Russia's largest steel maker Severstal to split into threeunits; plans acquisitions overseas

14 April 2008

Mumbai: Severstal, Russia's largest steel maker, will split its business into three separate divisions and consider further acquisitions in North America, Europe and Africa.

Severstal, controlled by billionaire Alexei Mordashov, will create separate divisions to focus on its Russian steel business, its international operations and its raw material assets - coal, iron ore and gold - reports quoting senior company executives said.

Severstal, with a market capitalisation of $24.7 billion, expects a leaner, focused structure to improve its competitiveness, and productivity, cut costs and improve profitability.

Severstal, Russia's second-largest steel maker, has expanded into North America and is now among top five US steel makers by capacity.

Severstal, which owns the former Rouge Steel plant in Dearborn, Michigan and jointly owns the SeverCorr venture in Columbus, Mississippi, is acquiring the Sparrows Point mill in Baltimore, Maryland for $810 million. 

The steel major is expanding its Cherepovets plant in Russia and is also building mini-mills elsewhere in the country to serve booming demand from the construction sector. The company plans to invest a total $6 billion in Russia by 2011.