Global economic crises are not a new phenomenon, and metallurgists feel these tendencies quite sharply. Another cycle of the global crisis in metallurgy began at the end of 2019, and now the degree of heat has increased due to the pandemic and the response to it – the lockdown of world economies.
How the global crisis affects the work of the Zaporizhstal plant, does the plant have prospects for the future – in an interview with the General Director of Zaporizhstal Alexander Mironenko.
Alexander Grigorievich, please briefly describe the general trends in which Zaporizhstal operates now.
– The crisis and pandemic at one point drove the whole world into a situation where the usual logistic ties were cut off, markets closed, investment projects were frozen as much as possible. After the first wave of the pandemic, commodity markets began to recover faster, which led to higher prices for iron ore raw materials. At the same time, the price for finished metal products on the market fell by almost a third, and as a result, we received an increase in the cost of our high-margin product – rolled products, as a result, significant losses.
We lost a lot, but we continued to pay salaries steadily, provide employment for people, keep social guarantees as much as possible and pay taxes.
Alexander Grigorievich, in your opinion, Ukraine is ready to follow the path of de-industrialization, abandoning focus on the real sector of the economy ?
– When building a strategy for the development of Ukraine’s economy for the future, it is very important to rely on the real sector of the economy, which produces and sells high-margin products, filling budgets, providing employment for people in specialized and related industries. In Ukraine, such industrial platforms are already operating: the chemical industry, metallurgy, the agricultural sector, and mechanical engineering. We have industrial potential, infrastructure for it, hardworking and talented people.
The IT sector, like the service sector or the tourism sector, must develop and exist, but it is necessary to objectively assess the situation, their development is possible only with the normal functioning of the real production sector.
Do you feel the increasing competition in the market? What are the priority markets in this regard?
– Competition has been felt quite sharply and for a long time. There are several reasons, but the key one is the recession of the world economy. The world community often speaks of fair competition, but specifically Zaporizhstal, like many other manufacturers, has experienced the hardships and deprivations of the protective measures introduced by Europe. The quotas introduced by the EU pushed us out of the European market, where we had been working for years and occupied up to 35% of the market. Now the share of Ukrainian metal products on the European market cannot exceed the 20% mark.
Do you think there is a solution to this problem?
– Certainly. The state needs to increase the level of consumption of metal products in the domestic market and protect its domestic producers in foreign markets.
All advanced countries follow this path. What does this mean by the example of the Ukrainian mining and metallurgical complex? Everything is simple – it is necessary to develop metal-intensive industries: build roads, bridges, renew railway infrastructure, social infrastructure, build locomotives and wagons, and heavy equipment. Simply put, create something new and modernize what exists.
By not stimulating metal consumption inside the country, we are seriously losing – we become less competitive and lose our investment attractiveness.
The second step is to protect the national producer. The state itself does not earn money and does not fill the budgets, this is done by the national business. It is at the expense of our taxes that they build hospitals, roads, kindergartens, update public transport, pay salaries to public sector employees.
How do you rate the challenging 2020? Have we managed to cope with the crisis that has been complicated by the coronavirus pandemic?
In 2020, our team showed flexibility and variability, a creative approach to production, which is critical in such conditions. Experiencing the pressure of quarantine restrictions, we staked on the development of our own customer focus – and time has confirmed the correctness of this decision. We worked a lot on quality and cost. The high order execution discipline deserves special attention, which gave us a competitive advantage and showed our clients our interest in a reliable mutually beneficial partnership.
We intend to continue developing, increasing efficiency, investing in modernization and retaining our workforce despite all the difficulties.
I would also like to touch upon the topic of 2020 in the aspect of political PR, when the pressure on the plant in the field of ecology has sharply increased. The approaching date of local elections brought with it an increased activity of political parties – accusations fell on us about the lack of modernization of equipment, the shutdown of gas purifications and