By KYIV. Dec 6 (Interfax-Ukraine) – Safe sea shipping, financing for small- and medium-sized steel consumers, the simplification of customs procedures and the expansion of the export product range, along with help to certify Ukrainian products in global markets will significantly increase foreign exchange earnings from the export of steel products.
This opinion was expressed by Metinvest Group’s Chief Financial Officer (CFO) Yuliya Dankova at the Export Credit Forum 2023 held in Kyiv.
This Forum was a response to a request from export-oriented businesses to create a national and international platform for open dialogue among the government and exporters about developing Ukrainian non-raw material exports.
The event discussed financial instruments to support the expansion of Ukrainian products, work and services to global markets. The main focus was investment insurance, as since legislative changes, the country’s Export Credit Agency (ECA) can insure investors’ financial risks, which will contribute to building infrastructure and enterprises that will further export their products.
The Export Credit Forum is organized by ECA in partnership with the Ministry of Economy of Ukraine and with the support of the USAID Competitive Economy Program. The forum was attended by First Deputy Prime Minister, Minister of Economy of Ukraine Yulia Svyrydenko, heads of the Verkhovna Rada Committee on Economic Policy, the Export Credit Agency, representatives of banks, regional military administrations, international partners and export companies from various industries and regions of Ukraine.
The government plans to reorient the economy from raw materials to process manufacturing by stimulating investment in the real sector and non-raw material exports.
“The same transformation should happen in the breakdown of exports. Currently, the share of process manufacturing is around 35%. We need to strive for 70-80%,” Svyrydenko said, quoted by the press service.
In turn, the Chief Financial Officer of Metinvest said that Metinvest generated $1.3 billion in foreign-currency earnings in the first nine months of this year and has significant potential to increase exports.
According to her, the first factor that will contribute to developing the group’s export capabilities and boosting foreign-currency earnings is the safe shipment of products through the Black Sea.
“We must have a constant supply of ships, insurance for them and the ability to cooperate with financial institutions. We need to be able to receive funds not after crossing the Bosphorus or Suez, but as before, after loading products onto ships,” Dankova said.
The second factor is the ability to obtain finance for small and medium-sized Ukrainian companies that consume Metinvest’s steel products so that they can export their products and have stable cash flow. “Then we, as suppliers, will be protected. This will also help to increase exports and foreign-currency earnings for Ukraine,” she added.
Another condition for boosting foreign-currency earnings for the country is to resolve the issue of re-clearing products in transit through European countries. The Metinvest CFO believes that Ukraine should join European initiatives to develop a computerised transit system.
In addition, expanding the range of non-raw material product groups under the Foreign Economic Activity Commodity Nomenclature codes supported by the ECA could increase the group’s export opportunities. Currently, the list of metal products includes only pipes and not flat and long products, which are high value-added goods.
According to Dankova, the recognition of Ukrainian quality certificates or assistance in certifying products in foreign markets would also help to promote domestic products globally.
The Metinvest CFO added that staff shortages are impacting Metinvest’s operations. In addition, she commented that businesses and the government need to become reliable partners for Western consumers even during the war.
