Air Liquide Severstal Unit Launch

Air Liquide Severstal has just launched the largest gas production unit in Russia. A joint venture created in 2005 between Air Liquide and the steel producer Severstal, Air Liquide Severstal has been set up within the Cherepovets steel complex, in the Vologda region, situated between Moscow and St Petersburg.

With a daily production capacity of 3,000 tonnes of oxygen, it is the biggest gas unit in Russia and the largest air separation unit in the world dedicated to the steel industry.

Its priority will be to supply the Severstal steel mill with high purity oxygen in addition to nitrogen and argon and it will also provide liquid oxygen, nitrogen and argon to the Russian industrial market. Global investment amounts to €100 million.

Designed and assembled at Cherepovets by the Air Liquide Engineering Department with qualified Russian subcontractors, this production unit will allow Severstal to increase its production of very high quality steel, in particular for the car industry.

Equipped with Air Liquide technology allowing reduced energy consumption, this production unit will contribute to the fight against global warming (which Russia entered itself into by signing the Kyoto Protocol) by saving 50,000 tonnes of CO2, emissions each year, that is, the equivalent of the total CO2 emissions of a town of 10,000 inhabitants. To illustrate its involvement in and contribution towards a sustainable environment, on the day of the launch, Air Liquide Severstal symbolically planted 100 trees on the Cherepovets site.

“The start-up of this new air separation unit is a major stage in the development of our large-scale investment program”, emphasized Anatoly Kruchinin, a member of the JSC Severstal Administration Board and Managing Director of the Cherepovets steelwork company Severstal. “It will allow us to increase our production of steel on this site to 9.5 million tonnes. We are very satisfied with our partnership with Air Liquide for the construction of a new industrial production unit and we intend to continue it within the framework of our joint venture Air Liquide Severstal”.

At the launch of Air Liquide Severstal, Klaus Schmieder, Senior Executive Vice-President of the Group Air Liquide, declared “We are very happy and very proud of our partnership with Severstal, one of the world leaders in steel production. The commissioning of the Air Liquide Severstal production unit allows us to firmly anchor our position in Russia and to accompany an industrial sector that is in full expansion into the future. In accordance with our development strategy in expanding areas showing particular potential, we intend to increase our investment in Russia in the years to come.”

SeverStal is an international steel producer with a listing on the Russian Trading System and the London Stock Exchange. Incorporated in 1993, the company focuses on high value-added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. SeverStal owns mining assets in Russia, thus securing its supplies of raw materials. In 2006 SeverStal produced 17.6 million tonnes of steel and had revenues of $12.4bn, PBT of $1.8bn and EPS of $1.27 dollars. In Q1 2007 Severstal had revenues of $3,6bn with PBT of $616,1mln and EPS of $0,39 dollars. In July 2007 the company had a market capitalization of $16.1bn. The majority of the company's stock (82.37%) belongs to Alexei Mordashov, with the remaining 17.63% owned by institutional investors and employees. SeverStal’s supervisory board has 10 members, five of whom are independent non-executives including a chairman. The company has recently put in place corporate governance systems which match international standards.