Procurements

NLMK Group's procurement policy pursues economic efficiency of the Company, support of its competitive advantages of low production costs, high marginality against peers, successful implementation of our upgrade and operational efficiency programmes.

The procurement policy's objective is to purchase goods and services, made using advanced technologies and modern materials with balanced price-quality ratio, at minimum risk and on the most favourable terms.

To achieve this the Company promotes the idea of competitiveness of suppliers of goods and services, the appropriate level of competition in procurement, impartiality, transparent procurement procedures, fair and equitable treatment of all suppliers.

Procurement policy principles

  • Principle of competition suggests that all purchases shall be conducted on a competitive basis by comparing the offers from suppliers as per pre-approved criteria and the choice of the best offer.
  • Principle of openness sets forth the regulated competitive environment of competitive procurement to take into account equal rights of participants and provide instructions to suppliers for decision-making in order to achieve their business targets.
  • Principle of equality implies that the terms of procurement procedures, methods, criteria and procedures for determining the winner shall be established in advance and shall be equal for all participants.
  • Principle of cost effectiveness implies that procurement procedures shall be carried out with lowest possible costs.
  • Principle of efficiency defines the ultimate result of the procurement process is the purchase of required goods and services of required quality and quantity with maximum economic benefit for the Company.
  • Principle of responsibility means that the authorized persons of the Company shall be responsible for all the clauses of the contract that they have concluded, and no one can exert pressure upon the authorized persons so they would violate the terms and conditions of the contract.
  • Principle of continuous operation implies that the Company and its suppliers should be confident of the continuance of their commercial relationship.
  • Principle of mutual guarantees sets forth the delivery and payment guarantees at the start of the commercial relations between the Company and its suppliers.
  • Principle of confidentiality implies that the access to the information of the third parties shall be restricted with the same degree of care with which the Company treats and protects its own confidential information, when partners specify that the data they provide are confidential.
  • The Company recognizes purchases with payment upon delivery with deferred payments as the predominant form of payment. At the same time the Company guarantees the timely payment to the contractors.
  • Principle of awareness stipulates that the Company shall seek to have as wide the supplier and manufacturer database as possible at their disposal. NLMK Group's procurement management system

NLMK Group has introduced the procurement management system based on SAP SRM (Supplier Relationship Management) and SAP SLC (Supplier Lifecycle Management).

SRM systems allows to provide

  • Equality for all the participants
  • Higher level of awareness and transparency of NLMK Group's procurement service
  • Lower rate of human errors during procurement procedures
  • Information security
  • Clear history of interaction
  • Less paperwork

SAP SRM System

Getting an access to the system enables the potential suppliers to take qualification check and take part in procurement procedures (requests for proposals, tenders), undertaken by NLMK. For all interested in NLMK's SRM system it is necessary register in it.

In case of any questions on SAP SRM operation you can contact the technical support service by e-mail srm@nlmk.ru, or by calling +7 (4742) 444 100 from 9:00 to 17:00 Moscow time.