Interview of Severstal’s general director Alexei Mordashov

Alexei Mordashov told the Vedomosti why he isn’t sorry to refuse plan to turn Severstal into the largest steel-smelting company in the world.

The steel industry has been back in crisis. Few people were prepared for this. As a result, due to the revaluation of U.S. assets in 2009, Severstal reported a loss in the amount of $1 billion because of U.S. assets, which generated losses. But the main owner of Severstal Alexei Mordashov drew conclusions from this story: unprofitable U.S. plants were sold and the European asset was deconsolidated. And in the last year, Severstal was a leader in terms of profitability among all Russian metallurgists. New market conditions raise new requirements for companies: they must be as efficient as possible, it isn’t profitable to buy assets. Mordashov told about strategy and tactics of Severstal, as well as about its non-core investments in an interview with the Vedomosti.

- Is the current markets situation a new crisis? Is the situation worse or better as compared with 2008?

- I think this is a new wave of recession. The problems that caused the previous downturn, weren’t resolved fully. Today we are in the economic conditions that are similar to the end of 2008 - beginning of 2009. At the same time, the conditions are similar and heavy, but we entered them no so quickly as then. In October of 2008, Severstal’s portfolio of orders decreased two times. Now we have entered a similar situation for 18 months and this gave us more time to bring ourselves into compliance with the situation. Today, many companies enter this situation, being healthier - with a more efficient set of assets, with a good profitability. The situation is bad, but we are prepared for it.