The third national specialized exhibition Kievmash took place October 23-26.
This year, a record-breaking number of companies attended the trade show (45 Ukrainian enterprises and 30 producers). In the previous years, according to organizers of the exh

Металлопотребление

MACHINE-BUILDERS TO BE THE MAIN METAL CONSUMERS

The third national specialized exhibition Kievmash took
place October 23-26.

This year, a record-breaking number of companies
attended the trade show (45 Ukrainian enterprises and 30 producers). In the previous
years, according to organizers of the exhibition there were much fewer participants.

A representative of the editorial board interviewed
exponents. The main topic discussed was development of the domestic market for metal
consumption. It turned out that the product range offered by Ukrainian metal works fully
satisfies domestic machine-building enterprises. A number of points were especially marked
by the participants. First of all, they spoke about tax reduction, which everyone would
benefit from. Secondly, it was pointed out that if prices for Ukrainian metal products
were lower than or at least level with the world prices, Ukrainian metal companies would
have much more advantages. In the present day situation, for example, it is cheaper to
import German stainless steel sheets and plates than to purchase the Ukrainian product.
Thirdly, exporters are worries with the complexity of the effective customs clearance
procedure. Fourthly, Ukrainian machine-building and tool-constructing companies do not
have dealer structures abroad. They can only find new customers by participating in trade
shows.

Many exhibitors pointed out that the organization of such
exhibitions has many drawbacks. Two similar exhibitions used to take place simultaneously
in Dnepropetrovsk and Kiev. Poor advertising campaign resulted in such a small number of
participants.

It is possible to state that the domestic metal market has
started reviving although Russia still accounts for the largest share of orders. Following
are extracts from interviews with some of the “Kievmash-2001” participants.

LLC Kharkov Multihead Machine Factory

Alexandr ZOZULYA, deputy director on sales

- Mr. Zozulya, please say a few words about your company.

- The factory was founded in 1930. For over 70 years, the
company has been performing special-purpose orders for machinery. The first unit of
machinery was manufactured for the needs of Gorkiy Car Factory. Since then, machines for
vehicle construction have accounted for 60% in the enterprise’s production structure.

- Who specifically are the consumers of your products?

- These are the companies that have just launched
large-scale production or have had it for a while. Unfortunately, we have not been able to
start fruitful cooperation with Ukrainian car manufacturers such as Auto-ZAZ, KrAZ, or
Lutsk Car Factory. At the same time, we equip such Russian enterprises as Gorkiy Car
Factory, AvtoVAZ, and Kamskiy Truck Factory.

- Who is the main supplier of raw materials to your
factory?

- We have had Kramatorsk Metallurgical Mill and
Zaporozhstal as our suppliers of beds and frames and stainless steel respectively.
Unfortunately, we had to refuse to purchase from Zaporozhstal owing to their high prices
and have to buy stainless steel from Krupp. The latter’s products are of higher quality
and cheaper.

- What equipment is now enjoying the highest demand?

- We manufacture special-purpose lathes and other tool
machines tuned for specific detail of the customer. This machinery is assembled of unified
components. I want to point out that it has become a tendency for our customers to order
highly sophisticated machines recently. During Soviet times, we mainly manufactured simple
lathes for drilling, whereas now buyers want to have equipment that would allow them to
make the most complex details. We have an in-house design office, which has enabled us to
resolve the most complicated tasks.

- How has the output of your factory changed in comparison
with “good” times?

- 1977 was the year of the highest output, when the factory
manufactured around 1,000 machines, whereas we have made only 48 units this year. This is
explained by the present-day poor demand for our products on the market and low solvency
of most of our potential customers.

- What is the ratio between your company’s domestic sales
and exports?

- Half by half. Russia is the main target country for our
exported products, whereas non-CIS countries account for only a small portion of our
orders (we have made a few machines for Korean factories).

- What must be done today in order for Ukrainian
machine-building to operate efficiently and profitably?

- First of all, we would like the government to create such
conditions on the Ukrainian market that Ukrainian machine-building enterprises were our
main customers. Russia has already kept up in machine tool construction: they have
launched their own production of a wide range of machines, and we are bound to lose this
market in the near future.

JSC KISLORODMASH

Olga RUNETS, sales and marketing department

- Ms. Runets, please, say a few words about your enterprise
and its products.

Kislorodmash Plant was founded in Odessa in 1948. Initially
it was designed for manufacturing of portable and stationary machines for metalworking. In
1955, however, the plant had to switch to production of air-separating units for chemical
industry. The enterprise specializes in manufacturing of cryogenic machinery for
obtaining, storage, and transportation of air-separation products.

The enterprise’s products are ISO 9001-95 certified, as
well as are acknowledged as corresponding to the applicable Russian state standards.

Scientific research institute “Kriogenmash” was
established as the company’s daughter enterprise and is operating today to design the
products ordered by customers and exercise control over product quality.

- Who are your primary consumers?

- These are, first of all, machine-building, metallurgical,
chemical and oil enterprises, as well as aviation, energy-generating, agricultural, and
food-producing companies.

- What metallurgical companies are you mainly cooperating
with?

- Our two main partners are Artemovsk Non-Ferrous Metal
Working Plant and Azovstal Integrated Mill, although we work with nearly all Ukrainian
metallurgical companies.

- Metal of what origin does your company use?

- We mainly work with Ukrainian metal buying rolled metal
articles and stainless steel in Donetsk and Dnepropetrovsk and rolled copper, brass, and
tubes from Artemovsk Non-Ferrous Metal Plant. Rolled non-ferrous articles make up the only
exception: we have to buy this category of raw materials from Russian producers. The
company tries to avoid intermediary structures by buying directly from producers, which
secures high quality of our products.

- What are the main difficulties connected with exports of
your products?

- First of all, red tape during customs clearance of the
goods. Many Russian companies would like to work with us but they are afraid of how long
customs clearance might take. Introduction of VAT levied on imports of Ukrainian products
by Russia has been yet another negative factor this year.

- How can a company benefit from participation in
exhibitions and which of them do you think most advantageous for your company?

- Exhibitions and trade shows provide an exponent with an
opportunity to launch an advertising campaign, present its equipment to a wide range of
experts, consult and be consulted on many important matters, and monitor market
tendencies. As concerns Kislorodmash, we have already participated in 10 exhibitions this
year and have scheduled to attend at least two more shows (namely, “Oil and Gas-2001”
in Kiev and “Mashprom-2001” in Dnepropetrovsk).

KIEV MACHINE-TOOL CONCERN JSC “VERKON”

Vladimir DMITRIK, sales and marketing department

- Mr. Dmitrik, how long has your enterprise been on the
market?

- Since 1934. Our factory was the only Soviet manufacturer
of unattended machine tools.

- What products does your company make at present?

- Today we manufacture various lathes and other machinery
for both large-scale and individual production and has the facilities for any repair and
recovery services.

- What metallurgical mills does your enterprise cooperate
with, i.e. where do you get your metal from?

- We have mutually beneficial cooperation with
metallurgists; they give us the metal we need, whereas we supply them with needed
equipment. We purchase only Ukrainian metal, mainly from Krivoy Rog and Dnepropetrovsk
(Krovorozhstal and Dneprospetsstal). The range of products offered by Ukrainian metal
makers fully satisfies our needs.

- Are there any Ukrainian end consumers of your products?

- Yes, there are many, but not many of them have enough
money. This is why first of all, we have to cover those who can pay.