Seversatl optimezes management structure

Further to the management and organizational changes announced by Severstal (“Severstal”, “the Company” or “the Group”) on July 15, the Company announces further changes to optimize its management structure in order to achieve its stated goals of improving efficiency and reducing costs.

As part of these changes Oleg Veter is leaving his position as Chief Executive Officer of Severstal Metiz. He will be replaced by Alexander Shevelev who has previously held the positions of Deputy Governor of the Vologda Region and Deputy Mayor of Cherepovets. Prior to that, Mr. Shevelev was an Executive Director at Severstal Metiz.

As previously announced, Severstal Metiz has been separated from the Severstal Russian Steel Division and Mr. Shevelev will report directly to Vadim Larin, newly appointed group Chief Operating Officer and Deputy CEO of Severstal.

Management structures subordinate to Vadim Larin, Chief Operating Officer and Deputy CEO of Severstal, are being formed.

Roman Filippov, previously Finance Director of the Severstal Resources Division, has been appointed as Head of Controlling of Severstal. Financial departments of all Russian-based business units will report to Mr. Filippov.

Agnes Ritter, previously Severstal Resources’ Production Director, has been appointed as Group Production Development Director. All Production Directors and Technical Directors across Severstal’s business units will report to her.

Dmitry Sakhno, who was previously Project Development Director at Severstal Resources, will now head a new Resource Projects Department.

Sergey Starodubtsev, previously Severstal Resources’ Sales, Marketing and Logistics Director, has been appointed Director of Raw Material Procurement, Sales and Logistics for the Group. His responsibilities will include the procurement of raw materials for the Severstal Russian Steel Division.

Severstal Resources’ procurement function has been transferred into a new Group Centralized Procurement Department which is headed by Pavel Lezhnev. The new centralized procurement function will enhance competitiveness by creating buying synergies for the Group. Mr. Lezhnev will report to Denis Pavlyuchenkov, the Russian Steel Division’s Supply Director.

Alexey Soldatenkov, Business System Development Director for the Group, will continue in his position and will focus primarily on projects at the Severstal Russian Steel Division.

In line with the company’s focus on efficiency and cost reduction, the centralized department of health, safety and environment of the Group will no longer exist. The head of the department – Igor Lykov is leaving the company. The heads of business units of the company and line managers will take responsibility for health, safety and environment issues. At the same time Alexey Soldatenkov, Business System Development Director for the Group, will coordinate health, safety and environment work at the Group level.

Alexey Mordashov, Chief Executive Officer of Severstal, commented: “This process to optimize our management structure will reduce the “distance” between the management teams and employees. This will enable Severstal to both improve efficiency and reduce administration costs. Severstal will continue its efforts to further improve efficiency, reduce costs and strengthen competitiveness.”