24 July 2014
During the first six months of 2014 (the “period”), the Distribution Network
of Severstal’s Russian Steel Division, increased sales of steel products by 617
thousand tonnes, or 16%, against the prior year. The Distribution Network
comprises Trade House Severstal-Invest, Severstallat, Severstallat Silesia,
Severstalbel and Severstal-Ukraine. In January and February, the Distribution
Network delivered more than 11% of the Severstal Russian Steel Division’s total
steel product sales .
Andrey Alekseev, Head of the Severstal Russian Steel Division’s Distribution
Network, said: “This strong increase in sales was driven by service
improvements and changes we have implemented to enhance customer service. We
are creating a wide network of large well-stocked warehouses and remote
offices. This system allows us to broaden the range of products, build
efficient logistics chains and to maintain efficient communication with our
regional sales representatives. With our new systems, we have been able able to
boost sales and reduce costs, thereby increasing EBITDA in the period by more
than one and a half times against the prior year.”
In 2013, the Distribution Network opened its office in Finland. This year, a
further ten offices were opened in Russia with more in the pipeline.
ZAO Trade House Severstal-Invest, part of the Distribution Network, reported a
9% year on year increase in sales to 320 thousand tonnes. The volume of
deliveries to Central and North-West districts of Russia reached 208 thousand
tonnes, which is a 9% increase versus corresponding period of the previous
year. During the same period, the sales volume in Central Black Earth and Volga
Regions increased by 14% to 104 thousand tonnes.
In the first six months of the year, AO Severstallat and its subsidiary
Severstallat Silesia, which together represent the Distribution Network’s
operations in European Union markets, boosted sales by 32% to 234 thousand
tonnes. In January and February, the companies increased supply volumes to
Eastern Europe and Scandinavia. In the first half of 2014, 93 thousand tonnes
were sold to Poland, Czech Republic and Hungary and volumes to Finland and
Sweden reached 33 thousand tonnes. The most substantial increase in sales
volumes was recorded in the German market, where 20 thousand tonnes of steel
products were delivered, which is double what was sold to that market in the
previous year.
Volumes to Ukraine and Republic of Belarus during the reporting period
increased 6% year on year to 63 thousand tonnes.
The distribution Network continues to develop [metal working]. During the
period, output increased 12% year on year to 122 thousand tonnes. In European
Union countries, the Distribution Network produces welded structural and
water-and-gas pipes, belts, blanks and plates. SMC in Russia provides services
including the coiling and cutting of bars, slitting and cross cutting of rolled
steel and produces profiled sheeting and expanded steel sheets.
During the period, the share of products produced by OAO Severstal’s operations
in the Distribution Network’s sales portfolio of increased 6 ppts to 98%.