According to Ivan Nefedov, Severgal’s general director, these funds were mainly used for construction of the foundation trenches for Severgal’s future industrial and management facilities.

At this stage 10 companies are engaged in the construction. With the beginning of the foundation concreting jobs and mounting of the steelwork of the buildings 21 companies will be employed at the construction site. In 2003, the number of subcontractors will grow further and reach 30, thus including virtually every member of Cherepovets Association of Constructing and Mounting Firms.

Special construction headquarters were created to coordinate subcontractors’ activities at the site. Severgal’s general director, Metallurgremont (chief subcontractor) and other construction companies’ representatives are engaged in the headquarters’ coordinating activities. Flags of Severstal, Severgal and Cherepovets Association of Construction and Mounting Companies were hoisted at the construction site.

Severgal joint venture was created by Severstal and Arcelor in September of 2002. The new company has signed a contract with Metallurgremont (Cherepovets construction company) for the construction and mounting of the hot dip galvanizing line with the annual production capacity of 400,000 tonnes. This is the second largest contract, amounting to 1 billion rubles (US $ 3.2 million).