ArcelorMittal Kriviy Rih, Ukraine-based subsidiary of the world's largest integrated metals and mining company ArcelorMittal, plans in 2010 to increase its steel product output by about 22.6 percent year on year to 5.5 million mt, the plant's CEO Jean Jouet has said in an interview to the Ukrainian business newspaper Ekonomicheskie Izvestiya.
According to the sale and purchase agreement signed with the State Property Fund of Ukraine in 2005, the company undertook to produce at least 6 million mt of steel products per year.
"We complied with this requirement until 2007, but since the crisis began in 2008 we produced less than 6 million mt, and in 2009 less than 5 million mt [4.487 million mt]. In 2010 we hope that steel production and shipment will amount to more than 5.5 million mt. Thus, it will be more than in 2009, but still will not reach the pre-crisis levels," Mr. Jouet said.
According to the CEO, in the medium and long term, steel consumption in the Ukrainian domestic steel market will develop. "This is connected with construction. For us, this means large infrastructure projects; however, until they start, we do not expect a serious increase of domestic shipments," he added.
However, Mr. Jouet noted that the Ukrainian domestic market will never be significant for the company. "As always, we are focused on exports, the share of which amounts to 80 percent of total shipments. Of course, this market is important. Our main product is rebar. In better times Ukraine was purchasing one million mt of this product, which is only 20 percent of our production. Therefore, for us and for other producers, it is important to remain competitive in foreign markets," he stated.
As SteelOrbis previously reported, in 2010 ArcelorMittal Kriviy Rih plans to invest more that UAH 1.7 billion ($213 million) for the implementation of its modernization projects. However, the company may freeze its investment activities if no solution is found in relation to the VAT refund issue in Ukraine. "The money the company is owed [by the state] due to this tax now amounts to UAH 1.7 billion," the CEO said.
According to the preliminary data, in 2009 ArcelorMittal Kriviy Rih registered a loss of UAH 120.026 million (about $15 million).