PJSC "Azovstal" (Ukraine) AZOVSTAL IRON & STEEL WORKS Company s business profile Sample PDF Moscow October, 2014
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CONTENTS 1. General information... 6 2. The enterprise structure, capacities, range of products... 7 3. Production output and tendencies of development... 11 4. Sources and suppliers of resources... 19 5. Sales... 27 Domestic market... 28 Exports... 33 6. Competitiveness... 45 7. Personnel... 49 8. Environmental Activities... 51 9. Corporatization... 56 10. Financial Standing... 58 11. Realised Projects, a Development Program... 61 Appendix 1: The main productive facilities and their characteristics... 73 Appendix 2: Mix of products and their characteristics... 75 Appendix 3: Azovstal s Rolled Steel Exports in 2001-2013 by kind (customs codes) and country, thousand tons... 78 Appendix 4: Contact information... 94 INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 3
List of Tables Table 1: Azovstal production by kinds in 1997-2013, by year, thousand tons Table 2: Imports of coking coal by Azovstal in 2001-2013, thousand tons Table 3: Supplies of iron ore resources to Azovstal in 2001-2013, thousand tons Table 4: Russian supplies of iron ore resources to Azovstal in 2001-2013, thousand tons Table 5: Imports of ferroalloys by JSC Azovstal in 2001-2013, tons Table 6: The structure of sales of Azovstal in 2010-2013, thousand tons Table 7: Share of exports in the total production of rolled steel at Azovstal in 1997-2013* Table 8: Commodity pattern of Azovstal Works exports in 1997-2013, % Table 9: Average annual export prices on Azovstal steel in 2001-2013, $/ton Table 10: Average annual personnel JSC Azovstal in 2001-2013 Table 11: Distribution of staff by the level of education Table 12: Financial results of Azovstal in 2001-2013, million UAH Table 13: Major investment plans of MK "Azovstal" for 2014 List of Figures Figure 1: Structure of sales of "Azovstal" products in the domestic market by types of consumers, % Figure 2: Domestic Prices for Rolled Steel of Azovstal in 2010-2014 including VAT, $/ton Figure 3: Geographic pattern of Azovstal s exports by regions in 2007-2013, % Figure 4: Geographic pattern of Azovstal s exports by regions in 2009, % Figure 5: Geographic pattern of Azovstal s exports by regions in 2010, % Figure 6: Geographic pattern of Azovstal s exports by countries in 2011, % Figure 7: Geographic pattern of Azovstal s exports by countries in 2012, % Figure 8: Geographic pattern of Azovstal s exports by countries in 2013, % INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 4
ANNOTATION PJSC "Azovstal" (company s business profile) This report (business portrait) is a description of one of the largest Ukrainian steel companies - JSC "Azovstal Iron & Steel Works". The report consists of 11 sections, contains 94 pages and includes 13 tables, 8 figures and 4 appendices. The business portrait is based on desk research. As information sources, data Ukrstat (the State Statistics Committee of Ukraine), the State Customs Service of Ukraine, official statistics of rail transport, annual and quarterly reports of issuers of securities, as well as Internet sites of companies-producers were employed. The first section is a general information about the company. The second section providesdata about the structure and capacities of the enterprise, its product mix. The third section gives the volume of output of products for various processes and their dynamics, and discusses the development trends. The fourth section is devoted to sources of raw materials and their suppliers, both domestic and foreign. Marketing of products is discussed in the fifth section, supplies on the domestic market and for export are considered separately. The sixth section we consider the competence of the company, determining its competitiveness. Data on productivity, staffing, compensation can be found in the seventh section. The eighth section is devoted to one of the most important areas of functioning of industrial companies at the present stage - environmental activities. The privatization of the company, its course, the shareholders and their impact on the company are described in the ninth section. Data on the financial condition of the company during the years 2001-2013 are shown in the tenth section. The eleventh and final section is devoted to the development program of the enterprise and the implementation of planned projects. Appendices provide information about the main technological equipment and its characteristics, the enlarged product portfolio, the geographical structure of exports of rolled products by kinds in 2001-2013, as well as the company address book. INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 5
1. General information Azovstal Integrated Iron-and-Steel Works is located in the city of Mariupol, Donetsk oblast, at the Azov Sea coast. Azovstal was commissioned in mid-1933, when the blast furnace No.1 produced cast iron. In 1933 also a first open-hearth furnace was commissioned. MC "Azovstal" is a company with a complete metallurgical cycle, which also has its own port facilities. The main products of Azovstal are rails, heavy sections and plates. Azovstal is a Ukrainian monopolist in production of plates from low-alloyed and special steels, steels for bridge and ship building, high-pressure boilers, thick strip for pipes, rails and rail products. In terms of production volumes the enterprise is one of the leaders in its industry in Ukraine. At present time, Azovstal is a subsidiary of the Metinvest Holding. Metinvest includes enterprises, providing a complete cycle of ferrous metals production, from mining in processing resources (including coal and coke) up to high-value-added products (rolled steel, pipes, etc.). The Holding also has developed domestic sales and service network: Metinvest-Ukraine and Metinvest- SMTs. INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 6
2. The enterprise structure, capacities, range of products Production capacities of the enterprise allow to produce ХХ mln tons of pig iron per year, ХХ mln tons of steel and ХХ mln tons of finished rolled products per year. The enterprise structure includes: Coke production The structure of the plant at the beginning of 2013 included 3 coke batteries, with a total design capacity of ХХ thousand tons of coke of the 6% humidity (productivity at the beginning of 2011 - ХХ thousand tons/year). Needs of "Azovstal" in coke the plant provides for about 65%. In June 2012 MC "Azovstal" decommissioned the coke battery number 5, and at the end of October - coke batteries number 6 and number 7 in connection with a reduction in demand for coke. Since the beginning of 2013 the plant operates one coke battery. It is planned in the next three years to decommission two older coke batteries. The structure of a coke production includes a coal-preparation shop, a coking shop, a capture and desulfurization shop and other subdivisions. Sintering plant The sintering plant included two sintering machines with a total caking area of 135 m 2. The sintering plant provides more than 35% of the demand of the blast furnace plant in iron ore. In December 2012 the Metinvest Group has decided to mothball the sintering plant of "Azovstal" and move the sinter production to Mariupol Ilyich, with a part of the dismantled sintering equipment transferred to Mariupol Ilyich. The resumption of work of the sinter plant is technically impossible. Blast furnace shop and a shop of processing metallurgical slug The blast furnace production as in the mid-2014 included 4 blast furnaces with a total capacity of ХХ million tons per year, including the blast furnace number 2 (BF-2) 1,719 m 3, BF-3 1,800 m 3, BF-4 2,002 m 3 (stopped for reconstruction with the capacity increase from 1.1 to 1.5 million tons of pig iron per year), BF-5 1,513 m 3, BF-6 1,719 m 3. In September 2008, BF-1 with the useful volume of 1,233 m 3 was removed from service. In the pig iron production the enterprise practices the secondary treatment of iron with various reagents. The capacity utilization in 2011 was 86.5%, and in 2012 it decreased to 77.4%, and in 2013 to ХХ %. Because of the shortage of coke in the middle of 2014 only two of four blast furnaces were operated in turns. INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 7
Until 2007, the Metallurgical shop had a section of slag processing, which was later transformed to the shop of processing of metallurgical slag. The new plant produced crushed stone and granular slag. When crushing slags, the metal is extracted and then is used as an additive to the BF charge and metal scrap. Steelmaking production is represented by an oxygen converter shop (built in 1978). A list of available steelmaking facilities includes: 2 basic oxygen furnaces (BOFs), 6 furnaces of electroslag remelting, 3 installations for steel refining in ladle, 4 slabbing two-strand concasters, 2 ladle furnaces, a vacuum-degassing facility VP-350, a furnace for smelting synthetic slag. An average annual production capacity in 2011 was ХХ million tons, and the utilization - 95.8%, while the converter steel production method was utilized by 99.86%, and the open-hearth method - by ХХ %. The open-hearth furnace shop with a capacity of ХХ million tons of steel was closed in May 2011. Converter shop (a capacity of ХХ million tons) It incorporates two top blowing converters of the capacity ХХ tons each, a continuous casting shop with four curve-type two-strand concasters and three steel refining units. The complex of concaster-6 (launched in 2008) includes 2 twinposition ladle-furnaces of the firm VAI and a twin-position vacuum degasser of the firm VAI. The plant average annual capacity in 2009 was 4.48 million tons, in 2010 4.785 million tons, in 2011 ХХ million tons, and in 2012-2013 ХХ million tons. All converter steel is continuously cast. The plant produces slabs with crosssections of 220-250x1250-2000 mm and 300x1550-1850 mm from more than 600 grades of carbon, low-alloyed and alloyed steel under national and international standards. The capacity utilization of the converter shop in 2011 was 99.86%, the capacity utilization in the continuous casting - 96.8%. In 2012 the converter shop used only 86.5% of capacity, and in 2013 ХХ %. In the fall of 2014 converters worked in turns. The closing of the open-hearth furnace shop and the need to increase the steel production necessitated the further development of the converter production, including through the construction of the third converter and the renovation of existing units. The casting shop (the capacity of ХХ thousand tons) was closed in November 2013. Rolling production (the capacity is around ХХ million tons per year). The list of a core rolling equipment is as follows: INFOMINE Research Group www.infomine.ru; e-mail: info@infomine.ru; Phone +7 (495) 988-1123 8