Novomet

completed

Headquartered in Perm, Novomet (“Novomet”, the “Group” or “Company”) was established in 1991 by the staff of the Republican center for Powder Metallurgy Engineering and Technology. The Company is the second largest Electric Submersible Pump (ESP) producer in the Russian Federation (24% market share) and fifth largest producer globally (6% market share). ESP’s are designed to pump oil from wells that are up to 4 km deep under extreme conditions.At the moment the Group has their own manufacturing plant (“Novomet Perm”) which is situated in Perm on two individual sites and produces various products including ESP units and water production and injection systems. An ESP typically consists of pumps, motors, protectors, gas separators, filters, scale preventers, sand traps, valves and intakes. The technological process includes mix (powder) preparation, cold pressing, details assembly; heat treatment of assembled blanks in a shielding nitric-hydrogen gas environment; assembly of submersible motors, electric submersible centrifugal pumps, filters, gas separators and reservoir pressure maintenance systems; and technological equipment. Novomet Perm’s has two plants in Perm: (i) a production facility where pressing and heat treatment is conducted in Shosse Kosmonavtov; and (ii) an assembling and testing facility, located in Ryazanskaya. Novomet channels its sales mostly through direct sales and leasing though in 2002 a service enterprise for service and repair of equipment was established. The Group provides a comprehensive set of services including routine maintenance and full repair. Currently Novomet operates 7 service centers in Russia (“Novomet Service”) in Western Siberia, Orenburg and Saratov regions and the Commonwealth of Independent States (CIS) in Kazakhstan and Azerbaijan, and there are subsidiaries in Egypt and Colombia (center for disassembly). As of May 2013 Novomet serviced 5,029 wells equipped with Novomet’s equipment in Russia and CIS. New subsidiary service centers are planned for commissioning by June 2014 in Colombia, Ecuador, Argentina, Romania, Indonesia and Iraq. The major investments are planned for Novomet’s expansion, include: (a) refinancing short term debt of$30 million; (b) working capital injection ($10m) and, (c) expansion of international service operations ($15m). Aside from the above, Novomet is also planning to develop a new foundry and cable production plant in an industrial zone in Perm within 2 existing buildings. The project is in the design stage and will not be financed by IFC.During the previous few years Novomet reconstructed the two manufacturing facilities in Perm whereby equipment has been modernized manufacturing techniques and materials have been improved.