Russian mining and steelmaking company NLMK wants to raise its sales in Russia to 7.3 million metric tons in 2017, up 25% from 5.8 million mt in 2013, the company said in its 2017 strategy framework.

　　If this is realized, NLMK’s domestic sales will account for 45% of its overall steel sales, up from 39% in 2013.

　　In total, NLMK hopes to sell 16.2 million mt of steel products in 2017, 9% more than the 14.9 million mt it sold last year, and 16.3 million mt in 2018. By then, high value-added products should account for 40% of the total sales versus 35% in 2013.

　　The company’s annual capital expenditures from 2014 through 2017 are set to decrease to $900 million/year, with $350 million of this to be spent on maintenance and environmental projects. As a comparison, NLMK used to spend as much as $1.5-2 billion/year in certain years between 2007 and 2012, but that was the time when the company expanded including via mergers and acquisitions.

　　NLMK now intends to finance all its capex projects with internally generated cash and keep its net debt-to-EBITDA metrics as low as 1.0x, down from 1.9x in Q3 2013.

　　NLMK may also downsize the workforce at its Russian steelworks. It currently employs 29,000 people at Lipetsk, with only half of this number being directly involved in the production process. The company’s management is working out ways to cut down the personnel via outsourcing or downsizing its administrative, logistics and repairs and maintenance services. In the same 2014-2017 period, NLMK is targeting a 30% increase in labor productivity, Platts understands.

　　In addition, NLMK aims to reduce energy consumption at its Russia flat rolled steelmaking division to 5.7 Gcal/mt, down from 5.9 Gcal/mt currently, as part of its operational efficiency improvement plans. The company will be prepared to implement a project that will allow it to increase its in-house energy generation to cover 70% of its needs, up from 50% currently, should energy tariffs grow sharply.

　　By 2018 NLMK aims to cut its air pollution emissions to 18.9 kg/mt from 19.4 kg/mt, use 5.8 million mt/y of waste (up from 5 million mt/y) which would exceed 95% of its waste generation, and also recycle waste already accumulated at its Russian steelworks.