Company History
Construction of Cherepovets Steel Mill
The construction of a large plant to supply the North-Western region of Russia with metal became possible after the discovery of the Kola iron cores and Pechora coal deposits in 1930−1933.
Due to the extreme climate and remoteness of the location, the construction of the integrated iron and steel works in the immediate vicinity of ore and coal fields was deemed inexpedient. It was decided to place the business near Cherepovets, which is both at the crossroads of ore, coal and finished product flows and at the intersection of the Vologda-Leningrad Railroad and Maria Water System.
On June 20, 1940, the USSR Council of People’s Commissars approved the Decree On Organization of Metallurgical Base in the North-West of the USSR, overlooking the construction of a metallurgical plant in Cherepovets.
The construction of the works was postponed due to the beginning of the Great Patriotic War (World War 2).
From Breaking the Ground to Steel Production
Construction of the works was postponed for 7 years. The fabrication shop was launched in 1951, after four years of construction works.
The plant’s co-gen produced its first electricity in May 1954.
August 24, 1955 is considered the birthday of Cherepovets Steel Mill. On that day, the first steel was produced at the works.
The coking plant was put into operation in February 1956.
The first steel ingot was made in 1958.
The blooming mill was commissioned in January 1959.
Europe’s largest sheet rolling mill began to work in November 1959.
The Cherepovets plant became a full-cycle integrated iron and steel works. New metallurgical facilities were put into operation in the following years: blast furnaces, electrical furnaces, converters, rolling mills for the production of sheet and section steel.
Reorganization and Privatization
Taking into consideration the complex structure and integrated nature of production, on June 23, 1983, the Ministry of Ferrous Metallurgy of the USSR resolved to reorganize Cherepovets Metallurgical Plant into Cherepovets Steel Mill.
On September 24, 1993, pursuant to a Decree of the President of the Russian Federation, State Enterprise Cherepovets Steel Mill was registered by the Mayor’s Office of the City of Cherepovets as Joint Stock Company “Severstal”.
Severstal has been actively growing since 1993, incorporating businesses manufacturing fabricated metal products and pipes and producing iron ore and other minerals, as well as steel making plants in North America and Europe.
Severstal Today
Severstal is an international steel and mining with a listing on the Russian Trading System (RTS) and on the London Stock Exchange (LSE). The company focuses on high added value products and unique niche products. It has a successful track record of acquiring and operating high-quality assets in North America and Europe. Severstal also owns mining enterprises in Russia and the USA, supplying them with raw materials. The company also has a gold mining segment, managing important assets in Russia and Kazakhstan.
In 2008 it was decided to modify the company’s management structure by creating three divisions: Severstal Russian Steel, Severstal Resources and Severstal International.
Severstal’s key asset is Cherepovets Steel Mill, an integrated steel plant with coking coal, agglomeration, blast furnaces, steel-smelting and rolling facilities. It is one of the world’s most powerful and modern ferrous metals manufacturing enterprises.
Currently the company’s assets are located in Russia, Ukraine, Kazakhstan, Italy, France, UK, the USA and Africa. In 2008 Severstal produced 19.2 mln tonnes of steel, posting revenues of USD 22.4 bn. The company’s 2008 EBITDA was USD 5.4 bn, while its EPS stood at USD 2.2.
Severstal’s corporate governance is in line with international best practices. The company’s Board of Directors has 10 members, 5 of whom (including the chairman) are independent directors.
History of the Company’s Divisions
Severstal Russian Steel
Severstal Russian Steel is one of the leading steelmakers in Russia. It consists of six segments: steel (Cherepovets Steel Mill, Sheksna Weld Pipe Mill, Kolpino processing service center), metalware (Severstal-Metiz), pipes (Izhora Pipe Mill, Sheksna Section Mill ), trading (Severstal-Invest), services (Stoic, SSM-Tyazhmash) and scrap procurement (Vtorchermet).
The growth of Severstal Russian Steel in 2008 improved the company’s leading position in the Russian market. Severstal Russian Steel specializes in high value added products, such as cold-rolled and galvanized sheet (including automotive grade steel), thick-gauge plates and pipes.
Severstal Resources
Severstal Resources is Russia’s leading producer of iron ore, coal and gold. Severstal’s mining division was formed by acquisitions made over the last 12 years. It comprises two iron ore integrated works (Karelian Pellet and Olkon), coal companies located in the North-West of Russia (Vorkutaugol) and in the US (PBS Coals), an iron ore exploration project in Liberia (Severstal Liberia Iron Ore), and a research institute (SPb-Giproshakht).
In 2007 Severstal Resources incorporated a gold mining segment which now consists of a number of gold mining assets in Russia, Kazakhstan and Burkina Faso, as well as several gold exploration fields in those regions. In 2008 Severstal Resources’ facilities produced 9.2 mln tonnes of iron ore pellets, 4.7 mln tonnes of iron ore concentrate, 4.6 mln tonnes of coking coal concentrate, 0.7 mln tonnes of coking coal, 2.2 mln tonnes of steam coal and 6 tonnes of gold.
Severstal International
Severstal International was created in 2008, comprising Severstal’s North American and European segments.
The North American segment has four integrated works, comprising Severstal Dearborn, Severstal Sparrows Point, Severstal Wheeling and Severstal Warren, and Severstal Columbus mini-mill.
Severstal’s European segment comprises Lucchini Group, which joins 15 plants and service centers based in Italy and France, and is one of Europe’s largest producers of high-quality rolled section steel. Lucchini Group consists of two business units: Lucchini Piombimo (Italy) and Lucchini Ascometal (France).
