The Ukrainian Association incorporates 346 various ironmaking and steelmaking companies and organizations, notably 16 iron and steel works and metallurgical mills, 7 tube works, 10 manufacturers of metal products, 16 coke-making factories, 17 refractory-m
THE UKRAINIAN ASSOCIATION OF FERROUS METALLURGICAL ENTERPRISES
The Ukrainian Association incorporates 346 various ironmaking and steelmaking companies and organizations, notably 16 iron and steel works and metallurgical mills, 7 tube works, 10 manufacturers of metal products, 16 coke-making factories, 17 refractory-making plants, 26 mining enterprises, 3 ferroalloy works, and 35 companies that recycle metal scrap. All these establishments employ over 470,000 people.
At present, these companies make 21.7 million tonnes of iron, 26.8 mln. t of steel, 19.1 mln. t of finished rolled steel, 1.2 mln. t of steel tubes and pipes, 300.7 mln. t of metal products, 717.7 mln. t of refractory materials, 47.1 mln. t of commercial iron ore, 17.3 mln. t of bulk coke, and 1.0 mln. t of ferroalloys. Some 3.4 mln. tonnes of metal scrap were recycled in 1999.
Companies that are members with the Association aggregately account for roughly 30% of the total manufacturing output and contribute some 75% to Ukrainian exports.
However, like the other sectors of the Ukraine’s national economy, this industry is facing harsh financial situation.
The Ukrainian Association of Ferrous Metallurgical Enterprises was set up back in October 1998 upon initiative of Metallurgprom, Ukrtruboprom, Ukrmetiz, Ukrrudprom, Ukrkoks, Ukrogneupor, and Ukrvtormet associations and metallurgical mills. Now, the Association works in contact with the Ukraine’s Ministry of Economy, the State Committee for Industrial Policy, and a number of other ministries and institutions.
Signing of a Cooperation Agreement, taking of joint steps to deal with urgent issues, and rendering of methodical assistance to mining and metalmaking companies to tackle pressing problems have all fostered close manufacturing contacts with the State Committee for Industrial Policy.
The Association aims its main activities at participation in drawing up and lobbying of laws and by-laws pursuant to regulation of the Verkhovna Rada (Supreme Council) "On measures to overcome the crisis in mining and metallurgical complex of Ukraine". Moreover, the Association elaborates and discusses with the involved manufacturing companies various proposals on supplies of fuel, power, and raw materials at prices that would lower metalmaking costs and enhance competitiveness. Another direction deals with generation of steps needed to arrange manufacturing activities of domestic refractory-making companies (because refractory materials are currently imported to Ukraine) and feedstock supplies.
Coordinated policy in working out of joint approaches to pressing problems is the main objective of the Association. Yet another direction is unification of companies’ efforts to settle the issues related to delimitation of markets, pricing policies, exports of goods, antidumping procedures, drafting of depreciation statements, and disposal of excessive capacities. The Association has assigned itself a task of establishing contacts with foreign business partners.
To save current assets of manufacturing companies, the Association has compiled its proposals on amendments to the law of Ukraine "On value added tax" as regards application of a 0% VAT rate on inter-company supplies of goods, works, and services between ore mining and processing enterprises.
Though metallurgical mills have managed to get over the 1996 crisis and have even done somewhat better in terms of output of the major metallurgical products, certain problems still remain in this industry.
At the moment, problems of mutual settlements and supplies of the full necessary quantities of electric power, diesel fuel, iron ore feedstock, metal scrap, refractory materials, etc. are still pending.
Constant restrictions on electric power supplies and lack of diesel fuel that lead to manufacturing losses were the major causes of uneven performance of mining enterprises. Considering exports, the Ukrainian market is short of more than 7 mln. tonnes of iron ore concentrate. Therefore, even on the initial stage of drafting monthly distribution of raw materials, namely during the meetings on balance of production and supplies, it is constantly determined that metallurgical mills will not receive all the required iron ore concentrate from domestic manufacturers. In a number of cases, Ukrainian metallurgists had to turn down business with Ukrainian ore-mining companies owing to establishment of permanent business contacts and entering into contracts and agreements with foreign suppliers of high-quality iron ore.
The metalmakers have lately been alarmed with a considerable increase in railway freightage rates for cargo transportation within Ukraine and to abroad.
At this point of time, Ukrainian refractory-making companies can completely meet metallurgists’ demands for high-quality refractory products that rival similar foreign articles.
Pollution control is the problem of the day for all the mining and concentrating companies at this point of time. That is why the Association thinks it necessary to submit proper proposals on fixing the maximum charge for environment emission and waste accumulation at 0.1% of the amount of gross expenses. It is also required to generate and approve the procedure of how to spend the pollution funds transferred by industrial companies, giving an upper hand to allocation on environmental projects.
Jointly with the Ministry of Economy and the State Committee for Industrial Policy, the Association is getting ready to work out advanced long-term industrial programs for phasing out of excessive capacities and reconstruction of the functioning ones, for raising of investment capital, and for improvement of the industry’s financial health via lobbying price and tax-policy laws with legislative authorities.
Antidumping procedures have led to imposition of 9 to 50% antidumping duties against Ukrainian-made products. All the countries act in an organized and solidary way trying to keep Ukrainian manufacturers away from their markets.
To protect domestic manufacturers, the Association is launching an antidumping inquiry on foreign organizations that do business with this industry and examination of metal and refractory supplies inside Ukraine.
At present, the Association is putting together the materials that will be submitted to the Interagency Commission for subsequent initiation of a special inquiry into imports of Russian, Slovakian, and German magnesia refractory products to Ukraine.
The Association permanently keeps its finger on the pulse of the situation on the metal markets and works on establishment and expansion of trade contacts with foreign companies.
To arrange cooperation and conduct joint investment activities, in April there was organized a business meeting with top executives of Austria’s VOEST-ALPINE STAHL AG with a field trip to the leading Ukrainian metallurgical mills, namely Krivorozhstal, Zaporozhstal, Ilyich Iron and Steel Works of Mariupol, Azovstal, Dzerzhinsky Iron and Steel Works of Dneprovsk, and Petrovsky Iron and Steel Works of Dnepropetrovsk.
The Association is brisking up its efforts to present mining and metalmaking companies at exhibitions, workshops, and conferences and to drive products’ quality to the level of international standards.
The Association targets its efforts at expanding the current markets and searching for new metal markets, at participation in various international tenders, protection of companies’ interests during antidumping procedures, establishment of business contacts involving exports, prices, affiliated supplies of products among industrial enterprises and export supplies, wider application of scientific and technical information.