Khartsyzk Pipe Launched Modernized Production Line

Khartsyzk Pipe (HRTR) launched a new production line with a maximum annual capacity of 300 ths mt of large diameter pipes (508-1422 mm) with qualitative characteristics competitive on the global market. The company plans to load the new line with 100 ths mt of pipes in 2007 (or 17% of total production in 2006). Khartsyzk Pipe’s Director of Strategy and Investments Aleksandr Kravtsov said the new line will enable the company to expand its export markets. In 2007, the company will invest another USD 27.3 mln (UAH 138.1 mln) into modernization. Eugene Cherivachenko: Khartsyzk Pipe’s short-term prospects look bright, in our view, due to booming demand for large diameter pipes worldwide, especially in Russia. However, we are cautious about the company’s future beyond 2010 (see our pipes report of November 2006), when Russian demand for long diameter pipes will decrease, while supplies of pipes will grow following the completion of new production facilities in Russia.