Two separate companies will be founded in place of former Severstal divisions. One will make furniture, the other enamelware. Severstal will hold a 100% stake in both companies. The spin off was announced by Vadim Mahov, Severstal director of strategic planning. Alexei Mordahov, head of Severstal group, signed all paperwork necessary for the spin off.

Severstal has been preparing for the spin off for over two years. In 1999-2001, Severstal consumer goods division production grew twofold from 180 million rubles to 374 million rubles. Gross profit changed from the loss of 1.8 million rubles to the profit of 90 million rubles in 2001. The management aided in improving product quality, changing product range, cutting costs and exporting consumer division's products.

Today Severstal-Mebel (Severstal-Furniture) supplies frames for chairs made by Ikea. Severstal-Emal (Severstal-Enamelware) takes part in international exhibits, exports its products. Severstal-Emal produces pans with antiburn teflon coating. Last year it began testing coating done with sandblast machines.

All of that caused significant improvement in year's results. Profit grew by 50-80%. The same increase is planned for 2002.

Soon Severstal will also spin off its machine building and repair servicing units. Fifteen repair shops and several Severstal repair subsidiaries will together form a new company, named Severstalmash. New company will have production, servicing and engineering divisions. In the near future this new company will become one of the largest in the North-west in terms of employee numbers (up to 10,000), production facilities and the scope of production.