Recently, our team conducted a survey among clients, the purpose of which was to determine the specifics of the work of foundries in 2023. The purpose of this study is to identify difficulties and problem areas both in the casting production process and in organizational aspects.
EU programme for the development of the Ukrainian economy Ukraine Facility
Currently, our team is actively engaged in issues related to the development of the mining and metallurgical complex sector (Green Metallurgy), so the information collected from clients will be taken into account when developing new projects together with the authorities and business representatives.
Since 2023, the founder of Ukrfavorit, Olena Isayeva, has been a member of the interdepartmental group created by the government to implement the EU Ukraine Facility program.
The Ukraine Facility is a recovery program for Ukraine proposed by the European Union. It is expected to receive €50 billion in funding over 4 years (2024-2027). To launch the Ukraine Facility, the government must prepare a plan for the country’s recovery, reconstruction and modernization, as well as detail the reforms and investments that will need to be implemented as part of the EU accession process. Source of information Source of information
According to the announcement of the Executive Vice-President of the European Commission Valdis Dombrovskis, under the Ukraine Facility program, Ukraine will receive the first tranche of €4.5 billion in March 2024, and the second of €1.5 billion in April 2024. Source of information
TOP-3 problems of foundry enterprises
According to the results of a survey of representatives of the foundry industry, in 2023, enterprises had several problems that directly affected the profitability of production activities.
Fig. No. 1 – Results of the survey “The biggest problem of foundry production in 2023”
1. Lack of personnel.
Over the past 2 years, the problem not only of foundries, but also of most enterprises in Ukraine, is the lack of qualified personnel. In most cases, the shortage of workers arose due to mobilization, and a certain percentage of staff reduction is also due to the emigration of Ukrainians abroad or moving to safer settlements in the country. According to the survey results, 53% of enterprises had a reduction in employees due to mobilization measures.
At foundry enterprises, the most vulnerable area, where the shortage of personnel is acutely felt, is the production link. In 2022-2023, the number of calls to technical specialists of Ukrfavorit increased by 15-20% due to the lack of technologists in production. In order to provide timely service to our customers, we had to slightly modernize the provision of services and master online consulting. However, in the case of calls with serious problems with casting technology or equipment operation, our technical specialists must visit the production site to conduct a technological audit.
2. Complicated logistics.
Logistics, especially outside the country, is also an important problem. We have previously written about the blockade of the Ukrainian-Polish borders and the truckers’ strike. For more details on the situation at the border, please visit the link
Currently, the border with Ukraine is blocked due to a strike by Polish farmers. They are demanding restrictions on the import of agricultural products from Ukraine and Poland’s withdrawal from the so-called “green” EU agreement. According to current information, about 2,300 freight vehicles are waiting in line at six checkpoints on the Ukrainian-Polish border. Source: Source of information:
We are also seeing difficulties with freight transportation within the country. This situation is a consequence of mobilization measures and population emigration. 27% of respondents report major delays in deliveries.
To minimize risks and deliver materials on time, our team is engaged in planning. We talked about this in more detail in the article
3. Lack of orders.
Due to the difficult situation and hostilities in Ukraine, foundry enterprises have faced a reduction in orders, or even their absence. This was reported by 20% of respondents. Ukrainian manufacturers had many orders from different countries of the world. But now, some foreign customers are afraid to take risks and invest their money in the production of products in our country. The reduction in orders is also due to difficulties with delivery, in particular, the lack of air connections. Exporting products now requires more effort and longer delivery times. Not every customer can wait and tries to avoid downtime due to expectations of products from Ukraine.
The reduction in orders is also due to the shutdown of customer enterprises due to military operations.
Results
Despite the above difficulties, the foundry industry has prospects for the future. There are donors who are interested in investing in the development of our country. The state is also implementing programs to support and start new businesses. We will tell about this in the next article, where we will share the results of the work of foundry enterprises for 2023.
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LLC “Ukrfavorit”
