Ukrainian industrial company Interpipe increased sales of pipe and railway products in tons by 17% in 2021. The total sales amounted to 776 thousand tons. The share of exports in the sales structure was 82%, the share of the Ukrainian market was 18%.
Sales of tubular products increased by 28% compared to 2020 and amounted to 602 thousand tons, mainly due to an increase in demand for pipes for oil and gas production (an increase in sales by 2.3 times, to 191 thousand tons ).
The skyrocketing hydrocarbon prices encouraged energy companies around the world to invest in mining, which in turn led to increased demand for tubular products in both the Western and Eastern Hemispheres. That is why Interpipe increased sales of pipe products in 2021, for example, in the Middle East by 20%.
At the same time, the Company is consistently implementing a strategy to increase the share of premium pipe products in its sales portfolio. If in 2020 the sales of premium connections amounted to 27 thousand tons, then by the end of 2021 this figure amounted to 42 thousand tons (+56%).
Last year, pipe supplies to the Ukrainian market increased by 12% compared to 2020. Sales to private gas companies showed the main increase, while sales to state-owned energy companies did not change significantly.
Sales of railway products - wheels, tires, axles and wheel sets - in 2021 decreased by 10% compared to 2020 and amounted to 174 thousand tons.
Stagnation continues in the railcar building industry in Ukraine, which, following the results of last year, reduced the production of freight cars by a third - to about 2 thousand units. At the same time, the potential of Ukrainian transport engineering is much higher, but the owners of obsolete rolling stock do not decide to invest in its renewal. Nevertheless, the growth in the field of car repairs in 2021 made it possible to keep Interpipe's sales in the Ukrainian market almost at the level of 2020.
At the same time, sales to the markets of the CIS countries in 2021 fell by 25% after the Russian Federation imposed an embargo on imports of Ukrainian railway products in February. Nevertheless, the active work of Interpipe to diversify sales markets made it possible already from the 2nd quarter to partially offset the negative effect of the embargo due to sales to the countries of the European Union, North and South America, and the Middle East.
In 2021, Interpipe significantly increased sales of wheel sets to export markets, primarily to the European Union. In total, the Company sold 20 thousand units. wheel sets, which is 25% more than in 2020. At the same time, sales of kolpars assembled at facilities in Ukraine showed an increase of 38%.
Fadi Hraibe, General Director of Interpipe:
- We continue to implement our strategy to increase sales of high value-added products. For 2022, we have set ourselves an ambitious goal of doubling the sales of premium and semi-premium tubular products.
We plan to achieve this through further prequalification and deliveries to major oil and gas companies around the world. In addition, we are aimed at expanding the range of our own premium connections by developing and mastering the gas-tight UPJ-ULT (Ultimate) and semi-sleeved sleeveless UPJ-SF (Semi Flush).
The task of the railway products division is to significantly increase deliveries and expand the product portfolio in the segment of passenger railway products. In 2020-21, Interpipe successfully supplied passenger railway wheels for Deutsche Bahn high-speed trains, but now it is necessary to complete certification with other global car building companies.
In order to achieve its goals in export markets, Interpipe intends to invest in increasing its production capacity. For 2022, we have a record investment of $77 million in new projects planned. The company intends to complete a key project - the construction and launch of a pipe heat treatment line at Interpipe Niko Tube, which will increase sales of premium products, as well as a number of smaller installation projects a finishing line, a new pipe threading line and a new sleeve winder. In the railway division, Interpipe will continue to increase its capacity for full-profile machining of wheels, and will also begin upgrading the thermal section of the wheel-rolling shop.
About company:
Interpipe is a Ukrainian industrial company, a manufacturer of steel pipes and railway products. The company's products are supplied to more than 80 countries through a network of sales offices located in key markets of the Middle East, North America and Europe. In 2021, Interpipe sold 602 thousand tons of pipe products and 174 thousand tons of railway products. Railway products are sold under the KLW brand.
Interpipe employs 10,000 people. In 2020, the Company transferred UAH 2.54 billion to the budgets of all levels.
