As SteelOrbis, we had a conversation with KSP Steel, first seamless pipe producer in Kazakhstan for oil and gas industry, and very young but dynamically developing company. KSP Steel is a fully integrated steel mill, which covers a full cycle of production starting from steel smelting and ending with the output of finished steel products. KSP Steel sees its main goals as to satisfy Kazakhstan's domestic market with high quality materials and also to enter the international markets with products which comply with international quality standards. We thank KSP Steel General Manager E. Kreimer for answering our questions.
-Could you tell us briefly about KSP Steel's mission?
KSP Steel is the first Kazakhstan-based plant for the production of seamless steel pipes for the oil industry. We also produce rebar, wire and ferroalloys.
The first goal of KSP Steel is to satisfy domestic needs for steel in the Kazakhstan market with high quality steel products - i.e. supplying rebar to the construction market and pipes for the oil industry - and also to replace expensive import products with less expensive merchandise produced domestically. This is the social mission of KSP Steel. In addition, KSP has created more than 4,000 jobs for engineering and technical specialists. KSP is also planning to enter the international markets with products which comply with international quality standards.
-What is your company's product mix and production capacity?
KSP Steel is a fully integrated steel mill, which covers a full cycle of production starting from steel smelting and ending with the output of finished steel products. The mill uses the most up-to-date technologies in its production processes.
Our annual production capacities include:
- 420,000 mt of rebar with 8-32 mm diameter and lengths of 6-12 m, and wire with 5.5-12 mm diameter
- 350,000 mt of seamless steel pipes, OCTG and line pipes, OD 60.3-349.7 mm, WT 4-40 mm.
All products are in compliance with the following standards: GOST 632-80,633-80, 8732-78, API 5CT, API 5L, API 5B, and European standards DIN and ENI.
-Could you share with us your opinion regarding the current situation of strong demand in the Kazakh domestic market? How long do you expect these high levels of demand to continue?
The Republic of Kazakhstan is one of the most dynamic developing countries, and is also rich in natural resources. In developed countries three main sectors serve as the main indicators of the level of national economic development; housing, construction and automotive. The construction industry in Kazakhstan, in the current period, is the most rapidly developing sector. Due to high demand, the country's needs for construction materials, including rebar, will not decrease as long as the strong development trend in the country continues.
-Currently, which of the world's regions are the most interesting for you in terms of export deliveries?
For pipe exports, we are interested in Russia, the Middle East, Turkmenistan, Azerbaijan, Uzbekistan, Iran and the USA.
-What are the shares of billets, rebar and seamless pipes in your overall export volume?
Currently, the finished steel rolling capacity of KSP Steel fully consumes the mill's own billet output in the production of rebar and pipes. As for our rebar production, 100 percent of all our output is supplied to the local Kazakh market. So we are exporting only pipes at the moment.
-Recently the situation in the CIS has worsened and some enterprises are even now experiencing a scarcity of scrap. What is the current situation with scrap supplies at KSP Steel? Do you have or plan to have your own scrap base?
Kazakhstan has enough resources to be self-sufficient in scrap. KSP Steel has also its own scrap processing faculties, through which we are able to satisfy our scrap needs by 100 percent two months in advance.
-Do you plan to implement any investment programs directed at increasing current production capacity? Could you speak briefly about these programs if any?
At the moment, KSP Steel is concluding the implementation of an investment program for the construction of a seamless pipe producing plant, and continues to master production capacities for their more effective use. We don't have a new investment program at the moment, but we have new ideas which are directed at the expansion of our production capacity and which will be implemented in the future.
-The global trend of consolidation in the steel industry is a very widely discussed topic at the present time. Could you share with us your opinion on this issue? Do you consider the possibility of a merger with any company?
No, we don't discuss the question of consolidation. KSP Steel does not plan acquisitions or mergers with other companies.
-Recently, the government of Kazakhstan has been considering the imposition of an export duty on several metallurgical products. Could you share with us your position on this issue? How do you think such a duty will affect exports of your products?
It is natural that the government should implement some leveling measures, which will play a stabilization role in the not-very-stable current market situation. The export duty on products of metallurgical raw materials is the government annuity No. 2, which is imposed on exports of natural resources of all countries. The imposition of the duty will have no impact on the export of our products.
-How do you see the future development of your company?
Currently, the development of the company is concerning with perfecting use of equipment, increasing its production to designed capacity and achieving the maximum efficiency in capacity use.