Based on the domestic market by developing technology to keep competitiveness

Asian Metal: Thank you for taking time to have an interview with Asian Metal. Please introduce your company.

Sergey Petrosyan: Volzhsky Abrasive Works -"VAW" - is situated in the city of Volzhsky, adjacent to Volgograd. The plant was founded in 1961, and currently is the largest producer of silicon carbide in Europe, and the only one - in Russia. In 2007 VAW became a part of industrial Group CUMI (India).

Distinctive trait of our silicon carbide manufacturing technology is the use of self-propelled mobile furnaces, which travel along the network of rails first from the loading area to the fusion cell, then to the air cooling area, water cooling area and, finally, to the dismantling station, where the kiln is unloaded, block of silicon carbide is sorted, and the unreacted mix is collected to be loaded into other furnaces, along with fresh raw materials. This kind of technology allows flexible control over the required properties of silicon carbide.

There is a complete processing facility in place at the plant, providing the full transformation of the crude silicon carbide into FEPA-grade abrasive materials and refractory grits, as well as the specialized fractions to suit the customer's needs. We are also a large supplier of metallurgic grades of silicon carbide with SiC content at 88-92% and 92-95%.

Apart from silicon carbide, the plant also manufactures vitrified and resinoid abrasives, using both own silicon carbide and purchased fused alumina-based materials. Last year the plant has commenced the production of coated abrasives.

Our plant also makes the oxide-and-nitride-bonded refractory products, using the silicon carbide of own make as a primary raw material.

Asian Metal: As you mentioned above, your company is the only one producer of silicon carbide in Russia, can you talk about Russian silicon carbide market briefly?

Sergey Petrosyan: Russia, just as the other countries, which consume silicon carbide, is seeking to expand the areas of application of this material. However, the primary applications still are abrasive, refractory and metallurgic industries. Owing to large-scale production and logistical advantages, VAW manages to satisfy the need of most of Russian customers. Some of the products that we do not produce, like the graded microgrits, are imported by the consumers. Due to ecological limitations, VAW produces relatively small volume of green silicon carbide, which is used for own needs only, hence this type of silicon carbide is mostly imported to Russia.

Asian Metal: The price of green silicon carbide powder has declined in China since the second half of 2016 due to decreasing consumption volume in photovoltaic field, but the price for black silicon carbide has increased since the second half of 2016. What is the price of the Russian market?

Sergey Petrosyan: Since VAW neither produces, not trades the green silicon carbide microgrits, we are not monitoring this situation. However, we assume that the consumers of such products do monitor the market behavior.

Asian Metal: In China some plants reduced or even suspended production this year due to environmental protection inspection, is there the same problem in Russia? If yes, how do you deal with the problem?

Sergey Petrosyan: As far as the environmental supervision is concerned, in Russia this was the most essential condition for the operation of industrial enterprises for the last decades.

A series of actions had been taken by the plant towards the improvement of ecological situation over the last ten years, resulting the fact the currently the emission of harmful substances, produced in the course of silicon carbide fusion, is today at the same level as that of the best global silicon carbide facilities, which utilize systems of gas collection and disposal. This fact is firmly verified through the strict and mandatory control of atmospheric emissions for compliance with maximum-allowed concentrations, conducted by an independent laboratory on a daily basis. Besides, we have also created our own mobile laboratory, duly accredited by authorities. Our plant occupies territory of 62 hectares close to the city, and this laboratory is capable of swiftly reaching any point of it, to conducting the necessary measurements at shortest notice.

Our shareholders very well understand the importance of this matter, and every year we invest considerable amount into the new technologies of environment protection. Since 2007 VAW is a member of Silicon Carbide Manufacturers Association, which is primarily geared towards the exchange of information for the purpose of introduction of new and best technologies in the fields of environment protection, health safety and industrial security at the silicon carbide production.

Asian Metal: Whether Chinese market affects your sales volume, when the price for the material changes sharply in China?

Sergey Petrosyan: Since we export considerable part of our silicon carbide, we certainly feel the changes at the markets of those countries, where supplies from China are dominant or significant. We would rather not comment the processes, occurring in China, but we look positively at the sheer fact of increase of market prices, which, however, are still some distance away from the ones we saw in 2009-2010. As far as the sales volume is concerned, in the last few years we were running at virtually 100% of capacity utilization. In the period of substantial decrease of prices at the foreign markets, our flexible technology allowed reroute the manufacturing towards the products that were in high demand at the domestic market. Hence it can be said, that the sudden fluctuations of prices in China did not influence our conjuncture very much.

Asian Metal: What do you think about the price and market of silicon carbide in 2018?

Sergey Petrosyan: Well, earlier I already mentioned that the market prices of the last years were forcing many silicon carbide producers to operate on the verge of profitability, and this fact did not allow much to be invested into manufacturing technology and environment protection. We hope that in 2018 the trend towards the increase of price will continue; but this very much depends on supplies from China.

Asian Metal: Does your company have a new development plan to keep the market competitive?

Sergey Petrosyan: Yes, we certainly have a development plan, approved by our shareholders. We are properly correcting it, depending on the changes of the situations at the primary sales markets, but the most important is that we are quite committed to remain competitive for the years ahead.

Asian Metal: Thank you!