Steel self-control.Interview with the president of NLMK Oleg Bagrin
~~The president of NLMK Oleg Bagrin - why to increase investment in a crisis.
There is a downswing in the steel industry. Many companues are mired in debt and can not get out because of low prices for their products. UC Rusal has stopped several plants, the Evraz Group announced the conservation of the Claymont Steel plant in the U.S. and put up their Czech and South African companies up for sale. But the Novolipetsk Steel (NLMK) headquarters is increasing their investment. In 2013, the analysts of World Steel Dynamics placed NLMK fourth in the ranking of the most efficient steel companies in the world. The president of NLMK Oleg Bagrin told about the ways to improve competitiveness and to count on in a changing economic environment in an interview with "RBK".
The competitors did not leave us behind.
Last year the Russian market showed a rather interesting phenomenon: a record high volume of steel consumption amid slowing economic growth. What is the reason?
Here, as in the world, the picture is heterogeneous. If you look at the structure of consumption, you can see a serious drop in demand in certain sectors in 2013: 15% in engineering, 20% in the automotive industry. The infrastructure and construction remain a source of demand growth, which stagnated from 2008 to 2010. Now the market returns to its long-term trajectory. Commercial real estates, housing are put in place, new projects are implemented. Hopefully, the positive trend will continue.
The Ministry of Economic Development estimated that this year's steel companies will be able to reduce costs by about 133 billion rubles by limiting the growth of tariffs of natural monopolies. How much is it really possible to save?
The consumers will receive no cost reduction due to the rates freeze. The additional costs just would not appear. Freezing rates does not mean that the company generates revenue, it means that money, taken out of its pocket, will be no more than today.
But would there be any savings?
