Zagorsk Pipe Plant was the only company that managed to increase the production of large-diameter pipes in 2018. The company relatively recently entered the pipe market and immediately pressed its competitors. To what does the plant owe a sharp rise?
The largest manufacturers of large-diameter pipes in Russia reduced production by 25% in 2018, a correspondent reports. The Moscow Post. The drop in volumes is due to the completion of Gazprom’s major Nord Stream 2 and Turkish Stream projects. The only player on the market that managed to significantly increase output is the Zagorsk Pipe Plant (ZTZ). The enterprise, which entered the market relatively recently, tripled its production, up to 491 thousand tons. And how did he manage to do this?
ZTZ is planning supplies for Gazprom’s Power of Siberia, Power of Siberia-2 and South Stream projects. The plant also intends to increase the export of large-diameter pipes from 307 tons to 30 thousand tons this year. In the coming months, the company expects to complete accreditation for the supply of Transneft, which accounts for 14% of the consumption of large-diameter pipes in the country.
Competitors believe that ZTZ underestimates prices, effectively bringing down the market. However, the commercial director of the company, Dmitry Simankov, said in March this year that the cost of products on the domestic market makes it possible to compensate for all costs and make a profit.
Contracts with Gazprom
The Zagorsk Pipe Plant with a capacity of 500 thousand tons of large-diameter pipes per year was opened in 2015 in the Moscow region. The first contract with Gazprom for 7.4 billion rubles. The company concluded in May 2017.
In January 2018, ZTZ received an order from Gazprom for the supply of 100,000 tons of pipes. To do this, in 2017, the state monopoly suspended part of the contracts with the Chelyabinsk Pipe Rolling Plant (ChTPZ), the Pipe Metallurgical Company (TMK), the United Metallurgical Company (OMK) and the Izhora Pipe Plant, considering that their prices were too high. The Zagorsk Pipe Plant offered to supply pipes to Gazprom at a 13-15% discount.
At the end of 2018, Gazprom signed a direct contract with ZTZ for the supply of 500 thousand tons of large-diameter pipes for the Kovykta-Chayanda section of the Power of Siberia gas pipeline. Earlier, ChTPZ, TMK, OMK, Izhora Pipe Plant, and ZTZP refused to participate in the tender for the supply of 602 thousand tons of pipes due to the low offer price. The maximum amount of the contract was 47.4 billion rubles. After that, Gazprom gave almost the entire order to ZTZ, changing the conditions to more favorable ones, reports RBC. The reasons for this decision were not disclosed. Could Gazprom be in cahoots with ZTZ?
According to the Unified State Register of Legal Entities, the founder of ZTZ is its CEO Denis Safin. The enterprise is included in the same group with the Insulation Pipe Plant (ITZ). Their president is Denis Safin’s father Galalkhak Safin. In 2017″businessman“Wrote that at the end of 2016, a blocking stake in the amount of 25% was acquired by a classmate of President Vladimir Putin, co-founder and partner of the law firm Egorov, Puginsky, Afanasiev and Partners (EPAM) Nikolai Egorov. He may be Safin’s secret engine, which negotiates with Gazprom and Sberbank?
At that time, ZTZ owed Sberbank 5 billion rubles. However, after Egorov became a shareholder, Sberbank postponed the start of payments to 2018, and also issued ZTZ another 1 billion rubles. Egorov is credited with friendship with the chairman of the board of Sberbank German Gref.
In March 2018, the media reported that Yegorov, being also a co-owner of the Antipinsky Oil Refinery, intended to sell his stake in connection with the revocation of the license from OFK-Bank, of which he was the largest shareholder. According to sources The Moscow Post, it was also about the sale of ZTZ shares. However, in this way they simply could start a rumor on the market so that ZTZ would not be considered a serious rival.
Old pipes instead of new ones and criminal cases
The group, which includes the Zagorsk Pipe Plant and the Insulating Pipe Plant, are becoming the main players in the market and the main suppliers of Gazprom. However, the reputation of companies is not ideal. In September 2017, a criminal case was initiated against Denis Safin on suspicion of fraud. The businessman was placed under house arrest. He was charged with misuse of subsidies from the Ministry of Industry and Trade in the amount of 133 million rubles.
According to the arrested person himself, this money was spent on repayment of interest on the loan. In November of that year, the white was closed, and Safin was released from custody. The money was returned to the state.
The insulating pipe plant was involved in a scandal related to the construction of the Transneft oil pipeline to the port of Ust-Luga. Transneft’s contractor for the supply of large-diameter pipes was Industrial Technologies. In 2010-2011, instead of new products, Promyshlennye Tekhnologii purchased used pipes in different regions of Russia at a low price and new ones of lower quality.
Purchased pipes were delivered to the Insulation Pipe Plant, where they were cleaned of rust, old insulation, and defects were eliminated. Then, false markings of Chelyabinsk Pipe Rolling Plant OJSC were applied to the products.
The damage to Transneft’s subsidiaries – Spetsmornefteport Ust-Luga LLC and Nevskaya Pipeline Company LLC, the operator of the oil terminal in the port of Ust-Luga, was estimated at 4.56 billion rubles. Director General of Industrial Technologies Pavel Zakrevskiy was sentenced to two years and six months in a penal colony. Vasily Nesterenko, commercial director of Industrial Technologies LLC, and his subordinate, manager Mikhail Vladimirov, received five years and four and a half years in a general regime colony, respectively. Employees of the Insulation Pipe Plant were not held accountable. And why, it would be very interesting to know?
Apparently, Gazprom does not care about the reputation of its contractors, who are trusted with billions in contracts. The secret may be that Gazprom gives its old ZTZ pipes for restoration, and then buys them from him as new ones. For the beautiful eyes of Safin, of course, no one will do this. But for the “kickbacks” they can try. This is just an assumption, but everything is painfully easy for ZTZ and Denis Safin.