Steel Construction Product TARGOVISTE, Romania, Jun 04, 2008 (PR Newswire Europe via COMTEX)----Mechel OAO (NYSE: MTL), one of the leading Russian mining andmetals companies, announces the commissioning of a new constructionreinforcement production line at its Mechel Targoviste subsidiaryin Targoviste, Romania. The project follows the program of Mechel'sservice and sales subsidiary, Mechel Service OOO, aimed at enteringthe market of custom made construction reinforcement. Mechel has continued to strengthen its positions in the EasternEuropean Steel Construction Product . In March 2008, Mechel Service OOO opened itsbranch, Mechel Service Europe OOO, in Romania, which providesMechel's metal product sales in this region. The new productionline installed at Mechel Targoviste is expected to produce highmargins as it produces custom made reinforcing elements conformingto each customer's specific needs. Mechel will continue to supplyproducts that meet the latest demands of customers in theconstruction industry. The new production line will release inserts ("joist webs") used tomanufacture apertures of doors and windows, bind reinforcementstructures together, and strengthen bearing structures; as well aswelded frames necessary to create bearing concrete columns andother construction frames. All custom made products will possessunique characteristics needing no additional processing prior toits use. The complex was supplied by SCHNELL, Italy, one of the leadingmanufactures of equipment for metallurgical plants. The productionline's projected capacity is 1,000 tonnes of shaped steel per monthwith the potential for a significant increase in output. The project investments amounted to 1 million euros, or USD $1.5million. The primary costs were for designing and acquiring theequipment, preparing premises, and training new personnel. Tooperate the line, 40 additional employees were hired. Manufacturing custom made reinforcement elements includes severalstages, including: sorting, cutting, bending, and storing. Eachstage is provided with the latest machines that can automaticallycut and displace reinforcements, obtain maximum preciseness whilecutting large quantity of rebars, and bend any forms. All machinesare distinguished by its type of operation and maintenance. Eachmachine is very cost efficient and can produce at high speeds withminimum manual labor. Mechel Management OOO Chief Executive Officer Vladimir Polincommented: "This production gives Mechel Service Europe OOO anopportunity to offer construction companies a supply of finishedreinforcing elements in the long term and will attract more endusers due to its complex supplies and wider range of services.Using our reinforcing materials, we can reduce construction periodswhile ensuring a high quality product and reliability." Mr. Polin continued, "This new production line has given us thepotential to win a new market niche. This is especially importantconsidering there is rapid growth in the building materials marketof Eastern Europe, which is tied to the general economic growthtrend in this region. The new line at Mechel Targoviste willproduce high margin products that are currently in high demand onthe market. After commissioning the production line and arrangingthe shaped steel sales, the product volumes will be ramped up byinstalling additional equipment. We are pleased that Mechel's steeldivision continues to successfully execute on its strategicobjective to transfer to manufacturing downstream products withhigh added value. This allows Mechel to maintain a steady marketposition and generate stronger profits." Mechel is one of the leading Russian companies. Its businessincludes three segments: mining, steel, and power. Mechel unitesproducers of coal, iron ore concentrate, nickel, steel, rolledproducts, hardware, heat and electric power. Mechel products aremarketed domestically and internationally. Some of the information in this press release may containprojections or other forward-looking statements regarding futureevents or the future financial performance of Mechel, as defined inthe safe harbor provisions of the U.S. Private SecuritiesLitigation Reform Act of 1995. We wish to caution you that thesestatements are only predictions and that actual events or resultsmay differ materially. We do not intend to update these statements.We refer you to the documents Mechel files from time to time withthe U.S. Securities and Exchange Commission, including our Form20-F. These documents contain and identify important factors,including those contained in the section captioned "Risk Factors"and "Cautionary Note Regarding Forward-Looking Statements" in ourForm 20-F, that could cause the actual results to differ materiallyfrom those contained in our projections or forward-lookingstatements, including, among others, the achievement of anticipatedlevels of profitability, growth, cost and synergy of our recentacquisitions, the impact of competitive pricing, the ability toobtain necessary regulatory approvals and licenses, the impact ofdevelopments in the Russian economic, political and legalenvironment, volatility in stock markets or in the price of ourshares or ADRs, financial risk management and the impact of generalbusiness and global economic conditions.
