20% of these deliveries are new products strips for API 5L pipes, as well as corrosion-resistant and cold-resistant steel grades. 

According to Mr. D.Goroshkov, ??? is the major customer for Severstal. It accounts for 10% of total sales of the company. Therefore, mutual relations between JSC Severstal and ??? define the policy and the strategy of the two companies' development.

The main issues considered at the Coordinating Council held in Cherepovets, were the opportunities for further improvement of the tube strip quality. First of all to achieve the required corrosion-resistance of steel. The most amount of work in this regard Severstal intends to do at the Hot Strip Mill #3 (in ??lpino). In 2003 the investments into HSM #3 for improvement of plate quality were 1,4 billion Roubles, i.e. one fifth of the total company's investments. Plans for 2004 include a wide range of works on production modernization for the same purpose - improvement of tube strip quality. In particular, it is planned to install and commission the plate finishing line with the slitting and cut-to-length lines and high throughput reheating furnace in Hot Strip Mill #3. The new technology will be applied here -thermomechanical skelp rolling with the use of controlled cooling, and the automated control system for production process. As a result investments into the HSM #3 will remain at the level of 2003. In addition to this a number of measures are planned for implementation throughout the entire rolled stock production chain.

The joint plans of OMK and Severstal include creation of the program for developing new products. ??? products are made in compliance with the international standards, this producer is a supplier to Mitsui, Exxon Mobil, Shell and it intends to expand its presence in the foreign markets. The joint program of work with Severstal will allow to improve the so-called end-to-end technology of production. According to ??? President Mr. A. Sedykh, ??? buys from Severstal about 80 % of the required pipe strip and it is satisfied with the high quality of products which is confirmed by the fact these producers of steel and pipes won the tender on delivery of pipes for the "Sakhalin-1" project.

19 Febrary 2004