Mechel Service OOO opened its branch, Mechel Service Europe OOO, in March 2008, in Romania, provides Mechel’s metal product sales in this region. In order to win high value added market niche a new production line manufacturing custom made reinforcing elements conforming to each customer’s specific needs was installed at one of Mechel’s subsidiaries, Mechel Targoviste (The Company’s release of June, 4, 2008). In July 2008 a similar production line installation was completed at the Mechel Campia Turzii metallurgical plant. Mechel is thereby increasing output volume of products that meet the latest demands of its customers in the construction industry.

The new production line will release inserts (“joist webs”) used to manufacture apertures of doors and windows, bind reinforcement structures together, and strengthen bearing structures; as well as welded frames necessary to create bearing concrete columns and other construction frames. None of these custom made products will require additional processing prior to use.

The complex was supplied by Schnell, Italy. The production line’s projected capacity is 1,000 tonnes of shaped steel per month, with the potential for a significant increase in output. The project investment amounted to 1 million euros, or approximately USD $1.6 million.

“This project gives Mechel Service Europe OOO an opportunity to offer construction companies a supply of finished reinforcing elements throughout Romania,” Mechel Management OOO Chief Executive Officer Vladimir Polin commented. “At the same time, by installing two similar production lines within 400 kilometers of each other, we will decrease logistics costs and will be able to arrange flexible and convenient delivery schedules for our customers. After the line commissioning at Mechel Campia Turzii our reinforcing materials production capacity will increase two-fold, reaching a capacity of 2,000 tonnes per month, strengthening our position in this growing market niche. This is especially important considering the rapid growth in the building materials market of Eastern Europe, which is tied to the general economic growth trend in this region.”