Andrei Karunos

I

n the spring of 2004 UMMC, the leading player on the Russian copper market, began making copper pipes at one of its plants for construction sectors of Russia and CIS countries. However, as soon as sales of this product started, problems emerged. And that is exactly what Sergei Erypalov was talking about.
Foreign companies were shipping low-quality copper pipes to Russia for several years and, in Erypalov’s words, this "resulted in their bad reputation in general". Attempts to use such pipes in Saint Petersburg were also not quite successful. Copper proved to be faultless in heating systems but there were two breakdowns at copper pipelines of water supply. They were not investigated, experiments were just cancelled. As Sergei Erypalov said, the problem was not only with the quality of pipes themselves but also with the absence of norms for their mounting and operation. Even with all doubtless advantages of copper pipes their use requires more accuracy. For example, the protection from electric currents is needed, materials that "get along badly" with copper and can cause corrosion should not be used. All these peculiarities as well as requirements with respect to composition of alloys and physical characteristics of pipes are reflected by national standards in a number of countries. In Erypalov’s opinion, the European and American standards should be considered the basic ones.
Nobody at UMMC doubt that copper pipes should occupy an appropriate place on the Russian market and, above all, in the construction sector. The company, of course, is interested in advancing its products and that is why its representative again and again stressed advantages of copper pipes pointing to their service life as one of the most important. "As the world experience shows, copper pipes are designed for 50 years of operation", Sergei Erypalov said. "This cannot be proved so far by experiments: the use of copper for this purpose started several decades ago and time has not run out yet. However, the technical state of systems proves that they can serve for 100 years as well".
The director of UMMC for construction and reconstruction was confident: copper can rival any material. "What would you say, if you as a customer are required to choose between plastic and copper pipes to be installed in your house?", asked Erypalov and, not waiting for an answer, suggested: copper… it is an ecologically clean material that does not get oxidized… "But it is a very expansive metal", I said trying to object but immediately heard a new argument in favor of copper.
"It has been proved through experiments that a system consisting of copper pipes is by 15% to 20% cheaper than a similar system made of plastic pipes", said Erypalov. "You have to take into account not only the cost of one running meter of pipe but also the cost of fittings. If a copper fitting costs $0.1 to $0.2, the cost of the plastic one is $15. Good indicators of copper resistance and plasticity also allow to reduce expenses on material itself: for assembling a system pipes can be used with a diameter by 18% to 20% smaller than that provided for by the plastic pipe project. There is a special table of such recalculations", he noted.
The collapsing pressure for a copper pipe amounts to about 200 to 300 atmospheres. In other words, a copper pipe has a large margin to withstand loads possible during operation of public supply systems.
Also, a copper heating pipe can get frozen along with water up to four times and it will not be damaged because after expanding a pipe will return to its normal size. This is a very important advantage in case with Russia, where winters are long and frosty, while housing and communal services are bad. Everybody knows what problems and what extra costs there are, when residential areas and whole cities are left without heat because of breakdowns at heating systems.
Besides water supply and heating systems, copper pipes are used for providing gas as well. Sergei Erypalov said that gas tubes made of copper are highly reliable and they do not spoil the appearance of premises because of a high degree of plasticity they are put inside walls.
Discussing the question of why copper pipes have not occupied an appropriate place in Russia so far, Erypalov referred to the volume of copper consumption in the Russian construction sector equaling 3 kg per capita, while in other countries it is close to 15 kg per capita. In the opinion of the UMMC manager, federal as well local authorities are not very interested in establishing a copper market and, therefore, producers are forced to do it themselves. As Sergei Erypalov said, to this end necessary normative requirements with standards included should be developed, their acceptance should lobbied and actively promoted among potential customers.
"For 15 years already producers of plastic pipes have been advancing their products and they have been a big success as far as their business is concerned, In particular, they obtained the approval of a number of normative documents that allow to use plastic pipes at the expense of the copper ones", explained Erypalov.
In his words, the fact that copper producers are lagging behind can be explained to a large extent by the lack of experience of market operations. For a long time copper was regarded in Russia as a strategic material for the military industrial complex and, later, it became one the main export items. But the situation is changing, the volume of domestic demand is rapidly growing: by estimates of UMMC, the annual rates of growth amount to between 10% and 15%. So, the Ural Mining and Metallurgical Company decided to take upon itself the leading role in developing a market of copper products. The company intends to occupy solid positions in the sector of pipes for construction.
"This market niche is very promising", asserted Sergei Erypalov. "By our estimates, the potential capacity of Russia’s copper pipe market may amount to 15% to 20% of the total volume of pipe consumption by the construction industry or over 100,000 tons a year. Such a level of pipe sales can be reached in 5 to 7 years", he said.
UMMC plans to develop the new market in cooperation with the European Copper Institute. In Erypalov’s words, at the first stage the company can also cooperate with one of European enterprises, which would be capable of supplying pipe fittings, stop valves, etc.
Responding to the question about the company’s attitude towards potential competitors Erypalov remained calm. There has been no copper pipe market in Russia so far, he said. Therefore, there is no need to fear the world’s leading producers yet. And among Russian companies UMMC is the only one, which has capacities and technologies necessary for making products that correspond to the European standards.

Profile:
Sergei Erypalov.
One of top managers at the Ural Mining & Metallurgical Company, director for construction and reconstruction. 42 years old. Has a diploma of civil engineer, specialist in metal structures. Worked at several large enterprises in the Urals but regards his work at UMMC as the most fortunate step in his career. This company’s business is diversified and UUMC has its own construction complex. In Erypalov’s words, he got a chance there to do what "any constructor only dreams about: to build large production complexes, sports complexes, world-level hotels". Besides, being engaged in charity activity UMMC is building and restoring churches, monasteries, mosques. Erypalov has participated in building 14 Christian temples and he was presented with high awards by Russia’s Orthodox Church.
Married, has a daughter.
––––––––––-

Now:
In 2004 the Ural Mining & Metallurgical Company has increased the volume of producing cathode copper to 340,000 tons from the 300,000 ton output in 2003. It was reported by the company’s technical director Konstantin Plekhanov at the investment conference held in Yekaterinburg on September 7. In this connection the Reuters news agency reminds that just until recently the company has not planned to raise copper production. Plekhanov explained this change referring to the high market demand. He stressed that the UMMC leadership considered the most promising a build-up of making products with a higher added value. Therefore, this current year the production of copper rods will exceed 250,000 tons. Plekhanov also reported the UMMC intention to build in 2007 a new electrolyses shop at Uralelectromed JSC, the company’s parent enterprise. This shop will make it possible to raise volumes of cathode copper production up to 450,000 tons a year.