All distributors were screened on several criteria, such as regularity of purchases, solvency, availability of own storehouses, opportunities for additional processing, etc. Twenty five distribution companies were selected, which had direct agreements with Severstal and accounted for 80% of this sales group. The rest must buy rolled steel at an e-trading site.

In compliance with the newly established rotation principle, 3-5 companies showing the worst performance, will switch to e-trade, and those most successful in e-trade will be included in the list of the best 25 distributors, who have direct agreements with the company.

According to Dmitry Goroshkov, sales director of Severstal, “The new regulations will allow Severstal to make several million rubles of additional profits each month.” Additionally, new software is expected to speed up business procedures and enable to sell steel on-line. Presently, 16,000 tonnes of rolled steel a month are sold via e-trade.

25 March 2003