CUSTOMER NEWSLETTER ISSUE 1 2012

At the end of 2011, and just in time for the Pueblo facility’s 140th birthday, EVRAZ announced a significant investment to upgrade the Pueblo rail mill. Already the largest producer of rail in North America, EVRAZ is focusing on product quality, straightness, head-hardening and operational improvements, and expanding total capacity by 10 percent – approximately 580,000 tons annually.

EVRAZ is creating next-generation products that will extend rail life and reduce maintenance costs. Improving characteristics of the rail, which in the long run will reduce costs for railways, is just as important as increasing current production levels. That is why the company is also investing in its research labs. In fact, the product development labs are getting all-new equipment to expand the types of tests EVRAZ can conduct, such as rolling contact fatigue testing.

“These upgrades are driven by customer demand. North American rail companies are constantly expanding and improving their networks and require best-in-class products, on time and at the right price,” said Conrad Winkler, Executive Vice President – Long Products Group. “This investment will help us continue to meet our customers’ growing and diverse needs. When our customers talk, we listen.”

Work is already under way to improve maintenance operations and reduce mechanical marks. The entire project has an expected completion date of early 2013, but customers will see benefits as early as the fourth quarter of 2012.

LAYING TRACKS FOR THE FUTURE

I N S I D E T H I S I S S U E :

MESSAGE FROM MIKE REHWINKEL

PORTLAND SPIRAL PIPE MILL: CUSTOMER AUDIT & DEMO

INTRODUCING TIGRAN ATAYAN

THE PEOPLE BEHIND OUR PRODUCTS

SPARKS

THE ENDLESS APPLICATIONS OF HOLLOW STRUCTURAL STEEL

“Our number one priority is always delivering top-quality product to our customers. This investment will enable us to continue to do that.”

– CONRAD WINKLER Executive Vice President Long Products Group

Conrad Winkler with Ben Lutze, Vice President and General Manager – EVRAZ Pueblo.

550 MILES OF STEEL PIPE

The Tubular Products team hosted a group of customers for an audit of the recently upgraded EVRAZ Portland spiral pipe mill. The audit included a large diameter pipe production demonstration and a review of the major upgrades that have been completed as well as those in process.

“EVRAZ has a robust LD pipe offering with operations in Regina and Camrose, and now in Portland,” said Dave Coffin, Vice President of Sales – LD Products. “We appreciate the valuable input our customers provided during the audit and are very pleased that the demonstration resulted in numerous orders for the mill. Our customers can be confident in our ability to deliver product that meets their oil and natural gas transmission needs.”

Upgrades at the Portland spiral mill include automated gap control, new hoist cranes to reduce change-over time, weld wire splicing and a new jointing mill.

During my time at EVRAZ, I’ve witnessed how dynamic our industry is. We’ve seen sectors like rail and OCTG boom while others remain level or slow down. Regardless of market conditions, our customer focus remains constant.

We’re making changes and investments that not only deliver immediate value with better quality and on-time delivery, but also position us to meet your future needs as they shift with the changing market forces.

In Pueblo, we’re expanding and upgrading our rail mill and research lab. On the tubular front, we approved immediate engineering design projects to expand heat treat capacity at our Calgary facility, double production of premium connections at Red Deer, and enable us to offer a wider range of OCTG products.

We anticipate that demand for large diameter pipe will pick back up, so we’ve been taking steps to ensure our Portland spiral mill is ready to help meet that need in conjunction with our other pipe mills. We shared that progress with customers who attended our recent spiral mill demo.

As I toured all of our facilities across North America in March, I was very pleased by the progress being made across our organization. As always, you have my commitment to continue to raise the bar.

MESSAGE FROM MIKE REHWINKEL

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PORTLAND SPIRAL PIPE MILL: CUSTOMER AUDIT & DEMO

“I want EVRAZ to build long-term relationships with our customers, helping them succeed in this dynamic market.” – MIKE REHWINKEL

President and CEO EVRAZ North America

Dave Coffin (left) talks with a customer at the Portland spiral mill audit and tour.

THE PEOPLE BEHIND OUR PRODUCTS

In February, EVRAZ appointed Tigran Atayan as Executive Vice President – Tubular Products. Tigran brings a depth of experience in manufacturing and business. He is already very knowledgeable about the EVRAZ North America business, having worked closely with Mike Rehwinkel during the past two years on strategically important projects and programs.

In his new role, Tigran will oversee commercial and manufacturing operations for the tubular products group across the U.S. and Canada. “My focus will be taking our three greatest assets—our employees, our facilities and our customers—to the next level,” states Tigran. “We have the assets to be successful; the next step is to focus on efficiency—yield, quality, uptime of production lines and on-time delivery.”

The Rail Technical Services and Product Technology teams at the EVRAZ Pueblo facility work together to continually advance the performance of EVRAZ rail products.

“We’re proud to be part of a facility with a 140-year history, but also one that’s constantly looking for ways to modernize operations and stay competitive for the next 140 years,” said Dan Daberkow – Technical Services Engineer.

Reflecting on today’s workforce, Technical Services Engineer Dave Romero added, “We’ve had a resurgence of young, skilled workers eager to apply their technical expertise. Regional universities are also helping to infuse new energy and advanced practices into our industry. There’s a great pool of talent here.”

Joe Kristan, Director of Product Technology, leads a group that acts as a think tank for new product development and process improvements. His skilled and recently expanded team includes Ph.D. Metallurgist Mark Richards and Engineer Gerald Velarde, who like Joe, has a master’s degree in metallurgy. They work closely with the process control coordinators in the mill who help ensure product quality and process optimization.

“We’ve assembled a very capable team with extensive metallurgical expertise to address the needs of our customers through product development and optimization,” said Kristan. He added that their two biggest projects currently are next generation rail with improved rolling contact fatigue (RCF) performance and improved rail weld performance.

The technical and product development teams bring a wealth of experience in the rail industry – over 50 years between Dan and Dave alone. They also have deep family roots at the Pueblo facility. Dave and Joe are third-generation EVRAZ Pueblo employees and Dan and Gerald’s fathers retired from the mill.

PERSONAL FACTS:

Tigran moved to Chicago last summer with his wife Anna and their two sons. He likes the city’s unique character, particularly its combination of people and infrastructure, and the food!

Up for an adventure? So is Tigran. In his free time, Tigran enjoys hiking in the mountains. In fact, he has climbed the peaks of Nepal.

Tigran finds the steel industry incredibly exciting. He’s inspired by co-workers who love what they produce and is invigorated by the challenging combination of supply chain, management and continuous improvement opportunities.

INTRODUCING TIGRAN ATAYAN

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“Our customers are an incredibly important asset — one that we are committed to investing in.” – TIGRAN ATAYAN

Executive Vice President Tubular Products Group

Left to right: Mark Richards, Joe Kristan, Dan Daberkow and Dave Romero.

THE ENDLESS APPLICATIONS OF HOLLOW STRUCTURAL STEEL

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Traditionally used in bridges, highway signs, guard rails and power transmission towers, hollow structural steel (HSS) is now increasingly used by architects and engineers as a design focal point in buildings and other structures. The EVRAZ Portland structural tube mill is supplying its customers with HSS for this new trend of applications. The structural tube mill can produce square sections ranging from 2-1/2 to 10 inches and rectangular sections from 3x2 to 12x8 inches in gauges from .125 to .500 inches. With the ability to handle coil as thick as .625 inches, the mill’s slitting line is the largest in the western United States. It is also the only U.S. slitter capable of handling coil that’s 110 inches wide.

“HSS is high-strength, easy to fabricate, environmentally friendly and very cost-effective,” said Mike Koslosky – National Sales Manager. “With the wide variety of available shapes, HSS applications are almost endless.”

Steel plate made at EVRAZ Portland has been used to manufacture more than 600 wind towers over the past 4 years. The average wind tower weighs more than 200 tons.

The Portland spiral pipe mill has made more than 400 miles of large diameter pipe – including 260 miles of 42” X80.

EVRAZ Armalloy steel plate, a product developed specifically for military operations, can stop armor piercing bullets traveling at over 2,000 MPH.

The Pueblo rail mill is the only domestic producer of deep head-hardened, long-wearing rail, producing more than a half million tons per year.

The HSS sales team with new product at the Portland structural tube mill. Left to right: Ty Merlock, Mike Stacey, Randy Osborn and Mike Koslosky.

MADE IN CANADA BY EVRAZ FOR THE KEYSTONE XL AND CUSHING EXT PIPELINES

550 MILES OF STEEL PIPE

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Questions or comments are welcome. Please send to communications@evrazna.com.