Our Strategy in Action

To become one of the global industry leaders by EBITDA, while retaining a leading position in margins and returns on investment

Severstal is a global steel and mining company with a strong position in emerging markets both in steel and in raw materials.

There is a number of crucial industrial growth drivers which we believe to be key to our success, and which ultimately will help us achieve our financial objectives.

3 industrial growth engines

to achieve Severstal corporate financial objectives:


High level of market concentration	Vertical integration	Cost competitiveness
High level of market concentration secures better production discipline over the industrial cycle, secures closer relationships with customers and also provides opportunities to target high-potential niche segments.	Vertical integration is an integral part of business model. Severstal is one of the few global steel companies with favourable balance in both iron ore and coking coal. We are almost fully self-sufficient in steel-related raw materials in Russia and will target at least 70% to 80% self sufficiency in iron ore and coking coal globally.	We believe that cost competitiveness in every region where we produce steel is a vital element to strengthen Severstal position over the cycle and to enjoy industry-leading margins. Our flagship facility. Cherepovets Steel Mill, is one of the world's largest standalone integrated steelworks by capacity, is also one of the lowest-cost steel producers globally. We plan to develop our asset structure to bring all our steel assets in line with the regional cost leadership targets.

Strategic priorites

Priority 1

High-grown, low-cost emerging markets will dominate in our asset portfolio
- To expand in Russia and other CIS countries is a top investment priority
  
  Our low-cost, vertically-integrated steel production base in the high-potential Russian market is the key element of Severstal business model to provide high margin over the cycle.
  
  Russia and other CIS countries enjoy a combination of attractive industrial factors:
  - high potential of steel demand growth
  - abundant raw materials with a unique combination of captive iron ore and coking coal
  - cheap energy
  This provides plenty of investment opportunities for Severstal. We will actively explore business development projects in Russia and other CIS. both in steel and in mining.
  
  Top expand our position in other high-growth emerging markets

Priority 2

Vertical integration of our steel operations globally is also one of the top priorities
- Severstal will continue to pursue interesting opportunities for growth, those with high potential to create value, to increase our presence in globally competitive, local raw materials.

Other priorities

The restructuring of Severstal US integrated mills is a key priority for us this year. Our main goal is to return to sustainable profitability. We will pursue all interesting opportunities both internally and externally to maximise and capture the value of our US assets through participation in further market consolidation in North America.
We aim to selectively expand our presence in cost-flexible mini-mills in scrap-rich regions (USA and Russia), to utilise their cost flexibility and high returns on investments.
We will also continue selective investments in gold and other highly attractive non-steel related commodities.