Annual Report & Accounts 2013
Severstal Annual Report 2013 Home > Performance > Severstal Russian Steel > Key production facilities

Key production facilities

Steel production

Cherepovets Steel Mill is one of the world’s largest stand-alone integrated steelworks by capacity, and is an excellently located low-cost steel producer. It produces a wide range of flat and long products, including hot and cold-rolled flat products, galvanized and colour-coated products and long-steel applications. Rolling Mill 5000, located in Kolpino, near Saint-Petersburg, produces thick plate for large diameter pipes, ship and bridge building and other industries.

Mini-Mill Balakovo is a new generation mini-mill focused on the production of long products for the construction industry. The first butch of long products was rolled in December 2013. The launch of electric blast furmace are scheduled for 2014 and will have a capacity of one million tonnes of long products per year.

Severstal-SMС-Kolpino applies the primer to shipbuilding plates, produces semi-finished products for machinery and large fabricated sections for the construction industry. The company has been certified for compliance with international standards ISO 9001, ISO 14001 and OHAS 18001. SMС-Kolpino has an automated steel product preservation line, distinguished by its shotblasting and protective prime coating, which are sheet metal processing methods designed to prevent corrosion. It also has an automated beam welding line, which produces welded structures such as T-bars and I-bars and automated plasma-beam cutting lines which conduct sheet metal plasma cutting, including those used for manufacturing welded structures.

Severstal-Gonvarri-Kaluga Steel Centre is designed to produce 170,000 tonnes of rolled metal products per year for the automotive and electrical industries.

Gestamp-Severstal-Kaluga Stamping Facility is equipped with a number of press lines and produces the all of the rolled steel products, from coils to car components, for international car manufacturers. It has an annual output of 13 million stamped parts and has the potential to expand production.

At the beginning of 2014, we launched the Severstal-SMC-Vsevolozhsk service centre, which is a joint venture with the Japanese giant Mitsui. This centre prepares high-quality CRC and galvanized steel, which will be further stamped at our joint venture with Gestamp in Vsevolozhsk. The service centre’s capacity is 150,000 tonnes.

Severtar, a joint venture with Rutgers, based at Cherepovets Steel Mill plant, will produce vacuum pitch, technical oils and naphthalene.

Pipe production

Izhora Pipe Mill in Kolpino specialises in manufacturing large diameter pipes from plate, which are produced at the nearby Kolpino Mill-5000. It has a production capacity of 600,000 tonnes of pipes per year, which are mainly used for oil & gas pipeline projects.

TPZ-Sheksna was launched in 2010, and is designed to produce up to 250,000 tonnes of electric-welded pipes of various diameters, thicknesses and lengths for the construction industry, as well as square and rectangular sections with different cross-sections. The plant uses semi-finished steel products made at Cherepovets Steel Mill.

Metalware production

Severstal-Metiz manufactures more than 55,000 product types, including low-carbon and high-carbon wire rods, nails, cold-drawn steel, steel ropes, netting and fastenings. It has a maximum production capacity of more than 1.5 million tonnes per year. Severstal-Metiz comprises several subsidiaries: the Cherepovets site in north-west Russia, the Orel site in central Russia, the Volgograd site in the Povolzhie region, as well as subsidiaries in Italy (Redaelli) and Ukraine (Dneprometiz). The subsidiaries benefit from being located in developing markets with high concentrations of industrial and retail customers.

Scrap collection and processing

Our scrap-processing facilities allow us to use a wide range of steel scrap. They are located in several Russian regions, and include special cutting and packaging lines for processing scrap and preparing it for use in smelting.

Trading companies

Severstal Russian Steel’s domestic sales are made to regional and other distributors, directly to end-users, or through Trading House Severstal Invest. Trading House Severstal Invest has a wide network of metal centres throughout the country. We conduct export sales principally through the subsidiary Severstal Export GmbH, as well as through JSC Severstallat, LLC Severstal-Ukraine and ZAO SeverstalBel. This distribution system minimises our reliance on intermediaries and reduces our distribution costs.

Service companies

Our service companies maintain the production processes of Cherepovets Steel Mill, providing timely, high-quality equipment repair services. They are organised into four types of activity: equipment repair services, machine building, other repair projects, and design and development projects.

Severstal Promservice is one of the largest repair companies within Severstal Russian Steel. It provides services to Severstal and third-party clients. Severstal Promservice provides construction and equipment assembly services, manufactures and repairs energy equipment, produces steel sections and automotive systems and carries out diagnostics and land surveying.

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 Russian Steel

Russian steel producers enjoy a unique advantage over their global peers, in that the country is strong in iron ore, coking coal and primary energy, making vertical integration, a low cost base, and market resilience all a reality.

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