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31 October 2014

Severstal's Distribution Network Increases Sales by 11% in the First 9 Months of 2014

Severstal Russian Steel Distribution Network, which includes TD Severstal-Invest, Severstallat, Severstallat Silesia, Severstalbel and Severstal Ukraine, increased sales of steel products by 11% to 947 thousand tonnes in the first 9 months of 2014. Key events of the quarter included the shipping of the millionth tonne of steel products from SMC Cherepovets and the preparation of the new production line at Riga SMC for launch.

The Russian business of the Distribution Network, ZAO TD Severstal-Invest, increased its sales to 514 thousand tonnes in the reporting quarter, an 11% increase from the first 9 months of 2013. Deliveries to Central and North-Western regions increased 7% year-on-year to 326 thousand tonnes. Sales to Central Black Earth Region and Volga Region increased by 22% year-on-year to 176 thousand tonnes.

AS Severstallat and its Severstallat Silesia subsidiary representing the Distribution Network in the European Union reported a 27% increase in sales year-on-year with 345 thousand tonnes of products sold in the first 9 months of 2014. Shipments to Finland and Sweden reached 50 thousand tonnes, a 53% increase from the same period of 2013, while sales to Eastern Europe increased by 35% and reached 132 thousand tonnes. The largest growth is attributable to Germany where we ship our own products, with 70% year-on-year increase in the first 9 months of this year.

Individual businesses of the Distribution Network rely on service management to increase their sales. “We work on continuous improvement of our business processes and focus on customer needs. It must be convenient to work with us for our customers,” says the Head of Severstal Russian Steel Distribution Network Andrei Alekseev. “We expand our product range by launching new products in our steel service centers; we keep improving our warehouses to ensure that popular products are always in stock; and we are working on making our logistics more efficient. This effort helps us expand into new market segments and serve customers whose businesses require high service levels,” he adds.

In the first 9 months of 2014, our Distribution Network subsidiaries increased in-house production volumes to 184 thousand tonnes, achieving 10% growth year-on-year. TD Severstal Invest increased its production volume this year and now offers rebar uncoiling and cutting services, coiled steel slitting and cutting to length, and also manufactures decking and expanded metal. Latvian and Polish subsidiaries of the Distribution Network manufacture structural, water and gas pipes, strip, blanks and commercial sheet metal. In the third quarter, AS Severstallat completed the installation of the new cut-to-length line and started manufacturing high-quality plates up to 12 mm thick in October.