Mechel Reports Long-Term Partnership with SAP AG

Mechel, JSC, one of the leading Russian mining and metals companies, announces the signing of a strategic partnership memorandum with SAP AG, the world’s leading supplier of business management software solutions.

As a result of the September 20 meeting between Mechel OAO’s Chief Executive Officer Yevgeny Mikhel and SAP AG’s President for EMEA Franck Cohen, the two sides signed a memorandum for strategic partnership to increase the efficiency of the company’s key processes. The document provides for the gradual implementation of SAP software solutions, based on specialized industry packages in Mechel’s mining, steel and sales divisions.

The two sides also decided to jointly implement the Enterprise Resource Planning (ERP) project in all of Mechel’s sales network business units. ERP will be deployed and fully functional in the sales units within 18 months.
“Implementing ERP in our sales division will enable Mechel Group to increase the efficiency of our key processes. With its help, we will bring together all the main processes in Mechel’s service and trading businesses, speed up closure of our financial accounting, cut expenses due to making many of our processes centralized and automated, and dramatically increase our company’s operational efficiency. We consider this as an investment project and have taken into consideration what positive quality and quantity effects it is expected to have. This initiative is due to provide support to Mechel sales network’s annual growth and consolidate our company’s position on the international markets,” Mechel JSC’s Chief Executive Officer Yevgeny Mikhel noted.

The project of a consolidation system for Mechel JSC based on SAP software was launched in 2007 and included all of Mechel’s divisions. It enabled the group to optimize a number of important financial processes and standardize collection and processing of the holding’s consolidated financial accounting.

About SAP
SAP is the world’s market leader in business management software (SAP defines business management software as solutions for enterprise resource administration and certain applications), offering solutions and services that allow companies of all sizes, working in over 25 industries, to increase the efficiency of their business. The company has over 92,000 clients (including clients who acquired Business Objects) in over 120 countries.