From strength to strength PJSC ‘Zaporizhstal’

FROM STRENGTH TO STRENGTH

General Director of PJSC ‘Zaporizhstal’ Rostyslav Shurma

PJSC ‘Zaporizhstal’ is one of the Ukraine’s leading steel producers and part of its largest mining and metallurgical conglomerate, Metinvest Group. Philip Yorke reports on a company that has gone from strength to strength as a result of its continuous investment in new technology and the manufacture of ‘high-end’ products with higher aluminium content and special steels.

Cold-rolled coil of PJSC ‘Zaporizhstal’

PJSC ‘Zaporizhstal’ introduces innovative technologies. Picture of sintering plant control centre

PJSC ‘Zaporizhstal’ is acknowledged as one of the most successful European iron and steel works despite the advent of low-cost steel flooding the market from China. The company exports much of its production to over 60 countries worldwide and in 2015 produced more than 3.8 million tonnes of pig iron, almost 4 million tonnes of steel and over 3 million tonnes of rolled steel products. The high quality of its products is endorsed by the growing demand from its customers worldwide. During the past five years, the company has invested more than $400 million. This has been achieved through a combination of constant improvement of its manufacturing technology, and its ability to respond quickly to market challenges and the diverse needs of its customers.

Competitive advantage

PJSC ‘Zaporizhstal’ operates in a highly competitive environment, with all those involved in the steel industry maximising their potential and endeavouring to minimise costs. However, the company has been able to maintain its leadership position by raising the level of its customer services, expanding its product range and improving quality throughout its supply chain. During the past 18 months, PJSC ‘Zaporizhstal’ has started the production of 22 new types of rolled products. In addition, it has the competitive advantage in terms of logistics, offering a unique delivery speed and guaranteeing the supply of metal to its partners in both Central and Eastern Europe. This has been enhanced by its growing reliance on river transport, which has reduced costs and delivery time to its customers.

The company also constantly optimises its raw material supply chain. PJSC ‘Zaporizhstal’ is situated in close proximity to the suppliers of coke and fluxes. The lean management programme, which is combined with the on-going process of reducing production costs including those aimed at quality improvement, is implemented in the manufacturing process.

Recent investments at PJSC ‘Zaporizhstal’ were aimed at the modernisation of the sintering plant and the installation of modern gas

purification systems to all its sintering machines, conforming to the highest European standards. Besides this, the company has extensively modernised the blast furnace process using the most advanced technologies. In the near future, PJSC ‘Zaporizhstal’ plans to construct a new oxygen converter shop with continuous strip production department. This latest investment programme represents the largest modernisation project in the history of the Ukrainian mining and metallurgical group.

Broad product portfolio

PJSC ‘Zaporizhstal’ offers both hot- and cold-rolled steel products in coils and in sheets. Hot-rolled products are manufactured in thicknesses between 1.8mm and 8mm, and cold-rolled products are manufactured in product mix between 0.5mm to 3mm. In addition, the wide product mix of the Works is represented by steel strip, black sheet and formed section products.

The main consumers of these products include pipe producing companies, construction companies, transport companies, agricultural machinery and household appliances manufacturers. The company also manufactures tailor-made steel products taking into account the requirements of its partners.

Rostyslav Shurma, the company’s General Director, told Industry Europe, “We work daily to reduce the production costs throughout our entire supply chain and we have achieved significant results in improving our energy efficiency and reducing the consumption of natural gas. For example, in December 2010, our natural gas consumption was more than 54 million cubic metres, whereas in 2016 we have reached a historical low, by reducing monthly consumption of natural gas to 10 million cubic metres. We use pulverised coal injection technology in our blast furnaces and replace natural gas where possible with a mixture of secondary gases (coke and blast furnace gas mixture).”

Expanding markets

As a part of the company’s strategy to develop initiatives to improve the quality of its products and expand its product mix to meet new and niche market sectors, the company is targeting markets in Southern Europe and beyond. The domestic market of PJSC ‘Zaporizhstal’ remains its preferred customer, however sales to the EU increased by over 16 per cent last year. The company also increased its sales to countries in Eastern and Southern Europe. PJSC ‘Zaporizhstal’ is also increasing sales to Turkey, and its share in the Works’ sales structure has increased to 16 per cent. Today the Works is drawing up plans for partnerships in countries and market segments where PJSC ‘Zaporizhstal’ is not represented yet.

Mr Shurma added, “We are working at the world market, which has recently seen a considerable expansion of Chinese products. Chinese manufacturers do not hesitate to dump steel products prices in order to increase their market share. However, now customers pay more attention to quality, and therefore our task is to provide high quality and shortest delivery time of our products. In such circumstances, we must use our numerous competitive advantages.” n For further details of PJSC “Zaporizhstal” innovative products and services, please, visit: www.zaporizhstal.com