1. Increasing operational efficiency:
2. Maintaining status and income level in traditional segments, including by means of increasing the share of non-standard and value added products.
3. Expanding the product line, entering new product segments, increasing the presence in the OCTG segment.
4. Setting up a new business model:
5. Managing critical risks
The goal of OMK’s strategy is to turn into a supplier of solutions for the entire value production chain of the oil and gas industry.
The production of large diameter pipes is of key importance to the company. OMK is the leader of the Russian LDP market, accounting for a 32% market share. OMK is a unique supplier of pipes for major strategic oil and gas pipeline projects inside the country and beyond. Our strong points in this market are: having our own plate production with Heavy Plate Mill 5000, two modern production lines for making welded LDPs, and pipe coating lines.
This enables us to:
OMK currently holds the country’s most successful “off-shore resume”: we are the first and only Russian pipe company that participates in the Nord Stream gas pipeline project. The successful fulfillment of obligations under this project has guaranteed our victory in a number of off-shore projects: Baidaratskaya Guba, the underwater link between the Sakhalin Island and the mainland as part of the Sakhalin – Khabarovsk – Vladivostok, and Dzhugba – Lazarevskoye – Sochi projects. The company has also supplied LDPs to the following major pipeline construction projects: South Stream, Power of Siberia, Bovanenkovo – Ukhta, Southern Corridor, Zapolyar'e – Purpe, and Kuyumba – Taishet.
The basis of the LDP division strategy is to keep the leading positions on the Russian market, differentiating the markets and products by participating in the new pipe delivery projects (for example, under the DNV for off-shore pipelines) and promoting sales on foreign markets in case of changes in the internal market.
The division’s strategy in conditions of increasing competition is aimed at precise market segmentation, singling out priority directions, search and development of new application niches for welded pipes, focusing on the segment of extra characteristics pipes, readiness for price competition on the markets with maximum rival pressure. The division’s strong points on this market are as follows:
In the near future, the main tasks facing the Oil and Gas Pipe Division will be influenced by changes in the pipe consumption structure on the part of the oil and gas companies: the growing complexity of extraction conditions and the increase of the average well depth will contribute to the rise of demand for casing with extra features. At the same time, the revenues generated by the standard products is going down following the inauguration of new facilities and the emergence of new manufacturers. In this connection, the Oil and Gas Pipe Division puts the following development aims for itself:
OMK is the Russian market’s leader of railway wheels, holding 54% of the market. The company shows a steady competitive edge by being able to produce wheels with unique consumer qualities: wheels with extra durable rims, L grade passenger wheels, wheels for high-speed trains, and wheels withstanding a 25/30 ton axis load.
The strategic focus of the Railway Wheels Division is on the following:
The division’s most immediate task is to shift wheel production to the use of conticast billets. This should considerably upgrade end product quality.
OMK is the largest supplier of pipeline fittings on the Russian market and one of the leading manufacturers of pipeline valves. OMK’s product range contains unique items that no other manufacturer in Russia is able to produce; for instance: tees for large diameters and high pressures that meet the current and potential market requirements.
Target investments into developing and launching unique complex products enabled us to become a key supplier for installation nodes at the Russkaya and Kazachya compressor stations in the Southern Corridor project.
In line with OMK’s strategy to set up a new business model for the company by becoming a comprehensive solutions provider for the oil and gas industry, OMK opened a second engineering and technology center in Ufa in 2014. The Ufa center designs solutions for: entering the equipment set segments for the oil and gas industry, complex tank and vessel equipment, and oil and gas quantity and quality measurement stations.
The following are the main guidelines for developing the division and increasing its operational efficiency: