxiliary services that make all production process fully integrated. The services of the chief mechanic, and chief energy specialist are used for manufacturing spare parts, technical equipment for replacement, carrying out current and planned repairs of the shops’ main technological equipment .

Product range At present, Uzmetkombinat produces hot-rolled steel used in the reinforcement of concrete constructions, a thermo-mechanical steel for concrete constructions, round and square hot-rolled steel, steel black strip, steel black corners and channels, steel grinding balls for ball mills, as well as nuts, bolts and nails used in construction. Figure 6. Dynamics of steel production for Uzmetcombinat

2003 2004 2005 2006 2007 Q1 2008

Production, USD mln 110,739 199,521 205,701 186,738 299,987 45,831

Growth rate, % 9.80% 23.30% 1.10% 5.50% 7.20% 1.10% Source: Company data The plant also produces low-carbon general purpose steel wire that is 6.5 mm in diameter for industrial needs and 2.0-4.2 mm in diameter for metal-ware production. The plant produced last year 645.3 thsd t. of steel (+4,4% growth) while finished rolled metal amounted 619.5 thsd t. (+5,4% growth). In the first three quarters of 2008, Uzmetcombinat produced nearly 517 thsd metric tons of steel; 3% more than for the same period in 2007.



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Low prices make for strong competitiveness

Electric furnace steel accounted for 452 thsd metric tons (a 4% growth) of the overall amount of steel produced, while open-hearth furnace steel amounted to nearly 65 thsd metric tons (a loss of 3%). Export grew on a total amount of 232 thsd t. that is 23% increase versus the same period of 2007 year. The average price for steel bars was USD 710 per tonne. Figure 7. Average price for steel bars: Uzmetcombinat and competitors, USD

680

730

780

Arcelor MittalKrivoy Rog

Mechel MMK Uzmetcombinat

Source: Metal-Expert Lower production costs will continue to support prices for Uzbek steel at a lower level than compared to the world prices, providing the opportunity to compete with other steel producers in terms of quality and sales volume. The monthly dynamics show that the recent global crises has hurt major steel industry producers as a drop in demand has forced them to lower production output by more that 20%, while Uzmetcombinat had to lower production only 10% in September. In comparison, for instance, ArcelorMittal Krivoy Rog reduced its production of steel bars by 23%. Figure 8. Monthly finished steel production dynamics in 2008, % MOM

-2%

0%

2%

4%

6%

8%

10%

12%

14%

February March April May June July

Source:Metal-Expert



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Monthly export growth is, on average, at nearly 15%

This Uzbek steel producers is still demonstrating a stable financial position as export volumes are increasing every month due to their lower prices relative to the company’s Ukraine and Russian competitors.

Major suppliers of production materials Uzmetcombinat buys resources (energy carriers. scrap metal and other resources) needed for its production, mainly from Russia and Ukraine. Among its main suppliers are such enterprises as: the “Magnezit" Industrial Complex, "Pervouralski Dinasovy Zavod", "SPZ", "EZTM", "Ukrgrafit", "Zaporozhskiy Ferrosplavny Zavod", "AZTM", and others. Equipment for producting nonferrous metals is imported by leading European firms (from Austria, Germany, Italy, and Switzerland). Among them are "SKET Walzwerktechnic" (Germany), "Techcom Import Export GmbH" (Germany), "Veitscher Radex" (Austria), "ABB EQUIPMENT MARKETING" (Switzerland), and “Mino” (Italy).. The company promotes effective cooperation, in terms of equipment delivery, with such Italian companies such as Tamini. In August 2008, Uzmetcombinat bought new Italian equipment for the transformers at its electric melting shop. The enterprise is introducing new scientific projects, together with "Chelyabgipromez" (in Chelyabinsk), EZTM (in Elektiostal), VNIIMetMash (Russia), NIIChM (in Dnepropetrovsk,Ukraine), and OJSC "Uzogirsanoatloyiha" (in Tashkent).

Outlets and export facilities The relatively lower price for a ton of steel makes Uzmetcombinat attractive for both domestic consumers and overseas enterprises. The company is developing foreign economic activity directed at establishing stable relations with foreign partners. Most export is directed toward Kazakhstan, Russia, Kyrgyzstan, Iran and other nearby countries. The modernization program will help Uzmetcombinat to increase its export volume to USD 150 mln in 2008 and continue positively through to 2011. Figure 9. Current and projected export growth, USD mln

10

60

110

160

210

2001 2002 2003 2004 2005 2006 2007 2011F




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The volume of exports in 2008 is expected to increase on to 245 thsd metric tons; however within the first three quarters of 2008, the export volume had already reached 232 thsd metric tons; this is a 23% increase compared to the same period in 2007. Kazakhstan continues to be the main consumer of Uzbek steel. The average monthly growth in demand is nearly 15%. The company thus delivers steel on the internal market to the Almalyk Mining-Metallurgical Complex, while exports go to “Raptor Management Ltd.” (UK), “Granadient” (Kazakhstan), “Dion Group Inc.” (USA), and “Incomservices” (Azerbaijan).

Quality of production Uzmetcombinat pays special attention to the issue of quality-produced products. The raw materials supplied to the plant for use in manufacturing products are 100% subject to the control of the authorized institution as to their conformity to normative documents. Uzmetcombinat now has three certificates for the production of rolled metal, including rolled bar, hot rolled steel products, heat-treated rolled products, steel grinding balls, strips of copper and its alloys. Figure 10. Certificates, given for production of rolled metal

1 TUV CERT 15 100 64277

2 Bureau Veritas Certification 213861 dd.02.05.2007 till 06.04.2010

3 National certification system of the Republic of Uzbekistan UZ.SMT.04.001.0017 dd.16.01.2007 Source: Company data It is also a fact that the “Metalcertificate” Russian Organization for Certification has awarded the company a certificate for copper and its alloys, giving a green light for the sale of Uzmetcombinat products in Russia. You can also refer to the full list of certificates received by the enterprise in the Appendix presented at the end of the report.

Modernization program: new facilities, more products. Economic growth and infrastructural development causes the demand for steel to grow very fast. That places modernization among the priorities for Uzmetcombinat as a unique ferrous metallurgy representative in the country. The list of investment projects, which has been approved by a Decree by the President of the Republic of Uzbekistan “On the program of modernization, technical and technological re-equipment for “Uzmetcombinat” production for 2007-2011”, includes nine separate projects. The cost of these nine planned investment areas total expenditures of USD 49 mln. The first stage of the CapEx program has already taken place in 2007. Therefore. last year Uzmetcombinat made numerous resulting developments: • The development of new rolling technology using hard-alloy rolls at the Rolling

Mill Shop #2. This will allow the company to extend its range of rolled products and reduce the power and natural gas rates.

• The organization of production welding electrodes at a capacity of 500 metric tons per year. This relates to the development of new kind of products – welding electrodes.

• The organization of production wire in the the company’s steel wire making shop, at a capacity of 6,000 metric tons. This is for the production of a new kind of product – steel wire that is 2mm to 8mm in diameter.



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• The development of new technology for processing slag dumps from steel’s

production. It will allow the production of extra scrap metal at a quantity of 8,000 metric tons per year, an improvement in the environmental situation in the region, and the production of slag for the cement industry.

• The modernization of the electric melting furnace DSP-100 UMK #4 and the replacement of the transformer for furnace that aided in increasing the furnace’s output by 100 thsd metric tons to achieve 650 thsd metric tons per year.

All of these above-listed efforts have made it possible to implement such new products as: - Hot rolled steel square bars, with a dimension of 10mm. - Steel welding wire, 4mm or 5mm in diameter, and of the SV08 steel quality. - Electrodes with metal plating, for the manual arc welding of steel. The production of electrodes by Uzmetcombinat begun on May 15, 2007. In 2007, it produced 81.8 metric tons of electrodes of the 13/55 Э46 UONII type. In the first five months of 2008, the enterprise successfully produced 280 metric tons of electrodes. Figure 11. Electrodes production, metric tons

81.8

280

0

50

100

150

200

250

300

2007 Q3 2008

Source: Company data The increased capacity in producing steel signals results in lower prices in the future. As a result, capital spending by steel producers is often used as an indication of future steel prices - more capital spending today suggests more factories, greater capacity and, therefore, lower prices in future. The total amount of investment planned for spending as part of this modernization program equals USD 11 mln.



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Figure 12. Capital Expenditure dynamics, USD thsd

0

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008F

Source: Company data, Sokrat calculations The reconstruction of the oxygen compressor shop, including the installation of a AKAp-6-2, was completed. Now this allows for the realization of large volumes of high-quality argon, not only to supply for the company’s internal needs, but also for sale. At present, Uzmetcombinat is finishing the reconstruction and modernization of its arc-furnace shop at a cost of USD 7.4 mln. Such a measure will allow the enterprise to increase the furnace’s productivity to the level of 650 thsd metric tons by 2011, while the total production capacity of Uzmetcombinat facilities equals 750 thsd metric tons per year. In 2007-2008, this industrial complex intends to finish its project on improving the arc-furnace shop. All planned investment projects on the modernization of technical and technological equipment will be financed from the resources available, in accordance with Uzmetcombinat’s budget. Figure 13. Net volume of the modernization cost of this project

New capacities

40%

Modernization60%




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The current economic crisis will not negatively impact on Uzmetcombinat in any serious way

In 2008-2009, the company plans to spend USD 5 mln for furnace of section rolling shop reconstruction. This will allow decreasing natural gas consumption and costs of production on USD 600 thsd every year. The arrangements and plans for 2008-2011 that are mentioned in the modernization program for Uzmetcombinat include: • The reconstruction of the gas cleaning unit at the DSP-100 UMK electric melting

furnace. This will allow for increasing the efficiency of cleaning effluents during steel melting.

• The reconstruction of the continuous furnace at the Rolling mill shop #2. This will allow the company to economize on the consumption of natural gas and reduce production costs.

• The modernization of the ball rolling mill and increasing the production of grinding balls to 160 thsd metric tons per year. This will allow to meet the growing demand for grinding balls by enterprises in the mining-metallurgical and cement industries.

• The replacement of worn-out equipment. The final realization of the investment program will make it possible to increase the production of steel by 12.7% (to 695 thsd metric tons), and of special iron production by 12.3% (to 492 thsd metric tons). Thus, the overall volume of production should increase by 30.5%, while exports are expected to increase 1.5 times. Figure 14. Results of Uzmetcombinat’s modernization and technical re-equipment program

2006 2007 2008E 2011FSteel (thsd metric tons) 616.70 645.30 669.82 695.00Finished rolled metall (thsd metric tons) 585.60 619.50 640.00 670.00Including grinding balls (thsd metric tons) 127.90 138.10 480.00 492.00

Results of the program of modernization and technical reequipment of Uzmetcombinat

Source: Company data, Sokrat calculations

Risks and Opportunities Among the major risks and weaknesses we see: - Lower prices for metal worldwide; - Economic risks (higher inflation, taxation changes). The price of steel is highly dependent on global economic cycles - when the global economy is heating up, steel prices tend to rise; - Currency risks (the UZS depreciates approximately 4-6% each year); - A high level of amortization and depreciation. Moreover the program, which is aimed at modernization and decreasing production costs, makes Uzmetcombinat less susceptible to the above-mentioned risks. The financial crisis and Uzmetcombinat. Our opinion is that the flexibility and high demand from the CIS countries will maintain Uzmetcombinat’s financial position at a high level. This enterprise finances almost all of its modernization programs and expansion using its own means. Moreover, rather low prices for steel products are demonstrating that the company is more flexible than its rivals. In times of crisis and a falling level of demand for steel, it can become evident that steel producers will have to lower the prices of their products. That may hurt their financials and bring huge losses. Furthermore, Uzmetcombinat’s prices are lower than the average level, making its financial position more flexible as it will not have to make any huge cuts in the prices of its products.



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Looking at the strengths of Uzmetcombinat’s activity we see: - Appropriate ecological norms; - Good financial position and capacity to cover expenses using its own finances. It

covers the costs of all nine investment projects using its own cash; - Government support: Uzmetcombinat is a company with a State share of 72%,

what makes its position stronger from a side of demand level and pricing policy. - Positive prospects in light of modernization. Its new facilities will help to lower

production costs and increase the overall production level by 12.7%; - Lower prices for commodities worldwide will lower production costs; - The region’s high economic growth.

Shareholders structure The company’s shareholders equity is USD 24.3 mln, which is presented as 40.01 mln shares at a face value of UZS 800 (USD 0.63) each. Common shares amount to 39.1 mln units (97.7% of shares), while preferred shares account for 0.9 mln units (2.3% of all outstanding shares). The biggest shareholder of the company is the State (the Government of the Republic of Uzbekistan), which actually owns a 71.91% stake in the company. Figure 15. Shareholders’ structure Shareholder StakeState Property Committee 71.91%Labor collective 10.00%Free-float 18.09% Source: Company data The analysis of the company’s dividend policy shows that the size of dividends payment on common and preferred shares demonstrates stable growth. Figure 16. The history of dividends payments

2003 2004 2005 2006 2007

Net profit for the enterprise USD mln 8,086 20,030 13,753 19,716 28,100

Dividend payout rate 11.17% 20.50% 19.65% 19.40% 18.12% Source: Company data It should be mentioned that the Government had excluded OJSC “Uzmetcombinat” from the list of planned privatizations for 2007-2010. The only property that is eligible for sale is free-float amounting to 7,074,325 shares. It is noteworthy that Uzmetcombinat increased its Share capital 11-fold a few months ago in order to lure financing for its ongoing modernization process. Although there were fears about the possible dilution, all minority shareholders were given access to the shares issue and could easily buy additional shares. Our DCF valuation of Uzmetcombinat incorporates the planned CapEx program and takes into account the new number of shares.



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Operational and Financial model: In analyzing and forecasting the company’s further financial situation, we based our assessment on a DCF model. Among the major assumptions were such operational figures as the volume of steel production by Uzmetcombinat, COGS and SG&A growth rates. Based on official company data, the program of modernization and technical re-equipment is expected to provide an increase in the volume of steel production to 696 thsd metric tons per year by 2011. Apart form this, Uzmetcombinat produced 645.3 thsd metric tons of steel in 2007. The forecasted volume of production for 2008 is expected to increase on 3.8% to 669.82 thsd metric tons. The possible projected capacity of the enterprises facilities amounts 750 thsd metric tons per year. We expect the plant to lift production to the level of its potential full capacity by 2018. Thus, we forecast that the average world price for one metric ton of steel will show an 18% increase in 2008. Our model assumes that world prices for steel will increase 5% in 2009 and be constant for 2010-2013. It is remarkable that one metric ton of hot-rolled steel cost USD 548 in 2007. Meanwhile, the price of one metric ton of steel, produced by Uzmetcombinat, was USD 100 lower compared to world prices. Lower steel prices will help the enterprise to compete with other rivals in terms of its export activity. The same dynamic was used for the cost per metric ton growth rate calculation, taking into account that the modernization of facilities is expected to lower production costs by USD 600 thsd every year. We also used the approximate SG&A growth rate at a level of 1%. We had no specific information about the source of Other Operation Income/Expenses, which is why we valued those parameters as 0. It’s important that Uzmetcombinat will fully cover all expenses, planned within the modernization program for 2007-2011 with its own available cash, with capital expenditures expected to be USD 49 mln. Thus, the company has no LT liabilities as it fully covers its expenses from its own resources. Every year,15% of the net income is retained on reserve capital. The average dividend payout rate equals 17%. From 2007 to 2011, the forecasted amount of CapEx amounts USD 49 mln. So it is noteworthy that the company is increasing its capacities and paying great attention to ensuring its stable financial position, demonstrated from the figures below.

Valuation and Recommendations We base our valuation for the DCF model on EBT, D&A, CapEx and Change in NWC figures. We took the D&A rate at a level of 3.5%. CapEx and NCNWC figures show that the company fuels resources for the modernization and re-equipment of its facilities with the major part of the CapEx seen for 2007-2011. In this valuation, we estimated the WACC rate at a level of 18%, assuming that the terminal growth rate is 0%. After 2015, we assumed the model to be stable within the final three years. For a comparative valuation, we used steel producers, analyzing such ratios as EV/EBITDA and P/E for 2006-2007 and forecasted figures for 2008 and 2009. The EV/EBITDA for Uzmetcombinat was 11.2 in 2006, 8.5 in 2007, and is expected to decrease to 2.3 and 2.0 in 2008 and 2009 respectively. The enterprise’s P/E was 14.2 in 2006 and and 9.0 in 2007. Thus, our operational and financial model showed further decline in the ratio to 2.5 in 2008 and 2.0 in 2009. Our weights were awarded as 25% each of the data for both 2008 and 2009. The DCF model showed an upside potential of Uzmetcombinat shares at a level of 308% with a target price at USD 28.59. The Comparative valuation showed an upside of 3% and a target price of USD 7.21. Thus, we recommend BUYing shares in Uzmetcombinat, with an upside of 308% and a target price of USD 28.59.



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Figure 17. Balance sheet, USD mln

Source: Company data, Sokrat calculation

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00

0

To

tal

Lia

bil

itie

s &

Eq

uit

y1

47

23

23

15

41

95

42

68

48

45

1,0

27

1,2

29

1,4

30

1,6

31

1,8

32

To

tal

Lia

bil

itie

s3

23

94

14

24

44

54

64

74

94

94

94

9

Lo

ng

-Term

Lia

bil

itie

s0

00

00

00

00

00

0

Long-T

erm

Deb

t0

00

00

00

00

00

0

Oth

er L

ong-T

erm

Lia

bili

ties

00

00

00

00

00

00

Sh

ort

-Term

Lia

bil

itie

s3

23

94

14

24

44

54

64

74

94

94

94

9

Acc

ounts

Pay

able

16

20

21

21

22

22

23

24

25

25

25

25

Short

-Ter

m D

ebt

00

00

00

00

00

00

Acc

rued

Exp

ense

s16

19

20

21

22

22

23

23

24

24

24

24

Eq

uit

y1

15

19

32

74

37

64

98

63

97

99

97

91

,18

01

,38

11

,58

21

,78

3

Shar

e Cap

ital

224

24

24

24

24

24

24

24

24

24

24

00

00

00

00

00

00

Tre

asury

Cap

ital

00

00

00

00

00

00

Ret

ained

Ear

nin

gs

74

121

190

277

381

501

636

790

961

1,1

31

1,3

02

1,4

73

Min

ori

ty I

nte

rest

00

00

00

00

00

00

39

47

59

75

93

114

138

165

195

225

256

286

To

tal

Deb

t0

00

00

00

00

00

0

Net

Deb

t(1

)(5

4)

(11

7)

(20

2)

(30

7)

(44

2)

(59

4)

(76

6)

(95

9)

(1,1

59

)(1

,36

0)

(1,5

61

)

Bo

ok V

alu

e1

15

19

32

74

37

64

98

63

97

99

97

91

,18

01

,38

11

,58

21

,78

2

No

n-C

ash

Net

Wo

rkin

g C

ap

ital

44

56

63

69

75

81

88

96

10

51

05

10

51

05

CIP

Finan

cial

Inve

stm

ents

Inta

ngib

le A

sset

s

Res

erve

Cap

ital

Additio

nal

Pai

d-i

n C

apital

US

D m

ln

To

tal

Ass

ets

No

n-c

urr

en

t A

ssets

PP&

E,

Net

PP&

E,

Gro

ss

Acc

um

ula

ted D

epre

ciat

ion



15

Figure 18. Income Statement, USD mln

Source Company data, Sokrat calculations

US

D m

ln2

00

62

00

72

00

8F

20

09

F2

01

0F

20

11

F2

01

2F

20

13

F2

01

4F

20

15

F2

01

6F

20

17

F2

01

8F

Net

Sale

s2

02

.12

70

.53

36

.93

71

.13

95

.54

21

.64

47

.14

76

.55

10

.35

46

.55

46

.55

46

.55

46

.5

CO

GS

(137.6

)(1

78.6

)(2

18.8

)(2

32.7

)(2

39.1

)(2

45.8

)(2

51.3

)(2

58.2

)(2

66.6

)(2

78.0

)(2

78.0

)(2

78.0

)(2

78.0

)

Gro

ss P

rofi

t6

4.5

91

.91

18

.11

38

.51

56

.41

75

.81

95

.82

18

.22

43

.72

68

.52

68

.52

68

.52

68

.5

Gen

eral

and A

dm

inis

trat

ive

Cost

s(7

.2)

(10.7

)(1

0.8

)(1

0.9

)(1

1.0

)(1

1.1

)(1

1.2

)(1

1.3

)(1

1.4

)(1

1.5

)(1

1.5

)(1

1.5

)(1

1.5

)

Sel

ling a

nd M

arke

ting

(1.9

)(2

.8)

(2.8

)(2

.8)

(2.8

)(2

.9)

(2.9

)(2

.9)

(3.0

)(3

.0)

(3.0

)(3

.0)

(3.0

)

Oth

er O

per

atin

g P

rofits

0.0

1.4

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Oth

er O

per

atin

g E

xpen

diture

s(3

5.1

)(4

8.7

)(3

4.1

)(2

2.2

)(1

3.3

)(7

.3)

(3.7

)(1

.8)

(0.9

)0.0

0.0

0.0

0.0

Op

era

tin

g P

rofi

t2

0.3

31

.27

0.5

10

2.6

12

9.3

15

4.5

17

8.0

20

2.2

22

8.4

25

4.0

25

4.0

25

4.0

25

4.0

OIB

DA

20

.33

1.2

75

.11

07

.61

34

.71

60

.31

83

.82

08

.02

34

.22

59

.82

59

.82

59

.82

59

.8

Inco

me

on C

apital

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exp

ense

s on C

apital

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Oth

er F

inan

cial

Inco

me/

Exp

ense

4.1

0.9

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Ext

raord

inar

y In

com

e/Lo

ss0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

EB

ITD

A2

4.4

32

.17

5.1

10

7.6

13

4.7

16

0.3

18

3.8

20

8.0

23

4.2

25

9.8

25

9.8

25

9.8

25

9.8

Dep

reci

atio

n(0

.0)

(0.0

)(4

.6)

(5.0

)(5

.4)

(5.8

)(5

.8)

(5.8

)(5

.8)

(5.8

)(5

.8)

(5.8

)(5

.8)

EB

IT2

4.4

32

.17

0.5

10

2.6

12

9.3

15

4.5

17

8.0

20

2.2

22

8.4

25

4.0

25

4.0

25

4.0

25

4.0

Inte

rest

Exp

ense

(2.5

)(1

.0)

(0.0

)(0

.0)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

EB

T2

1.9

31

.17

0.5

10

2.6

12

9.3

15

4.5

17

8.0

20

2.2

22

8.4

25

4.0

25

4.0

25

4.0

25

4.0

Inco

me

Tax

(2.6

)(3

.5)

(4.9

)(7

.2)

(9.1

)(1

0.8

)(1

2.5

)(1

4.2

)(1

6.0

)(1

7.8

)(1

7.8

)(1

7.8

)(1

7.8

)

Inco

me

Tax

on E

xtra

ord

. In

com

e/Lo

ss0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net

Inco

me

19

.32

7.5

65

.69

5.4

12

0.2

14

3.7

16

5.6

18

8.0

21

2.4

23

6.2

23

6.2

23

6.2

23

6.2

Div

iden

ds

Dec

lare

d(3

.7)

(5.0

)(9

.8)

(14.3

)(1

8.0

)(2

1.6

)(2

4.8

)(2

8.2

)(3

1.9

)(3

5.4

)(3

5.4

)(3

5.4

)(3

5.4

)

Net

Inco

me a

fter

Div

iden

ds

15

.62

2.5

55

.78

1.1

10

2.2

12

2.2

14

0.7

15

9.8

18

0.5

20

0.8

20

0.8

20

0.8

20

0.8

Yo

Y c

han

ge

Net

Sal

esn/a

33.8

%24.6

%10.2

%6.6

%6.6

%6.0

%6.6

%7.1

%7.1

%0.0

%0.0

%0.0

%

Gro

ss P

rofit

n/a

42.4

%28.6

%17.2

%13.0

%12.4

%11.4

%11.5

%11.7

%10.2

%0.0

%0.0

%0.0

%

Oper

atin

g P

rofit

n/a

54.0

%126.0

%45.6

%26.0

%19.5

%15.2

%13.6

%13.0

%11.2

%0.0

%0.0

%0.0

%

OIB

DA

n/a

54.0

%140.7

%43.3

%25.1

%19.0

%14.6

%13.1

%12.6

%10.9

%0.0

%0.0

%0.0

%

EBIT

DA

n/a

31.6

%133.9

%43.3

%25.1

%19.0

%14.6

%13.1

%12.6

%10.9

%0.0

%0.0

%0.0

%

EBIT

n/a

31.6

%119.6

%45.6

%26.0

%19.5

%15.2

%13.6

%13.0

%11.2

%0.0

%0.0

%0.0

%

EBT

n/a

41.7

%127.0

%45.6

%26.0

%19.5

%15.2

%13.6

%13.0

%11.2

%0.0

%0.0

%0.0

%

Net

Inco

me

n/a

42.5

%138.1

%45.6

%26.0

%19.5

%15.2

%13.6

%13.0

%11.2

%0.0

%0.0

%0.0

%



16

Figure 19.Statement of Cash Flows, USD mln Source: Company data, Sokrat calculations

US

D m

ln2

00

8F

20

09

F2

01

0F

20

11

F2

01

2F

20

13

F2

01

4F

20

15

F2

01

6F

20

17

F2

01

8F

Op

era

tin

g A

ctiv

itie

sN

et

Inco

me

66

95

120

144

166

188

212

236

236

236

236

Min

ority

inte

rest

00

00

00

00

00

0D

&A

55

56

66

66

66

6Chan

ges

in N

WC

(12)

(7)

(6)

(6)

(6)

(7)

(8)

(8)

00

0C

ash

fro

m O

pera

tin

g A

ctiv

itie

s5

99

31

20

14

31

65

18

72

10

23

42

42

24

22

42

Invest

ing

act

ivit

ies

Cap

Ex

(18)

(16)

(16)

(17)

(6)

(6)

(6)

(6)

(6)

(6)

(6)

Cash

fro

m I

nvest

ing

Act

ivit

ies

(18

)(1

6)

(16

)(1

7)

(6)

(6)

(6)

(6)

(6)

(6)

(6)

Fin

an

cin

g a

ctiv

itie

sD

ivid

ends

and o

ther

withdra

wal

s(1

0)

(14)

(18)

(22)

(25)

(28)

(32)

(35)

(35)

(35)

(35)

Chan

ge

in L

T D

ebt

0(0

)0

00

00

00

00

Cash

fro

m F

inan

cin

g A

ctiv

itie

s(1

0)

(14

)(1

8)

(22

)(2

5)

(28

)(3

2)

(35

)(3

5)

(35

)(3

5)

Cash

fro

m C

han

ges

in S

hare

ho

lders

' Eq

uit

y2

20

00

00

00

00

0C

ash

fro

m O

ther

Act

ivit

ies

00

00

00

00

00

0To

tal

Ch

an

ge in

Cash

53

63

86

10

51

34

15

31

72

19

22

01

20

12

01



17

Figure 20. Margins, Ratios, Multiples Source: Sokrat calculations

20

06

20

07

20

08

F2

00

9F

20

10

F2

01

1F

20

12

F2

01

3F

20

14

F2

01

5F

20

16

F2

01

7F

20

18

F

Gro

ss M

argin

32%

34%

35%

37%

40%

42%

44%

46%

48%

49%

49%

49%

49%

Oper

atin

g M

argin

10%

12%

21%

28%

33%

37%

40%

42%

45%

46%

46%

46%

46%

OIB

DA M

argin

10%

12%

22%

29%

34%

38%

41%

44%

46%

48%

48%

48%

48%

EBIT

DA M

argin

12%

12%

22%

29%

34%

38%

41%

44%

46%

48%

48%

48%

48%

Net

Mar

gin

10%

10%

19%

26%

30%

34%

37%

39%

42%

43%

43%

43%

43%

Bala

nce

Sh

eet

Rati

os

Deb

t-Equity

Ratio

n/a

0.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

0

Curr

ent

Ratio

n/a

2.4

33.8

35.3

67.4

09.7

812.7

415.9

119.2

522.5

826.6

530.7

234.7

9

Quic

k Ratio

n/a

0.8

02.1

73.6

45.6

27.9

310.8

213.9

217.1

920.4

624.5

328.6

032.6

7

Mu

ltip

les

Sto

ck P

rice

, U

SD

0.6

614.0

07.0

021.2

0

Shar

es O

uts

tandin

g,

mln

33

39

39

MCap

, U

SD

mln

246

274

829

EV,

USD

mln

245

273

713

P/Sal

es0.0

0.2

0.8

2.2

EV/E

BIT

DA

0.1

1.4

3.6

6.6

P/E

0.1

1.7

4.2

8.7

Marg

ins



18

Figure 21. DCF valuation Source: Sokrat calculations

US

D m

ln2

00

72

00

8F

20

09

F2

01

0F

20

11

F2

01

2F

20

13

F2

01

4F

20

15

F2

01

6F

20

17

F2

01

8F

Fre

e C

ash

Flo

w t

o F

irm

(1

8)

41

77

10

41

26

15

91

81

20

42

28

23

62

36

23

6

EBIT

32

71

103

129

155

178

202

228

254

254

254

254

- Ta

x(2

)(5

)(7

)(9

)(1

1)

(12)

(14)

(16)

(18)

(18)

(18)

(18)

+ D

epre

ciat

ion

0.0

4.6

5.0

5.4

5.8

5.8

5.8

5.8

5.8

5.8

5.8

5.8

- Cap

Ex

(3.0

)(1

8.0

)(1

6.0

)(1

6.0

)(1

7.0

)(6

.0)

(6.0

)(6

.0)

(6.0

)(6

.0)

(6.0

)(6

.0)

- W

C n

eed (

incr

ease

)(4

4)

(12)

(7)

(6)

(6)

(6)

(7)

(8)

(8)

00

0

WA

CC

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

18

.0%

Dis

count

Fact

or

n/a

0.8

50.7

20.6

10.5

20.4

40.3

70.3

10.2

70.2

30.1

90.1

6FC

FF D

isco

unte

d

n/a

34

55

63

65

70

67

64

61

53

45

38

Su

m

of

FC

FF

61

6

Ter

min

al G

row

th R

ate

0%

Ter

min

al V

alue

212

En

terp

rise

Valu

e8

28

Net

Deb

t(1

)

Eq

uit

y8

29

Fair V

alue

per

shar

e, U

SD

21.2

0

Curr

ent

Pric

e, U

SD

7.0

0

Up

sid

e2

03

%



19

Figure 22. Comparative valuation

Source:Sokrat calculations Source: Sokrat calculations

Sh

are

s O

uts

tan

din

g,

mln

Sh

are

P

rice

,U

SD

MC

ap

,U

SD

mln

EV

,U

SD

mln

20

06

20

07

20

08

F2

00

9F

20

06

20

07

20

08

F2

00

9F

20

06

20

07

20

08

F2

00

9F

20

06

20

07

20

08

F2

00

9F

20

06

20

07

20

08

F2

00

9F

Uzm

etc

om

bin

at

n/

a3

9.1

7.0

00

02

73

.72

73

.01

.41

.00

.80

.71

1.2

8.5

3.6

2.5

14

.29

.94

.22

.91

2%

12

%2

2%

29

%1

0%

10

%1

9%

26

%U

KR

AIN

EArc

elor

Mitta

l Kry

vyy

Rih

KSTL

UZ

3,8

60

1.5

66

,01

95,6

51

2.0

1.5

0.9

0.8

6.8

5.3

2.3

2.6

10.4

8.0

3.4

3.8

29%

28%

39%

33%

20%

20%

28%

23%

Mar

iupol Il

lich I

SW

MM

KI

UZ

3,3

52

0.2

17

19

691

0.2

0.2

0.1

0.1

1.9

1.4

0.6

1.3

4.0

2.6

0.9

2.2

13%

14%

20%

9%

6%

8%

14%

6%

Azo

vsta

lAZST U

Z4,1

94

0.2

29

32

1,0

73

0.4

0.3

0.2

0.2

2.7

1.7

1.1

1.4

4.3

2.2

1.4

1.9

16%

19%

21%

14%

9%

13%

14%

9%

Alc

hev

sk I

SW

ALM

K U

Z25,7

75

0.0

19

48

01,0

46

0.9

0.6

0.2

0.2

8.0

5.2

1.2

1.3

9.8

7.5

1.0

1.0

11%

11%

19%

15%

4%

4%

11%

8%

Za p

oriz

hst

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T U

Z2,6

44

0.2

38

62

9473

0.3

0.2

0.2

0.2

1.3

1.9

1.3

3.1

3.7

5.7

2.7

15.9

21%

13%

12%

5%

10%

6%

8%

1%

Dze

rzhyn

kaD

MKD

UZ

2,7

77

0.0

97

27

1305

0.3

0.2

0.1

0.1

2.2

1.9

0.7

1.7

3.0

2.5

1.1

10.9

12%

11%

15%

6%

8%

7%

9%

1%

Enak

ievo

ISW

EN

MZ U

Z16.0

89

.71

57

-50.0

0.0

0.0

0.0

0.0

-0.1

0.0

0.0

2.3

4.0

0.8

3.8

13%

7%

12%

4%

7%

3%

7%

2%

Petr

ovk

aD

MZP

UZ

1,8

49

0.1

46

27

0378

0.8

0.6

0.4

0.4

20.4

9.2

2.3

4.0

46.3

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2.8

6.3

4%

6%

18%

9%

1%

0%

11%

4%

Ukra

ine,

MC

ap

-weig

hte

d a

vera

ge

1.4

1.1

0.6

0.6

5.8

4.4

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9.5

3.6

2.7

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24

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31

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4%

16

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22

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7%

RU

SS

IAEvr

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roup S

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I368

17

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712,7

67

1.5

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0.6

0.5

4.9

3.0

1.5

1.5

4.7

3.0

1.4

1.4

31%

34%

36%

33%

17%

17%

21%

19%

Sev

erst

alCH

MF

RU

1,0

08

5.6

5,6

43

6,1

02

0.5

0.4

0.3

0.3

2.1

1.6

1.1

1.1

4.8

2.9

1.7

1.8

24%

25%

25%

23%

10%

13%

15%

13%

Nov

oli p

etsk

Ste

elN

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U5,9

93

1.3

07

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18,0

93

1.3

1.0

0.6

0.6

3.0

2.4

1.5

1.5

3.8

3.5

2.1

2.1

45%

44%

41%

37%

34%

29%

28%

25%

Ma g

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0.3

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0.5

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1.5

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1.0

2.4

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1.6

1.7

31%

29%

27%

25%

22%

22%

18%

16%

Mec

hel

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R R

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9.0

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46

7,0

52

1.6

1.1

0.7

0.6

7.6

4.2

1.8

1.6

6.2

4.1

1.6

1.2

21%

25%

37%

38%

14%

14%

22%

26%

Ru

ssia

, M

Cap

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hte

d a

vera

ge

1.1

0.8

0.5

0.4

3.7

2.5

1.4

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1.7

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32

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34

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20

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21

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AS

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32

12

7,9

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27,3

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1.3

1.2

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0.9

4.7

4.2

4.0

4.1

8.1

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6.7

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27%

27%

26%

23%

16%

17%

16%

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Ni p

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38

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0.6

5.4

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4.5

8.4

7.7

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19%

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16%

14%

9%

8%

7%

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JFE H

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24

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56

27,2

40

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0.8

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4.7

4.5

3.8

3.8

5.5

5.7

5.9

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22%

21%

21%

17%

11%

9%

7%

7%

Sum

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ries

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21,7

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1.3

1.1

6.8

6.4

5.9

5.7

7.1

6.5

7.5

7.8

25%

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22%

19%

14%

14%

10%

8%

SAIL

SAIL

IN

4,1

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2.2

29

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76,8

95

1.1

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0.8

0.7

5.7

2.7

2.8

2.7

10.0

5.8

5.8

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19%

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30%

24%

14%

19%

19%

16%

Chin

a Ste

el C

or p

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20

1.9

1.6

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7.2

5.7

4.7

5.6

8.8

6.7

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6.9

27%

29%

26%

21%

22%

25%

20%

17%

Bao

shan

Iro

n &

Ste

el C

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4,6

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18,1

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0.9

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0.6

0.5

4.5

4.2

3.2

3.2

8.7

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17%

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16%

8%

7%

8%

7%

Angan

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1.3

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0.7

0.6

4.7

3.8

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7.6

6.7

4.8

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28%

27%

24%

21%

13%

12%

12%

11%

Wuhan

Iro

n &

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el C

o.

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,17

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4.7

3.4

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22%

25%

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19%

9%

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Maa

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Ltd.

600808 C

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0.5

13

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25,9

49

1.4

0.9

0.5

0.5

8.6

6.2

3.9

4.4

11.2

10.2

6.4

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16%

14%

14%

12%

7%

5%

5%

4%

Tangsh

an I

ron &

Ste

el C

o.,

Ltd.

000709 C

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26

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43,7

30

1.1

0.7

0.5

0.4

8.1

5.2

4.3

4.0

13.3

8.2

5.6

5.0

13%

14%

11%

10%

5%

6%

5%

5%

Asi

a,

MC

ap

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hte

d a

vera

ge

1.3

1.1

0.9

0.8

5.5

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8.4

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6.3

6.4

23

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22

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13

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12

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Lati

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14

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15,9

83

1.5

2.5

2.2

1.7

6.2

5.9

4.5

3.4

9.1

7.3

6.4

4.7

24%

42%

48%

49%

12%

26%

26%

26%

Usi

min

asU

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3 B

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13

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55,8

74

1.0

0.8

0.7

0.6

3.0

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1.9

1.7

5.5

3.7

3.7

3.2

34%

38%

37%

34%

20%

23%

21%

20%

Ger

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25

5.9

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13,7

15

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3.2

24%

20%

23%

22%

12%

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11%

11%

Lati

n A

meri

ca,

MC

ap

-weig

hte

d a

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1.3

1.6

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26

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Develo

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10.4

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17%

18%

21%

19%

9%

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11%

Thys

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pp A

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6.1

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10%

10%

9%

10%

3%

4%

4%

4%

Nuco

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0.9

0.8

0.5

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3.3

7.1

8.5

5.5

6.2

22%

18%

17%

15%

12%

9%

9%

8%

US S

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18,9

10

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2.4

4.4

6.8

2.5

2.7

14%

10%

16%

14%

9%

5%

10%

8%

Voes

tal p

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AG

VO

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412,3

36

1.5

1.2

0.9

0.7

8.6

6.2

4.6

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8.0

5.0

5.6

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17%

20%

19%

18%

8%

11%

7%

8%

Develo

ped

Mark

ets

, M

Cap

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hte

d a

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1.1

0.7

0.5

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6.3

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2.7

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8.8

5.6

3.7

3.8

16

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18

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8%

9%

10

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20

06

20

07

20

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20

06

20

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20

08

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20

06

20

07

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vs.

Ukra

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n p

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5%

7%

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-48%

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-64%

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54%

vs.

Ru

ssia

n p

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-16%

-19%

-40%

-39%

-67%

-71%

-62%

-46%

-69%

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-59%

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vs.

Asi

an

peers

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5%

8%

3%

-51%

-45%

12%

62%

-41%

-29%

52%

125%

vs.

LA

TA

M p

eers

-4%

54%

70%

47%

-54%

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10%

-49%

-44%

17%

36%

vs.

DM

peers

-22%

-33%

-39%

-37%

-44%

-54%

-27%

7%

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-43%

-12%

33%

20

06

20

07

20

08

F2

00

9F

20

06

20

07

20

08

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20

06

20

07

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Imp

lied

by U

kra

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iple

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20%

7.3

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7.4

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5.5

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5.6

255

3.6

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3.5

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3.5

500

6.3

311

4.6

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2.5

459

4.5

270

10.7

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lied

by R

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mu

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5.8

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5.6

526

4.2

347

4.2

683

2.3

159

2.0

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2.6

812

3.7

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2.1

598

2.2

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by A

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6.5

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7.3

687

7.5

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3.4

630

3.8

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7.8

179

11.3

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4.1

364

4.9

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10.6

145

15.7

301

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by L

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6.7

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10.7

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11.9

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10.3

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3.1

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3.5

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6.6

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7.6

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3.5

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3.9

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8.1

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9.5

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5.4

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4.6

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4.2

479

4.4

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3.9

367

3.2

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5.1

176

7.4

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4.3

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3.9

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6.1

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6.3

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6.6

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3.7

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20

Figure 23. List of products manufactured by Uzmetcombinat and certified according to International and European standards

TUV NORD

4.

Hot rolled steel strip, 30x8mm,10mm;36x6mm; 40x6,8mm; 48x8mm,10mm;50x8mm,10mm,12mm

Hot rolled steel stripDimensions: 30x6mm,8mm,10mm,12mm;36x6mm,8mm,10mm,12mm;40x6mm,8mm,10mm,12mm;45x6mm,8mm,10mm,12mm;50x5mm,6mm,8mm,10mm12mm;56x6mm,8mm,10mm,12mm

№141078 dd. 06.07.2007

№110515 dd. 24.05.2006 GOST 2495-80

GOST 3282-74/ GOST 380-2005

NSS.UZ.01.138-0591385 dd.12.06.2007. GOST 9466-75/GOST 9467-75Electrodes with metal plating for manual arc welding of steels and facing, grade UONII 13/55, type Э50А, Ø4,0mm

grade: M1p; M1ф: M2p; M3p

Copper strips,

Wire of low-carbon steel, heat-treated of general purpose Dimensions:2.0; 2.8; 4.0; 6.5 NSS.UZ.01.138-0591382 dd. 12.06.2007.

NSS.UZ.01.138-0411878 dd. 12.01.2007.

POCC UZ.ЧC07.C00008 dd.31.03.2007 till 12.01.2010

POCC UZ.ЧC07.C00012 dd. 21.09.2007 till 23.04.2010

NSS.UZ.01.138-0591378 dd.23.04.2007

GOST24295-80/ GOST 24788-2001

Corrugated monobasic barbed wire, without plating, type K NSS.UZ.01.138-0411879 dd.26.01.2007.

Gaseous argon of high and the first quality NSS.UZ.01.138-0653774 dd.30.08.2007.

Steel enameled kitchen wares NSS.UZ.01.138-0411877 dd.05.12.2006 GOST 24788:2001 Technical description

GOST 24295-80/GOST 24788-2001

NSS.UZ.01.138-0411867 dd.27.01.2006. GOST 7524-89/TSh 48.3.005-2005

NSS.UZ.01.138-0322907 dd. 09.03.2005.

POCC UZ.ЧC07.C00015 dd.26.11.2007.

GOST 380-2005

POCC UZ.ЧС07.C00014 dd. 26.11.2007.

Hot rolled equal steel angles Dimensions: 2.5; 2.8; 3.2; 3.5; 4; 4.5;5; 5.6; 6.3; 7.5

NSS.UZ.01.138-0411870 dd.23.05.2007

NSS.UZ.01.138-0591388 dd. 25.07.2007.Steel grinding balls, d.40mm; 100mm;120mm

NSS.UZ.01.138-0653771 dd. 02.08.2007.

SSAQ 023.1.2.0004 dd. 26.11.2007GOST 103-2006/GOST 380-2005/GOST 535-2005

GOST 2590-2006/GOST 535-2005/GOST 380-2005

Hot rolled steel square bar, side 12mm, 14mm, 16mm, 20mm

SSAQ 023.1.2.0003 dd.26.11.2007

NSS.UZ.01.138-0591390 dd.30.07.2007.GOST 535-2005/GOST 2591-2006/ GOST 380-2005

Certificate, date of issue, scheme of certification Normative documentation on output of products

NSS.UZ.01.138-0653772 dd.10.09.2007.

SSAQ 023.1.2.0001 dd.26.11.2007

30.

31.

National certification system of the Republik of Uzbekistan

28. Brass strip, alloy CuZn30 TSh143-001:2006

29.GOST 859-2001

GOST 1173-93

27. Brass strip of general purpose, Л68GOST 2208-91

GOST 15527-2004

NSS.UZ.01.138-0411875 dd. 02.10.2006

POCC UZ.ЧC07.C00009 dd.22.05.2007 till 02.10.2009

25. Gaseous, technical oxygen GOST 5583-78

26. Gaseous, medical oxygen GOST 5583-78

NSS.UZ.01.138-0591380 dd.29.05.2007.

NSS.UZ.01.138-0591380 dd.29.05.2007.

23. GOST 285-69

24. GOST 10157-79

21.

GOST 24788:2001

№156503 dd. 26.12.2007

22. №125206 dd. 05.12.2006

NSS.UZ.01.138-0322909 dd. 17.06.2005

NSS.UZ.01.138-0411871 dd.25.05.2006

NSS.UZ.01.138-0653781 dd. 27.12.2007Steel enameled kitchen wares (by names)

Basin (6.5litres)

19. GOST 283-75

20. GOST 5336-80

UZ.SMT.01.138-0653782 dd.29.12.2007.

NSS.UZ.01.138-0653778 dd. 31.10.2007Steel wicker unary net, dimension 2-45.2.5, with square mesh №45

Wire constructional nails dimensions:1.8x32mm; 2.0x40mm;2.5x50mm; 3.0x70mm

17.

18. GOST4028-63

POCC UZ.ЧC07.C00017 dd. 26.11.2007.

NSS.UZ.01.138-0653770 dd. 02.08.2007

NSS.UZ.01.138-0653776 dd. 27.09.2007Wire constructional nails, dimensions:4.0x100mm; 4.0x120mm

Hot rolled steel channel, dimension:№5; 6.5; 8; 10

15. Hot rolled steel channel, dimension: №8

16.

NSS.UZ.01.138-0322910 dd. 17.06.2005.

NSS.UZ.01.138-0411869 dd. 18.04.2006Hot rolled steel channel, dimension:№10

GOST 535-2005/GOST 8240-97

13. Steel grinding balls, d.70mm

14. Hot rolled steel channel, dimension: №5; 6.5

11.

12. Steel grinding balls, d.68mm TSh48.3.005-2005

POCC UZ.ЧC07.C00016 dd. 26.11.2007

NSS.UZ.01.138-0591387 dd.23.07.2007.

8.

9.

GOST 380-2005

10. Steel grinding balls, d.40mm GOST 7524-89

NSS.UZ.01.138-322911 dd. 24.06.2005. GOST 103-2006/GOST 380-2005/GOST 535-2005

NSS.UZ.01.138-0591384 dd.11.07.2007. GOST 8509-93/GOST 535-2005

GOST 2590-2006

5.

6.

7.

Hot rolled steel round bar, diameter 12mm÷42mm SSAQ 023.1.2.0002 dd.26.11.2007

NSS.UZ.01.138-0591389 dd.30.07.2007. GOST 535-2005/GOST 380-2005

Hot rolled steel round bar, diameter 10mm NSS.UZ.01.138-0411876 dd.08.112006.

2.

3. TSh 48.3-004-2003Reinforcing bar steel of die-rolled section, diameter 10mm÷32mm

№

1. PH 155/07/01

EN 1758

EN 1172

EN1652

Certification field/ Organization on certification

Strips of copper and copper alloys for guide elements

Sheets and strips of copper and its alloys for construction

Plates, sheets, strips and straps, round sheet slab of general purpose




21

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october 2008, uzbekistan uzmetcombinat: steel production · october 2008, uzbekistan uzmetcombinat:...

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