OJSC Magnitogorsk Iron and Steel Works ("MMK" or "the Company") announces that its Trading House continues to increase shipments of high-tensile steel used in the production of TUCANO combine harvesters at the CLAAS factory in Russia (Krasnodar Territory). As a result, the proportion of components used in these combine harvesters produced from Russian steel increased to 70%.

MMK started trial deliveries of its metal to CLAAS factories in Germany prior to the launch of this new production capacity. Under a contract signed in August 2015, MMK supplies CLAAS with cold-rolled steel sheet of particularly high flatness and high rolling accuracy.
MMK Trading House was a sound choice of Russian partner, as it can offer conditions that met all the requirements of the high-tech, state-of-the-art, CLAAS factory. Furthermore, MMK Trading House offered a logistics scheme which made it possible to further optimize the minimal level of warehouse stocks. Another undeniable advantage is that cooperation with a Russian supplier is currently economically advantageous. As a result of this cooperation with MMK, CLAAS was able to reduce its expenses on steel by 15%.

“We work with more than 40 Russian suppliers, but MMK is a key partner. Today, our TUCANO harvesters are by 70% made from high-quality Russian steel. We believe that this is set to grow going forward. This will allow us to increase the localization level, reduce our reliance on imports, and make CLAAS harvesters even more Russian,” said General Director of the CLAAS factory in Krasnodar Ralf Bendisch.

“MMK is unique due to our core focus on the domestic market, which remains the priority for us for many years. The mill produces a wide range of metal products, which meet the needs of some of the most sophisticated clients. We are glad that our steel has received good reviews from harvesters producers in the Krasnodar Territory. We are ready to further develop our relationship, which provides clear benefits not only for the two companies, but also for end users,” said MMK’s Russian Sales Department Head Alexey Kuzmin.
About MMK:
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2015, the company produced 12.2 million tonnes of crude steel and 11.2 million tonnes of commercial steel products. MMK Group had sales in 2015 of USD 5,839 million and EBITDA of USD 1,668 million.

About CLAAS:
CLAAS is a family business founded in 1913 and is one of the world's leading manufacturers of agricultural engineering equipment. The company, with corporate headquarters in Harsewinkel, Westphalia, is the European market leader in combine harvesters. CLAAS is the world leader in another large product group, self-propelled forage harvesters. CLAAS is also a top performer in world-wide agricultural engineering with tractors, agricultural balers and green harvesting machinery. The CLAAS product portfolio also includes state-of-the-art farming information technology. CLAAS employs around 11,000 workers worldwide and reported a turnover of 3.838 billion euros in the financial year of 2015.
The company has operated in Russia since 1992. In 2003 it launched local production of grain harvesters. Currently the factory in Krasnodar produces nine models of grain harvesters and ten models of tractors. In 2015 the second factory line was opened. The company sells its products through Claas East company in Moscow supported by 18 sales partners across Russia.

MMK Contact Details:

Investor Relations Department:
Andrey Serov, Head of IR
tel.: +7 (3519) 24-52-97
E-mail: serov.ae@mmk.ru

Communications Department:
Sergei Vykhukholev
tel.: +7 (499) 238-26-13

E-mail: vykhukholev.sv@mmk.ru
Dmitry Kuchumov
tel.: +7 (499) 238-26-13
E-mail: kuchumov.do@mmk.ru