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Mechel Continues to Develop Mechel Service OOO Subsidiary
01/16/2009 - Mechel OAO reports a number of positive achievements as the result of its plan to develop the branch network of its Mechel Service OOO service and sales subsidiary, including the opening of new sales offices, the transformation of existing units, the acquisition of HBL Holding, and the upgrade of a number of its production and service facilities.
Mechel OAO announced a number of positive achievements as the result of its plan to develop the branch network of its Mechel Service OOO service and sales subsidiary, including the opening in 2008 of new Mechel Service offices in Belgorod, Ulyanovsk, Astrakhan, Irkutsk, Kaliningrad, Stavropol, Mineralnye Vody, Anapa, Naberezhnye Chelny, and Vidnoye (Moscow Region).
In connection with the expansion of Mechel Service OOO's production facilities, the company transformed units in Tyumen, Omsk, Krasnodar, Sochi, and Nizhny Novgorod into branches. Mechel Service OOO has also opened additional warehouses in Rostov-on-Don, Samara, and Krasnoyarsk.
Mechel Service's sales network currently includes over 50 offices in 40 major Russian cities, with subsidiaries also operating in Romania and Kazakhstan. In September 2008, Mechel Service acquired HBL Holding, a German group of steel trading and distribution companies, to support continued expansion of its sales network, enhancement and extension of its range of services, and expansion of its client base,. The acquisition has also strengthened Mechel Service's position in the European Union and allowed it to increase its number of sales units to 65.
Along with expanding its sales geographically, Mechel Service, as part of its development program, implemented numerous projects to better organize its production and service sites in 2008. The company launched new equipment for straightening and cutting off reinforcing bars to custom tailored sizes in Yekaterinburg, Krasnodar, St. Petersburg, Rostov-on-Don, Sochi, Chelyabinsk, and Tyumen. The company also initiated the installation of a new 1200 to 1500 tonne/month automatic line for welded mesh production in the Moscow Region. This new service started operations at Samara and Novosibirsk. These innovations allowed Mechel Service OOO to substantially expand the range of marketable products and services it can provide to customers.
"The development of Mechel Service's branch network in 2008 enabled Mechel to substantially enlarge its client base and ensure steady sales of our finished metal products even while the industry experienced a strong decline of demand in Russia and abroad," commented Mechel OAO Senior Vice President Vladimir Polin.
Looking ahead to 2009, Mechel Service plans to continue its sales expansion program, develop its branch network, and continue to install new production and service facilities. The company said that it also is currently considering expansion of its sales network in Kazakhstan, and developing a program to expand its operations to the Russian Far East, CIS, and far-abroad countries. As part of establishing its own production and warehouse base, Mechel Service also expects to complete the upgrades of its warehouse complexes in the Moscow Region, Yekaterinburg, Ufa, and Anapa.
Mechel, one of the leading Russian mining and metals companies, unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat, and electric power. Its business includes four segments—mining, steel, ferroalloys and power—and its products are marketed domestically and internationally.
