OREANDA-NEWS. July 17, 2007.  The Governor of the Saratov Oblast, Pavel Ipatov, and Anatolyi Kruchinin, General Director of OAO Severstal’s Cherepovests Iron and Steel Work,  will sign on July 18 in Saratov a framework Agreement of assistance in the implementation of a project for the construction of a reinforcing steel mini mill in the municipal unit Bykovo-Otgorskoe, located 160 km from Saratov.

The annual output of the new enterprise to be commissioned in 2010 will be 1 MT of bar sections. Around 400 new jobs will be created in the region as a result. Projected investments will be about $500 million. The mini mill will use metal scrap as a feedstock eliminating the first “black” processing cycle, which will practically reduce the environmental impact to zero.  Logistics of the production process and supplies under the new project will be presented at the Investment Committee of the Saratov Oblast in late July.

As emphasized by Mr Kruchinin, “the location of the construction of this plan was not chosen by chance. The Russian construction market keeps growing. Over the last year alone, the use of reinforcement in Russia increased by 30%. The Saratov region and the Privolzhsky  market have a shortage of bar product. Severstal’s experience of producing quality reinforcing steel at the Cherepovests Iron and Steel Work enables this problem to be resolved in the future. Even today quality heat strengthened reinforcing steel, grade A 500 C, which is in maximum demand on the market, accounts for about 80% of total shipments to Russian construction companies.”

According to Mr Kruchinin, sales to the construction sector in Russia’s domestic market are seen as strategic by Severstal. OAO Severstal Russian steel makers – CherMK Severstal and Trade House Severstal-Invest – supplied about 1.5 million tons of metal products to the construction market in 2006.