Dneprospetsstal needs more orders on special steel

2012 was rather complicated for the only Ukrainian producer of special steel and alloys Dneprospetsstal (Zaporozhye). The point was not even in the fulfillment of production plan but the complications due to the reduction of the orders portfolio and the growth of prices of the resources, including energy. The state was in no hurry to pay its debts as well.

The press service of the enterprise reports, in 2012 Dneprospetsstal smelted almost 330 thousand tons of steel (by 22.5% less than in 2011) and produced about 220 thousand tons of rolled metal – by 21.8% less than in 2011.

The reduction is obvious as well as its reasons. First of all, the matter is in reduction of consumption of special steel in machine-building, shipbuilding, aerospace, car-building and oil and gas industries not only in Ukraine but in about 60 countries – the consumers of Zaporozhye metals. Besides, there is much competition with European, Chinese, Russian and other producers.

The uninterrupted change of ownership and management affects the enterprise’s activities. Ukrainian oligarchs used the plant for their political purposes starting from the first pre-election battles. As reported by the staff of the plant, Russian business connected with VS Energy of Alexander Babakov is one of the shareholders now. The second large and well-known shareholder is the owner of Privat Group, Igor Kolomoisky. The personnel lays  claims against both of them.

In August it became known that the owners planned 25% reduction of staff and the trade unions started defending the rights of metallurgists actively. They knew that the leaders of Zhitomiroblenergo controlled by Babakov cut off Gorvodokanal and left more than 20 thousand citizens without water and electricity in the analogous situation. Only Kiev managed to settle down the issue. Later Igor Kolomoisky proved he was not going to be too soft with the staff and stopped Zaporozhye ferroalloy plant due to high power energy tariffs.

Nevertheless, the plant managed to avoid reduction of 2,000 positions due to arrangement of smaller amount. 500 out of 700 positions were cut on various reasons, including retirement. The rest 200 were provided with the set payments and filing at the employment bureau. Thus, the enterprise started 2013 with reduced membership. However, the goals remained the same – prevention of further worsening of financial condition and achievement of the results at least at the level of the previous year.

At the same time, the problem of Dneprospetsstal lies not only in reduction of the orders portfolio. Though the enterprise is energy-intensive, the share of power energy in the prime cost of metal doesn’t exceed 8-9%. And the non repayment of VAT by the state was a really mean move. The plant can’t obtain millions of dollars due to idleness of the tax service. Court trials help to obtain some part, but this long mechanism deprives Dneprospetsstal of floating capital.

In spite of this nervous situation, the plant took care about its future and used the times of its incomplete load for the repair and reconstruction as well as new building. In the first quarter of 2012 Dneprospetsstal put into operation a new ferromolybdenum workshop with modern equipment and gas purification at the rate of 150 thousand cubic metres per hour. The production capacity of the workshop makes up 3.5 thousand tons of FeMo per year. The plant needs about 1,000. The world need makes up 150 thousand tons.

The new workshop helps to obtain the product used in technological process of production of special steel and alloys with a lower prime cost. In its turn, it makes it possible to reduce the costs, which is really important in current conditions, and send some products to outside consumers. The total value of the project made up more than $3 million. Putting into operation of the new production sector also helped to provide about 80 new working positions.

Besides, the plant improved the ecological situation not only due to reduction of production volume but due to its gas purification plants.

Local authorities claimed that the enterprise needed to reduce emissions in its third steel-smelting department (65% of the products). The purification equipment made in 1970-s didn’t meet the modern requirements. As a result, in 2010 the contract with Turkish CVS Makina for delivery, mounting and launch of gas-purifying plants (800 thousand cubic metres per hour) for filtering of the emissions from arc furnaces in the department was signed. The building amounted to $10 million.

At the same time, Dneprospetsstal signed a contract with Siemens VAI Metals Technologies GmbH, Germany, for delivery of the new steel-smelting arc furnace (DSP-60) for €10 million. The new furnace is intended for smelting of special steel grades by means of arc remelting. The heat size makes up 60 tons, total production – up to 540 thousand tons per year, the capacity of the furnace transformer – 60 MVA.

These important objects were put into operation last year. Now they have to reach their designated capacity and cover the investments.

Source: http://www.rusmet.ru/news.php?act=show_news_item&id=61482&sign=i

Translated by Alexandra Utyasheva