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Severstal vp switch will not alter strategy

Keywords: Tags  steel, Severstal North America LLC, Sachin Shivaram, vice president, commercial, leadership changes, commercial division, Thomas Marchak executive appointments


NEW YORK — Severstal North America LLC will not alter its marketing and sales strategy despite a change at the top of the Russian-owned steelmaker’s commercial division, according to the company’s newest vice president, Sachin Shivaram.

"In terms of strategy, nothing is going to change. I think we have a great strategy in place, particularly with an excellent position in the automotive market," he told AMM in an interview. "We’re absolutely committed to that and we’re also committed to our customers. Nothing changes. This is just a change in people and not a change in commercial strategy."

In the past three weeks, the Dearborn, Mich.-based company has announced new appointments in its highest executive positions, including Saikat K. Dey as chief executive officer (amm.com, Sept. 3) and Olga Petrova as chief financial officer (amm.com, Sept. 16). Shivaram was named vice president of commercial Sept. 24 (amm.com, Sept. 24).

Within hours of the news, customers of Severstal’s Columbus, Miss., and Dearborn mills expressed concern that their relationship with the company may change, particularly given the exit of Thomas Marchak, Shivaram’s predecessor, from his former role. Marchak has been appointed a special advisor to Dey for an unspecified period of time. Shivaram insists, however, that those fears are unfounded.

"From my perspective, the fear is that customers have had a relationship, obviously a very personal one, with us and there’s a history of things that are talked about and not written down anywhere—just understood. The fear is that it just all disappears and that’s absolutely not the case here," Shivaram said. "Tom (Marchak) and I have a good relationship and he’s not going anywhere. All that knowledge will pass on and stay within the relationship. And the entire sales team is still here. I don’t think there will be more changes on the commercial side."

Shivaram likely faces a steep climb ahead. Not only has he been appointed to arguably one of the more difficult positions within the steel world—selling steel at a time when the market is oversupplied and under duress—but his experience to date is rooted in the long products and raw materials sector.

Shivaram joined Severstal in December 2012 as general manager of metallics, having previously worked at Luxembourg-based ArcelorMittal SA’s Long Carbon Americas division as head of strategy and marketing. He is convinced, however, that the lack of experience may prove to his benefit.

"I’m going to have to embrace that I’m not from within that part of the industry. Hopefully, I can work that to my favor and bring some different thinking," he said. "It also gives me a chance to ask dumb questions and sometimes you get good answers. Before I started on the scrap side, I hadn’t done anything in scrap and I enjoyed the learning process. I imagine that to be the same in flat-rolled. It’s the most complex aspect of the industry."

The leadership change at the top of Severstal’s commercial unit comes at a time when contract negotiations for 2014 are under way, leading some observers to question the company’s decision to replace a top commercial leader at such a critical juncture. Marchak affirmed, however, that the company’s previous pledge to move away from "CRU minus" deals and its guidelines on contract negotiations will stand as is (amm.com, Aug. 22).

"I don’t think this changes anything," Marchak told AMM. "We’re going to walk through this period together. We have a few things we’re working on from the 2013 operating plan, which we’re almost two-thirds of the year through. We’ll continue to go through that plan and forecast for the balance of the year. We’re also going through our 2014 operating plan session and we’ll be holding hands on that. From an approach standpoint, what we’ve said we’re going to do won’t change."

Starting next week, Marchak and Shivaram will begin calling on customers and assuring the market that dealings with the steel producer will remain "business as usual."

"Unlike other companies I’ve worked for, everyone here genuinely cares," Shivaram told AMM. "Tom has brought that attitude not just to the sales organization but all of Severstal and that’s going to continue. More than just saying it, our customers will see it."


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