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Foundry production in Ukraine

Despite the demand for products, the average load of enterprises in the industry does not exceed 20-30%

Like all other industries, the foundry industry has been hit hard by Russian military aggression. In addition to falling demand, at least 50% of the industry’s enterprises felt the impact of the war, sometimes with partial destruction of production. Large foundries are located in the south-eastern regions – most affected by the hostilities.

Situation in the industry

The approximate volumes of the decline in foundry production in 2022 are, as well as in steel sector and mechanical engineering, up to 70%. According to preliminary data, the foundry industry produced approximately 190 thousand tons of products last year compared to 450 thousand tons in 2021.

Foundry production volume in Ukraine

To date, enterprises in the industry are working almost at a minimum. Their average load now does not exceed 20-30%. The main consumers of foundry products now are Ukrzaliznytsya, Ukroboronprom and infrastructure construction. Surprisingly, despite the war, there is no growth in demand for the industry’s products from Ukroboronprom.

It is important to note that, in many ways, the foundry industry, unlike other industries, is more flexible in terms of the ability to move production to safe areas and quickly restart production. There are several facts about the relocation of small foundries to safe areas. At the same time, the relocation of large foundries is complicated by large fixed assets. Even before the war, large foundries were mainly in the structure of machine-building enterprises. And only about half of the relatively small independent foundries were located in safe regions.

Dialogue with the authorities

We are in constant dialogue with the central executive authorities on expanding the role of foundries in the current and post-war economic development of the country. In particular, we are trying to communicate with the Ministry of Strategic Industry. It can be stated that today, instead of developing and implementing a unified state industrial policy under martial law, there is a duplication of the functions of the Ministry of Economy, the State Property Fund, Ukroboronprom and a number of other departments, which affects the effectiveness of managerial decision-making.

Now there must be a balance in the industry – we must understand what needs to be produced, in what volumes, etc. There is no such balance. We do not understand what industries the state plans to develop and how. Only if there is an industrial strategy, both the state and the industry can effectively interact to solve, among other things, defense tasks and for the post-war reconstruction of the country.

We can close almost the entire line of foundry products necessary for the Ukrainian defense industry, we give our proposals to Ukroboronprom, but we are told in response that everything is there and everything is organized. But we know the real situation from the inside – in fact, foundry products for the defense industry are needed and they are not enough.

Post-war situation

We must already now think about the post-war restoration of Ukraine within the framework of the tasks that the president sets. I am sure that the foundry industry will have a special place in this process. The products of the industry will be in great demand in the process of restoring infrastructure – roads, non-residential premises, industries, etc.

Ukrainian casters (after a little re-equipment of production facilities), together with steelmakers, can produce as much product as needed to restore the country, and it will take a lot. The Ukrainian foundry industry, taking into account the existing capacity losses, remains capable of producing 1.5-2 million tons of products. Of course, this will take some time and there will be a strong demand for foundry products.

My analysis of the work of enterprises in the industry showed that the foundry workers are very positive, united and active, they were able to quickly adapt to the conditions of the war, they work even in conditions of shelling and look for opportunities to continue working. Therefore, the foundry industry is fully prepared to participate in the current provision of the country’s defense capability and in the post-war restoration of infrastructure.