Interview with Peter Kratz, CENTRAVIS Supervisory Board Chairman

By: Darya Manzhura October 6, 2014 Centravis ltd supervisory board meeting took place in Nikopol in September.

In your opinion, what are the key takeaways?

We’ll continue with a strategy of steady growth. This means that we’ll continue to invest into new products, supplementing and adding to existing product lines. It also means that we’ll become more active in markets where we have not been very active so far. This is in particular the case for the US and certain markets in the Middle East and East Asian countries.

Continuing investments is a clear sign of confidence in the company notwithstanding turmoil in the East of Ukraine, isn’t it?

Yes, definitely. We’ve discussed the political & economic situation in Ukraine in depth. There are risks. However, we have come to the conclusion that these risks will not materially endanger the overall course of Centravis. The company’s performance has tremendously improved over the last 18 months: with volume growth, with performance improvement, with much higher profitability. So the company I dare say is in good shape. Also, institutions like EBRD have a clear mandate to provide support to the country and its economy. They are our partners.

Therefore we confirmed that we’ll provide financing for CapEx. The budget is quite sizeable. But what is also very important: We can do many things better by re-engineering our internal processes. The Board gave a clear signal to management that we want management to focus on processes with the objective to improve productivity & efficiency. We can do better and we shall do better.

What benchmark have you chosen for the management?

It’s not so easy to make detailed benchmarking. There are certain widely accepted performance figures, e.g. tons produced per employee. We know about the practices used by our competitors or by other successful companies outside our industry, and we’ve got to see how we can match.

You mentioned that the BOD discussed the risks emerging from the turmoil in Eastern Ukraine. Do they have an impact on the company’s business?

First I’d like to say that there are quite some clients who decided to actively support us. They buy more than ever, saying: We want to help you! Of course they also do so because they know they receive good quality, excellent service and on-time delivery. But it is also true that certain customers are more reluctant especially those dealing with big projects. Here I can only say that we at our Nikopol manufacturing plant are not impacted at all by the East-Ukrainian turmoil. We have already seen to it that out supplies are more spread out. So we receive billets & other products from more sources than just one or two. And we have also analyzed & prepared appropriate actions in the field of gas & electric power supply.

What do you think will help the Company to go through this uncertain period?

Very simple: Continue to build on our strengths. As I said earlier – we provide good service. We have excellent product, we know what our clients want. Let’s continue to do what we do well and let’s at the same time improve our internal efficiency. Let’s become more competitive every day!

What message do you deliver to your co-citizens in the EU regarding the current situation in Ukraine?

When I talk to friends and partners in the West I tell them that the country is going through a difficult period. Ukrainians are prepared to take into hands their own destiny; but they need support from the West if we want them to become part of our world. So give them trust, but also help them financially. In fact, this is what the EU is doing now.

To give you an example: Right now we are finalizing a debt restructuring extending the duration of loans received together with EBRD and other banks. This is a clear sign of trust in both the country & the company.

But as you said that’s not enough. You want more efficiency, higher productivity, and higher profitability, which would definitely require a profound change of business practices from almost every employee. What is your recipe of making people trust and like the changes and participate in them?

We promote change not because we are in difficulties, but because we want people to support the growth strategy & the success strategy we have started 18 months ago. For each & every employee this is a good sign. Therefore each & every employee should happily join the bandwagon, support all initiatives. We want employees who are prepared to do their jobs on their own without much control, based on their own initiative and bringing into play all their personal know-how and experience. So change also means empowerment. We want strong and motivated employees. Let’s call them “world class people”.

And the last question. Every great inspiring company has a promise. What can be the promise for CENTRAVIS for the next 5 years?

Our promise to customers as well as employees is very simple: We show excellence. And we do so with excellent people. We want to be world class. Therefore we shall be world class.

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