Open Joint Stock Interpipe Nizhnedneprovsky Tube Rolling Plant: Interpipe increased sales of pipeline and rail products in 2021
Interpipe, a global producer of steel tubes and railroad products, increased sales volumes of tubes and railroad products by 17% year-on-year in 2021. Total sales were 776 kt. The share of exports and domestic sales was 82% and 18%, respectively.
Tube sales were up 28% year-on-year and amounted to 602 kt, mainly supported by robust demand for OCTG tubes. Its sales were multiplied by 2.3, to 191 kt.
Soaring oil prices have encouraged energy companies to invest, having boosted demand for tubular products globally and in the MENA region in particular. Interpipe increased pipe sales in the Middle East by 20% year-on-year in 2021.
Interpipe has consistently implemented its strategy of expanding the share of premium pipe products in its product portfolio. In 2020, premium sales amounted to 27 kt. However, at the end of 2021, this figure increased by 56% year-on-year, up to 42 kt.
Last year, domestic pipe sales increased 12% year-on-year. Sales to private gas companies were the main driver of growth, while sales to public energy companies were little changed.
Sales of railway products – wheels, wheelsets, axles and tires – in 2021 fell by 10% year-on-year and amounted to 174 kt.
Ukraine’s wagon and wagon building industry is still stagnant, in 2021 the production of freight wagons contracted by a third, to about. 2 thousand units. In contrast, the potential of Ukrainian transport engineering is much higher, but owners of obsolete rolling stock still refrain from investing in its renovation. Nevertheless, the growth of the aftermarket segment in 2021 allowed Interpipe to maintain its domestic market sales almost at the level of 2020.
Sales in the CIS market in 2021 were down 25% year-on-year as the Russian Federation imposed the embargo on imports of Ukrainian railway products in February 2021. However, Interpipe has managed to diversify and redirect its sales to the European Union, the Americas and the Middle East. East shortly in Q2 2021 which allowed the Company to partially offset the negative impact of the embargo.
In 2021, Interpipe significantly increased its sales of wheelsets in export markets, mainly to the European Union. 20,000 wheel units were sold (+25% YoY). At the same time, sales of axles assembled at our own facilities jumped 38% year-over-year.
Fadi Hraibi, CEO of Interpipe:
– Interpipe is pursuing its strategy of expanding sales of high value-added products. For 2022, we have set ourselves the ambitious goal of doubling sales of premium and semi-premium tubular products.
To achieve this, we intend to continue prequalification and deliveries to major oil and gas companies in North America and the Middle East. Additionally, Interpipe is focusing on expanding the range of our own premium connections (UPJ-ULT and UPJ-SF).
The rail products division was also given the ambitious task of expanding the product portfolio in the passenger rail products segment. In 2020-2021, Interpipe successfully supplied passenger rail wheels for Deutsche Bahn high-speed trains, but now we need to complete certification with other global railcar and wagon building companies.
Interpipe intends to invest further to increase its production capacity. For 2022, we have forecast record capital spending on new projects of $77 million. The company is to complete a key project in the pipe division – the construction and launch of the heat treatment line at Interpipe Niko Tube which will increase the production capacity of premium pipe products.
In the rail division, Interpipe will continue to ramp up its wheel machining capabilities and will also begin the modernization of the thermal section of the wheel rolling workshop.
About the company:
Interpipe is a global producer of steel pipes and railway wheels, based in Ukraine. The company’s products are marketed in more than 80 countries around the world through the network of sales offices located in the key markets of Ukraine, Europe, North America and the Middle East. In 2021, Interpipe supplied 776 kt of finished products, including 174 kt of rail products.
Interpipe has 10,000 people working in the company’s facilities. In 2020, the company transferred UAH 2.54 billion in taxes to budgets at all levels and to extrabudgetary funds.
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