Centravis Sales Director: “Our company has created a solid base for future growth”

In spite of the expected global decline of the seamless stainless tubing market, Centravis – one of the industry’s top suppliers – keeps looking for new ways to build on its previous successful experiences and further expand its worldwide presence. In his most recent interview, Centravis Sales Director Vyacheslav Erkes spoke about the company’s results, and the ways in which the company plans to remain a solid global player in the face of turbulence in the local & global markets.

Global sales and growth prospects
In spite of multiple challenges both domestic and global, Centravis managed to increase its sales in physical terms at the end of 2014. According to Mr. Erkes, this was largely resulting from the company’s fundamental development strategy and extensive investments into the modernization of production. Over the last few years, Centravis has been steadily growing in tonnage exceeding twofold the average growth rate of the global stainless steel tubing market, which has been 5-6% per year.

Speaking about the current year’s sales strategy, Mr.Erkes noted that the company will continue to keep its sales focus in the western markets, something Centravis – whose share of sales outside the CIS now stands at 70% – has been actively doing since the mid-2000s. The company is also becoming more active in the Asian and Middle Eastern markets, where it has intensified customer certification as well as in the US, the market it first entered in 2006. According to Erkes, over the last six months, the company has received approvals by end users from Alstom Power (USA), Thyssen Krupp Industrial Solutions (India), FESTO (Germany), and Petrobras (Brazil). Centravis also obtained qualification by ADCO, ZADCO and ADMA OPCO (ADNOC Group (UAE).
In 2014, America became Centravis’ second largest market along with Russia, while Europe remained the biggest sales area with over 50% of company product sold there. In their turn, Asian markets, including the Middle East, Turkey, India, and Southeast Asia, accounted for around 10% of sales. As Mr.Erkes said, these last areas, together with the United States, will be the company’s two top priorities in terms of increasing sales. “Despite the growth in Asia and America, Centravis will defend its position in the key markets of Russia and Europe, offering its customers in those markets all of the best and most advanced products in the company’s portfolio. Centravis has also kicked off its marketing activities and is now actively promoting its key products and features, like furnace tubes, instrumentation tubes, urea grades, nickel alloys, and more in China”, commented Centravis Sales Director.

Local market and global competition
Unlike many of its competitors, Centravis, according to Erkes, literally has no local market. Before 2014, Ukraine’s stainless steel piping market was about 0.5% of the world market, which was primarily due to the relatively slow economic development of Ukraine. Following the 2014 hostilities, the market dipped by at least 50-60%, resulting in a decline in production in the engineering industry. However, Vyacheslav Erkes remains hopeful that the Ukrainian economy will again begin to grow in 2016-2017 in response to the proposed government reforms.

In spite of the recent quick growth of many Asian players, Centravis remains within the top-10 largest manufacturers of stainless steel seamless piping in the world. Responding to competition from its counterparts, Centravis is looking into creating more sophisticated and advanced products in those areas where the company detects opportunities for growth. In recent years, Centravis have been actively cooperating with the automobile business, supplying instrumentation tubes for manufacturers of fuel injection components. Today, the company’s tubes are used in fuel injection systems in the engines of the latest models of Audi, BMW, and Porsche. And the company continues to further invest in and develop the precision tubes segment. By the middle of next year, Centravis also expects to be finished with all of the necessary certification for ultra-supercritical boiler tubes used for thermal power and begin sales of this new product worldwide. This will make Centravis one of the few companies globally capable of producing such tubes.
In addition, furnace tubes continue to be one of the company’s flagship products. In terms of production, Centravis saw great sales performance in this area last year, and became the 3d largest manufacturer of this product worldwide, and the company continues to further invest in this direction.
On top of that Centravis strives to be the most customer-oriented supplier in the market and to this end offers the utmost in flexibility in customer relations. “It’s very important that both our sales people and clients are the very best of friends – in the truest sense,” says Erkes. Touching upon the Russian market, where the company is facing competition from state-owned companies and large holding groups heavily backed by the Russian government, Centravis’ Sales Director indicated that the company’s strategy would be to focus more on the most complex segments and requirements, where it will continue to create value for Russian customers who will continue to prefer its services.
A few examples of what the company is doing to improve customer service include virtual stocks for customers; on-line tools like EDI (electronic data interchange); implementation of key account management approach, and many other.
Centravis also wants to be as close to its customers in 2015, and so a large focus is being devoted to the development of its sales channels through opening new representative attracting highly qualified sales agents. And, of course, one of its strategic priorities is to become the fastest provider in the market – offering its customers the shortest delivery time possible.

Prospects for 2015
Despite growth in the volume of sales, the company did not see the same in its revenues, and this was influenced by two major factors. The first is due to a decline in the price of nickel, and the second relates to Centravis’ dynamic growth in new markets. Additionally, the company’s revenue in US dollars was severely affected in Russia by the end of 2014, as a result of the drastic devaluation of the ruble.
In spite of the above-mentioned factors, as well as the expected 5-7% decrease in the world market of seamless stainless tubing in 2015, the company has set a task to grow, and Erkes believes it is currently very well positioned to do so.

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