OREANDA-NEWS. SeverStal, one of the leading and most profitable steel companies in the world, today announced that SeverCorr started production at its next generation steel mill, less than two years after construction began, Severstal's press service reports. SeverCorr is a partnership between SeverStal and leading US steel industry veterans lead by John Correnti. The partnership was created to build an innovative steel mill in Mississippi to serve the fast-growing Southern region of the US.  The mill is unique in that it produces high quality steel by using scrap metal, instead of coal, and has an electric arc furnace with integrated finishing equipment. It is located near a number of large steel customers, making the distribution channels more efficient.  SeverCorr complements SeverStal's other US business, SNA, which is based in Dearborn, Michigan, and primarily serves the manufacturing hub of the Midwest United States.

The US currently contributes 16% to SeverStal's total revenues and is a priority market for the company.  In its first half results for 2007 announced in September, SeverStal stated that it is earmarking approximately 10% of its total capex spending of $10 billion between now and 2011 for the North American market to improve production and efficiency. There is also potential for further investment at SeverCorr depending on the performance of the plant and conditions nearer to the time.

SeverStal, CEO Alexey Mordashov said, "Our partnership with SeverCorr, along with SNA, increases our footprint in the US.  The US is an important market for SeverStal based on a number of factors, we are confident about the growth prospects in the region and are investing in growing our US businesses. We believe in the strength of the US economy and are committed to the US market. There is a high concentration of customers in the regions in which we operate that demand the specialty niche steel products that our company produces. 
The US market is also benefiting from positive global industry dynamics.  There is strong demand for steel worldwide, especially in Russia, our home market. This has led to a tightening of supply everywhere.  Higher energy costs make transporting steel less economic making it more efficient to have mills located closer to the customers they serve." Mr. Mordashov joined Mr. Correnti, Mississippi Governor Haley Barbour, government and economic development officials and SeverCorr partners, customers and employees at the site of the plant on October 23 to celebrate the start of production at the mill. Mordashov continued: "We are excited to be part of the development of SeverCorr and have high expectations for the mill. I commend John and his team for reaching production in just two years; building a steel mill of this caliber requires a tremendous amount of teamwork, know-how and operational excellence. We are also thankful to the Golden Triangle region and state of Mississippi. They've been very supportive and we look forward contributing to the growth of the area."

OAO SeverStal is an international steel producer with a listing on the Russian Trading System and the London Stock Exchange.Severstal has a successful track record of acquiring and integrating high-quality assets in North America and Europe."SeverCorr" is OAO Severstal's and its American partners` super-modern mini-mill, located in Columbus (USA), utilizing electric steel melting technology. The plant is capable of producing up to 1.5 million tons of high-quality steel per year. Severstal has invested a total of $880 million in the plant. It employs 450 people. The General Director is John Correnti. SeverCorr is located in close proximity to railway and major highway networks, and is also well-placed to benefit from the automobile plants currently under construction in the south of the USA. The miniplant's products are intended for use in the automobile, construction, agrarian, pipe-making and machine-building sectors.