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Nikopol Ferroalloy Plant will suspend part of production due to high electricity prices

Ukraine / Ferrous metallurgy

As a result of difficulties with the sale of ferroalloys and a twofold increase in electricity prices, 9% of the plant's employees will go idle in compliance with the legislation of Ukraine and payment of 2/3 of the tariff. This is about 500 people.

Nikopol Ferroalloy Plant will suspend part of production due to high electricity prices

Nikopol Ferroalloy Plant (NFP) will halve production in October compared to September due to problems with the sale of ferroalloys and high electricity prices. Vladimir Kutsin, General Director of NFP, spoke about this in an interview with the Electrometallurg newspaper.

“Almost from the beginning of the year we have been working in a normal rhythm, including September at the level of 60 thousand tons, therefore, of course, the production of 35 thousand tons in October certainly looks like a significant reduction in volumes. But this is how the market rules. Naturally, we cannot influence this process on our own. At this stage, we cannot sell more than 35 thousand tons of products, moreover, we still have stocks in warehouses, "said Kutsin.

According to him, although the issue of selling products is the main one, the topic of the cost of electricity is very painful for NFP, because the enterprise is volatile, and more than 30% is the share of electricity in the cost of production.

"If in 2020, on average, we worked at a price per 1000 kWh from 1295 hryvnia, then in October 2021 the price is 2508 hryvnia, which is two times higher than we worked in 2020," said the director of the plant .

“The situation is not critical yet. We agree on all issues, we believe that in idle time, in compliance with the legislation of Ukraine and payment of 2/3 of the tariff, a maximum of 9% of the plant's employees will leave. This is about 500 people. There are divisions that will be affected to a greater extent, since there is a direct connection with the shutdown of some of the furnace units. But in furnaces that continue to work with their full staff, workers will receive full wages. These 9% of the CPF will include 12% of the shop workers, a total of 145 people. In order to survive in this situation, we will reduce the number of contractors and provide work for our repair units; we will carry out most of the work on our own, ”Kutsin said.

Mainly the repair units of the plant will work, where there will be no downtime. The press service of the plant noted that the decrease in production rates will not in any way affect the implementation of the NFP investment program, and the general situation with the sale of ferroalloys will improve in two to three months.

Nikopol Ferroalloy Plant is the largest producer of silico- and ferromanganese in Ukraine. The enterprise produces ferroalloys from imported and Ukrainian raw materials. The plant is controlled by the EastOne group, created in the fall of 2007 as a result of the restructuring of the Interpipe group of Viktor Pinchuk, as well as the Privat group of Igor Kolomoisky.

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