Severstal's Distribution Network Boosts Sales in First 9 Months of 2013
The distribution network which operates in five countries achieved sales volumes of 816,000 tonnes, an increase of 5% on same period of 2012.
The Distribution Network’s sales for the first nine months of 2013 contributed to 11% of Severstal Russian Steel Division’s total sales volumes. The network’s principal markets are Russia’s major steel consuming regions, i.e. the central and north-western regions, Volga and Black Earth (Chernozem) Regions, and Northern and Eastern European countries, Ukraine and Belarus.
Network sales to Russia exceeded 470 000 tonnes for the first nine months.
Andrey Alekseev, head of the Distribution Network of the Russian Steel Division of OAO Severstal commented: “Despite the general slowdown in economic growth, the Russian steel consumer market is still far from saturated and demand for steel products continues to rise. The Distribution Network has seen sales growth to Russia’s key steel consuming regions that is significantly greater than the 3.8% estimated by the Worldsteel Association for 2013. Over the last nine months our deliveries to the central and north-western regions have grown by 17% compared to the same period of 2012.”
Network sales to Russia’s north-western region have reached 215,000 tonnes for the first nine months, and around 100,000 tonnes to Russia’s central region. Boosted sales volumes were driven by steel demand from major projects such as the Western High-Speed Diameter and housing developments in St. Petersburg as well as construction projects of federal significance in the Moscow Region.
The Distribution Network increased deliveries to the EU by 19% on the same period of 2012, with volumes of 272,000 tonnes, despite difficult market conditions in Northern and Eastern Europe and a slowdown in a number of EU countries including Poland, Finland and Estonia. Network sales to the Baltic states in January-September of 2013 grew by 17% on the same period of 2012, to 115,000 tonnes. Deliveries to Western Europe and Germany reached 125,000 tonnes (a 17% increase). Sales volumes in Scandinavia grew by 34% up to 32,000 tonnes following the opening of the trade office in Finland.
Over the nine month period [the Distribution Network] sold more than 115,000 tonnes of steel products to Ukraine and Belarus, which is a 150% increase on the same period of 2012.
Andrey Alekseev noted: “The companies operating on these markets joined the Distribution Network in Q2 2013, and were optimized according to best practices employed by other companies in the network over the period of a few months. The companies were then able to supply to former customers (to whom supply had temporarily halted) and extend the network offering to new customers.”
Andrey Alekseev said: “Our strategy is to increase sales, improve the efficiency of our businesses and reduce costs, and this is enabling the Distribution Network to develop successfully despite unfavorable market conditions.” He also added: “With a presence on all the target markets, we are looking forward to increased sales supported by our new product offerings and the increased accessibility to our products through the [extended] Distribution Network."
The Distribution Network’s average sales per employee grew by 31 % for the reporting period.