Interpipe Logistics Costs Increase 2.5-3.5 Times - Director General Korotkov

The cost of transporting the products of the Interpipe Pipe and Wheel Holding from the Ukrainian plant to the client increased 2.5-3.5 times compared to pre-war times.

The director general of Interpipe Andrii Korotkov said this in an interview with Forbes, Ukrainian News Agency reports.

"Compared to pre-war times, the cost of transportation increased 2.5-3.5 times from the Ukrainian plant to the client. The numbers vary widely depending on the different transport schemes. If in the pre-war period, logistics costs took 3-4% of the cost of production, now they have increased at least two and a half times," he said.

According to Korotkov, since the beginning of the war, Interpipe began to export products to Europe by road and rail with subsequent transshipment through ports, but a new problem appeared - the number of car carriers decreased.

"After February 24, no European company provided its cars for the export of products from Dnipro or Nikopol. At the same time, Ukrainian carriers increased prices for their services. Moreover, all Ukrainian exporters directed their transport flows through the nearest ports of Romania, which were unable to process the entire volume of new cargo. For example, Romanians lacked the experience of transshipment of pipes and railway wheels. However, gradually a new system of transportation began to take shape. All this time, carriers were harmed by missile attacks on various infrastructure facilities in new transport corridors. For example, there is currently no railway connection between Odesa and Izmail. For Interpipe, this is a problem, because it is easier to load one car with 60 tons of products than to order three trucks for this," he said.

According to Korotkov, today the main shipping ports for the company are Romanian ones.

"We are also trying to establish a corridor to the north of Europe. However, these are not Polish ports in Gdansk or Gdynia, since previously they did not work with pipes. Therefore, we decided to transfer our products through the ports of Belgium and the Netherlands. However, this corridor is an even longer road than through Romania. Taking products by car or rail to Benelux is difficult and expensive. Therefore, Interpipe is trying to master the transportation to the north-west of Europe via the Danube. First, the products will be transported by cars to the Ukrainian port of Izmail, from where it goes to the Romanian port of Galati by sea barge and then by river barges go upstream of the Danube to the north-west of Europe. However, so far these are just test batches," he said.

As Ukrainian News Agency earlier reported, the Interpipe Pipe and Wheel Holding sent a vessel loaded with pipes to the United States for the first time since the beginning of the war.

In 2021, compared to 2020, Interpipe reduced EBITDA by 16.3%, or USD 44.6 million, to USD 228.4 million.

In 2021, compared to 2020, the company cut profit by 2.1 times, or USD 103.8 million, to USD 91.3 million and increased revenue by 31%, or USD 267.8 million, to USD 1.133 billion.

In 2021, compared to 2020, the holding increased the sale of pipe and railway products by 17% to 776,000 tons.

Interpipe is the largest producer of pipes and wheels in Ukraine, controlling the Nyzhniodniprovskyi Pipe Rolling Plant, the Novomoskovsk Pipe Plant, and the Niko Tube Nikopol Seamless Pipe Plant (all in the Dnipropetrovsk region).

In October 2012, Interpipe put into operation the steelmaking complex Interpipe Steel.