Restructuring of industrial economies in countries in transition: Experience of Ukraine



Given the general reduction of output in the metallurgical industry over the last few
years one can admit some improvement of quality structure of the metallurgical products. The
share of advanced steel producing technologies such as electric and oxigance methods exceeded
50 per cent in the total steel output that is much greater than it used to be before the
restructuring. It may be assessed as a positive trend on the hand of market tools. Under the
condition of total reduction of output in the sector there is a comparative growth of high quality
and competitive types. Nonetheless according to the world experience one can not rely entirely
on spontaneous positive influence of the factors and account on automatic achievement the
optimal result. This is completely true as far as Ukrainian metallurgical industry is concerned.
Measures for overcoming the crisis have to be base on a deep and comprehensive restructuring
the entire industry rather then on monitoring positive shifts in the output structure while the
decrease in the industry is being in progress.

Main directions of structural changes in the ferrous metallurgy, being traditional on the
nature, are determined, first of all, the needs and the potential of domestic and foreign markets.
They are as following:

raising the share of electric furnace method of steel production (currently its share is less
than 3 per cent), continued casting (in Ukraine it makes only 2 per cent of the total output,
while the world average is 24 per cent);

expansion the output of cold-rolled plate, first of all for carriage-building and car production;

output of various types of steel plates and nonferrous metal plates, pipes of small diameter,
compound profile rolled iron, precise casting products.

The directions called above determine improvement the structure of output for metal
products and raise their quality. In addition, measures of restructuring for the ferrous metallurgy
may resolve some other problems as well, first of all, the improvement of ecological state in
regions with well developed metallurgical industry, the reduction of fuel and energy
consumption. The reduction of coke consumption at the expense of closing down some
obsolete blast furnaces for instance will make useless the number of coke and chemical plants
with the reduction capacities of those in operation. The main stream for the ferrous metallurgy
industry restructuring remains to be the reconstruction and technical renovation of currently
operating capacities. The main cause of such a choice for the restructuring is the critical state of
productive capacities, which are warned out at some enterprises by 60-70 per cent, and
backward technological level of productive circles, especially blast furnace and steel melting
processes.

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