Industrial Union of Donbass

ISD Holds the key to success

The Industrial Union of Donbass Corporation, known as Industrialny Soyuz Donbassa (ISD) in Ukraine, is the nation’s largest holding company, owning businesses that operate in a number of key steel market sectors.

The companies that operate under the direction of the Union are notably active in the production of steel, steel pipes, coke, and other ferrous metallurgical products.

The ISD Corporation was formed in December 1995 by a number of organisations, mainly located in the Donetsk region of Ukraine. The Head of ISD Directors Board is Sergey Taruta; the director general of the ISD Corporation is Oleg Mcrtchan. The head office is situated in Donetsk, Ukraine. Over the past 13 years, ISD has aimed at steadily increasing the amount of enterprises under its jurisdiction. This mainly focused on businesses within Eastern Ukraine in the early years of the Union, but this scope has expanded to companies located in other European countries over recent years. The investment targets are the developing markets of Ukraine, Poland, Czech Republic and Hungary.

Commencing its business outside Ukraine, the ISD Corporation implements its production policy in accordance with unitary standards of corporate management, not only technically but also in terms of social and ecological responsibility as well as working with partners and investors.

The core of Industrial Union of Donbass is comprised of the following major steel assets: Alchevsk Metallurgical Plant and Alchevsk Coke Plant (Alchevsk, Ukraine); Dneprovskiy Metallurgical Plant (Dneprodzerdzhinsk, Ukraine); ISD-Dunaferr (Dunaujvaros Hungary); ISD-Huta Czestochowa (Czestochowa Poland). Global steel sales are conducted through Duferco International Trading Holding and network of regional service centers.

Between 2000 and 2002, ISD was one of the leading corporations in Ukraine in terms of income rating, and the Union has utilised this status to provide funding to the enterprises it controls. Indeed, at the turn of the millennium, total capital investment reached levels of $120 million, and over the last five years, around $550 million has been spent on privatisation projects. The seven-year modernisation and investment programme in CEE mills totals to $2.7 billion. In 2007 it reached its peak and made $1.06 million. The program will be completed in 2011. Its results so far have increased the production up to 11.5 mln. mt, that is by 19 per cent. Current steel assets in CEE by 2010 would have a 15-19 mln. mt. steelmaking capacity as a result of the ongoing Capex programme.

The ISD Corporation has recently focused on working with companies outside of Ukraine to develop the capabilities and capacity of the enterprises it controls. This can most notably seen in ISD’s work with the Austrian companies Siemens VAI and VAI Fuchs. Between 2004 and 2007, these two companies delivered equipment and machinery to develop the continuous steel moulding capacity of the Alchevsk Steel Mill.

The first phase of work on the mill was completed late last year. Viktor Yushchenko, the country’s president, conducted the opening of the oxygen converter plant –first in CIS countries since 1982. The development, which is viewed as an important step for the future of metallurgy in CIS area, has seen the Alchevsk Metallurgical Mill transformed from an open-hearth furnace steel production to a new modern converter facility, which will improve the grade and quality of steel that is produced. The building process began in August 2005 when earth was excavated to install the foundations for the future oxygen converter plant, which was followed by the first column of the building being erected in April 2006.

Within 18 months all of the necessary technological equipment has been installed, including controlling systems, automation devices, desulphurisation and skimming stations and gas purifying areas, which will ensure the highest quality of steelmaking. The converters have a capacity of approximately three million metric tonnes a year and will increase production to 5.2 million tons of steel a year, rising to 7.2 million by 2010. A 3000 strong team of builders and fitters, who worked round the clock to complete the converter in record time, best illustrates the scale of the project.

One of the converters’ main advantages is their high productivity and efficiency. The average melting time in the new installation is around 40 minutes, compared with four hours for older and more conventional plants. Furthermore, the effect on the atmosphere has been greatly diminished with processes added at every stage of development that will mean an emissions output of less than 30 mg per cubic metre.

The move towards environmental friendly measures continues with better coverage of dust and discharge locations. There are also better practices for the after-burning of gas, which will now be mixed with blast furnace and coke gases to produce electricity at gas-steaming units that are currently nearing completion. The practice of a dry system of catching dust – water has traditionally been used – helps utilise the waste material without sludge formation and the discharge of polluted water.

With an increase need for cast iron and steel driving demand for oxygen, nitrogen and argon, it comes as no surprise that a third and fourth generator have been commissioned for the site. Work on the first of the further two installations is currently underway while work on the fourth will commence in June of this year. ISD is confident that by implementing the best steelmaking science and practices in the world the converters will meet the best standards of automation.

ISD has also invested in Dneprovskii Dzerzhinskii Metallurgical Mill, installing a number of ladlefurnace units. The commissioning of this equipment, from Austrian companies Voest Alpine and VAI Pomini, allows the mill to complete the out-of-furnace treatment of steel, broadening the range of smelted steel produced at the site, as well as increasing the quality and overall productivity of the metal. VAI Pomini also provided Dneprovskii with a continuous casting, seven-grooved machine that allows between 1.6 million to 1.7 million tons of square section and round section billets to be produced per year.

The Industrial Union of Donbass was formed under the guiding principle of continuous investment in Ukraine’s industrial economy. This can be witnessed in the recent development of metallurgical plants across the country, with the moves to make steel works more productive as well as environmentally sound.

Industrial Union of Donbass

Services: Holding company
Sites: Ukraine
Employees: 100,000 (indirect)