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TMK Announces Production Results for 2007

OAO TMK (TMK), one of the world’s largest oil and gas pipe producers, and the market leader of the Russian pipe industry, today announces its production results for 2007.

For the year 2007, the total volume of shipped [1] pipe products amounted to 3,074,000 tonnes.

Volumes of shipped pipe products in 2007

(Thousands of tonnes)

While implementing its investment programme and offsetting downtime due to the extensive upgrading of its mills, TMK nonetheless managed to increase pipe shipments by 56,000 tonnes to reach 3,074,000 tonnes, an increase of 1.9% on the previous 12 months.

The growth in shipment volumes for 2007 was mainly attributable to an increase in seamless pipe production, the company’s core product. TMK fully loaded its seamless capacities and increased shipments in this segment by 4.2% while retaining its dominant position in the high-tech OCTG segment. Shipments of seamless pipes in 2007 accounted for 65.9% of Company total, compared to 64.4% in 2006.

Premium tubular goods represented 28% of total shipments in 2007.

A sharp growth in imports from Ukraine and China resulted in slightly lower shipment volumes of welded pipes compared to the previous year.

TMK’s CEO Konstantin Semerikov said, ‘’Following a very successful year for the pipe industry in 2006, we managed to keep our market position and further increase sales volumes thanks to TMK’s competitive advantages: its dominant Russian market position, focus on the oil and gas sector, relatively low costs and efficient modernisation programme.

Despite some slowdown in growth in 2007-2008 we still expect growth to pick up by 2009. The implementation of our Strategic Investment Programme is on schedule and its effects should be felt by that time, significantly strengthening our market position and establishing TMK as a world leader in pipe manufacturing.”

[1] ‘’Shipped’’ refers to shipped from TMK plants for subsequent sale to customers.