Mechel takes the first position among Russian hardware producers

Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that according to the report released by Prommetiz, a Russian association of hardware producers, in October and November 2009 the two plants of Mechel’s steel division became the leaders in hardware production among companies which are the members of the association.

In the beginning of December Prommetiz, a Russian association of hardware producers, released a survey on hardware market development in Russia revealing that in October and November 2009 the two plants of Mechel’s steel division – Beloretsk Metallurgical Plant ОАО (BMK OAO) and Vyartsilya Metal Products Plant ZAO (VMZ ZAO) jointly produced more hardware than any other Russian companies-members of Prommetiz association. Thus, in Q4 2009 Mechel gained the first position in Russia by hardware production volume.

In October and November BMK OAO produced about 63 thousand tonnes and VMZ ZAO produced more than 18 thousand tonnes of hardware.

Prommetiz Association is the largest and most comprehensive Russian organization which provides data and analytical surveys about hardware markets. The largest hardware producers of Russia are the members of this organization.

Vladimir Polin, Mechel’s Senior Vice-President noted:

“This fact once again shows that our steel plants development strategy based on technical modernization and mastering new products, which are in high demand on the market, is correct. Even in the hardest crisis months of 2009 our Beloretsk Metallurgical Plant continued developing new types of products. Thus, in this April BMK OAO commissioned production of steel ropes with plastically drafted strands. In 2008, VMZ ZAO started demonstrating record results in production. The plant is still following this high standard.

Complex development of the company’s business segments and overall synergy as the result of such activity are also very important. At the end of 2008 and in 2009 we paid much attention to improvement of our sales structures and, particularly, strengthening our Mechel Service retail sales and service network. Good sales performance and efficient cost reduction programme resulted in recovery of our steel plants’ production capacity utilization up to the pre-crisis levels, as they were provided with orders and had competitive cost price. Fast recovery of our steel plants’ production capacity utilization allowed us to gain the leading positions in production of high margin commercial products including hardware”.

Based on Mechel press-service