OREANDA-NEWS. On May 30, 2007 Mechel OAO (NYSE: MTL) announced that the Kazan Branch of its subsidiary, Mechel Service OOO, has expanded its network with the opening of a new remote warehouse for metal product storage and transshipment in Izhevsk (Republic of Udmurtia), reported the press-centre of  Mechel.

Mechel Service OOO is a trading company engaged in domestic sales of Mechel’s metal products whose subdivisions operate in 16 major constituent entities of the Russian Federation.

The official opening ceremony was attended by Mechel Chief Executive Officer Igor Zyuzin, Mechel Management OOO General Director Vladimir Polin, and Mechel Service OOO General Director Andrey Ponomarev.

The opening of the new warehouse in the capital of the Republic of Udmurtia will permit Mechel to increase its warehouse sales, significantly reduce logistic costs in product transportation, and expand its market presence in the Republic of Udmurtia and the neighbouring regions. The warehouse premises are located within the facilities of Mechel’s Izhstal OAO subsidiary, which minimizes the Company’s lease costs and guarantees safe product storage. The Kazan Branch of Mechel Service OOO already has a remote operating division in Nizhny Novgorod.

The new remote warehouse division also has its own office and full-time staff. The nominal storage capacity for the warehouse, depending on the product type and storage method, is 5,000 tonnes minimum, and its transshipment capacity is 500 tonnes per day. The facility will primarily be used to store rebars from the Company’s Chelyabinsk Metallurgical Plant. The warehouse will also receive metal products from other Mechel’s subsidiaries, Izhstal OAO and the Company’s Beloretsk Metallurgical Plant.

Products from the remote warehouse will be sold mainly to the markets of the Republic of Udmurtia, Republic of Bashkiria, and Kirov Region. The warehouse has already received its first order for June, totaling 3,000 tonnes.

“We are developing Mechel Service by both increasing its sales through existing subdivisions and opening new subdivisions, thus expanding its sales geographically. Mechel Service also plans to increase sales through product line expansion initiatives. With a developed network of subdivisions and significant stock in storage, Mechel Service is capable of directly meeting the demands of metal product end users,” Mechel Service OOO General Director Andrey Ponomarev commented.