Russian steelmaker OAO Severstal plans to fast track the building of a new coating shop at its Cherepovets site at a cost of over RUB6 billion.

The new facility will comprise a hot dip galvanising line with a 400kt annual production capacity and a colour coating line producing 200kt per annum, according to Severstal.

The company's CEO Sergey Toropov said that the project will be the company's priority both strategically and economically as it will increase the production of high margin colour-coated products instead of lower margin cold-rolled products.

"The project completion will allow Severstal to increase its share in the Russian colour-coated products market," said Toropov.

A key function of the plant will be to reduce imports of sub-standard products coming into the country in large volumes. It will also enable the Russian steelmaker to develop and promote its own branded products including Steel Silk and Steel Velvet, both of which will be produced at the new site, once opened.

"This project will contribute to leveling out the current misbalance between supply and demand in domestic market also due to adoption of a new product - color coated steel for white goods", Toropov said.