Severstal Reorganizing Operations

OAO Severstal announced that it is reorganizing its businesses into three principal divisions: Severstal Russian Steel, Severstal Resources and Severstal International.

The new structure took effect the first of this month. The move will reduce the number of reporting lines between individual operations and senior management, ensuring greater operating efficiency and capitalizing on Severstal’s international diversity by providing for the continued growth of the global business.

Alexey Mordashov, Severstal CEO, said: "This restructuring is a logical next step in Severstal’s development, reflecting our already strong position as an integrated metals and mining business with a growing international focus. The simplified, more focused structure will serve to improve our competitiveness, increase production, cut costs and maximize profit."

The new structure of Severstal will be as follows:

* Severstal Russian Steel – Severstal Russian Steel will include the following segments: steel, pipe, metalware and services as well as scrap procurement operations. Anatoly Kruchinin, currently CEO of Cherepovets Steel Mill, has been appointed as CEO of Severstal Russian Steel.

* Severstal Resources – Comprising Severstal’s assets relating to iron ore, coal and gold extraction. The division includes mining and gold-mining segments. It is one of Russia’s largest producers of pellets and coking coal. Roman Deniskin will remain CEO of the division.

* Severstal International – a newly established division, comprising European and North American segments. Gregory Mason, Corporate COO of OAO Severstal, has been named CEO of the division.

Under the new structure four functional areas and four service and support areas will be established.