News
- 08.11.10
Magnezit Group: "We suppose to supply to the enterprises of Russia and other CIS countries the whole volume of their demand for up-to-date magnesia refractories”
- Metal Courier
Interview with the General Director of the Magnezit Group Mr. Odegov S.Yu.
At present the situation on the market of refractories remains rather ambiguous. On the background of step-by-step rehabilitation of metallurgy positive tendencies are observed in the refractory branch as well. But at the same time the market of refractories remains one of the most overstocked. Intensification of competition, which occurred due to sharp slump of consumption of refractory materials during the crisis period, forced manufacturers of refractories to look for new approaches to consumers and expand product markets.
At the moment Magnezit Group has the leading positions on the CIS market of refractory products. The company confidently demonstrates positive trend of development, launching additional capacities and expanding the range of offered products. We asked the General Director of Magnezit Group Mr. Odegov Sergei Yuryevich to tell about perspective projects, production results as well as about tendencies of refractory market.
- Segei Yuryevich, during the current year the market of metal products was conspicuous for its high volatility. What was the impact of abrupt ups and downs in the segment of ready-made rolled metal on the situation in refractory branch?
- During recent years the market of refractory materials was notable for stable level of capacity and fairly low average annual growth rate of 3-4%. This situation abruptly changed during the crisis period when manufacturers of refractories were forced to considerably reduce their production volumes due to lowering of demand for refractories on the part of consumers.
During the current year we observe increase of demand for refractories on the part of customers on the background of slowdown of crisis processes. Demand for high-quality and correspondingly for more expensive refractories grows. But growth rates are fairly low and full rehabilitation of the market might be expected not earlier than in 2011-2012 . Availability of our own raw materials base gives us in such a situation additional competitive advantages and enables to ensure stable and predictable profitability of the business.
What are perspectives of development of refractory market? What is your opinion: will the refractory sector become more mobile or more inert in relation to changes of situation in the segment of final products?
- Traditionally the refractory market is rather inert and high volatility in various segments of final products of metallurgy has no time to produce considerable influence on it. Exceptions are such global phenomena as crisis which turned out to become not only the reason for slump of production volumes in many branches of industry but also a catalyst of qualitative changes in metallurgy, modernization and renovation of basic technological processes.
Transfer from production in open- hearth furnaces to production in electric-arc furnaces and converters was speeded up in Russia as a result of the crisis. It is expected that production of steel will achieve before crisis levels only by 2011-2012 and by 2020 production of steel in open-hearth furnaces will be fully rejected. In Ukraine this process might be delayed by 3 – 4 years due to large volumes of production in open-hearth furnaces and need of considerable investments. For the period from 2011 to 2015 still more steel in Ukraine is forecasted to be produced in open-hearth furnaces due to growth of demand on the final products market.
At present the main task of refractories manufacturers is not only satisfaction of the current demand of consumers but also forming of conditions for efficient production of refractories which will be in demand in the future. Refractory market should become more mobile and react more keenly to customers’ requirements supplying to them not only materials but efficient service as well. Due to withdrawal of open-hearth furnaces we expect lowering of demand for magnesia powders, periclase and periclase-chrome bricks and at the same time consumption in the most competitive segments of periclase-carbon bricks and masses will grow and we are ready to such changes already today.
- We would like to arrest more attention on the results of your work in the current year. What volume of products will be produced in 2010? Do you plan to increase volumes of production in the next year?
- The priority tasks for Magnezit Group are nowadays qualitative growth and innovational renovation. We keep volumes of production at the annual level of 1,5-1,7 mln. tons of refractory products and at the same time we actively expand range of products with the aim of increasing the share of state-of-the-art and high-quality products with high share of processing. By the Strategy of development for the period from 2010 to 2015 we envisaged technological renovation, increase of production volumes of competitive products, growth of labor productivity and lowering of production costs. I would like to point out that it is the most important and the deepest project envisaging large scale changes of the whole production cycle and transfer to qualitatively new level of development.
- Sergei Yuryevich, the program of development of the Group stipulates implementation of several projects for expansion of capacities and production of new kinds of products. Will you please tell in more detail about these projects. On what production sites of the Group are you planning their implementation?
- At present Magnezit Group is the only producer of periclase clinker on the CIS territory and it means a considerable competitive advantage of our company. Transfer to the innovative for the CIS market clinker technology and expansion of products range on its basis, increase of production of fused powders and other competitive kinds of products are among the key directions of our development.
On the territory of Satka production site in Chelyabisnk region we implement an investment project for construction of the second and third stage of the complex for production of periclase clinkers. The first stage with the annual capacity of 50 thousand tons was commissioned in 2008 and became the biggest investment project of the Group amounting to 1 billion rubles. The complex includes grinding and briquettng subdivisions as well as a high-temperature shaft furnace which finishes technological line for production of clinker. By the year 2012 we are going to bring volumes of production of periclase clinkers up to 150 th. tons per year. During modernization of the technological chain we shall construct a multi-hearth furnace for decarbonization of raw magnesite and one more high-temperature shaft furnace will be erected as well as modern equipment for pressing and grinding will be installed.
One of the most perspective projects is construction of a modern industrial complex on the basis of Nizhne-Priangarsk production site (Russia, Krasnoyarsk Territory) for treatment of magnesite deposit which is unique for its quality of raw material, and production on its basis of refractory materials. The program is planned for the period up to 2015. It is planned to construct a workshop for decarbonization of magnesite as well as modernize and expand capacities for production of fused products.
Besides we are implementing a number of projects for production of competitive products on production sites of the Group in other countries – at Slovmag (Slovakia). Thus program of technological renovation of Slovmag will enable us to increase volumes of production of state-of-the-art periclase-carbon refractories for metallurgy and spinel containing bricks for cement industry. It is planned to increase annual production of oxide-carbon shaped products up to 25 th. tons, burned bricks – up to 30 – 35 th. tons. Increase of production indices will be due to improvement of efficiency of processes and modernization of capacities: equipment for treatment of fused periclase, its crushing and grinding up to necessary fractions. There will be additionally installed modern mixing and pressing equipment and reconstructed equipment for thermal treatment of bricks in furnaces. Technology of production of pitch-bonded bricks will be implemented there too.
Presence of the Group in Europe opens up access to modern technological innovations, enables to practically evaluate possibilities of their implementation and introduce the most efficient developments on our production sites. Magnezit Group is also represented on the inner market of China which is at present constantly growing and consumes enormous volumes of refractories. Here we are going to enter the number of the biggest producers of periclase-carbon refractories.
- What volume of investments is it planned to use for implementation of the projects?
- The investments volume accumulated during recent five years by 2010 achieved 7, 5 billion rubles. We expect that by 2015 this index will be doubled and surpass 15 billion rubles.
- Are you planning measures for expansion of raw materials base?
- Magnezit Group is fully provided for high-quality magnesia raw materials for production of refractory materials. At the moment we consider projects for development of raw materials base from the point of view of technological renovation and rational use of natural recourses as well as inclusion for treatment of accumulated reserves of inferior grade raw materials.
- Will you please tell about markets where Magnezit Group products are sold. What directions are the most first-priority for you for the present day? Which markets do you consider the most perspective and why?
- For the middle perspective we consider to cover the full volume of demand of enterprises in Russia and other CIS countries in modern magnesia refractories such as densely sintered clinker, carbon containing refractories for converters, electric arc furnaces, steel teeming ladles as well as in functional refractory elements for continuous casting machines. We are planning to considerably increase our presence on the international market including growth due to deliveries of “Russian magnesite” – high-quality periclase clinker and fused powders as well as refractories on its basis. These are competitive products and we notice even now interest to it on the part of the biggest world consumers.
Increase of export deliveries and entering perspective markets is an important direction of our development. We are present in Europe, in countries of Asia and Middle East. We started deliveries to the USA. In the future we shall enter markets of India and South-East Asia but at the same time we highly evaluate our constant customers and such an expansion of sales market has been planned not to their prejudice.
The world crisis did not permit to considerably increase export volumes in 2009 but during this time we obtained experience and possibility of more detailed study of perspective directions of activity. It helped us to find new partners and to create prerequisites for qualitative changes. Nowadays we offer magnesia powders of various kinds (sintered and caustic), converter and ladle modifying additives for modification of slags, gunning masses, thixotropic concretes as well as periclase, periclase-chrome and periclase spinel bricks for a whole number of branches of industry. We are planning to increase production volumes of high-quality periclase-carbon and alumopericlase-carbon bricks.
- At present 15 production sites and servicing subdivisions make part of Magnezit Group. Do you consider possibility of purchasing additional production assets?
- Not now, but we never exclude such a possibility.
- How do you evaluate competition on the market of refractories? What are competitive advantages of Magnezit Group?
- At present competition on the market of refractory materials is high and one of the reasons is intensification of activity of foreign companies looking for new markets. Magnezit Group is the leader on the market of refractory products in Russia and other CIS countries as well as in Eastern Europe and we are going not only preserve but also strengthen our positions.
Mentioning competitive advantages of our company I would like to point out that Magnezit Group has complete production cycle including mining and treatment of raw materials, production and sales of ready-made products, engineering and contract supervision as well as operational servicing of thermal vessels. It goes without saying that one of the competitive advantages of the company is its raw materials independence. Thus by volumes of mining of prospected resources of magnesia raw materials Magnezit Group occupies leading positions in the world.
Geographical diversification of products deliveries from different production sites of the Group as well as our own logistics center make it possible to practically exclude the risk of untimely delivery of urgent orders to our customers.
Metal Courier,
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