On the 20th of February 2013, a press-conference of the General Director of “Zaporizhstal” II&SW Rostislav Shurma was held, where he summed up the results of activity of the enterprise in 2012 and the further plans for development of the Works in 2013.

Production work

Summing up the operation activity of “Zaporizhstal” II&SW in 2012, Rostislav Shurma underlined the achieved stable positive tendency in operation of the enterprise.

In the conditions of the world financial crisis, against this background — decrease in orders volume, decline in prices for the products,- “Zaporizhstal” II&SW could complete 2012 with good operating performance results. On the background of the production volume decrease in the first half-year of 2012 : steel for 2.7%, roll stock for 2.8 %, in the second half-year of 2012, growth of steel production was for 3.2%, roll stock — for 3.7 % .

In the period from August to December, 2012, in the Blast Furnace production, the iron production volume over 9 thousand tons per nominal day was achieved, which is 300 t higher than the index of July, 2012. This is the best index in the Works’ Blast Furnace production when operating three Blast Furnaces. Reacting to the needs of its clients, in the second half-year of 2012, “Zaporizhstal” II&SW has increased the hot rolled sheets supplies for 20 %, and the monthly average shipment of cold-rolled stock grew from 60 thousand t to 75 thousand t, as compared with the first half-year. In a whole, in 2012 shipment of thin sheet made up 639.3 thousand tons.

In December, 2012, in the Hot Strip Rolling Production Shop, a Works’ record high throughout the Works’ whole history was hit in double coils production- 86.2% of the whole mass, or 209.8 thousand t, which permitted to decrease additionally consumption of metal for rolling process, and to increase considerably the production volume of hot strip rolling.

Sales Volume

The main negative factor, affected the Works’ production strategy in 2012, became the orders volume reduction at the home market of Ukraine and finished rolled steel prices drop at all markets of the CIS countries and outside. In the result of its sales policy reorganization, the Works, in whole, achieved growth in sales in 2012 — hot-rolled coils for 4%, cold-rolled coils — for 7 %, strip — for 15%, in comparison to 2011. Besides, it should be noted that shipments of metal products has been increased to the key trade markets important for the Works: to CIS — for 4%, to the Middle East — 38%, to the European countries — 4%, to Turkey — 14%.

Financial and economic indices

In the conditions of growth weakening in the world market tendencies, “Zaporizhstal” II&SW, due to responsible financial and economic policy in all trends of its principal activities in the second half of 2012, has achieved a considerable decrease in production cost price — UAH14,684 million, compared to 2011, when the cost price made up UAH17,037 million. For the account of the logistical complex realization in the second half of 2012 (reduction of the discharge coefficients, economy of the power resources, the stable providing with raw materials, well-timed carrying out the scheduled repairs), the cost price of steel reduced to UAH720 per ton. Due to above listed factors, from August, 2012, “Zaporizhstal” II&SW came up to the breakeven level before deduction of charges for tax payment, interest and accumulated depreciation (EBITDA).

Modernization and ecology

From August, 2012 “Zaporizhstal” II&SW resumed realization of the programme on modernization and revamping of the Works, “froze” by the enterprise in previous years. In December, 2012 a scale project on commissioning of the coal bulk storage had been completed, in the of pulverized coal injection plant in the Blast Furnace Shop. Full volume of investments into realization of PCI project made up about UAH 1 billion. This had a considerable energy-saving effect — refusal from natural gas consumption in the Blast Furnace production process for 300 million m3 per year. Implementation of this project has a considerable ecological effect — reduction in coke consumption will permit the Works to reduce greenhouse gas emission into atmosphere for about 300 thousand tons per year, in conversion to СО2. Within the scope of the nature conservation programme, from August, 2012 the Works started erection of a new sinter machine No.1, including installation of hi tech gas purification system. Putting into operation the complex of sinter machine and precipitator will allow the Works to reduce emission into atmosphere for about 10%, reducing in this way a technogenic burden on the region’s environment. The investments into the project made up about UAH240 million. Besides, a number of the investment projects of general cost over UAH50 million had been realized at “Zaporizhstal” II&SW in the second half year, 2012 — completion of the first stage of weighing facilities modernization, overhaul of the Blast Furnace No.5 with installation of the new car dumper, putting a new sampling section into operation. In 2012, the Works invested into modernization and revamping of the production facilities about UAH450 mill (65% of that amount was invested during the period August-December, 2012), for comparison, in 2011, the investments made up about UAH300 million.

Energy efficiency

Realization of a complex programme on detection of power losses at “Zaporizhstal” II&SW allowed reducing the metal products power intensity index for 3% (0.68 GJ/t) in 2012, in comparison with 2011. Here, the main reduction was achieved exactly in the second half year, 2012 — 5.1% (1.16 GJ/t), compared to the first half year, 2011.

In the period of August-December, 2012, due to optimizing the operation modes of the metallurgical and rolling mill equipment, carrying out the organizational and technical measures for reducing the costs, a considerable saving of purchased electrical power — 14.8 million of kW/h, for amount UAH12.14 million. In Open-Hearth production the monthly consumption of natural gas was reduced for more than 2.5 million m3 due to implementation of the organizational measures.

Social responsibility

In its activities, the Works continuously follows the principles of corporate social responsibility. Having marked the raising of industrial safety level and labour protection as one of its key priorities, “Zaporizhstal” II&SW increased investing of the social programmes, being realized at the Works. So, in August, 2012 the Works invested UAH35 million into purchasing of new uniform of improved type and higher comfort for the employees as well as personal protection equipment.

In the period of August-December, 2012, within realization of the announced strategy of creation safety and comfort labour conditions for its personnel, the Works send UAH350 thousand for purchasing and installation of the air-conditioners and split systems at the hot zones of operation. Besides, in the second half, 2012 the Works invested UAH2 million for purchasing and installation of gas analyzer, with the aim of raising the level of industrial safety. In the period of August-December, 2012 the Works realized the first stage of the capital repairs programme of sanitary and personal service rooms in the Works’ Shops. The investments of the first stage made up about UAH 920 thousand. The Works gives system support to the city in such key directions as education, health care, culture, sport, infrastructure development and upgrading. Upon the results of 2012, “Zaporizhstal” II&SW transferred to the Ukrainian budgets of all levels UAH1.08 billiard, which exceeds the index of 2011 for UAH117 million (or 12%).

Plans for 2013

The General Director of “Zaporizhstal” II&SW Rostislav Shurma underlined, that 2013 is a symbolic year for the Works’ personnel; this is the year of the 80th anniversary of the Works. In 2013, “Zaporizhstal” will continue the consecutive modernization and revamping of the production facilities, considering the ecological term. “Zaporizhstal” Works will continue realization of programme on equipping of all available sinter machines with gas purifying equipment. So, as of 2013, an erection of the gas purifying plant was scheduled behind sinter machine No.2, investment into the project is about UAH75 million. Besides, in 2013, they will start revamping of the pickling line section in the Cold Rolling Mill Shop No.1. Completion of the project will allow decreasing considerably the disposal of service water of the Works to the Dniper river. The investments into this project in 2013 make up about UAH233.5 million. In 2013, it is planned to preserve the total volume of sales of the marketable products at the level of 2012 (about 3.2 million tons of metal products), as well as to increase the volume of cold roll stock shipment to the markets of Ukraine and CIS.

Let us remind that on the 30th of July, 2012, Rostislav Shurma was appointed to the post of General Director of “Zaporizhstal” II&SW, earlier he occupied a post of Director Deputy of the Metallurgical Division of Metinvest Group. Together with Rostislav Igorevich a new team of the managers was appointed, they headed the main guidelines of the Works’ activity, and they faced the problems of an effective operational control, work-out a complex of measures for products competitive recovery, intensification of the production volumes and increase in products output with high added value cost.