Dmitry Goroshkov, Severstal's sales director, Olga Naumova, director of sales and marketing of ChSPZ, and representatives of technical and financial units of both companies participated in the 2nd Coordinating Council of Severstal and ChSPZ.
The Coordinating Council reviewed ChSPZ performance in the 1st quarter of 2002 and made preliminary evaluations of the 2nd quarter results. It was noted that set volumes and prices allowed Severstal to maintain the volumes of sales of section steel, while ChSPZ was able to keep the price level on their purchases. This had a positive impact on the two party relationship.
In the first quarter of 2002 Severstal sold 102,391 tonnes of rolled steel to ChSPZ. This is 13% less than in the corresponding period of 2001. The decrease was caused by worsening of the situation in the hardware market and was in part do to decreasing stock. However, in the first quarter of 2002 ChSPZ increased sales of products made of rolled steel from mill 150 by 9% in the framework of contracts with ChsSPZ's key clients. In the second quarter of 2002 Severstal will increase sales of steel made at the mill 150 of the section rolling plant by 5% as compared with the like period of last year.
The parties decided to continue joint programs aimed at broadening the product range and increasing product quality, in particularly, they are to implement measures, which will enable to produce wire of bearing steel.
According to Dmitry Goroshkov, Severstal's sales director, ChSPZ is a key Severstal client. It's important that parties will continue to work together on terms that are beneficial to both.
Participants of the meeting agreed that coordinating councils begin to bring results. They noted that improving the relationship between the senior management has helped to improve the relationship between technical departments of the two companies.
The next Coordinating Council will take place in August of 2002.