MetallurgMash: Pulse of the Market

Siemens VAI estimates that the capacity of the Russian machinery market will reach €1,1 bn by 2015. Although it is less than the pre-crisis level (€1,4 bn in 2088), still is it much bigger as compared to €796 M in 2008, €772,4 M in 2010 and €857 M in 2011. In his interview to Metal Supply & Sales, General Information Partner of Metal-Expo, E. Nikolaev, Director for Sales, Industrial Sector (Metals Technologies Solutions for Industry), Siemens VAI gave an outlook of the market.

- Mr. Nikolaev, how dynamic in your estimation is the Russian machinery market?
- Now we observe a certain revival after the global economic crisis. 2009 was very bad and many contracts were suspended. Today all the pre-crisis contracts have been almost fulfilled. However we do not see many investments so far and I guess the pre-crisis investment activity will hardly be reached. Still certain reconstruction is going on. Mainly companies invest in technologies and equipment with the aim to improve products quality. Today the period of intensive development is almost over giving way to extensive development: since the main producers have reached their design capacities they begin to pay more attention to quality. There are a lot of aggregates and technologies to improve quality including out-of-furnace steel treatment, automation and control systems etc. Customers’ demands as regards to quality always grow and in concerns all the segments including oil and gas industry, the automotive industry, etc. International car producers for example according to production setting up and localization regulations sooner or later will have to use 100% Russian parts. Steel companies consider these trends and try to fully meet the customers’ demands. The main investments will go this direction in the next three years. Now we together with Arvedi promote a revolutionary development: an aggregate for continuous strip production. Production capacity of such aggregates reaches 2—2,5 M t. depending on the range.

- From which sectors of the ferrous industry you receive most of orders?
- We cooperate with the biggest Russian steel producers including NLMK, Severstal, Evraz, Mechel, etc. Our main customers in their turn focus on meeting the demands of the oil and gas and automotive industries. Recently, for example, we have received a contract for supplies of 2 merchant mills with the capacity of up to 500k t from Evraz. We are in the middle of negotiations with Severstal as well. I must admit that as compared to the pre-crisis period customers are not willing to make quick decisions.

- What is the share of the Russian market in the total Siemens sales volume to the steel companies?
- Russian market accounts for 5 до 10% of the total Siemens turnover. Of course it depends on the number of orders.

- What is the Siemens in the Russian market?
- We estimate our share in the Russian market reaches 25—30%. This only concerns the imported equipment. Besides we do not cover the whole range of equipment: for example, we do not have equipment for coke and chemical production although our equipment range is quite broad: from blast furnace production of high conversion products.

P.S. Leading equipment producers and engineering solutions suppliers will present their products at MetallurgMash’201, Exhibition for Equipment and Technologies for Steel Industry and Metalworking, on November 15- 18, at the All-Russia Exhibition Center, Moscow. The exhibition will be held jointly with Metal-Expo’2011