The hardware sector manufactures a wide range of products that are in great demand within Ukraine and abroad. In 1998 more than 28% of the sector’s output was directly exported. Approximately two thirds of this amount were dispatched to non-CIS countries.
UKRMETIZ ASSOCIATION OF UKRAINIAN HARDWARE COMPANIES
The hardware sector manufactures a wide range of products that are in great demand within Ukraine and abroad. In 1998 more than 28% of the sector’s output was directly exported. Approximately two thirds of this amount were dispatched to non-CIS countries. In fact, the hardware sector has a much greater export potential.
At this point of time, hardware producers mainly get into tolling transactions with raw materials (42.2% of the total feedstock in 1998) and take advantage of barter (51.3% of the total sales in 1998). After supplying raw materials to producers, most intermediary companies purchase ready-made metal products and sell them to foreign consumers. This indicates that Ukrainian hardware products have a potential to market abroad.
Krivoy Rog and Makeyevka Iron & Steel Works supply billets to manufacture hardware in Ukraine. Statistics on rolled metal production and hardware output in Ukraine show that in the past few years only 50-65% of the hardware sector’s demands for wire rod were satisfied with direct supplies. Foreign producers from Moldova, Russia and Belarus, as well as intermediary business entities, supply the remaining amount of billets priced 1.5-2 times lower than billets purchased from local metallurgical works. On the whole, the potential of Ukraine’s metallurgical works to manufacture billets is underused by some 70%, as the remaining raw is forwarded abroad.
As of 1999, Ukrainian hardware manufacturers were as follows: OJSC Dneprometiz (former Dnepropetrovsk Hardware Manufacturing Association) with the installed capacity for 450,000 tonnes per year; OJSC Zaporozhye Steel-Rolling Plant (former Zaporozhye Hardware Plant) with approximately 300,000 tpy; Druzhkovka Hardware Plant with some 190,000 tpy; CJSC Stalmetiz (former F.E. Dzerzhinsky Steel-Rolling Plant of Odessa) together with CJSC Zvarmet with some 130,000 tpy; OJSC Stalkanat (former Odessa Steel Wire and Cable Plant) with roughly 80,000 tpy; Kiev-based Pismenny Hardware Plant with some 20,000 tpy; Chernovtsy Hardware Plant with about 6,000 tpy; OJSC Silur (former Khartsyzsk Steel Wire and Cable Plant) together with LLC Ukrmetallocord with 320,000 tpy; and Kharkov Hardware Plant with some 3,000 tpy.
Being members with Dnepropetrovsk-based Ukrmetiz Assn, these manufacturers produce 98% of the total Ukrainian-made average-quality wire, 100% of medium- and high-carbon wire, 100% of steel wire cables, 82% of bracing and fasteners, 88% of steel netting, and 42% of welding materials (electrodes, welding, and flux-cored wire).
In other industries, selected manufacturers have workshops that produce consumer hardware products as well. For example, Yuzhny Machine-Building Plant produces special bracing for the needs of mechanical engineering; Dnepropetrovsk Research and Development Plant for Welding Materials produces electrodes and flux-cored welding wire, etc.
In the past couples of years, productive capacities of the hardware sector were utilized by only some 19-23%. The main production setback occurred in 1993-1994. It was in 1996-1998 when the sector experienced a certain stabilization of manufacturing outputs, notably as regards galvanized wire, cold-drawn died reinforcing wire, medium- and high-carbon steel wire, steel wire cable, steel netting, mechanical and rail bracing.
Analysis of the current situation points out the following internal and external factors for recession in production and absence of clear production recovery tendency.
The external factors include loss of regular clients, mainly in Russia, and poor competitiveness of Ukrainian products on non-CIS markets.
The internal factors include low quality of feedstock metal, its permanent shortage and high cost, all of which worsen consumer qualities of the end products; depression in allied sectors that are traditional consumers of metal products, e.g. construction, mechanical engineering, etc.
Currently, a number of manufacturers produce unique types of commodities. For example, OJSC Silur makes steel cords and multi-purpose wire cables, notably cables for aircraft construction; Kiev Hardware Plant manufactures stainless steel netting, including the micrometer-size ones; Druzhkovka Hardware Plant produces rail bracing; OJSC Zaporozhye Steel-Rolling Plant and OJSC Silur manufacture aluminum and steel-aluminum wires, etc.
To substitute imported products, it is planned to commence production of wire made of bearing, corrosion-resistant, and refractory steel (16,000 tonnes of such wire are to be made by 2010); automobile bracing (up to 200 tonnes per year); merchant bracing and fasteners for household appliances, instrument-making, furniture, etc. (up to 3,000 tpy); high-strength bracing; flatted tape; section wire, 4-6 mm in diameter, for manufacturing of closed-construction large-diameter steel cables; high-strength galvanized large-diameter cables for coal-mining; slow-whirling shaft steel cables (up to 1,000 tpy); and aluminum wire rod for steel-aluminum wire manufacturing (up to 6,000 tpy).
OJSC Dneprometiz has put into operation the Koch galvanizing line for making of wires, 1-5 mm in diameter, reconstructed and installed 5 new Sket draw-benches, reconstructed the barbwire workshop, and rearranged the company’s manufacturing architecture (merged workshops into production units).
OJSC Silur is currently assembling and has already partially commissioned lines and units for heat treatment of cable wire.
Generally, to synchronize output and sales, it is scheduled to reduce productive capacities to 870,000 tonnes by 2005 and to 710,000 tonnes by 2010. The ways of capacity reduction will be determined in each particular case and may include changes in product mix, adjustment of equipment operating mode, equipment disassembling, disposal, liquidation, etc.
The most promising technical and technological directions of hardware production development are technical re-equipment of the industry with high-output economical machinery with advanced automation, mechanization, and product quality control; design and development of combined production processes (rolling and drawing, coating and drawing, drawing and galvanizing, drawing and bracing production, etc.); introduction of electrolytic coating lines, including coating of small-size items; development and financing of scientific research aimed at solving long-term technological tasks, including reduction in power consumption, improvement of tool durability, and enhancement of product quality; standardization of local products based on the accumulated international experience; product certification; production of economical types of commodities; nourishment of conditions promoting technical inventions.
Environmental protection measures embrace switching to environment-safe and low-waste technologies, notably acid-free or hydrochloric-acid removal of scale; dry galvanizing; utilization of non-oxidized wire rod; efficient waste disposal, in particular sludge recycling and reclamation of waste slurry ponds; commencement of copper sulfate production; reconstruction of dust-cleaning and gas-cleanup systems to minimize emission of hazardous wastes and substances.
Social and economic measures comprise targeted investment in technical re-equipment and replenishment of current assets; expansion of product mix to meet demands of specific local and foreign consumers.