NLMK joins forces with two Russian distributors

Russian-headquartered steelmaker NLMK Group has signed a cooperation agreement with two major Russian steel trading and distribution companies, Metallservis and Steel Industrial Company, the company says.

The agreement will enable NLMK to pursue the traders’ highly developed and efficient customer service and logistics network in exchange of their use of NLMK’s newly relaunched on-line marketplace. The two traders’ aggregate sales totalled 4.3 million tonnes in 2018.

The agreement will allow the traders to gain access to NLMK’s marketing and IT expertise. NLMK meanwhile will receive an access to the network of warehouses and services, ensuring prompt delivery of their products, Ilya Guschin, NLMK sales executive said during the press conference call attended by Kallanish. NLMK’s potential hosting of competitors products on its platform will be mitigated by the much wider outreach that its products will have due to the cooperation, he added.

The agreement creates Russia’s largest shared network of over 70 warehouses and established logistics, which will eventually be selling up to 30,000 different products. The trading facility has been in operation since early 2018, but having moved it to the new IT platform, based on SAP, it has become much improved. It is able to accommodate new volumes of trading and customer service by enabling more options of delivery, communication and implementation.

NLMK has already doubled sales of its products through the platform in the first half of 2019 to 36,000 tonnes, while in May sales reached 120,000t in annualised terms, it says. Construction companies take up around two thirds of the clients, with traders and steel structures’ manufacturers and consumers taking up another third in roughly equal measures.