Metinvest counts on state support in launching economy, reducing taxes, encouraging investment – CEO

Metinvest Mining and Metallurgical Group considers it necessary for the government to start the economy by reducing taxes, deregulating and encouraging investments, and notes a number of positive steps on the part of the state to stimulate business in war conditions.

According to Metinvest CEO Yuri Ryzhenkov in an interview with the European Business Association (EBA) project Let's talk, the company was sure that there would be no war, although they took a number of actions, fearing the aggravation of the situation in Donbas. However, the reality turned out to be worse than expected.

"The business had to be rebuilt because we lost two large enterprises. More precisely, we have not lost them yet – we hope that we will return them, we will be able to restart. Even our shareholders said that they would do everything for Mariupol to exist, for Azovstal and Illich Iron and Steel Works to work," the top manager said.

At the same time, he pointed to the blocked Black Sea ports, traditional for exports not only to Asia, but also to Europe. Therefore, the company now uses land border crossings to the west.

The company also continues to take care of people, pay salaries, and help in finding employment in the cities where it operates. At the same time, due to the reduction in business, about 45% of the administrative and management company staff had to be cut.

Ryzhenkov added that currently the main problem for exporters is logistics, as well as the economic feasibility of transportation: "Ukrainian railway tariffs are already quite high, plus we have railway tariffs in Europe that are even higher than Ukrainian ones. If we add up all this, then it is simply unprofitable for us to supply ore to China." Therefore, if the situation does not change, the company will not mine ore.

"There is no other recipe. We have European consumers to whom we send it. And here, of course, we will work at maximum capacity. But they will not be able to take all the ore that we can produce. Everything else needs to be exported somewhere – either to the Middle East, or to Asia. And here the question of economic feasibility arises," the head of the company explained.

At the same time, he considers it necessary for the EU and Ukraine to decide whether we want to earn big money on logistics services provided to producers of ore and grain. Or we want to restart the economy and provide an opportunity to export. Then privileges for these transportations are required. Therefore, this is a joint work between the state, logistics companies and companies such as Metinvest, that have this ore, grain or something else that needs to be supplied to foreign markets.

Ryzhenkov agreed with the thesis that it is necessary to produce more finished products in Ukraine in order to extend the processing chain and export more expensive products.

At the same time, he pointed out another problem – will the company be able to supply these products somewhere? Europe has enough of its own manufacturers, and it may not be economically feasible to transport products to European ports in order to later deliver them to some distant markets. The way out is to develop the economy. It is necessary not only to tell the metallurgists: you must process ore and produce products of greater added value, but also to stimulate those sectors of the economy in Ukraine that will buy these products. But for this it is necessary to end the war, restore the economy, "Ukraine must become stronger, it must win, and then it will develop."

"It is impossible to invest in strategic things when you don't understand what will happen to the country in the long term. Yes, we believe in Ukraine's victory, but we don't understand when it will be," the head of Metinvest stressed, adding that the group has adjusted its investments, "we are making as much investment as necessary to maintain the status quo."

Regarding destroyed and seized facilities, the company is currently documenting all of this.

As part of the global strategy, the company has business outside of Ukraine: two factories in Italy, a factory in Bulgaria, a factory in the UK, mines in the USA. There is also a large trading company that sells the products of the group around the world.

At the same time, the company is considering the prospect of building a new plant in Bulgaria or Italy. But in order to do this, you need to be sure that the group will be able to deliver ore from Kryvy Rih.

"Now it can be, but not guaranteed. That is, we are considering different scenarios. Our technology strategy involves investments both in Ukraine and in other countries. Over the past eight years, we have invested the most in Ukraine," the CEO specified.

According to him, the Ukrainian authorities need not only to talk about starting the economy, but also to do what they say. Because there is a lot of talk about deregulation or lowering taxes, encouraging investment, but in reality the opposite is being done.

He also recalled that until recently there was a problem of VAT refunds. This problem is always there, but here it was the most serious, because since February the VAT refund for all exporters has been stopped. This is a problem not only for metallurgists, but also for farmers and other exporters.

Source: www.en.interfax.com.ua