Severstal announces 2015 capex program

PAO Severstal announced the details of its 2015 investment program in support of its long-term competitiveness strategy.

Severstal plans to invest about RUB 30 billion throughout the entire enterprise during 2015 to develop key areas, including increasing production of high value-added products; increasing the level of customer service; continuous improvement of health and safety standards. At the same time, management remains focused on reducing operating and administrative costs.

Investments in Severstal Russian Steel in 2015 will amount to about RUB 16 billion. Half of this amount will be invested in development projects, including the construction of a new polymer coating line, reconstruction of continuous cold rolling equipment. The rest will be aimed at supporting environmental projects.

Investments in the Severstal Resource division in 2015 amount to about 13 billion rubles. 7 billion rubles will be invested in development projects, including the completion of construction at the Zapolyarnaya mine and the expansion of the capacity of the Karelsky Okatysh open-pit mine, the construction of a new water circulation block and other works. In 2015, RUB 6 billion will be spent on improving coal and iron ore operations, as well as projects to improve health and safety.

Alexey Kulichenko, CFO of Severstal, said that Severstal is taking a balanced and balanced approach to capital expenditures that will be flexible to market conditions. The 2015 investment program will enable Severstal to continue to achieve its strategic goals by further improving efficiency and generating healthy free cash flow. At the same time, the program focuses on product improvement and service standards.