Business news

24 Jul 2020

Belarusian steel mill BMZ works to increase export

An archive photo

ZHLOBIN, 24 July (BelTA) – The Belarusian steel mill BMZ is increasing export. The efforts were discussed as Prime Minister of Belarus Roman Golovchenko visited the company, BelTA has learned.

BMZ is resuming normal operation. Steel output is expected to increase by 18% in July in comparison with the previous month. Positive dynamics in export and earnings is expected.

As a major exporter BMZ has felt the coronavirus’ impact on the world economy. The pandemic has hit sales of hardware items hardest, in particular, sales of such an expensive product as metal cord. Due to quarantine measures many European consumers have noticeably reduced consumption or have put on hold the execution of the existing contracts. Markets are recovering little by little. As a result, BMZ expects to increase metal cord production in July by more than 70% in comparison with the previous month to over 5,400 tonnes. The production of bronzed bead wire and steel wire is expected to increase substantially as well.

In H1 2020 BMZ made 1.25 million tonnes of steel, which was converted into rolled steel products, hot-rolled pipes, metal cord, and various kinds of wire. More than 80% of the metal products was exported. The exports were shipped to 49 countries. The largest importers included Russia, Israel, Lithuania, Germany, and Netherlands.

The company continues working despite the pandemic’s impact. The manufacturing facilities are making products in response to customers’ orders, which virtually rules out putting any stock into storage. The stock in storage is now equal to 3.5 days of the company’s output. The approach allows preserving the workforce and the company’s stance on the global market. Active work to make sales more effective and reduce costs help achieve these goals as well. A new tool was introduced in 2020: sales of spot varieties of metal products via the Belarusian Universal Commodity Exchange (BUCE). It allows BMZ to attract clients from the geographically close markets of Poland and Ukraine.

Work to diversify sales continues. This year the company has been able to penetrate the Italian market of bronze bead wire and the Kenyan market of cast bars. Export to Austria, Spain, Poland, Finland, France, and Switzerland increased by more than 50% in comparison with the same period of last year in physical terms and monetary terms. Sales in the USA, Singapore, Burkina Faso, Ghana, and Kenya increased considerably.

BMZ works to reduce costs, too. In January-June these measures saved Br79.3 million or 6.3% of the prime cost of the manufactured products.

The diversification of target markets, the manufacturing of new kinds of products, and the reduction of prime costs are expected to allow BMZ to reach the breakeven point in July.

The prime minister was made familiar with manufacturing facilities of the steel mill. A conference with the company’s management and a meeting with BMZ workers are also on the agenda.

The public joint-stock company (OAO) BMZ, the Management Company of the holding company Belarusian Metallurgical Company (BMC), is a high-tech Belarusian metallurgical enterprise. It comprises infrastructure shops and four manufacturing divisions connected by one technological chain. The divisions focus on steel smelting, mill products, pipe products, hardware items. BMZ exports more than 80% of its output every year.