Magnitogorsk Iron and Steel Works (MMK) confirmed its status as the largest supplier in Russia of rolled metal for the production of pipes. At the end of 2018, the Company shipped 3.3 million tonnes of hot-rolled steel to the Russian market, of which more than half was delivered to companies in the pipe industry.
MMK's Head of Sales to Pipe Companies Alexander Kadoshnikov made this comment at the 9th All-Russia Conference ‘Steel Pipes: Production and Regional Sales’ held in Rostov.
According to him, the pipe industry is one of the key segments of MMK's presence in the domestic market. It accounts for more than a quarter of all the plant's Russian sales. MMK firmly holds the position of Russia's largest supplier of rolled metal for the production of welded pipes. Last year, the Company shipped a total of 3.3 million tonnes of hot rolled steel to the Russian market, about 56% of which went to pipe manufacturers. In 2017, the supply of hot-rolled steel to the market amounted to 3.2 million tonnes, and a year earlier it was 3.1 million tonnes.
MMK itself is a manufacturer of pipe products, producing round, galvanised and shaped tubes since 2017. The volumes of shipments of MMK’s own pipe products to the domestic market in 2018 amounted to 60,000 tonnes, including 11,100 tonnes of galvanised pipes. In 2019, the volume of shipments of pipe products to the Russian market is planned to remain at the same level as in 2018.
As noted by Alexander Kadoshnikov, in a highly competitive market, the most promising marketing strategy is to find and consolidate market niches. In this regard, MMK continues to work on developing new products and improving the quality of already existing products. Over the past year, MMK has mastered production of new types of products from steels of different strength grades, as well as expanding the numbers of sizes and brands of product. In particular, in 2018, the technology for the production of sheet metal from grade 0H9 cryogenic steel was developed and mastered for use in projects for cryogenic equipment and in the construction of facilities for transportation, use and storage of compressed and liquefied natural gas. In 2019, there are plans to expand the size and range of rolled products made from cryogenic steel.
Another important direction for enhancing MMK’s presence in the pipe products market is to maintain the same quality and continue constantly improving customer services. From 1 April 2019, MMK put into operation an automated system for operational and production scheduling, providing customers with the opportunity to conduct a comprehensive check of orders for feasibility at the time of registration, automatically search for 'travel companions' to optimally aggregate light-tonnage orders. It allows customers to see the planned date of shipment of finished products, monitor the execution of each order by redistribution and informs customers in a timely manner about the current stage of their order.
For maximum customer convenience, a Technical Support Office has been created for questions about the quality of the rolled metal products and technical issues, which works on the principle of having 'one window', i.e. using a single centre for complaints and technical support. The most up-to-date information resources are used widely in the office, the progress of claims can be tracked by the client in real time and can also be tracked with the help of a specially designed mobile application.
Work to improve the overall efficiency, increased competencies in the production of niche products and the development of customer orientation allow MMK to retain and strengthen its market position.
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing unit encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2018, the company produced 12.7 mln tonnes of crude steel and 11.7 mln tonnes of commercial steel products. MMK Group had sales in 2018 of USD 8,214 mln and EBITDA of USD 2,418 mln.
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