Today Russian metallurgists are on trend. Special attention is paid to the implementation of new technologies and equipment modernization in all economic realms. Large corporations and even small businesses invest the lion’s share of their profit into innovations.
Economic events taking place in the world have resulted in a decrease in demand for and consumption of metal products and, it would seem, have worsened the position of Russian metallurgists. However, firstly, quite a large amount of consumers of their products are located abroad which is beneficial to the maintenance of demand and the fast adaptation to the market conditions. Secondly, in the context of a diminution in demand, metallurgical enterprises put emphasis on a strategy of economic manufacture and production of competitive products with the best possible quality characteristics in order to satisfy the needs of internal and external customers. This is where metallurgists invest their capital. Almost all large metallurgical conglomerates invest dozens of billions of Rubles in the renewal of their capacities per year. For instance, the aggregate investment amount into the creation and modernization of production capacities in Russia in 2014-2030 was calculated back at the end of 2014. It is estimated to be 2.1 trillion Rubles in ferrous metallurgy and 1.25 trillion Rubles in non-ferrous metallurgy.
The enterprises of the tubular division of ChelPipe Group – Chelyabinsk Pipe Rolling Plant and Pervouralsk Pipe Plant – shipped 865 thousand tons of steel pipes to their customers in the first half of 2016, which is 19% lower than the volumes of the similar period in 2015 (- 206 thousand tons). This decline is caused by a drop in demand for large-diameter pipes which are one of the main products of the company. This trend is observed in all large Russian manufacturers. There is also a certain reduction in the areas of seamless products and welded pipes, including large-diameter pipes (LDP), which is caused by the rescheduling of the deadlines of the infrastructure projects of Gazprom (“The Power of Siberia” and “Nord Stream”) and by a decrease in Transneft’s consumption of LDP for the repair and operating needs of the existing oil pipelines. Nevertheless, the shipments of oil pipes increased by 6% - 180 thousand tons - which can be ascribed to an increase in the volume of oil recovery and exploratory drilling in Russia.
The results of ChelPipe reflect the market trends. At the same time, the enterprises of ChelPipe Group actively modernize their production and expand their opportunities for export.
For instance, Pervouralsk Pipe Plant (part of ChelPipe Group) was audited by the classification society DNV GL (Norway) this year. Following the results of the inspection, the enterprise was awarded a certificate of approval of pipe production for the shipping industry. The document is valid until 2020. The audit consisted of several stages: the confirmation of the factory’s ability to manufacture products in accordance with the rules of DNV GL, the testing of products and the study of a report on the pipe manufacturing process which was performed by experts of the central office of DNV GL. The experts assessed: necessary process equipment, control and test devices, including non-destructive testing units, product manufacture technology, personnel qualification, identification and traceability of products at all production stages. The certificate of conformity covers the manufacture of hot-rolled and cold-deformed pipes made of carbon and carbon and manganese steel grades with a diameter of up to 219 mm and a wall thickness of up to 40 mm. On a global scale, the presence of such a certificate expands ChelPipe Group’s opportunities for selling its products to the shipping industry in the market of MENA (Middle East and North Africa), Turkey and Europe.
Or there is an example of another focus, this time on the domestic market. The META Group (part of ChelPipe Group) implemented a number of advanced projects aimed at developing the company’s client service in the first half of 2016: there is a unified contact center for all regions which allows you to make toll-free calls using the telephone number 8-800 and which has been operating since April; the construction of client zones at scrap collector sites in Chelyabinsk and Yekaterinburg is being completed. It all has led to some positive financial results for the enterprise. The META Group sold 667 thousand tons of ferrous steel scrap in the first six months of 2016, which is 7% higher than the figures of the similar period of last year (624 thousand tons).
Large-scale infrastructure investment projects of ChelPipe Group, of which the company can brag during the years in which it modernized its activity, are also worthy of note.
The Finishing Center of ChelPipe was launched at Pervouralsk Pipe Plant in May 2009. It manufactures oil pipes and oil and gas pipes with enhanced operating characteristics which can be heat-treated and to which an anti-corrosion coating (varnish) can be applied, as well as pipes with threading. The additional finishing of oil pipes is a crucial element of meeting the customer’s requirements. Owing to the procedures performed with the help of modern equipment of the Finishing Center (heat treatment, threading, application of anti-corrosion compounds, additional hydraulic tests, non-destructive instrumental testing and so on), the products become more reliable and can withstand high pressures and severe climatic conditions, and its lifetime is extended. All products of the Finishing Center are certified in accordance with Russian standards and the majority of international standards. The project’s expenditures are 210 million USD. The Center’s capacity reaches 115,000 tons per year (40,000 tons of oil and gas pipes and 75,000 tons of tubing and casing pipes).
A new modern shop producing large-diameter pipes called “Height 239” was launched in July 2010. It significantly increased the annual production volume of this type of pipes at ChelPipe, up to 1.35 million tons. The shop’s equipment allows manufacturing single-joint welded pipes with a diameter of up to 1,420 mm and a wall thickness of up to 48 mm and a length of 12 to 18 meters, with external and internal coatings. The characteristics of the products manufactured by the shop “Height 239” comply with all customers’ requirements (including prospective ones) and can be used in severe climatic conditions (for instance, in Eastern Siberia, where the volume of exploration and development of oil and gas field is increasing), in the context of increased seismic activity and when pipelines are laid at sea bottoms. The project’s expenditures are 880 million USD. The shop’s capacity reaches up to 1 million tons of LDP per year.
ChelPipe commissioned a new modern electric and steel melting complex called “Iron Ozone 32” at Pervouralsk Pipe Plant in November 2010. Nowadays the shop provides for 75% of the volume of semi-finished goods that ChelPipe Group requires for the production of seamless pipes. The project’s expenditures are 670 million USD. The shop’s capacity reaches up to 950,000 tons per year.
That year also saw the emergence of a new standard of metallurgical production – White Metallurgy. Products, technologies, personnel qualification of White Metallurgy enterprises are in compliance with the most stringent modern standards and are sometimes even ahead of the market requirements for some years to come. The principles of constant improvement are implemented in all White Metallurgy shops. More than half of pipe manufacturers in new shops of the company have a higher education. ChelPipe Group welcomes and encourages its employees to acquire new engineering professions and provides them with opportunities for study. The production in the shop “Height 239”, the Finishing Center and the complex “Iron Ozone 32” can be compared with the organization of processes in automobile and airline companies and the IT industry. The technologies and equipment in White Metallurgy shops allow working in overalls of any color, including white.
A joint project of ChelPipe and Rosnano – an enterprise called “ETERNO” producing stamp-welded parts of pipelines (bends, T-bends, crossings, bottoms with a diameter of up to 1,420 mm) with the use of nanostructured materials – was implemented in 2015. The factory’s capacity reaches up to 10,000 tons of stamp-welded parts of pipelines (SWPP) per year. The enterprise, which is equipped with modern equipment of the leading manufacturers from Sweden, Switzerland, South Korea, Poland, Italy, has unique technological advantages which allow meeting the global quality standards at a competitive production cost and within the shortest delivery periods. The range of “ETERNO” targets the needs, including prospective ones, of vertically-integrated oil and gas recovery companies, as well as pipeline project operations, first and foremost, Gazprom, OJSC and AK Transneft, OJSC.
The scale of projects, the number of implemented measures, as well as constant modernization and future plans, are indicative of rather positive prospects for Russian metallurgy, irrespective of all difficulties and problems which the economic instability has caused. Firstly, as experts says, the demand for metal products will remain stable since it is universally hard to imagine what material can become a full-fledged replacement of metal in construction, the fuel and energy complex, machine engineering, the military and industrial complex and other industries. Secondly, modernization will definitely lead to an increase in the quality of manufactured products and, in general, will contribute to the improvement of the competitive ability of Russian metallurgical enterprises.