In June, Geneva of Switzerland became the place for the 4th Conference on Metallurgy in Eastern Europe, which is a traditional annual meeting organized by London-based «Metal Bulletin» magazine.
DISCRIMINATION OF UKRAINIAN METALLURGY
In June, Geneva of Switzerland became the place for the 4th Conference
on Metallurgy in Eastern Europe, which is a traditional annual meeting organized by
London-based "Metal Bulletin" magazine.
Some 250 participants attended the conference and delivered eighteen rather
versatile reports.
It should be noted that London has become a large analytical center to
process information and publish a whole range of information magazines and reference
guides to various industrial sectors.
Since "Metal Bulletin" sets up high standard of seminars and
conferences, the speakers should pay extra special attention to the reports given to
professionals in trade, finance, and management within ferrous metallurgy.
On the other hand, it is extremely important to take advantage of the
speech delivered in order to directly or indirectly advertise the manufacturer’s
trademark. This becomes a paramount issue because direct distribution of information is
the most efficient way not only to make an interlocutor comprehend the positive
information, but to take down negative stereotypes of our business partners and rivals by
using all the variety of perceptive personal factors.
The conference’s speakers comprised representatives of the powerful
international traders with billions in turnover, managers with international banks, with
the European Bank for Reconstruction and Development (EBRD), higher executives with
ministries of the Eastern European countries, as well as managers of sale divisions with
metal enterprises.
"KrivorozhStal" State Mining and Smelting Works of Krivoy Rog was
invited to this forum not only as a participant, but also as a speaker on the urging
issues of Ukraine’s metal industry. In Geneva, the other spokespersons gave a rather
negative assessment to the situation in Ukraine. One of the managers with the EBRD further
exacerbated the situation by distinguishing iron & steel works in Katowise (Poland),
Kosice (Slovakia), and Galati (Romania) as the most promising metallurgic
"pearls" of Eastern Europe.
A broad coverage was given to success in implementation of the EBRD
recommendations by Karaganda Iron & Steel Works. As a result, the latter modernized
production process, changed management pattern, and expanded geographical distribution of
exports.
Yet, in all these reports, no one took into consideration or, better to
say, no one divulged the lack of preferential treatment of Ukrainian metal manufacturers.
By the beginning of the second day of the conference, this indirectly
caused formation of negative opinion on Russian and Ukrainian metal manufacturers. This
opinion treated producers from Ukraine and Russia as inert and unwilling to execute
programs needed to adjust to the market conditions. Practically, the following theses were
issued:
-
By selling products at dumping prices, Ukraine undermines the European
market; -
Ukrainian companies sell low-quality metal products;
-
There is a lack of balanced marketing policy.
Thus, by the conference closing, we had to make important amendments to our
draft speech in order to give a more impartial and fair overview of the Ukrainian metal
industry.
We devoted the first part of our report to achievements of
"KrivorozhStal" Works, which are well known and of which we are very proud.
These include mastering of new product types, successful completion of ISO 9002
certification for rolled rebars, improvement of management system, and, what is the most
important, attainment of profitability at "KrivorozhStal". This information was
of real and sincere interest to representatives of trading companies and banking
delegations. Since managers of financial entities were positive that
"KrivorozhStal" was slowly decaying, these data were a big surprise for them.
Hence, achievements of our production and technical specialists, along with
persistent and responsible approach to the adopted programs aimed at raising the technical
level of the Works, have created significant preconditions to upgrade the international
standing of "KrivorozhStal".
One can reckon that falsified information on what is happening in our
country is deliberately transferred both to foreign people and even to the Ukrainians.
That is why we dedicated the second part of our report to this issue.
It should be noted that, at present, Ukraine sells to the USA twice as few
products in the USD equivalent as it imports from the United States. And even in this
situation the US Trade Ministry initiated antidumping litigation against Ukrainian metal
manufacturers, who contribute about 40% to Ukraine’s foreign currency earnings from export
supplies. Can this sincerely be called a strategic partnership? The situation between
Ukraine and the EU is also not too rosy. It looks like we have been given a Cinderella
part. And everybody openly lets slip from the memory the sound fact that Ukraine is a
country with the 50-million population located in the very heart of Europe.
During the past few years, we have traditionally had a negative trade
balance with Western Europe. By purchasing more than we sell, we thereby financially
backup manufacturers of the largest industrially developed countries worldwide. Moreover,
the list of our imports comprises items, which are quite far from being of critical
importance for Ukraine.
If we take a closer look at what Ukraine sells, the situation looks even
nastier because pig iron makes up 27.4% in the total metal exports by weight, scrap metal
– a 30.6%, and semi-finished products – a 23.4%. Unambiguously, all this evidences
disparity in relations between Ukraine and the EU, when "finished" metal
products represented by rolled metal account for less than 14% of the total export. In
1998, Ukraine once and for all gained a status of the source for cheap raw materials and
semi-finished products.
All the Ukrainian manufacturers managed to supply only about 250 ths. tons
of rolled metal to the EU. Without any doubt, this is a paltry amount, which can by no
chance be treated as an input of our metal manufacturers to ruination of the European
market. One shall keep in mind that the market collapsed during the unrestricted influx of
cheap metal products from Asian countries and during domination of supplies coming from
Poland, Czech Republic, Slovakia, and Romania free from quotas.
Discrimination of Ukrainian metallurgy is obvious. I believe that it is the
time for us to claim a more fair and rightful treatment from the European Union and the
USA.
This statement of the report stirred up the meeting’s participants.
Our Eastern European competitors are still being treated as preferential
business partners. Western Europe imposes no strict limitations on metal sales for the
Poles, Slovaks, or Romanians. Kazakhstan-made metal was offered the similar treatment,
thus enabling Kazakh manufacturers to expand geographical distribution of supplies from 19
all the way up to 65 countries worldwide within three years. If only we were offered such
conditions!
Yet, we have to operate under the conditions when all (!) the Ukrainian
metal manufacturers can supply only 25,000 tons of wire rod to every one (!) of the EU
member-countries during one year!
A strict system of limitations has also been raised against our Russian
colleagues. Though, restrictions against the Russians are a little less severe than
against Ukraine by their retaliatory nature from the EU and the USA. Besides, the
consequences are far less dramatic for Russian metallurgists, since raw and materials cost
much less in the Russian Federation. This allows Russian metal manufacturers to maneuver
on the market with greater ease and offer products at the more competitive prices.
Thus, we have to solve the problem of survival in the fierce competition
under extremely inauspicious conditions. Overseas, no one hails supplies of high-quality
metal from Ukraine. Although the market is recovering at the moment, which somewhat
facilitates stabilization of our situation, we haven’t got a chance to relax.
Summarizing the results of the conference, it should be emphasized that
representatives of Ukrainian iron & steel works simply must participate in
international exhibitions, conferences, and symposia. This is required to make and
maintain the positive manufacturing and financial image of the Ukraine’s metal industry.