Athens, November 7, 2013

NEW INVESTMENT

SIDENOR S.A, a subsidiary of Viohalco Group informs the investor community that, within the framework of its strategic decision to further reduce production costs, enhance competitiveness and support its exports, it has decided to implement – initially at the SOVEL premises - innovative investments, totaling 10 million Euros, which will significantly reduce both the production costs, as well as the carbon footprint for each ton of steel produced.

The aim of the new investment is to avoid the reheating of billets with gas, as done in the classical reheating furnaces and for this purpose an electric induction furnace will be fitted, in line with the continuous caster, which will raise the temperature of the already hot billets to the required rolling temperature, before they cool.

The new induction furnace will be installed initially in the production facilities of SOVEL in Almyros Magnissia and then, following the implementation of the electric power interruptability contracts and the expected further reduction of the electricity cost, at Thessalonica plant as well, with an additional investment of 8 million Euros. With this investment, in addition to the significant environmental benefits, the flexible operation of the furnace will be enabled (easy on/off operation without the need to keep the reheating furnace constantly operational, as is the case currently with the classic gas furnace), while at the same time the losses in the steel produced will be drastically decreased, as the hot billet will not remain in an oxidizing environment for a long time.

It is worth noting that that part of the SOVEL's production is already produced by applying the same technology since 2010 and will now be extended safely throughout the whole plant's production.

The aforementioned actions are expected to substantially improve the production cost, as they save an estimated 200KWh of energy per produced ton of steel, while at the same time the achieved reduction of total direct CO₂ emissions of SOVEL will exceed 55kg per ton of steel. This will be an improvement of more than 30% in the total carbon footprint of the facility, since steel rolling will then have a zero carbon footprint (due to no use of natural gas).

With this new innovative investment - the first of its kind in Europe - the international competitiveness of the SIDENOR Group is further strengthened, making it one of the most competitive steelmakers in Southeastern Europe.