The Pipe Division of POLYPLASTIC Group discussed their results of 2016. The Traditional Convention of commercial companies of POLYPLASTIC Group Pipe Division took place on 6–7 February 2017 at Ochakovo Business Centre, the Headquarter of the group.
Miron Gorilovskiy, General Director of POLYPLASTIC Group, noted in his opening address that the previous year was the first year of growth after two years of decline, or rather a year of decline and a year of slump. Despite the fact that increase was only 1.5% for the whole Group, 2.3% in all enterprises in Russia, the growth happened on the background of continuing crisis and market contraction, which was 3%. This is a resounding success, especially considering that, unlike the most of the market participants, the Group stayed true to its principles and did not compromise neither the quality of products nor its business transparency for the sake of cost cutting.
Despite continuing crisis, the Group opened yet another plant in Khabarovsk, which has already produced a considerable quantity of pipes and offers great prospects for 2017.
Other plants also continue to evolve:
- Sibgazapparat got three more lines for production of CORSYS corrugated pipes with diameter up to 1000 mm,
- Omsk Pipe Plant has increased production output of solid-wall pipes (including PROTECT pipes with protective layer) by more than 10,000 tons per year and
- Yugtrubplast commissioned a Cincinnati line, purchased from dissolved ROSTR that, for the production of pressure pipes with diameter up to 1200 mm.
- Novomoskovsk Pipe plant has temporary stopped production of solid-wall pipes concentrating on SPIROLINE spiral wound pipes and PVC pipes, as part of the optimisation program of existing production assets. They also will get a unit for rotational moulding relocated from Belarus and have already started production of valves as part of import substitution initiative.
The Group remains true to its tradition of introducing new products and technologies every year. A great work has been done over the past year in developing cable protection systems, ELECTROPIPE pipes of all types are now actively distributed in the Central region and beyond. MULTICLEAN pipes, a brand new product of POLYPLASTIC Group has created a great interest amongst customers. Significant success was achieved in deployment of Subterra trenchless pipelines renovation technologies using POLYLINER PEX pipes of own design. The attempt to deploy the technology by selling it to construction companies did not bring the expected results, which led to creation of Group’s special divisions for pipeline renovation.
Sales volume (as well as production) is expected to grow with the increase of the innovative products, Mr. Gorilovskiy said while talking about coming year.
They have achieved the target to increase the market share in Russia and the countries of the Group’s operation, in the opinion of Kirill Trusov, Director of Pipe Division. He presented detailed analysis of the performance of all commercial companies of the Group in 2016. He also noted on obvious positive changes in increasing efficiency of the operational activity – optimisation of warehouse stock and overheads. This matter will have a special attention next year.
2016 was very dynamic and most of the problems were solved by the Trading houses in a competent and professional manner Mr. Trusov said at the end of his speech. All companies gained new experience and, despite difficult external circumstances, achieved good results.
The upcoming reorganisation of the Managing Company was one of the major topics discussed during the convention. The current management structure was formed in 2005–2007, when POLYPLASTIC Group started building pipe plants and created Trading houses. It has become obvious that such a vertically integrated structure is not flexible enough and slows the development of the company. The new structure of the managing company of the pipe division will include six departments and their managers will make a Board of Directors, headed by the Director of Pipe Division. Therefore, the division will get a collegial management body and the system of horizontal connection between the departments necessary for the performance efficiency and the quality of decisions.
Fights against so-called “grey import”: The second day of the convention started with a seminar with participation of the representatives from Georg Fischer Piping Systems and TALIS, strategic partners of POLYPLASTIC Group. At the heart of discussion was quite a significant matter of the fights against so-called “grey import”, supply of products into Russia bypassing the authorised dealership network. The seminar participants pointed that not only it undermines dealership activity but also is unbeneficial to the producer. The practise shows that warranty withdrawal for the “grey” products is not effective and more drastic measures are required from strategic partners.
Outlook: Upon the closure of the convention, Mr. Gorilovskiy said that the company is successfully going through the current crisis. Not only it survived but strengthened its positions. It is possible that not everything have been done for the optimisation of its activity but a lot of things have been done and even more should be done in 2017 and in the future. The coming year will be quite difficult, especially the first half, but the company has all possibilities to survive these difficulties and arrive to the new stage of growth.