ArcelorMittal Kryvyi Rih, the biggest mining and steel plant in Ukraine, invested $415.4 million in the development of production in 2019, which was 6.2% less compared with 2018 ($433 million). The company said in a press release on Thursday that of these, operating costs amounted to $116 million, and capital – to $299.4 million.
“2019 was a difficult year for all plants of mining and steel complex of Ukraine, while the second half of the year was more difficult than the first one. It was increasingly difficult for Ukrainian exporters to sell their steel products due to a significant drop of prices and general decrease in steel consumption on the world markets. Along with rising costs, this negatively impacted on the financial condition of the steel companies and led to decrease in production. Nevertheless, ArcelorMittal Kryvyi Rih has managed to maintain fairly high rate of investments and continued the implementation of the strategic projects,” the company said.
“Despite the reduction of the investment program budget, in 2020 the company intends to complete the implementation of key investment projects and continue the implementation of new ones,” ArcelorMittal Kryvyi Rih said.
The company said that over the 14 years of operations in Ukraine, ArcelorMittal’s total investments amounted to $9.7 billion ($4.8 billion is the amount of the acquisition of the plant during privatization and $4.9 billion invested in development of production). Until 2022 the total volume of capital investments of ArcelorMittal Kryvyi Rih in the development of production will be $1.8 billion.
PJSC ArcelorMittal Kryvyi Rih (Dnipropetrovsk region) in 2018-2019 spent about UAH 320 million on the program to restore 27 locomotives.
According to a company press release, domestic and foreign analogues were used instead of Russian components during the overhaul of locomotives, thereby neutralizing Russian sanctions regarding the ban on the supply of spare parts and engines for diesel locomotives to Ukraine.
According to the press service, the plant has one of the largest railway fleets in the metallurgical complex: 172 locomotives (126 for servicing metallurgical production, 46 for mining). A few years ago, the company adopted an import substitution program. One of the main partners was Mykolaiv Diesel Locomotive Repair Plant, which established production cooperation with a number of Ukrainian and foreign manufacturers of various railways equipment.
Thanks to joint developments, Mykolaiv plant started installing diesel engines of well-known world companies, namely U.S.-based Cummins, UK-Belgian ABC Corporation, and others, on locomotives. In addition, the latest Heinzmann engine control systems (Germany), a rotary vane compressor jointly with the Italian company Mattei, a modern traction unit of alternating current (Electrotyazhmash), a microprocessor-based locomotive control system, etc. were installed on the machines.
Thanks to the measures taken, the plant in 2018–2019 got the opportunity to restore 11 diesel locomotives, in particular with the replacement of engines and deep modernization. In addition, 16 more cars were repaired on the basis of its two diesel locomotive repair depots.
PJSC ArcelorMittal Kryvyi Rih has opened the third metal products warehouse in Kyiv region, from which the company plans to ship 5,000-6,000 tonnes of products per month.
According to the press release of the steel plant, the company is expanding its distribution network in Ukraine and opening the eleventh metal products warehouse in the country and the third one in Kyiv region. Earlier this year the company acquired additional sales sites in Odesa and Dnipro.
The new distribution warehouse in Kyiv (at 9 Luhova Street) is conveniently located for deliveries to Obolonsky and Podilsky districts, as well as to the central part of the capital. The planned turnover will amount to 5,000-6,000 tonnes per month, if necessary, it can be promptly increased to 8,000 tonnes. The total capacity of the new site exceeds 10,000 tonnes of metal products. Its delivery to the warehouse can be carried out by rail as there are tracks, the warehouse is also equipped with two cranes with a lifting capacity of 10 and 20 tonnes.
According to Anastasia Tatarulyeva, the deputy director general for marketing and sales at the plant, Kyiv region accounts for 20% of the total consumption of the plant’s products in the domestic market.
“It leads in terms of the volume and pace of construction in the country. It has good prospects for the development of infrastructure and the industrial sector, not to mention housing construction. In the first six months alone, more than 684,000 square meters of housing were built and commissioned here. Construction remains the key customer for us, so the development of our sales network in the capital is a natural and logical step in distribution,” she said.
PJSC ArcelorMittal Kryvyi Rih (Dnipropetrovsk region) whose major shareholder is the largest steel producer, ArcelorMittal, will channel UAH 10.845 billion into payment of dividends, which will be UAH 2.81 per ordinary registered share.
This decision was taken by shareholders of PJSC ArcelorMittal Kryvyi Rih at an extraordinary general meeting on October 10, the company’s press service said.
The procedure and timing for the payment of the dividends will later be determined by the enterprise’s supervisory board. After that, the funds will be transferred to shareholders. At the same time, it is specified that, according to the Law on Joint-Stock Companies, dividends must be paid within six months from the date of the decision by a meeting of shareholders.
The press service recalls that the last time dividends were paid for 2007, before the 2008-2009 crisis. After that, ArcelorMittal use funds to modernize production and carry out large-scale investment projects. The current dividend payment will not affect the implementation of the investment program. In the next five years, $1.8 billion will be invested in the development of production. Of the amount, about $300-350 million is to be invested in the construction of a pelletizing factory. It will produce pellets that will partially replace sinter as raw materials for blast furnaces. Therefore, the enterprise will be able to close two worn sinter plants and thereby reduce emissions by 50–55%, according to the press service.
ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. Its staples are long products, in particular, reinforcing bars and wire rods.
ArcelorMittal owns the largest mining and metallurgical plant ArcelorMittal Kryvyi Rih in Ukraine and a number of small companies, in particular PJSC ArcelorMittal Beryslav.
Ukrainian President Volodymyr Zelensky has announced a compromise has been reached with ArcelorMittal Kryvyi Rih, a mining and metallurgical plant in Kryvy Rih.
“They officially put the position, but we found some kind of framework – as of today. Because maybe something will change, I don’t know. We signed a paper for 400 million [hryvnias] – they need to build a cancer center,” Zelensky said during a press marathon in Kyiv on Thursday.
As reported, PJSC ArcelorMittal Kryvyi Rih will allocate EUR15 million (about UAH 400 million) for the construction of an oncology center in Kryvy Rih.
At the end of July, ArcelorMittal Kryvyi Rih said that the SBU Security Service of Ukraine had conducted searches at the enterprise as part of criminal proceedings opened against the enterprise for environmental pollution under Article 441 of the Criminal Code of Ukraine (ecocide).
Before that, Zelensky criticized ArcelorMittal Kryvyi Rih for having failed to meet the deadline to improve the environmental situation in the region and called for providing targeted financial support to those who suffered from harmful emissions into the atmosphere.
The Mining and Metallurgical Combine PJSC ArcelorMittal Kryvyi Rih has signed a contract with OTP Leasing financial support for purchase of four locomotives of CZ Loko based in Czech Republic. According to a press release from ArcelorMittal, the enterprise will receive diesel locomotives of an EffiShunter 1600 worth EUR 9 million in 2020.
OTP Leasing Director Andriy Pavlushyn said that the company had thoroughly prepared the given project with ArcelorMittal team and Czeck colleagues from CZ Loko.
“We are glad that the bargain was successful. For us this is a first step towards this direction: in financing operations with the locomotives, which together with our mobile and farm machineries, trucks and vans will enrich a portfolio of the main products of the company,” a press service quotes Pavlushyn as saying.
For his part, ArcelorMittal Transport Department Director Oleksiy Rybalkin said that the combine would be the first enterprise in Ukraine that will use Czech locomotives of the new generation.
Diesel locomotive EffiShunter 1600 is intended for shunting and line service. The locomotive is equipped with alternating/direct current power transmission (AC/DC) from the diesel engine to six powered wheelsets. Parameters of the vehicle are optimized for station shunting and for heavy operation on industrial sidings, e.g. in metallurgical, mining and petrochemical sectors, and for the line service.
CZ Loko is one of the largest Czech manufacturers of diesel-electric locomotives and special railway vehicles.
