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ArcelorMittal Kryvyi Rih sees 67% fall in sales in Ukraine in 2015, exports 87% of metal products - CEO

ArcelorMittal Kryvyi Rih sees 67% fall in sales in Ukraine in 2015, exports 87% of metal products - CEOArcelorMittal Kryvyi Rih (Dnipropetrovsk region) sold 0.5 million tonnes of steel products on the Ukrainian market in 2015, while earlier the enterprise sold 1.5 million tonnes.

"In 2015 construction activity declined a lot. Domestic steel demand has reduced significantly. ArcelorMittal Kryvyi Rih produces around 6 million tonnes of steel per year. At good times we sold at the domestic market about 1.5 million tonnes of steel, but last year indicator reduced to 0.5 million tonnes. Now 87% of production volumes are export ed and only 13% goes to the domestic market. This tendency is determined by significant reduction of construction activity in Ukraine last year and lack of big infrastructure projects," CEO Paramjit Kahlon said in his address at the conference organized by the European Business Association (EBA) held on January 21, 2016.

The Kahlon's speech at the conference was published in the Metallurg corporate newspaper on January 29.

He said that demand for steel products has gone down globally. Chinese producers are dumping in a big way in all the export markets where ArcelorMittal used to sell from Ukraine. Russian ruble devaluation has taken away all our markets in CIS countries, he said.

"We are no longer competitive in Georgia, Azerbaijan, Turkmenistan, and Kirgizstan, where we used to sell in big amounts. So from one side China is sitting in exports markets, and from another side Russia has taken CIS countries and it is coming to Ukraine also, total makes situation very tough for us to survive," the top manager said.

"In 2016 we hope situation will not remain like in 2015. We have given lot of proposals to the government to be a partner in road building, we could offer slag which is used in road building and our reinforced rebars for the government projects. We have experience in similar projects in EU countries and are the partners there. But as of now nothing concrete is taken place and we do not know whether it is going to start in 2016 or not," he said.

He said that the government does not take enough efforts to attract big investors.

"In Ukraine red carpet is missing for us or any investor. Rather many times we have to struggle to do business in this country, many times we have to beg our VAT return, for example. Things are changing, but the change is not coming that fast one can expect. We stayed when other investors left," Kahlon said.

Kahlon noted that ArcelorMittal believes in a long term strategy and despite a very tough situation today, ArcelorMittal is investing $1.2 billion in 2015-2019 in the modernization of the enterprise.

Kahlon expressed his personal belief that Ukraine is a great country and it has everything to be one of the best countries in the world.

"Just the right mindset and the right policy is missing," he said.

Source: Interfax-Ukraine
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