NIKOPOL, Ukraine – Vasyl Atanasov is the main shareholder in a family-owned business that makes highly specialized pipes for mostly Western markets.
Starting as a floor factory worker years ago, he has faced the behemoth task of turning an obsolete Soviet-era factory in the city of Nikopol in Dnipropetrovsk Oblast into a modern production site.
“We’re still modernizing,” his son Yury Atanasov, another shareholder of Centravis and its CEO, told the Kyiv Post. “I can’t say that it’s easy. Integrating modern production facilities into old Soviet infrastructure and manufacturing culture is not an easy task.”
His company, Centravis, is the sixth biggest supplier of seamless stainless pipes worldwide, fourth on the European Union market and second among former Soviet republics. Exporting 90 percent of what it produces, the company employs some 2,000 people.
The company’s share of the world’s seamless stainless pipes market is 4.2 percent.
Continuously improving product lines, Centravis has been introducing more complex types of steel and geometry and improving surface quality, Atanasov said.
“Since 2007, Centravis has pursued a strategy of increasing its share of high tech products,” he said.
Centravis has no direct competitor in this region because it has a very narrow focus –stainless seamless pipes, Daria Manzhura, a spokeswoman for Centravis, told the Kyiv Post.
It is also unique in terms of the broad geography of its supplies, she added.
The EU accounts for 54 percent of Centravis’ sales, while 28 percent go to ex-Soviet republics and 10 percent to North America.
Centravis’ sales rose 1 percent year-onyear to $230 million in 2014.
It is also one of the few companies in Ukraine where SAP enterprise resource planning software has been introduced, Atanasov said.
Another innovation is the introduction of Japanese 5S workplace organization methods and replacement of obsolete Soviet-era workplace safety rules with modern ones, Atanasov said.
Moreover, the company has an education license and is providing its employees and potential workers with the skills that Ukrainian schools and colleges cannot provide, according to Manzhura.
The buildings that are now owned by Centravis were launched in 1959 to 1961 as part of the Nikopol South Pipe Plant, founded in 1935. They were privatized in 2000. Subsequently the company started re-orienting its business from former Soviet countries to Western markets.
Centravis started upgrades in 2006 and has invested over $150 million in them since 2007. Specifically, the company bought equipment from German engineering companies SMS and IAS.
The upgrade was partially funded by the European Bank for Reconstruction and Development. The bank bought a 12 percent stake in Centravis for €10 million in 2009 and gave it a €48 million loan, of which €33 was syndicated to commercial banks.
The Atanasov family own 88 percent in the company.
The company was hit hard during the 2008-2009 financial crisis and defaulted on the EBRD loan. It is also facing problems during the ongoing economic crisis.
Centravis’ unconsolidated net loss amounted to Hr 600 million ($25 million) in 2014, compared with a Hr 120 million ($5 million) net loss in 2013, according to Ukrainian financial reporting standards.
However, Centravis’ consolidated earnings before interest, taxes, depreciation and amortization rose 93.8 percent year-on-year to $48.6 million in 2014, according to International Financial Reporting Standards.
Kyiv Post staff writer Oleg Sukhov can be reached at [email protected].
