Survival in the market of metal structures depends on the ability to reorient to the products in demand
The military aggression of the Russian Federation against Ukraine affected all segments of the Ukrainian steel market. Falling demand, logistics problems and other difficulties required market participants to make decisions about restructuring their work. The company «Ukrainian Steel Products Factory», which is engaged in the production of various steel structures, shares its experience of working in war conditions.
About the company
Our company produces steel structures for road construction (road fences, portals, lighting poles, etc.), the livestock sector (head-lock fences, box dividers, feed tables, etc.), utilities (stop pavilions, canopies, etc. ) and industrial construction (stair railings and platforms, non-standard types of steel structures).
Due to the difficult situation in the country and the decrease in the number of orders, the production load level fell by 80%. The largest decline is observed in the segment of steel structures for road construction and repair – it is approximately 95%. Now, from this specialization, we produce only stands for traffic signs.
The situation is a little better in the field of steel structures production for livestock sector. This is due to the fact that agrarians finance the purchase of livestock equipment from their own funds, while road construction depends on state procurement. However, we understand that currently spending on road construction and repair is not a priority for state and local budgets.
As part of optimizing the company’s work, we paid great attention to internal technological processes (increasing the efficiency of equipment use, reducing downtime, etc.). However, due to the drop in the volume of orders, we had to reduce the number of staff by more than 50%.
Search for new segments
The situation in the market of steel structures for an individual enterprise depends on the direction of activity and the ability of the plant to quickly reorient itself to the products in demand. However, if you are a producer of steel structures, this does not mean that you can make absolutely everything from steel.
We constantly monitor the market in search of in-demand steel structures that we could produce, but there is a question of the economic feasibility of producing one or another product.
Now the production of stoves and solid fuel boilers is in demand. We also considered this direction for ourselves, and we make stoves in small series. Also, the military now needs field kitchens, we are ready to produce them, but certification is required here.
The sharp reduction in the production of steel products in Ukraine did not greatly affect us, since the consumption of steel in our production decreased by approximately 90%. We replaced the Ukrainian-made steel that disappeared from the market with imported supplies. We do not import steel products, but buying, for example, 20 tons of imported steel is not a big problem.
We continue to buy Interpipe pipes from Ukrainian production.
In general, the prices of steel for steel structures increased by about 40%, but the cost price increased even more due to the prices of energy resourses.
Because of the war, it is difficult to talk about the prospects of the Ukrainian market of steel structures. We have now completely moved from long-term planning to short- and medium-term planning. We now have more situational than strategic decisions. But it can be cautiously predicted that after the end of the war, the market of steel structures will grow, since in many regions of the country it will be necessary to restore all kinds of infrastructure.