The list includes companies in the car-making, oil and gas, machine-building, ship-building industries, wire products and baring plants, household goods and regional distribution companies.

In Expert Magazine's rating of target markets and market segments Severstal has a score of 7.6 on the 10 point scale.

According to Anatoly Kruchinin, general director, Severstal's  strategy of working with target clients is dependent on the market conditions and trends.

According to export forecasts, 2003 will show growth both in terms of output and consumption. At the same time we are expecting significant growth of import from the former CIS countries: Ukraine, Kazakhstan, Moldova.

Anatoly Kruchinin said that costs to produce also grew in 2003 due to growth in the cost of services, provided by Russia's natural monopolies. It is expected that the prices for natural gas will go up by 27%, electricity by 20%, rail road transportation - threefold in three stages. First they will raise up by 13% from January 1st, then by 8% from May 1 and then by 15% from July 1. All of that will lead to growth of prices for raw materials.

In Mr. Kruchinin's view, the company intends to raise output in 2003 following the market trends. In 2003, Severstal intends to increase output up to 8,800,000 tonnes. It will also continue to streamline production and decrease expenditures.

In this environment, key target customers will play a major role in making large purchases, thus providing a substantial share of profits. Therefore working with key customers in target markets is a Severstal's major strategy in 2003. The company's success in the future will largely depend on that.

According to Dmitry Goroshkov, Severstal's director of sales, "Severstal chooses key customers based on their financial security and leadership position in their respective industries. This is very important to Severstal in order to move into these market segments. We identify companies which will be targets for innovative approaches, such as developing new products and services, overall relationships with clients. We have developed a special system of servicing key target customers in order to act more systematically, to have a strategy for price negotiations with our clients."

"We chose about 20 various aspects of our relationship with clients, which are not limited to the simple relationships with the buyer (procurement department of Severstal) and the sales departments. It involves the range of activities, including developing new products, improving logistics, creating consignment warehouses.

Long-term agreements allow us to establish stable relationships with our clients in the long run. These agreements last for almost 4 months to a year. Besides that, we will select most effective aspects of our relationships with each client and transfer that  experience to our relationship with other clients in Russia and abroad," said Goroshkov.

Most importantly, Severstal's strategy of working with key target customers will allow to reach the strategic objective of the 2003 - to increase the share of sales in the domestic market. Next year Severstal plans to increase sales to the domestic market up to 53%.