Annual Report & Accounts 2013
Severstal Annual Report 2013 Home > Performance > Severstal International > Costs


Total cost of sales in 2013 was US$3,725.4 million, 1.3 per cent less than in 2012. This is mostly due to the slightly cheaper cost of scrap and the positive effect of operational enhancements at all levels. For instance, a reshuffled approach to scrap purchasing has brought savings of US$16 a tonne at Columbus and of US$10 a tonne at Dearborn in the last two years.


In October 2013, the Tennessee Valley Authority (TVA) and Mississippi Governor Phil Bryant visited Columbus to honour Severstal for its energy efficiency, and presented us with a cheque of nearly US$2.5 million. Through TVA’s Major Industrial Programme, the steel plant was able to reduce its total energy use by 25 million kilowatt-hours, which is enough to power 2,000 average TVA homes. We are proud to help move the state forward in energy efficiency.

Also in October 2013, Severstal North America joined two of the most respected sustainability organisations for operations and sourcing: the United Nations Global Compact (UNGC) and the Conflict-Free Sourcing Initiative (CFSI). This allows Severstal to take its existing purchasing practices to the next level and become an industry leader in transparent and sustainable sourcing standards.

Severstal’s sustainable sourcing standards for its suppliers focus on three key areas:

  • Safe and healthy working conditions. We aim to follow the highest safety standards and comply with international human rights laws.
  • High environmental standard. We aim to foster environmental protection and manage resources responsibly.
  • Strong business ethics. We facilitate integrity, diversity and nondiscrimination, and ensure conflict-free sourcing.

CEO statement

Our strategic goal remains the same: we aim to be a leader in value creation. In the current volatile and challenging market environment, this means the ability to generate solid positive free cash flow throughout the market cycle.

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Chairman statement

Since listing we have been committed to the highest standards of corporate Governance and aim for full compliance with the UK Corporate Governance Code.

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Performance review 2012

Severstal achieved a solid set of results in 2012, despite worsening economic conditions, maintaining the Group’s EBITDA margin at 15.0%, reflecting the resilience of the business.

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Performance review 2012 - Severstal International

Severstal is now strongly positioned in one of the world’s largest and most dynamic markets. We have invested heavily in our US operations since 2004 and now this modernisation is complete, we are making good progress towards our production targets.

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