SeverStal Completes Management Transition at SeverCorr
04/25/2008 - Severstal completes its purchase of the outstanding ownership shares belonging to SeverCorr’s founding management team. John Correnti will leave SeverCorr as part of the purchase deal, as will Michael Wagner, Richard Painter, Edward Lehner, and Wynn Calland.
Severstal has completed its purchase of the outstanding ownership shares belonging to SeverCorr’s founding management team. Following the transaction, Severstal will hold approximately 85% of SeverCorr.
John Correnti will leave SeverCorr as part of the purchase deal, as will Michael Wagner, Richard Painter, Edward Lehner, and Wynn Calland.
Severstal had confirmed last December that it was in discussions with SeverCorr’s senior management team, and announced the beginning of its transition in early January, including the appointment of James Hrusovsky as CEO. Hrusovsky has been working closely with the founding management team to ensure a seamless transition.
Severstal said it will also be making additional (internal) appointments to finalize the SeverCorr executive management team and further ensure business continuity. As part of this process, the company announced the appointment of Mark Miller as Vice President and Director of Projects, and Tom Marchak as Vice President Sales and Marketing.
SeverCorr’s operational management team remains in place and departure, and Severstal said that departure of the founding management team will not impact operations. The facility continues to ramp up production, having produced approximately 350,000 tons of hot band in the first quarter of 2008. Phase II expansion, which will more than double the mill’s output to 3.0 million tonnes, is on-track to be completed by late 2010.
“Severstal has been a major supporter of SeverCorr within the past two years, giving strength to our development and further growth,” said Hrusovsky, commenting on the announcement. “Since taking over as CEO, I have met with many of the employees. I am impressed with the breadth and depth of talent here and the superior technology of the facility. I’m also encouraged by the continued support that we’ve received from our customers and local and state officials.”
Hrusovsky continued, “John Correnti and the founding management team have been tremendously helpful with the transition and we remain committed to their vision of creating one of the most technologically advanced mills in the steel industry to serve both the customers and community of the fast growing Southern region of the U.S.”
Mark D. Miller, Vice President and Director of Projects, had previously served as General Manager, Engineering and Project Management for Severstal Technology, LLC since 2005. He came to Severstal after working 10 years with Bricmont, Inc. as Project Manager over all projects within their engineering service group. From 1988 to 1995, he was Project Director at D&L, Inc., and from 1981 to 1988 he worked as an engineer at Cooper Power Systems. Miller began his career in 1979 as an application engineer at Delco Electronics.
Miller joins the SeverCorr team with a vast amount of project experience including design, engineering, construction, procurement, project scheduling, budgeting, and overall project management. He holds a Bachelor of Science Degree, Electrical Engineering from the University of Pittsburgh and is a Registered Professional Engineer.
Tom Marchak, Vice President Sales & Marketing, entered his first steel mill (Bethlehem Steel) in April 1984 as a Sales Trainee, and worked for a total of 16 years. He also assisted in the building and startup of Chicago Cold Rolled as VP of Commercial from 1996-1999. In 2003, he joined Kenwal Steel as the VP of Commercial in Burns Harbor, Ind.
Marchak joined the SeverCorr team in June 2006 as General Manager of Sales. A graduate of the University of Scranton in Pennsylvania, he also graduated from executive courses at the Fuqua School of Business at Duke University and the Wharton School at the University of Pennsylvania.
SeverCorr is a unique mill that produces high-quality steel by combining an electric arc furnace steelmaking process with an integrated-type finishing plant. It is located near a number of large steel customers, making the distribution channels more efficient. SeverCorr complements Severstal’s other U.S. business, Severstal North America (SNA), which is based in Dearborn, Mich., and primarily serves the manufacturing hub of the Midwest U.S.
U.S. operations currently contribute 16% of Severstal’s total revenues. Full consolidation of SeverCorr financials began in 1Q 2008.
OAO Severstal, one of the world’s leading metals and mining companies, focuses on high value added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion and EBITDA was $3.7 billion. EPS was $1.92.
