Among the main reasons for stopping businesses are logistical factors, increasing production costs and lowering product prices.
Metinvest Group has suspended operation of its mining and processing plants and metallurgical plant since July 1 due to logistics problems, according to the company’s website on Wednesday, June 29.
In particular, production will be suspended at two mining and processing plants in Krivoy Rog, and Kametstal will reduce work on a blast furnace.
From mid -July, production at Northern GOK will also be suspended: only Central GOK will continue to operate at a reduced capacity.
This decision is explained by the fact that, in particular, after the Russian Federation blocked the ports, companies were forced to deliver products by rail. As a result, logistics costs increased several times compared to pre -war times, and delivery times increased, which is why finished products stood in line at the EU border for many moon.
Also, due to rising energy prices and lack of demand, the cost of production continues to grow.
Among the external factors, metallurgists singled out a significant decrease in world prices for iron and steel and a decrease in demand for metal products and the volume of iron ore consumption in the EU.
Metinvest has ensured that they will not leave the employees of the businesses to their own devices.
“The company will involve thousands of employees to the maximum extent possible in carrying out repairs and territorial repairs to the said assets while maintaining their main income. Will not stop its projects to support the Armed Forces of Ukraine , providing hundreds of thousands of items of military equipment, ” – the message said.
The company noted that the industry could not return to normal operations without government support.
“First of all, we are talking about optimizing the logistics part, as well as other regulatory decisions,” the company said.
Earlier, the CEO of Metinvest Yuriy Ryzhenkov called the logistics problem the main one for economic development in conditions of war – the export of products of Ukrainian businesses has become unprofitable due to a significant increase on the cost of delivering the products.
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Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.