Ukrainian exports will lose on world markets due to high logistics costs, - General Director of "Zaporizhstal" Myronenko
Because of this, the industry is reducing production volumes and putting workers on forced layoffs, emphasizes Oleksandr Myronenko, the general director of the Zaporizhstal metal plant, Censor.NET informs with reference to the company's press service.
According to Myronenko, Western partners at the borders do not allow Ukrainian cargoes in the necessary volume: the products stand at the borders for a very long time, and the users wait for a very long time, and as a result, they look for similar products in Europe.
"Other products may not be as suitable for them in terms of price, but they are faster in delivery. Because the average delivery time for our products is about 30 days. This is a very long time, no one will wait that long when metal prices are falling," he noted. Myronenko.
The second reason is a 70% increase in cargo transportation tariffs by Ukrzaliznytsia. This made the production of Ukrainian products unprofitable, so the company indefinitely postponed the increase in production volumes.
"The increase in tariffs for railway transportation increased the cost of our products. We have become less competitive in the metal market, and this is a systemic problem that does not allow us to increase production volumes, and, accordingly, to increase foreign exchange revenues to the state budget. Expensive logistics make our products unprofitable: there is no it makes sense to produce. We planned to increase production and start up the third blast furnace from next month. But for now we have reviewed our plans, and at the moment we do not know when it will be done - maybe in September, or maybe much later," said Myronenko .
Currently, according to him, the plant operates only on two blast furnaces - this is 50% of the capacity. Accordingly, 50% of employees (that's about 5 thousand people) were sent to forced layoff with payment of 2/3 of the salary. To change the situation for the better, the state should support business and reduce taxes and tariffs that force companies to reduce production.
"Both our statesmen and business must decide what we make money on: whether on logistics or whether we increase production and create new jobs. The state should help business and promote its development, and not oppress it with taxes and tariffs. Then we all together we will be able to increase production volumes, create jobs and increase foreign exchange revenues to the budget," Myronenko summarized.
As you know, in the first half of the year, exports from Ukraine fell by 55.6%, and sales from Ukraine fell by 23.7%. The reasons are the blocking of ports and the complications of logistics, due to which the cost price of Ukrainian products has increased many times. Due to logistical problems, large industrial enterprises reduce or completely suspend production. Thus, ferroalloy enterprises are operating at 20% of the installed capacity, while some of the Ukrainian GOKs have suspended their work.
We will remind you that the Ministry of Infrastructure and "Ukrzaliznytsia" increased tariffs for freight rail transportation by 70%. The European Business Association and industry unions opposed such a decision: they called on the authorities not to shift the problems of UZ onto the shoulders of business, because everyone was affected by the war. In addition, the company is a state monopoly and can request financial assistance abroad, while private Ukrainian businesses currently receive no assistance at all.
