Owing to its development as a part of the Soviet economy, Ukrainian industry (including aluminum-making) faced many problems after Ukraine had become independent. Most of the inter-republican economic ties were broken. Practically none of the Ukrainian in
TOGETHER UNDER ONE BANNER
TOGETHER UNDER ONE BANNER
UNION OF ALUMINUM PRODUCERS AND CONSUMERS GIVES BIRTH TO
ASSOCIATION
Owing to its development as a part of the Soviet
economy, Ukrainian industry (including aluminum-making) faced many problems after Ukraine
had become independent. Most of the inter-republican economic ties were broken.
Practically none of the Ukrainian industries had a full production cycle at that time the
aluminum industry not being an exception. The country produced only alumina (plants in
Zaporozhye and Nikolayev) and primary and secondary aluminum in ingots. On the other hand,
rolled aluminum production was concentrated in Russia.
Moreover, after many companies were transferred into
private ownership, even cooperation between Ukrainian enterprises became hindered.
In 1993, the Ukrainian government approved the program
“Aluminum of Ukraine”, which, however, yielded no practical result.
A new complex program on development of the Ukrainian
non-ferrous metallurgy was worked out in 1999. This document now is the basis for
policy-making in the aluminum industry. However, no program is capable of tuning up the
mechanism of industrial cooperation. With this purpose, Ukrainian Association of Aluminum
Producers and Consumers was established in August 2000. The first Congress of the
association took place on December 20, 2000.
To some extent, the Union of Non-Ferrous Producers and
Exporters was a prototype of the Association. The Union was created in 1997 and was headed
by director-general of Zaporozhye Aluminum Works Ivan Bastryga.
The Council of the Association now consists of the
following industrial enterprises: JSC Ukrainian Aluminum, Ukrainian Aluminum Plant, LLC
Ukrainian Mining-and-Metallurgical Company, Nikolayev Alumina Plant, GSA-Ukraine, Donetsk
Institute of Non-Ferrous Metals, Ukraviaprom Association, Ukrainian Aircraft Scientific
Research Institute, JSC Zaporozhye Aluminum Works, joint venture Intersplav, LLC Obimet,
LLC Forum, Toreztverdosplav, Donetsk Iron and Steel Works, LLC Liteyschik, Aviant Plant,
Kharkov Aircraft Factory, Antonov Aircraft Design Office, Yuzhny Machine-Building Plant,
OJSC Artemovsk Non-Ferrous Metalworking Plant, OJSC Motor-Sich, and Titan Institute.
Altogether, the Association comprises around 70 business and non-commercial entities.
Alexey Lysenko, president of Ukrainian Mining and
Metallurgical Company, was elected the chairman of the Association, Viktor Beletskiy,
director general of OJSC UkrNIIAT (subsidiary company of Scientific Research Center
“Aviation Materials”), was elected deputy chairman, and Nikolay Pundik, deputy
director of Ukrainian Mining and Metallurgical Company, was elected responsible secretary
of the Association.
The key tasks of the Association are to unite aluminum
producers and consumers in order to establish economic ties, inter-industrial
coordination, and communication between and feedback from them with the purpose of gaining
most from mutually beneficial opportunities.
Many of foreign partners are reluctant to work with State
bodies in order to establish economic ties with the country. In this situation, the
Association will serve as the non-governmental body mediating between Ukrainian companies
and their foreign partners.
The main issues and tasks that aluminum producers and
consumers will face in the near future are as follows:
- Information structuring and processing;
- Working out and pursuing of aggressive marketing policy
on foreign markets;
- Harmonization of the national legislation as regards the
country’s industrial policy;
- Introduction of advanced technology in production of
aluminum, aluminum-based alloys and their products, as well as work on new alloys and
their application;
- Attraction of foreign investment in the Ukrainian
aluminum industry.
A number of specialized secretariats were created within
the Association with the purpose of monitoring the development and resolving the problems
of cooperation between the corresponding industries and aluminum industry (for example,
secretariats on aerospace engineering, shipbuilding, primary and secondary non-ferrous
metal-making, machine-building, energy sector, metal construction, scientific and
technical integration and development).
One of the figures that define a country’s standards of
living is annual per-capita aluminum consumption. In this respect, Ukraine is not only
lagging behind the world but also behind the figures reported during the Soviet times,
when Ukraine consumed 450,000-480,000 tonnes of aluminum. After the USSR’s
disintegration, this figure plummeted more than tenfold to only 40,000 tonnes. The
following two examples explain this downswing in domestic aluminum consumption. Until the
1990s, Kiev Aircraft Factory produced 90-100 airplanes per annum, whereas in the past 10
years, it has not made a single aircraft. Until the 1990s, Yuzhny Machine-Building Plant
constructed up to 100 rockets annually, whereas its current production schedule is 3-4
“Zenith” rockets a year. Such examples are numerous in all industries.
Participants of the Congress were optimistic about the fact
that it has united small-size and large-size companies of various types of ownership on
the equal terms.
Close attention was also paid to the problems of the
Ukrainian secondary non-ferrous metallurgy, which is now working for foreign industries.
Nearly all of Ukraine-made semi-finished products are now exported.
The so-called “garage” enterprises pose yet another
important problem. They make aluminum ingots of scrap with gross violations of the
production technology, thus being able to offer lower prices for low-quality products. All
they do is using illegal means to exhaust the domestic market for raw materials.
There are not many serious, large-scale aluminum producers
in Ukraine. No doubt, Zaporozhye Aluminum Works is one of them with the annual output
capacity of 130,000 tonnes of aluminum and aluminum-based alloys. However, in order to
make a tonne of produce, this enterprise spends tens of times more energy than similar
western aluminum producers do. Thus, efficient aluminum production here will be impossible
unless equipment is upgraded and advanced production technology is introduced.
In this context, construction of a new aluminum plant in
Kharkov region was also discussed. It is supposed to specialize in production of
aluminum-based alloys for aerospace engineering, the chemical composition and mechanical
properties of which significantly differ from standard high-quality alloys made by joint
venture Intersplav.
Science was yet another major issue discussed at the
Congress. The State does not allocate any financial means for research on aluminum, as
compared with the annual $128 million, which the USA-based Alcoa corporation, the largest
worldwide aluminum producer, spends on aluminum research.
As of today, there exist over 400 programs of Ukrainian
industries’ development. However, nearly all of them have failed, because it is highly
difficult to forecast the changes in the country’s economic situation.
Notwithstanding the negative factors, Ukrainian aluminum
producers are hopeful that the country will soon launch production of such aluminum
articles as sheets, plates, shapes, forgings etc. All these are in great demand now. By
the way, a number of aluminum articles made in Russia do not meet the requirements of
Yuzhmash. Thus, domestic production is also needed in order not to be dependent on Russian
aluminum producers.
The Congress also noted that experience of other industries
(for example, that in ferrous metal-making) indicates that similar associations abroad
help settle disputes over anti-dumping inquiries, which would be a highly important
function for Ukrainian metal companies, because it will help prevent initiation of many
inquiries in the future.
During the concluding press-conference, chairman of the
Association Alexey Lysenko emphasized that in no way does the Association intend to take
care of functions performed by the State Committee on Industrial Policy. On the contrary,
the Association is going to cooperate in any way possible with the indicated governmental
body with the sole goal of strengthening the positions of domestic aluminum producers and
consumers.
Chairman of the Association of Aluminum Producers and
Consumers
Mr. Alexey Lysenko, candidate of technical sciences
Born May 16, 1959
1981 – graduated from Donetsk Polytechnic Institute with
the qualification of engineer chemist-technologist (specialization – recovery of
secondary industrial resources).
1981-1984 – shift foreman, head of department, head of
workshop, and senior engineer-technologist of Donetsk Factory of Chemical Agents
(subsidiary of the Ministry of Chemical Industry of the USSR)
1984-1985 – senior engineer of the Institute of
Physical-Organic Chemistry and Coal-and-Fuel Chemistry of the Academy of Sciences of the
Ukrainian SSR.
1985-1988 – graduate student of Moscow
Chemical-Technological Institute named after Mendeleyev, cybernetics department.
1989-1991 – research engineer, senior research engineer,
scientific secretary of the Soviet Scientific Research and Project Institute of Secondary
Non-Ferrous Metals (subsidiary of the Ministry of Non-Ferrous Metals of the USSR).
1992-1994 – director on commerce and foreign trade, first
deputy director general of the Ukrainian Scientific and Production Concern
“Ukrtsvetmet” of the Ministry of Industry of Ukraine.
1994-1999 – director general of the Ukrainian Scientific
and Production Concern “Ukrtsvetmet” of the Ministry of Industry of Ukraine.
1999-2000 – deputy minister for industrial policy of
Ukraine, head of the State Department on Production and Processing of Precious Metals.
Beginning June 2000 – president of LLC Ukrainian Mining
and Metallurgical Company.