Severstal: No Plans To Exit U.S. Market

MOSCOW (AP) -- Russia's largest steelmaker Severstal said Friday it had no immediate plans to sell any of its loss-making U.S. assets and would seek to turn them into profitable ventures.

Severstal has been hit hard by weak world steel prices, falling output and big exchange rate losses amid the industry's global slump. First quarter results last week revealed the company's Russians operations were turning some profit, while North American and Europe were dragging on the company's overall balance sheet.

That has intensified speculation that the company may decide to sell some of its North American plants. Two of its five major plants in the United States have been idled -- in Ohio and in Pennsylvania -- a process that takes several months.

Gregory Mason, chief executive of Severstal's international operations, refuted those reports.

"We are not actively marketing any of our assets," he told The Associated Press.

He also said Russian assets are weathering the crisis better because they have more effective crisis management and cost-cutting programs.

"We're just incorporating underperforming facilities and taking opportunity to restructure the company much earlier than we would have under different circumstances," he said.

Mason said he has noticed some signs of recovery but they are still insignificant.

"We have very low visibility across the globe for both volumes and demand," he told AP.

Severstal's chief Alexey Mordashov said last week the company would not give guidance for the next quarter because of uncertainty over market conditions.

In 2004, Severstal became the first Russian company to acquire steel assets in the United States. Subsequent acquisitions in North America made the company the number four U.S. steelmaker by capacity.