Since the outbreak of the war, Metinvest, like the entire economy of Ukraine, has faced with the toughest challenges in the country's history. Many companies have been destroyed or found themselves in Russian-occupied territory. Steelmaking, mining and processing enterprises, and the mines themselves cannot be evacuated from occupied areas or protected in regions under threat from enemy artillery and airstrikes. It is, therefore, essential to look for new opportunities for work and alternative sources of support.

In his interview for the project “Very Big Players: When Will the War End and How to Keep Business Going - Five Thoughts from Ukrainian Manufacturers,” by publisher NV Biznes, Metinvest Group's Chief Executive Officer recounted how the Group’s enterprises have adjusted to the current reality and how they will operate when the war is over.

– Ukrainian and Western analysts believe that the war in Ukraine will not end this year. How long will the war last, according to the assumptions of your business plan?

– We believe that we have many long months, if not years, of war ahead of us. We are now implementing the appropriate changes to ensure our continued business development, maintain production and provide the country with foreign currency and tax revenues and our employees with jobs and salaries. Moreover, business transformation enables us to financially support the Ukrainian army and help civilians and our employees.

– Please tell us about three key measures for adapting the business to wartime conditions.

– The business has had to be rebuilt, given that two of our largest enterprises – Ilyich Steel and Azovstal in Mariupol - have found themselves in temporarily occupied territory. First, we have changed logistics routes inside Ukraine, found new suppliers of raw materials for our re-rolling plants in Italy and the UK, begun selling all US coking coal to external customers instead of our Ukrainian coke-making plants, and channelled all of our resources to retain employees and to support the people and the army. 

1. Reorganisation of logistics.

The Black Sea ports, which have traditionally been used to export raw materials and steel products to Asia and Europe, are currently blocked or occupied by Russian forces. So, we have had to rebuild all of our logistics chains. Currently, one of the only ways of exporting our products is by shipping goods by rail through the western border crossings whose throughput capacity cannot meet current demand. That is why Metinvest's production facilities in Ukraine are only being utilised at less than 50% of capacity. So, the primary task, in order to allow for the export of steel products and iron ore materials, is to increase the throughput capacity of the western railway border crossings and reduce logistics costs. It is also important that the rail capacity for exports be divided fairly between all sectors of the economy, without giving any unconditional preferences to any one industry.   

2. New suppliers of raw materials.

Previously, our overseas enterprises operated as links in the Group's vertically-integrated chain: Metinvest's coal mines in the US supplied coking coal to Ukraine for our coke-making plants, and the rolling plants in the EU and the UK used Ukrainian semi-finished products to produce finished products for end customers. Now, the US mines and the rolling plants in Italy and the UK operate as stand-alone enterprises. The mines have re-oriented their sales to domestic and export markets, and the rolling plants buy slabs on the open market.

3. Helping the army and Ukrainians. 

Since the beginning of the war, we have allocated more than UAH 1.5 billion to support the Ukrainian army, civilians, and our employees.

Metinvest and DTEK, in coordination with the Rinat Akhmetov Foundation, have established the Saving Lives project. More than 97,000 Ukrainians have received packages with essential goods from Europe, and medical workers in Zaporizhzhia and Kamianske have been supplied with medications worth EUR 238,000. Metinvest's Ukrainian volunteers have collected more than 100,000 kilogrammes of humanitarian aid.

Metinvest, the Rinat Akhmetov Foundation, and the Ukrainian Ministry of Health have also launched a medical programme: hospitals in Zaporizhzhia, Kryvyi Rih, Kamianske, Pokrovsk, and Avdiivka have received medications and equipment with a total value of around UAH 60 million. 

The Group is supplying more than 100,000 armour vests to the Ukrainian army. Some of them are being made using Metinvest steel and the rest are being purchased abroad. To date, the Armed Forces of Ukraine have also received 400 drones, 1,150 thermal imaging systems, 8,100 ballistic helmets, and 25,000 tourniquets and first-aid kits. Nearly 60,000 hedgehog anti-tank obstacles and 20,000 spiked strips have been produced from Metinvest steel.

We have prepared more than 6,000 places to accommodate employees who have been evacuated from Mariupol and Avdiivka. Rehabilitation and Re-integration Centres are operating in Zaporizhzhia and Kamianske. More than 1,000 employees have received essential goods, medical treatment and assistance with employment and re-training.

In order to retain workers from the Mariupol assets that are currently in occupied territory, we will help all employees who are willing and have either already left the city or intend to leave it, to re-train and find a job at our enterprises in Zaporizhzhia, Kryvyi Rih, Pokrovsk or Kamianske. We are offering substantial financial assistance to these employees, including compensation for relocation costs and housing rental, social benefits, humanitarian aid and guaranteed salaries. 

– How long will it take to rebuild the economy after the war?

– We should start rebuilding the economy now and not wait for the war to end. Right now, the entire economy must be focused on bringing the day of victory closer - through the restoration of infrastructure, ensuring a stable supply of fuel and energy, and maintaining efficient logistics chains with Western countries. The government and business should be united in this approach and share responsibilities in order to do more.

After Ukraine’s victory, we will have a chance to develop the domestic market and the industries needed to rebuild damaged infrastructure and we will see an influx of foreign investment. Ultimately, the post-war recovery of the country should also transform it dramatically and increase the efficiency of public administration and the economy. The European integration of Ukraine and opportunities presented by our country's accession to the EU should play a special part in this process. 

You can read the complete article by following the link on the NV Biznes website. 

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