Severstal announces 2022 capital investment programme

by David Fleschen

Severstal plans to invest $1,600 mln in 2022, focusing on a key areas of the Company's strategy, namely, excellent customer experience, cost leadership and new opportunities. It implies с. 38% yoy growth comparing to 2021 (CAPEX in 2021 was $1,157 mln).

Thus, new Severstal’s 2022 capital investment programme includes:

  • $878 mln to be invested in various development projects (including $336 mln to projects that will also improve environmental and climate protection performance);
  • $356 mln in maintenance;
  • $151 mln in capital overburden;
  • $137 mln will be allocated to investments in IT and digital projects, including completion of SAP S/4 HANA project, the automation of supply chain operations and production process as well as to a wide list of IT projects aimed at quality improvement;
  • $78 mln will be spent to industrial safety system improvements such as reconstruction of the fire safety system in the hot-rolling shop in line with the requirements of the best available technologies; and ecology and environmental projects such as water treatment, automatic atmospheric emissions monitoring; installation of electrofilters in sinter and crude steel production;

Severstal furthermore increased its guidance for total investments in 2022 comparing to last forecast published at the Capital Markets Day by $300 mln. Main factors of growth:

  • -$101 mln: Vorkutaugol disposal
  • +$150 mln: new projects;
  • +$115 mln: unspent CAPEX planned to 2021, reallocated to 2022 financial year;
  • +$27 mln: partially rescheduling of preparatory works for BF5 modernization;
  • +$20 mln: increase in capital overburden.
  • +$89 mln: costs increase for previously guided projects due to inflation and other factors

Source and Photo: Severstal

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