Severstal Distribution Group of Companies (the distribution network of the Severstal Russian Steel Division) in the first half of 2020 increased sales by 8% year-on-year, to 1.3 million tonnes.
In the second quarter of this year, all markets where the distribution network was present saw a decline in consumption amid restrictive measures to counter the spread of coronavirus infection. Severstal Distribution is a part of the continuous production chain of PJSC Severstal: all branches and service centers of Severstal Distribution in Russia and Europe in January-June 2020 processed and shipped metal products in a regular mode, subject to additional safety measures. This allowed the distribution network enterprises to maintain the level of sales, as well as to promptly respond to its recovery in May-June. SeverstalDistribution's sales in Russia in January-June 2020 increased to 580 thousand tonnes, which is 4% more than in the first half of last year. The main growth factors were the expansion of warehouse space due to the acquired warehouse complex in Vologda at the end of 2019, as well as the launch of an additional slitting line for coiled steel at the company's service center in Cherepovets.
“We have created a large distribution center in Vologda to promptly supply our regional warehouses with rolled metal, as well as for the development of processing in the Cherepovets SMC. This year Severstal launched a program development of supplies to consumers from the small and medium-sized business segment, for whom spot purchases from the warehouse and prompt receipt of metal products are relevant. The pilot of this program started in Moscow, where we now ensure the constant availability of the main product range for various niches, while making sure that our price remains market - fair and attractive to the consumer. Now the shortage of working capital for many companies is becoming critical, so we offer a number of financial services developed in cooperation with leading banks in Russia, ”said Timur Yudichev, head of the distribution network of the Severstal Russianstal division.
SIA Severtal Distributio sales in European countries in the first six months of 2020 amounted to 740 thousand tons, which is 13% more than a year earlier. Imports of rolled metal products from Russia to the countries of the European Union are limited by volumetric quotas, and the supply of products to the Russian domestic market is often the most economically efficient for Severstal, therefore the European division of the distribution network focuses on sales of metal products with increased added value: products processed in service metal centers, products with polymer and zinc coatings and valves with a comprehensive certificate of conformity, which includes several national quality standards of the Nordic countries.
“We strive to become the first choice company for our customers in the Baltic countries, Finland, Sweden, Germany, Belgium, the Netherlands , Poland, Czech Republic, Slovakia. European consumers purchase Severstal steel products from Severtal Distributio with a full range of additional services. This means that the rolled metal was imported to Europe and cleared by customs, was processed in various European service centers (in ours or independent), delivered to the client at the point and time specified by him. At the same time, the consumer has a direct communication channel with the manufacturer of metal products, which facilitates the solution of any technical issues, ”explained Timur Yudichev.
