Ukraine news: Zaporizhzhia steel plant feels war’s impact

Zaporizhia, Ukraine –

The Zaporizhistal Ironworks in Ukraine is stacked with flak jackets and anti-tank traps at the entrance. Every time an air raid siren goes off, and every day, most workers head to his one of the 16 bunkers that dot the sprawling property.

But some face the threat of artillery fire as well as the intense heat and sparks from the blast furnaces that forge the steel used in everything from rail cars to home appliances, and keep working to keep the molten metal moving. .

The southwestern city of Zaporizhia, for which the plant is named, is less than 50 kilometers (31 miles) from the front lines, and its housing and energy infrastructure are frequent Russian targets. Due to the effects of the war, the factory is running below full capacity and his third of the 10,000 workers are idle.

The damage to Ukraine’s metal industry has crippled a profitable sector and key employers needed to sustain a war-torn economy. Efforts to restore production and get goods back to customers around the world are critical in helping the country rebuild.

A pillar of the pre-war economy, the metal industry, which accounted for one-third of Ukraine’s exports, was overthrown by Russian forces that took control of the industrial heartland of the Donetsk and Luhansk regions.

For steel and mining company Metinvest, the slowdown at the Zaporizhstal steel plant is only part of the pain. Since Russia occupied Ukraine’s Crimea peninsula in 2014, the company has lost equipment and facilities in Russian-controlled areas, lacking sufficient security for workers to head to the front lines and grow.

But “the biggest damage we have suffered is the damage done to the Ukrainian economy,” Metinvest CEO Yurii Ryzhenkov told the Associated Press. “When a country is damaged, a company suffers like a direct artillery hit.”

Life still revolves around the blast furnaces at the Zaporizhstal steelworks, although only three out of four are in operation. A constant hissing fills the air, taking on the pungent, acidic taste of sulfur that comes from separating cast iron and waste deposits.

The worker’s silver suit reflects the dazzling light emanating from the churning red molten metal in the blast furnace, where temperatures reach 1,500 C (over 2,700 F).

The process looks busy, but workers know that less cast iron is melting than before the war.

“We have limits, both in terms of raw materials and sales,” says Oleh Ilin, blast furnace master.

Unlike other Ukrainian industrial enterprises, Zaporizhstal was not damaged by artillery or missile attacks. But like many others, its growth has been hampered by power outages, infrastructure damage, and Black Sea port blockades from Russian missile attacks.

The latter is one of the biggest challenges for Zaporigistal, and in its nearly 90-year history, work has been interrupted only twice: during World War II and shortly after Russia’s invasion of Ukraine. Russian forces were stopped just a few dozen kilometers from the factory last spring, but almost a year later they have never fully recovered.

The products produced by Zaporizhstal are expensive and difficult to reach customers. Trains instead of ships primarily move orders, increasing not only transport but also production and raw material prices.

Before the war, Zaporigistal was able to complete batches of steel strips used for electrical appliances, for example refrigerators, and deliver them in one to two months, said Roman Slobodianiuk, general director of Zaporigistal. said. Now that could take him over 3 months.

“Not all clients are ready to take such risks, so we have had to reduce our geographic reach,” he said.

Zaporizhstal worked with customers in about 60 countries, but that number was cut in half. The war affected the ability to fulfill orders in much of the Middle East and many African countries.

“Before the war, about 90% of metallurgical products were exported by sea, because it was much cheaper,” said Dmitro Goryunov of Ukraine’s Center for Economic Strategy.

The plant is now focused on closer European countries and the US market, reachable from Polish ports.

Data from trade associations Ukrmetallurgprom and Oxford Economics show that about a third of the metal industry’s capacity has been destroyed and output has fallen by about 65%.

The Ukrainian KSE Institute estimates that the war will cost all Ukrainian companies $13 billion USD. Economic output he said will shrink by about a third in 2022, with the economy ministry predicting growth of just 1% this year.

Governments rely on donations from allies such as the European Union and the United States to pay their citizens’ wages and pensions, helping them avoid printing money that could fuel inflation. Ukraine got a boost last week with her US$15.6 billion loan package from the International Monetary Fund.

Metinvest, meanwhile, is trying to rebuild two of its main facilities to Russia, including the Azovstal steel factory, where the Ukrainians fought off a siege from Mariupol’s labyrinth of tunnels and bunkers.

Maksym Notchenko, 41, a former Azovstal worker, watched from afar as the factory was besieged by the Russian strike.

He fled and started working at Zaporiistal last April. About 20,000 of his other Metinvest workers did the same, leaving occupied territories and front-line fighting. Before the invasion, Metinvest had about 100,000 workers, now he has 85,000.

CEO Ryzhenkov said the company will revive, mainly by lifting the blockade of Black Sea ports and restoring supply chains.

“The characteristic of Ukrainians is that despite everything that happens to us, we keep working, inventing new ways of working, inventing ways to be effective in any situation.

He says the only way to guarantee Metinvest’s security and development is to liberate all Russian-controlled territories, including Crimea. Therefore, the company invests resources to support the Ukrainian army.

“Their victory is a guarantee of Ukraine and the businesses that Ukraine can develop,” Ryzhenkov said.


AP Business Writer David McHugh contributed to this report from Frankfurt, Germany.

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