Magnezit: Putting Russian-made refractories on the global map

By Laura Syrett
Published: Wednesday, 27 May 2015

With a production history dating back to 1900, Russian refractories producer Magnezit Group has been exporting materials throughout its business life. The company is stepping up capacity and increasing the range and quality of its products and its CEO, Sergei Odegov, told IM that Magnezit expects to be a competitive supplier well beyond the CIS within the next few years.

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.

Pg 28  

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
Source: Magnezit 

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.    

Figure 1: Complex for production of dead-burned magnesia clinkers 

Pg 29 

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 

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.