Today Severstal's General Director and Head of the Severstal group, Alexei Mordashov, and the Co-Chairman of the Board of Directors of Arcelor, Francis Mer, laid down the foundation stone of Severgal, their joint plant, which will produce automotive hot dip galvanized steel.
   Severgal is a company registered in the Russian Federation and owned 75% by Severstal and 25% by Arcelor. Severgal annual capacity will be 400,000 tonnes. The plant will include a galvanizing line and will be built at Severstal's industrial site up to 2004. Severgal will sell its products mainly to the Russian car industry, in particular for exposed panels of automobiles.
   Arcelor will grant the joint venture a license for the use of its proprietary product, Extragal^TM, including the trademark and associated know-how. Extragal^TM, which is a pure zinc hot dip galvanized steel product, was specifically developed for the automotive industry. It is produced in Europe by Arcelor, in Canada by DoSol, a joint project with Dofasco, and from 2003 it will be produced in Brazil at the Vega do Sul plant, currently under construction.
   The project, which will be mainly supplied in steel substrate by Severstal, will also benefit from the company's present expertise and future development program for the production of high quality cold rolled steel. Severstal's modernization program includes important investments as well as the development of an efficient quality and management organization aimed at increasing product quality and obtaining international quality certificates.
   The Extragal^TM technology and trademark associated with Severstal management, technical and commercial expertise in Russia, will be key success factors of Severgal.

   Arcelor is a company born from the merger of European steelmakers Aceralia, Arbed and Usinor, which employs nearly 110,000 employees and operates worldwide in 60 countries. 2001 sales amounted - on a pro-forma basis - to 27 billion Euro for a crude steel production of 43.5 million tonnes.
   Severstal - Cherepovets Steel Mill is a parent company of the Severstal group which employs 45,000 people. Severstal sells steel to over 50 countries. In 2001 its sales volume was US $1.8 billion for a crude steel production of 9.3 million tonnes.