The main goal of this project is to set the most effective relationship of the section steel and wire products businesses to leverage them for the Group. Economic effect from implementing this project is US $ 10 million.

Analysis of market trends showed that wire products’ business will be more attractive in the long run in terms of through profit as compared with the market for section steel. At the same time globalization in the wire products markets is taking place. The producers of section and wire product are integrating with one another. Therefore, integrating the section-wire technology chain is important to strengthening the market position of the Group.

According to Olga Naumova, general director of CHSPZ, integration of the section and wire businesses will allow CHSPZ to better implement its service-minded strategy. “We will have an opportunity to follow contract terms precisely and reduce timelines. As a result, CHSPZ will have a substantial number of competitive advantages, important in the long run for the successful non price competition,” she said.

According to Dmitry Goroshkov, sales director of Severstal, “In the framework of this project the steel mill intends to enhance the quality of service it offers to its colleagues in the steel making division. As a result of this work, through profits of the entire steel making chain will grow.”

The decision was made to hold joint meetings to set sales portfolios of section and wire products based on through profits. Companies will continue to search for new ways of relating with view to streamline management of the entire section-wire production chain.

17 Febrary 2003