What is the present state of the Russian
refractories industry?
Production of shaped and unshaped refractory
materials in Russia fell in 2014 by approximately 5% for
fireclay, magnesia and magnesia-chrome products, as well as for
metallurgical magnesia powders.
---The reason for this was a reduction in the
share of steel produced in open-hearth furnaces by
approximately 16-18%.
But the share of high-alumina and oxide-carbon
bricks and masses increased by approximately 4-6% last year.
This shows the changing priorities of domestic refractories
manufacturers, as well as the improvement of the qualitative
and operational characteristics of Russian refractories.
The share of imported materials remained at the
same level for the third year in a row. It equals approximately
17-19% [of Russian refractories consumption] and includes
oxide-carbon materials, high-alumina and corundum vibration
cast shapes, gunning masses and other magnesia materials,
high-alumina and corundum concretes.
The share of exported materials has been
declining by 3% per year during the same three year period and
now amounts, according to preliminary data, to not more than
7-8% of the total market volume.
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Sergei Odegov, CEO of
Magnezit Group,
says that the company’s advantages in
terms
of expertise, specialist service capabilities
and
high quality raw materials supply will enable it
to tackle changing trends in the global
refractories
market.
Source: Magnezit
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What are the key markets being targeted by
Magnezit?
First of all, the main priority for Magnezit
Group is the production of calcined magnesia as well as
refractory materials, making up part of the new flagship
trademarked product line, Russian Magnezit, for manufacturing
high performance refractory products used in heat-containing
industrial vessels.
Russian Magnezit is fused and dead-burned
magnesia with a magnesium oxide (MgO) content of 97% and above,
a calcium oxide/silicon dioxide (CaO/SiO2) ratio of
at least 2, and a high degree of crystal size consistency.
Thanks to the application of high quality
materials in the production process for the Russian Magnezit
line of products, Magnezit Group continues to improve and
broaden the product line of oxide-carbon, magnesia-spinel,
magnesia-chrome and magnesia bricks, which allows for a
decrease in the share of analogous imported materials for the
ferrous and non-ferrous metallurgy and cement industries in
Russia.
Within two-to-five years after implementation of
plans aimed at growing production volumes of high quality
Russian Magnezit materials, a considerably larger quantity of
such products will be offered globally.
The main geographical market for Magnezit Group
is the CIS, but the company is actively increasing its share of
the European market, thanks both to expansion of production
volumes at its production site in Slovakia and to deliveries of
refractory materials from Russia.
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Figure 1: Complex for production
of dead-burned magnesia clinkers
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Magnezit has invested in a
new complex at its site in Sakta, Russia, for the
production of greater volumes of high quality calcined
magnesia products.
Souce: Magnezit
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What is Magnezit doing to expand its market share in
refractory products?
With the refractory materials offered through the
Russian Magnezit line, Magnezit Group is broadening its range
and bringing the quality of its finished refractory products to
a new level. So we are able to offer competitive substitutes to
imported materials for many branches of Russian industry.
Our number of customers has also been growing
thanks to the work of company specialists aimed at optimising
lining
materials – involving the selection of high
temperature materials from all production sites across the
group, as well as from the partner companies.
Indices of optimality may vary for different
customers: for some, it is low specific costs; for others, it
is payment conditions and terms of delivery or availability of
warehouses which can be reached during one day; for a third
group, complex delivery both of refractory materials and
maintenance materials (masses and fluxes), their installation
into thermal vessels and maintenance during the warranty period
are most important.
Accordingly, Magnezit Group tries to provide all
customers with the best way of achieving their targets.
Magnezit Group is managing to expand its market,
not only through product sales,
but also by offering comprehensive maintenance and service.
For example,
the group’s servicing company, Magnezit Montazh
Service, works with Magnezit’s own materials and
carries out specific contractor’s work with the
possible participation of other refractories manufacturers.
How much is Magnezit spending on
R&D?
R&D amounts to 3.5% of the
group’s annual product sales, excluding the costs
of design and improvement of equipment, as well as costs of
developing production at the new manufacturing plants.
The vanguard of the group’s
scientific and technological advance is Magnezit’s
Centre for Engineering Development. This facility is located in
the town Satka, in the Chelyabinsk region of Russia, and is one
of the biggest engineering centres in its sphere in Europe,
employing more than 150 specialists.
The centre brings together knowledge and
experience of all our subdivisions in various countries and
creates optimal solutions for customers, continuously
perfecting the group’s products and
technologies.
Areas being worked on by the
centre’s specialists include: the creation of
novel products; developing modern technologies; perfecting
technological processes with the aim of improving product
quality; the introduction of new manufacturing processes into
real production lines; analysis of raw materials; carrying out
joint research together with customers’ R&D
centres; and the protection of intellectual property.
Is Magnezit facing increasing competition
in the refractories industry?
Magnezit Group’s share of the
Russian magnesia refractories market amounts to about 75%, and
to more than 70% across the CIS.
Strong competition has always existed in our
branch of industry, but it is the driver of positive changes,
modernisation and the development of novel kinds of
products.
In the Russian Federation market, for some
products the group only competes with imported materials (for
example, in oxide-carbon and magnesia-spinel bricks) as other
domestic manufacturers are unable to offer the same quality and
prices.
Some other kinds of products, such as
high-alumina corundum concretes and bricks, and magnesia-based
gunning masses, have been actively produced and supplied by
domestic manufacturers for some time.
The main country-suppliers of competitor products
are China, Slovakia, Turkey, Greece and Germany. Products from
more than a hundred refractory companies worldwide are
represented on the Russian market.
Magnezit Group’s products
successfully compete with imported materials on quality,
as is confirmed by the service life records of various thermal
vessels at customers’ plants and by the long-term
contracts signed for them.
Besides this, Magnezit Group also offers advanced
services. The most efficient way of interacting with clients is
by providing prompt deliveries of refractories, high-quality
consulting and engineering services and maintenance work under
the guidance of a team of Magnezit professionals.
Does Magnezit expect to increase exports
of its products to international markets?
Magnezit Group has been exporting its products
abroad during the whole of its business history. At present,
export volumes to CIS markets (excluding Russia) and further
abroad amount to more than 25% of total output, in real
terms.
The main foreign markets are Ukraine, Kazakhstan
and other CIS countries.
Around 7-9% of total sales are delivered further
abroad. To Europe and the Americas, we mainly deliver materials
manufactured at our European plant in Slovmag, Slovakia, as
well as different magnesia powders.
After commissioning new capacity at our Satka and
Lower-Angara production sites for calcination (a multiple
hearth furnace and shaft kilns) and sintering (high temperature
shaft kilns), production volumes of magnesia with high MgO
content will increase during the next two-to-four years. This
will allow us to offer considerable volumes of high-quality
refractory materials, including materials in the Russian
Magnezit product line, on the international market.
What are the main opportunities and
challenges you see in the refractories market?
Among the main trends in the refractories market,
I can mention the following: gradual growth in demand for
services necessary to ensure the faultless operation of thermal
vessels; continuous reduction of costs on the part of consumers
of high temperature materials; the transfer to online of
tenders for purchasing of refractories; introduction of
advanced technologies and materials by foreign suppliers; and,
the reduction of customs duties on refractory products within
the framework of the World Trade Organization.
As for tackling these trends, the specialists at
our Centre for Engineering Development, the availability of
100% of our own raw materials for a period of more than 100
years and modern production capacities will allow our company
to take into account current trends, to maintain our position
in existing markets and to expand new ones.