Centravis Centravis

Centravis production director – about the current situation at the company and the company's plans

The war affected steel companies of Ukraine in different ways. Much depended on the distance from the epicenter of hostilities, the nature of the products and logistics. Pipe companies were no exception. Andriy Krasyuk, production director of Сentravis, the largest producer of stainless pipes in Ukraine, told about the current production situation at the enterprise and its plans in an interview for GMK Center

How does Centravis work now? How did power outages affect work?

– Since the beginning of the war, we have had three difficult stages. At the first stage – in March-April – we restored production volumes, gradually launched site after site. In May, we went to the mode of operation that allows us to ensure the normal volume of production with the available number of personnel. At the same time, we paid a lot of attention to social projects, volunteering, and helped (and continue to do so) our mobilized employees. It is our duty to do everything possible to support them.

The second stage for us began on July 12, after the first shelling of Nikopol. It was a new challenge – how to continue living and working. We were able to adapt the work schedule under the circumstances – the shelling was conducted at night, which allowed us to work during the day in relatively safe conditions. Each station had its own schedule, which was compiled in such a way as not to interrupt the technological cycle. During this time, we learned to be flexible and quickly adjust our work schedule.

Having a rather large portfolio of orders and obligations to customers, we understood that we had to work around the clock. Our main task was to ensure the safety of people, to take into account their fears and risks. We discussed with the team how to work safely at night. Ideas were born to build additional protective structures for people and equipment. We also introduced additional motivation for night shift work. They gradually entered the rut.

The third stage is missile attacks on energy infrastructure in October-November. They had a significant impact on us. After the shelling on November 23, we even suspended our work. At the moment, we are allocated power consumption limits, but they are not enough to run key production equipment. While the issue is at the stage of resolution, we are repairing some equipment and performing work that does not take us beyond the allocated limits. We understand the complexity of the situation in the country, but we hope that in the near future we will receive more capacity and return to normal production.

What are the business results and the average percentage of loading of the enterprise in 2022?

– In January-November, we produced 10.6 thousand tons of seamless pipes. We export more than 98% of almost all products. Production volumes averaged 60-70% of the pre-war level. In some period, we could not work objectively, and somewhere our loading was below 100%.

How did the situation with the sales markets change during the war?

– Customers appreciate the quality of our products, try to support us by continuing to place orders. But we understand that they take risks and try to minimize their risks by placing orders with our competitors outside Ukraine. Domestic demand, as before, remains at a minimal level. We continue to fulfill external contracts, although the process is complicated by the full-scale war.

Centravis remains an important supplier of tool tubes for the automotive industry to the markets of Germany, Italy, France and the USA. Somewhere we face a limitation of the share of Ukrainian suppliers, but we try to solve these problems and keep supplies to European countries. The volumes of deliveries to the USA and Asia have not changed, but we have, of course, left the Russian market.

What is the situation with providing the enterprise with pipe billets? Is there a need for its import?

– Since the beginning of the war, we switched mostly to imported pipe billets. As a result, the share of domestic collection is currently 20%.

What logistics does the company currently use?

– As before, it is mostly motor vehicles. After the start of a full-scale war, the railway was tried, but it was unprofitable and not very convenient. Logistics has become more expensive. If earlier part of the products went in containers from Odesa, now we send and receive products through Gdynia, Gdansk, Rotterdam, Hamburg.

How have the prices of products changed since the beginning of the war?

– The prices of our pipes are in no way related to the dynamics of quotations of ferrous metal on the world market. The price of nickel is a significant part of the cost of our products. Therefore, our product prices have even increased by an average of about 30% this year due to rising nickel prices and production costs.

What are your production plans for the near future?

– Now we are working on opening another production site closer to the western border. It will specialize in tool pipes for the automotive industry. We plan to start production there with a volume of approximately 25% of what was done in the cold shop at the main capacities before the war. For this purpose, we took a long-term lease of the workshop and transported part of the equipment from Nikopol.

Our decision is dictated not only by the war, but also by the desire to be closer to our Western customers. Many of them conduct production audits. Plus the issue of logistics – delivery time and cost play an important role.

Already in January 2023, we plan to issue the first pipes for decoration. At first, the new production will depend on the hot facilities in Nikopol – it will be necessary to make a billet pipe from an empty rod. In the future, we plan to attract suppliers of pipe billets from Europe and India.

That is, despite all circumstances, we work, make plans and look to the future. We believe in our victory, we are waiting for our defenders to return home alive and unharmed, and we want to focus on ordinary life issues of peacetime as soon as possible.