While launching the new production complex in the arc-furnace melting shop #6, the Russian Prime Minister was accompanied by Igor Sechin, Vice Prime Minister, Victor Khristenko, Minister of Industry and Trade, Nikolay Vinnichenko, the Plenipotentiary of the President of Russian Federation in Ural Federal Region, Mikhail Yurevich, Governor of the Chelyabinsk Region, Igor Zyuzin, the Chairman of the Board of Directors of Mechel OAO, Andrei Deineko, Chief Executive Officer of Mechel Steel Management OOO, and Sergey Malyshev, Managing Director of CMP.
The Russian Prime Minister’s introduction to the plant started with a presentation of CMP and the project for renovation of the arc-furnace melting shop #6 which includes just-commissioned complex for production of high quality and stainless steel. Sergey Malyshev, Managing Director of CMP, described current situation at the plant, focusing on investment programs being implemented as well as CMP’s capacities utilization level, which currently exceeds precrisis levels by 10%.
Then the Prime Minister pushed the start button of the high quality and stainless steel production complex. Mr. Putin examined production sites of the three machines constituting the complex. Mechel’s management described the production process of the two machines for out-of-furnace steel processing – ladle furnace # 2 and vacuum degasser as well as the main machine of the complex – slab concaster #2 that produced its first slab today.
Commissioning of the new complex would result in improvement of casted steel quality, boost in annual output of slabs from 600 thousand tonnes to 1.2 million tonnes, significant product range expansion and decrease in consumption of raw materials and power. The new equipment will not only ensure better quality of products but would also allow CMP to increase output of plates and coils of corrosion-resistant steel grades, competing in quality with the products of the leading European producers, after reconstruction of the plant’s rolling facilities.
Investments in the project totaled 3.6 billion rubles.
Igor Zyuzin, the Chairman of the Board of Directors of Mechel OAO’s, commented on the event: “Implementation of this project would allow CMP to start production of new types of stainless flat long products used in the most important industries of our country such as defence, transport machinery, construction. At the present moment these products are not manufactured by Russian metallurgical plants. Thus, commissioning of this new complex would result in the decrease in the share of the imported products and complete elimination of import in a number of product groups.”
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Mechel OAO
Ekaterina Videman
Phone: + 7 495 221-88-88
ekaterina.videman@mechel.com
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Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
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Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.
