Interview with Andrey Panfilov, founder of Steel Work LLC

Andrey Panfilov – founder of Steel Work LLC, President of APIS HOLDING told about crisis in industrial area and activity of the companies during actions taken against coronavirus infection COVID-19. Andrey Ivanovich, what steps are you taking now to keep the business afloat?

Business is stable only when it can adapt quickly, change its processes and models according to a significantly changing external environment. We also understand that it will never be like yesterday, our market in Ukraine will fall, it is difficult to predict how much, 10..20..30%. We take anti-crisis actions, which means sharp reduction of costs, optimization of organizational structure, and increase in operational efficiency.

What is happening with the FTE now (working as usual, leave at own expense, dismissal)?

We continue to work. Due to quarantine, the protective measures for the personnel have been significantly strengthened. Our main task is to maintain the “backbone” of those employees who create the main value for the client in our product.As we know, since fall an unfavorable situation began in all markets for our industry. We significantly reduce costs, we are optimizing the organizational structure, this is inevitable under existing conditions. But we are not considering a stoppage.

What losses do your companies suffer from quarantine? How much has demand decreased?

Our main customers are mining and steelmaking companies, mines and cement plants. Today, we cover almost the entire line of equipment parts that are exposed to wear and often act as the general contractor - from design to turn-key project completion. We now feel both a 40-50% drop in demand and an unsatisfactory payment discipline, all are in the mode of expectations for overhauls and investment projects. We've been waiting for spring, but the new “black swan” brought even more uncertainties, the market prospects are very foggy, how long it will last in our country - so far few can predict.While it is predicted that the virus will be active in Ukraine until the summer, and then we assume work in a regime of less stringent quarantine restrictions for up to a year or two. We are now assessing the losses ...

How do you manage to keep the market share under difficult economic conditions? Which markets are relevant for you?

For us, the domestic market of Ukraine always remains a priority. At the same time, we are actively developing our positions in the EU countries. Priority export destinations are Poland, France, Germany.First of all, we are focused on the metallurgical and mining industries. We have extensive experience in developing and implementing solutions in wear resistance at Ukrainian enterprises and we know what our foreign clients need and how to achieve this. We are also constantly looking for partners, suppliers of surfacing materials, alternative wear-resistant products for joint projects both in Ukraine and in foreign markets.

What do you recommend, as a head and owner of a business, in the context of this quarantine and crisis?

Despite everything that happens, you need to work and continue to plan your activities. Now we are forming a strategy for the next 3-5 years, taking into account new circumstances.Our business is conservative, it will not go into digital, but we know that it is necessary to improve our work in developing relationships with customers, rebuild our business model for their current pains and tasks, outperform the market in something, create the prerequisites for creating new trends for our market. We have been on the market in our business for more than 20 years and have experienced more than one crisis, it is always painful, but we treat it as the next cycle and do not make a catastrophe out of it. We concentrate on what we can influence, what is in our power to change, what exactly depends on us. And for our part, we are trying to extend this philosophy to our partners!