The metallurgical industry was one of the first to experience the onset of the COVID-19 pandemic. This sector of the economy has also been adversely affected over the past few years by a lack of qualified personnel. We met with Yuriy Ryzhenkov, Metinvest Group CEO, referred to in the media as ‘one of the most influential managers in Ukraine', to talk about the main challenges faced by the industry and potential 'recipes' for business recovery and development in difficult times.
The conversation was led by Yuriy Fedoriv, Partner, Head of Restructuring Practice & Head of KPMG in Ukraine Financial Services.
KPMG International has recently released the latest version of its CEO Outlook report for 2021. The research shows that global business leaders are confident in the growth of their companies and the global economy as a whole. Our Ukrainian Business Leaders Outlook 2021 confirms this prediction, with more than 70 percent of the CEOs sure that their business will grow.
In your opinion, how will the Ukrainian economy and metallurgy develop in the coming years?
Metallurgy is a cyclical business. Its development does not always reflect the economic cycle. This explains why metallurgical companies have just shown their best results worldwide in the COVID-19 years, with Metinvest being no exception. We are witnessing an unprecedented level of investment in infrastructure projects around the world. That's why I think the economy will be able to demonstrate growth next year. I am sure that by 2022, we will have passed through the current wave of COVID-19 and both the Ukrainian and global economies will have a chance to recover and operate at full strength. Furthermore, we predict an increase in steel consumption.
What factors will affect the rapid recovery of business, in addition to the lifting of restrictions to reduce the effect the pandemic?
First of all, a company’s chosen business model. It must be suited to the time and the external environment in both an economic and political sense and, even more simply, in a human sense. It is important for any business to understand that we are in this COVID-19 pandemic for the long haul. So you have to take this into account in your strategy.
How did the pandemic change Metinvest Group's strategy? What challenges did you face?
Metinvest only sells 20 – 25 percent of its products in Ukraine, while the rest is exported. Accordingly, we are influenced not only by what is happening in Ukraine but also by the situation worldwide. I can say that our company was among the first in Ukraine to be affected by the pandemic. When COVID-19 broke out in China, we had problems there with the supply and purchase of equipment. Then we had to halt two plants in Italy which is Metinvest’s second largest market after Ukraine.
At the same time, this gave us an opportunity to respond faster when the pandemic reached Ukraine. For example, from the very beginning of the pandemic we communicated intensively with our Chinese colleagues; metallurgists and equipment manufacturers. We received information about the procedures they used and the way they responded to restrictions, and we adapted their protocols to suit our businesses. This applied to remote work, mandatory mask wearing, disinfection, personnel placement, and even basics like the use of elevators.
From a long-term prospective, the pandemic has altered our view of the world. Let me give you a remote work example. We divided our administrative staff into several groups: the first group works permanently in the office, the second one only works remotely, and the third one spends 2 – 3 days a week in the office and then works remotely for the rest of the time. We also adopted a hot-desking system in the offices to accommodate administrative staff in a smooth manner.
For those employees who work remotely, we help then to adapt and create comfortable working conditions: we buy desks, pay for the Internet and other communication tools, and provide computer equipment. For video conferencing, Metinvest uses Microsoft Teams. Previously, shop managers spent a lot of time getting meetings. Now a meeting of a working group of any size can be convened within a few minutes and conducted effectively.
