Public Joint Stock "Novolipetsk Steel : NLMK's project to support agriculture targeting production of 180,000 tonnes of milk annually

NLMK Lipetsk is implementing a project to support agriculture. Construction of dairy farming facilities carried out by the Company is nearing completion in the Tver, Kaluga, and Altai regions. The farms will boost the supply of organic milk by 180,000 tonnes per year.

NLMK acts as the project's technical coordinator, facilitates project financing, and manages construction operations, employing best practices in automation, environmental protection and produce safety, and implements lean production to reduce waste. The Company has sourced high-efficiency equipment from global vendors to match the local climate for highest possible crop yield, productivity and milk quality.

Overview of the facilities:

• Three sites in the Tver Region with total headcount of 25,000 (8,600 in the dairy herd) and milk output of over 105,000 tonnes per year. The cluster is set to become one of the largest farming projects by cattle headcount. Future workers will be accommodated in a dedicated camp of detached and terraced houses. Road infrastructure is being repaired and expanded in cooperation with municipal authorities.

• The site in the Altai Region with total headcount of 6,000 (2,500 in the dairy herd) and milk output of over 30,000 tonnes per year. Repairs of the road infrastructure, undertaken by the Region's administration, are to be completed in 2023.

• The revamp project in the Kaluga Region will increase the farm's dairy herd from 2,400 to 4,000, and total headcount up to 8,000. The farm is currently producing up to 30,000 tonnes of milk per year, and once construction is completed, its output will exceed 45,000 tonnes of milk per year.

All construction activities are scheduled to complete in 2023. This will create over 700 jobs; total investment will amount to RUB 27 billion.

After construction is completed, the facilities will be operated by RUMELKO Group. The new capacities will enable it to become a top-5 producer of raw milk in Russia.

RUMELKO is already building out its crop farming capabilities to feed the cattle. The cattle farms will source 80% of feed internally.

RUMELKO owns 47,000 ha of land in the Tver, Kaluga, and Altai regions. Its yield from the 2021 harvest was around 135,000 tonnes.

RUMELKO runs a fleet of approximately 500 advanced powered and towed vehicles, including 40 grain and feed harvesters, and over 100 tractors, with a total value of RUB 3.5 billion.