KYIV - ArcelorMittal Kryviy Rih, Ukraine’s largest steelmaker, posted a net profit in 2016 of $100 million, nearly twice the previous year’s figure.
Net income from the sales of the products amounted to $1.96 billion. Capital investments hit $176.7 million. The volume of steel product sales grew by 13% year-on-year.
The company, owned by Indian billionaire Lakshmi Mittal, has pledged to develop his business in Ukraine and modernize the Kriviy Rih plant according to sound environmental principles.
“In 2016, we achieved the highest level of crude steel production since 2008, reaching the target of 7 million tons,” ArcelorMittal Kryviy Rih media relations specialist Anna Gatilova told the UBJ. “Eighty-seven percent of production was sold on export markets,”
Dmitry Churin, head of research at Eavex Capital, said improved profits for Ukrainian steel producers last year were largely linked to sharply higher steel prices on global markets.
“The average export price for steel products jumped 90% in 2016, reaching a level of $500 per tonne,” he said in a analyst comment.
Volatile Steel Prices in 2017?
But prices, Churin added, are likely to be quite volatile through this year.
“Steel plants will have to deal with rising prices for iron ore and metallurgical coke and that threatens to eat into part of steel producers' margins this year,” he said.
The company pointed to a combination of factors behind last year’s figures.
“First of all, the investments that we made earlier are working to help the company now,” Gatilova said. “The other thing is - the stability of the operation.”
Time to Invest
Earlier, Paramjit Kahlon, CEO of ArcelorMittal Kryviy Rih, said the company intends to increase capital and operational investments this year by 43 percent to $400 million.
"The ArcelorMittal Group has begun to invest in production and fulfills its obligations,” he said. “Most of the projects - about 70% - are directed at a renewal of technologies and improvement of the environment.”
The redevelopment plan for ArcelorMittal Kryvyi Rih runs until 2020. ArcelorMittal Kryvyi Rih is implementing a $1.2-1.5 billion investment program.
“Our strategy of developing a modern, competitive company assumes bringing the performance of ArcelorMittal Kryvyi Rih to the European level of energy consumption, efficiency, and environment-friendliness performance indicators,” the company said in a statement.
The main markets for ArcelorMittal Kryvyi Rih are in the Middle East and CIS countries. The company strives to improve consumer service, work on new products, and sell to new markets.
One new development was the start of production of 14 meter rebar, with sales to Israel and Britain. Other products obtained Belgian and Colombian certifications.
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Posted April 4, 2017