INTERPIPE Steel urges the Cabinet and the national Commission not to increase the tariff for electricity transmission for industry
Innovative steel melting complex INTERPIPE Steel is strongly opposed to a twofold increase in tariff for electricity transmission from 1 August 2020.
Ukrainian mining and metallurgical complex is one of the basic sectors of the economy, is in crisis due to the fall of external markets. The coronavirus pandemic has only exacerbated his situation. In the 1st half of 2020, domestic steel companies have significantly reduced production of steel.
So, just INTERPIPE Steel for 5 months of the year reduced production by 17%. In addition, enterprises INTERPIPE continue to work in conditions of sharp decline in demand for products. In the first half of the volume of production has decreased by 30-40%. The forecast for the second half also negative.
Growth of tariff for transmission of electric energy will mean a blow to 250 thousand people - employees of MMC and 600 thousand people including subcontractors. Revision of transmission tariff would increase the cost of electricity for steelmakers on average by 13%.
Denis Morozov, Director for Economics and Finance INTERPIPE:
INTERPIPE invested $1 billion including the construction of the new steel plant in the river. INTERPIPE Steel is the most stringent European requirements for environmental protection and is a rare example of "green" metallurgy in Ukraine. The CO2 emissions of our electric steel melting complex is negligible, is 10 times lower than for a conventional integrated steelworks. And we don't understand why metallurgists have to pay the highest "green" tariff in the world.
our facilities are 11 thousand employees, and about 50 thousand members of their families depend on, will the plants work in the current environment. The demand for our products in domestic and foreign markets have fallen sharply amid the economic crisis caused by the pandemic. Today, 85% of our products exported, and the cost of electricity will lead to catastrophic consequences - up to a total loss of sales in foreign markets and stop our businesses.
We call on the Cabinet of Ministers of Ukraine and National Commission, carrying out state regulation in spheres of power and utilities, prevent the increase of tariff for transmission of electricity for industry.
About company:
INTERPIPE is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company's products are marketed in more than 80 countries through a network of sales offices located in key markets of the CIS, the Middle East, North America and Europe. In 2019, INTERPIPE sold 798 kt of finished products, including 203 thousand tonnes of railway products. The sales of railway products under the KLW brand.
INTERPIPE has 11 thousand employees. In 2019, the Company transferred to the budgets of all levels UAH 3.25 billion.