October 07, 2008

Mechel to adopt electronic trading system for purchases

Mechel announced that it has started a project to develop and implement an electronic trading system and that along with eTradeCommunity, it is jointly realizing a project to develop and implement the Mechel procurement electronic trading system to automate the process of competitive purchases by Mechel’s subsidiaries.

Trading operations at Mechel Procurement’s electronic trading site which will be opened on Mechel OAO’s corporate web site will be carried out by 14 of Mechel's subsidiaries.

The release added that the system will use electronic digital signature technology as the instrument for confirming legal force of electronic documents, which will significantly optimize the contracting process and subsequent interactive work with partners.

The Mechel Procurement electronic trade system is designed to automate managing the processes of placing purchase orders and controlling goods, works, and services for Mechel’s subsidiaries. Procurement will be carried out strictly in the form of an auction with the primary selection criteria being price. The use of a tender system or sole provider will be possible in exceptional cases.

Mr Mukhamed Tsikanov senior vice president on economics and management of Mechel OAO said that “The objective that will be achieved as the result of this system implementation is neutralization or lowering of human factor in trading and purchasing operations. This product is another effective tool for controlling expenditures and developing constructive relations both with providers of material resources and users of our products. Using such an electronic trade site will enable Mechel to significantly reduce Mechel’s subsidiaries’ costs of trading and purchasing operations, thus increasing the efficiency of the group’s business.”