Adding to the mix - Interview with CEO of Metinvest International SA

Monday, 12 October 2009 11:27:16 (GMT+2)

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Andrey Parkhomchuk is the CEO of Metinvest International SA company, the holding company of the largest miner and steel producer in Ukraine. Metinvest International SA is a Switzerland-based steel trading company with regional offices throughout the world. As part of the Metinvest Group, it combines numerous product lines with extensive logistics services, managing orders from the purchase of raw material to delivery at their final destination. The companies within the Group produce 10.8 million mt per year of crude steel, more than 11 million mt of semi finished steel , over five million mt of metallurgical coke and over 40 million mt of iron ore – enough to meet its own demand in steelmaking raw materials and to be the key supplier to major steelmaking companies in Ukraine and Europe.

Andrey Parkhomchuk was appointed CEO of Metinvest International in 2007, bringing more than 10 years of valuable managerial experience at a large metallurgical holding company. Recently he sat down with SteelOrbis to discuss the firm's current activities and its plans for the future.

How do you see the export performance of Metinvest, and the competition in the international markets in this context? What are your most important markets?

We consider Middle East and North Africa markets to be strategic for us due to their proximity to the seas, but we actually trade all over the world. This year, as part of our customer proximity strategy, we strengthened our presence in Lebanon and opened two new branch offices: in United Arab Emirates and in Tunisia. Regarding competition, Metinvest as a Group has strong competitive positions due to its vertical integration and having its own raw materials base, as well as its strong intention to stay in line with the most advanced technologies. Metinvest International is always focused on forming strategic long-term relationships in our target markets.

Your company sells both raw materials and finished steel products, with most steel exports produced at your Makeevka Steel Works mill in Makeevka, Ukraine. How long have been selling the steel products produced at Makeevka to your main strategic export market, the Middle East?

We started to sell Makeevka products (mostly billets) to the Middle East in 2007.

Can you tell us about the production activities at Makeevka?

Makeevka Steel Works is now producing finished long products. Last year the mill closed all its less-efficient production capacities (blooming, open hearth furnace production) and invested over US$130 million into renovation. Makeevka's “150” mill is still operational and produces wire rods. This summer, the launch of “390” mill at Makeevka Steel Works was announced. It has brand-new technological equipment and production capacity of 720 kt of finished products per year. Some of Makeevka's production will be sold locally to the Ukrainian market, while most of its products will be exported.

The last time we checked, Metinvest International had decided to focus more on finished product sales rather than semis. Has your product range changed since then? Are any new product focuses scheduled for 2010?

Yes, we are already working on selling more finished products, such as rebars, wire rods, merchant bars and light sections. The launch of new mill will allow Makeevka Steel Works to produce rebars of 8-40 mm up to A500-A800 strength class. Additionally, next year Makeevka will start producing construction rounds 10-14, square bars 14-30 mm, angles 25-45 mm, hexahedrons 14-48 mm. The products will have high quality and correspond to all the important local and international standards. We look forward to the change of our product mix which will allow us to expand to new segments of the market.

Which grades of wire rod has Makeevka been producing so far?

They have been producing regular quality and high carbon grades. Currently, beside commercial steel grades they are mastering new grades with high added value. By now they have already mastered welding quality wire rods as per the local standards and are working for production in accordance with international standards.

Who will be your major consumers in the Middle East after the change of product mix?

We plan to sell finished products to local construction companies and distributors. First of all, it will be our existing customers in the region. Furthermore, we will continue to develop our customer base and attract new companies.

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