Severstal and Rugers Group of Companies Set Up Joint Venture

Severstal and Rugers Group of Companies Set Up Joint Venture. An agreement to this effect was signed on Friday, September 23d, in Moscow by General Director of Division Severstal Russian Steel Alexander Grubman and President and CEO of the RÜTGERS Group Mr. Henri Steinmetz.

Severstal holds 49% of the charter capital. Total investments make up USD 26.6 million due to borrowed funds over a period of 5 years.

A representative of the Rutgers Group of Companies will be appointed General Director of the Joint Venture. Severstal, JSC will appoint its representatives to the positions of Chief Financial Officer, Chief Operating Officer, and Chairman of the Auditors Committee.

Vacuum pitch will be used mostly by enterprises of the aluminum industry located both in Russia and abroad. As for oils and naphthalene, those will be purchased by Russian and foreign chemical companies. In accordance with a tentative forecast, export deliveries will account for about 60% of the JV’s total sales.

“A distinguishing feature of new technologies is low power consumption and high efficiency. For example, a coefficient of naphthalene recovery from the coal tar fraction will considerably increase (from 12 k tons per year to 20.5 k tons per year). The product line will also include such products as vacuum pitch (liquid and solid), liquid naphthalene; besides, there will be a broader spectrum of produced technical oils,” said General Director of Division Severstal Russian Steel Alexander Grubman, during the opening ceremony. “Not less important for us is the possibility to meet European ecological standards. For instance, atmospheric emissions of such substances as benzapyrene, ammonia, carbon monoxide, nitric oxides, benzole, etc. will be considerably reduced as a result of project implementation. At the same time, there will be no emissions of sulfur dioxide, nonorganic dust and soot.”

This joint venture is scheduled to become fully operational in the 1st quarter of 2013.