Interpipe intends to increase capacity utilization by 5-10% in the third quarter

The Ukrainian industrial company Interpipe intends to increase capacity utilization by 5-10% in the third quarter of 2022. This was stated by the CEO Andriy Korotkov in interview for Forbes.

In May-June, the capacity utilization for the production of pipes averaged 60-70% of the pre-war level, railway wheels – 45-50%. In the third quarter, the company plans to maintain these figures or increase slightly.

According to Andriy Korotkov, the war did not greatly affect Interpipe’s sales markets, since the duties and embargo imposed by the Customs Union in 2019-2021 forced them to stop deliveries to this market even earlier.

Now the main market for the company’s products are the European Union, the Middle East and the United States. In general, products are supplied to 80 countries of the world, except for Japan and China. In addition, Interpipe develops new products at the request of customers, since the demand for them does not depend on the war in Ukraine, but on trends in the oil and gas, construction and railway industries in the world.

“Earlier, we entered certain premium niches in the global pipe market, such as ultra-high-end gas-tight connections for the oil and gas industry in the Middle East and the USA. In addition, new pipes are being developed and supplied for customers in the field of mechanical engineering and construction in Europe,” said Andriy Korotkov.

The situation on the railroad wheel market is somewhat more complicated, as a large share was in the CIS markets. However, the company is already establishing cooperation with European, Turkish, Indian railway companies. The problem is that these markets are highly competitive and their capacity is smaller.

In addition, the CEO noted that after the United States canceled the 25% duty on Ukrainian steel for a year, Interpipe sent a vessel with pipes to the United States for the first time since the beginning of the war, and a second vessel is expected to be sent in July.

Interpipe notes rising shipping costs products to customers by 2.5-3.5 times after the beginning of the war and the blockade of the Black Sea ports of Ukraine. Products have to be delivered by road and rail to European ports, and then to customers.

According to the results of the first quarter of 2022 Interpipe increased net profit by 69.8% compared to the same period in 2021, to $21.8 million. Revenue increased by 19%, to $239.2 million, and EBITDA decreased by 63%, to $15.14 million.

In 2021 the company reduced net profit by 53.2% compared to 2020 – up to $91.32 million. The company’s revenue for the year increased by 30.9% – up to $1.13 billion. Sales of products in Europe increased by 20.2% over the year, to $287, 03 million

Interpipe is an international vertically integrated pipe and wheel company, one of the top 10 manufacturers of seamless pipes in the world and the top 3 manufacturers of solid-rolled railway wheels.