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Interview Home > Interview

Interview with Mr. Sergey Odegov, CEO of Magnezit Group

2020-11-27

From 2001 to 2005, Mr. Sergey Odegov was the head of the representative office of «Dalmond Trading International Limited» in Moscow responsible for the international development of the Group and the development of the sales network.

Since 1989 S.Odegov has held a number of positions at Kombinat Magnezit. He graduated from the Nosov Magnitogorsk Mining and Metallurgical Institute, studied at the Moscow Institute of Economics and Management in Industry, Chelyabinsk State University.

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Refwin: Dear Mr. Sergey Odegov, Refwin has interviewed with you 5 years ago.  Would you please share us what development did Magnezit obtained over the past 5 years?


Mr. Sergey Odegov: There have been major changes in our company. In 2010, we developed a strategy for quality growth — all resources were directed to modernization and expanding capacities. We have been implementing an investment program since 2013. It has 3 main directions:


1st direction - the mineral resource base development:

We are developing a new field at our Nizhne-Priangarsk production site in the Krasnoyarsk Territory. We started exploitation there in 2006, and since 2011 we have been developing one of the three largest magnesite deposits on the continent. Now we are building a new infrastructure to increase the capacity for the extraction and processing of high-purity raw materials of the Russian Magnesite brand.

We are also increasing the production of magnesite at our Satka deposits. Since 2017, we have been developing a new quarry and building new horizons for the Magnesitovaya mine. This became possible thanks to the new stowing complex.

We also made a big step in magnesite processing — we have completely replaced enrichment in heavy suspensions with X-ray transmission enrichment.


2nd direction - raw stone processing:

At the moment we concentrate our modernization program on production based on our key Siberian magnesite — I mean CCM, as well as DBM and FM. We produce our final raw materials — DBM and FM — with double-step technology.

For the decarburization we use 2 multi-hearth furnaces with a total capacity of 200 thousand tons p.a. Then CCM goes through grinding, briquetting and dead burning in two high-temperature shaft kilns - with a capacity of 50 and 80 thousand tons p.a. All together this forms the high quality dead burned materials production facility at our main site in the Chelyabinsk region.

There we already have a fused magnesia production line with the capacity of 60 thousand tpa. In August 2020 the first stage of the new fused materials production complex with a capacity of 50 thousand tons p.a. was launched. This is a fully automated production facility that includes unique joint engineering projects of the Magnezit Group and engineers of foreign companies.

There is also the raw stone processing modernization process at the Nizhne-Priangarsk production site. By 2025, we plan to increase the magnesia fusion capacity in this facility up to 60 thousand tpa.


3d direction — shaped and unshaped refractories production:

At Magnezits’ main production site there is a complete modernization of production lines for refractory products based on DBM and FM.

The 1st stage of a fully automated line of magnesia-carbon products has already been launched. Its design capacity is 120 thousand tons of products per year. All heat treatment takes place in the most modern and environmental friendly temper kilns. All pyrolysis products go through the afterburning system and are completely processed. The first temper kiln has already been launched at the beginning of this year, its capacity is 60 thousand tpa. We are launching a second kiln of similar capacity in early 2021. The mixing and pressing section is equipped with the most modern units; all presses on this production line are equipped with robotic systems.

The modernization of the production of magnesia carbon products at the Slovmag site has been completed. The complex includes all the highest standards of production technologies and environmental safety. As well as at our Russian site, heat treatment on the new line is performed in a modern temper kiln with an afterburning system.


At the end of 2020, we launch a new line for the production of magnesia-spinel products for the cement and lime industries with a capacity of 40 thousand tons p.a. The entire line is automated at all stages: from the most modern Laeis hydraulic presses till the sorting line, the whole process takes place without human intervention. The line is based on a Riedhammer high-temperature tunnel kiln with a capacity of 40 thousands tpa. After firing, the product goes to an automated quality control, sorting and labeling line with a capacity of 4.5 million bricks per year - a unique result of the joint work of Magnezit Group specialists and experts from several foreign companies. This is the only line in the world where 100% of the production is tested for internal and external defects. Marking and preparation of products for packaging and the packaging of pallets with products itself takes place in an automatic and continuous mode.

Our specialists have developed a new product line for the use in cement rotary kiln called RMAG®. RMAG® brick grades are based on many years of experience in the operation of refractories in the cement rotary kilns, as well as a large number of scientific works and research. These products will mainly be produced of our own raw materials — dead-burned magnesia and fused spinel.

RMAG® brick grades will be the main product in the new production plant. It consists of 3 groups — the Top group is designed for operation in super-harsh and very harsh conditions, for example, in units running on aggressive alternative fuels; the High group is designed for heavy duty dry and wet kilns; the Standard group — for normal working conditions,  in dry and wet kilns.

By 2023, our main production site for final products in Russia will have 2 more modern fully automated lines for the production of MgO-based fired products for the cement, lime, glass, non-ferrous industries and, of course, for our main consumer — ferrous metallurgy.

By the end of the year, we will install a new grinding center at this site. This is the most modern and precise equipment — you can get grinding accuracy up to 0.1 mm in fully automatic mode. By this way, for example, we will be able to offer products for secondary metallurgy and ferroalloy production with the highest possible grinding accuracy today!


Refwin: Whats the largest achievement you obtained and what are the biggest challenges you were facing in the past 5 years?

Mr. Sergey Odegov: Significant results for the Magnezit Group:

• Introduction of a complete integrated processing of raw materials. Magnezit Group has been provided with its own raw materials for more than 100 years, but we are developing extraction and sorting technologies that will allow us to make the most efficient use of both actually extracted raw materials and those already extracted. This absolute advantage gives us the opportunity to neutralize fluctuations in the refractories market for more than 10 years and readily accept its challenges.

• We also closely monitor all environmental trends and new technologies in the field of green metallurgy. And now we can say that all Magnezit Group's modernized facilities are designed with the highest level of environmental safety. We have taken a serious step towards minimizing the impact on the environment.

• Introduction of unique technologies for processing and obtaining end-products with the required performance. For example, CCM with specified activity and dispersion characteristics, including as a final product for industrial applications, or FM with a high degree of purity and even coarse-crystalline structure, etc.)


Refwin: Its learnt that Magnezit shares know-how with some other companies. What support you to share know-how with those companies How do you share those information with your partner or competitor?


Mr. Sergey Odegov: As you see, not everything depends on the quality of refractories because the operating conditions of consumers processes significantly affect them. This is not a transfer of technology, but a close cooperation that results in mutually enriching of our knowledge in refractories. With Intocast AG we had a joint production of basic unshaped refractories. Currently, we are working together in the field of MgO-based gunning mixes. We work with EKW GmbH in the CIS market to supply non-basic unshaped refractories and jointly adapt materials for specific consumers. There is a similar positive experience of working with partners from China.


Refwin: Covid-19 has deeply affected global business in this year. How did it affect Magnezit’s business and how do you meet those challenges during virus influence?

Mr. Sergey Odegov: There is an uncertainty among consumers and, consequently, uncertainty among us; many small and medium refractories consumers have significantly reduced or completely stopped their production;

The decline in production volumes of European and American consumers of refractories, as well as the transition of many companies to be less dependent from Chinese magnesia raw materials, significantly reduced the shipped volume of DBM and FM from China. This situation lowered the prices on the market and exacerbated the competitive environment.

Due to the closed borders and the termination of air traffic, we were unable to invite foreign specialists for our new facilities commissioning. However, this allowed our own specialists of the engineering department to expand the field of competence and to carry out installation supervision and supervision of our projects independently.


Refwin: During COVID-19, we hear some views about world refractories development. One point is that the supply structure will change, especially for the Chinas principle position in raw material supply; the other point is the virus will accelerate the development of smart factory” or industrial internet (industry 4.0)”, reducing labor usage in the whole supply chain. How do you think of those points? Do think there will be any other changes caused by virus?


Mr. Sergey Odegov: Weak demand for magnesia raw materials in the world and the reduction in its production, as well as the systematic transition of China to high-tech areas will contribute to new directions in the refractory business. Many companies, including ours, are engaged in deep modernization, which will lead to minimizing human influence on the process and reducing the costs associated with this (reducing the share of low-skilled labor, increasing wages for highly qualified employees, increasing the stability of product quality, etc.)

All over the world (including the PRC) there is a problem of attracting young people to our industry, especially to working professions. Automation of processes will make it possible to raise the qualifications of specialists significantly and to attract young people to manage modern production units and complexes with an appropriate level of wages and interest in the specialty. More specialists will be involved in the development of new refractory materials that will meet the challenges of consumers and, at the same time, reduce the ecological burden on the environment, both during mining and production, and after usage.


Refwin: What do you think are the key things for a refractories producer against COVID-19 and what will be the key point to recover from COVID-19 after pandemic suppressed?


Mr. Sergey Odegov: The most important issue is uncertainty. If the pandemic does not continue and has the same effect as in late 2019 or early 2020, the situation will be corrected in early 2021. However, the increasing number of morbid events and the lack of full-scale population vaccination may again lead to borders closure, traffic restrictions, etc. This will affect the consumer market and, consequently, the producers. Therefore, the most important thing now for any manufacturer is to be prepared for a long-term crisis and the world's long-term economy recovery, as well as to understand that there have been very serious changes in the structures of the economy and setting up a new system may take several years.

Thanks to the strategy we chose 10 years ago, which can now be called far-sighted, the Magnezit Group, despite the crises of the last decade, increases production volumes, carries out modernization, increases capacity, implements and optimizes technologies, develops and supports environmental projects. This allows us to be prepared for new shocks, as well as support our industry and our consumers.


Refwin: Currently, your main business operation is still in Mid and North Europe, CIS countries. Would you please share the latest situation of your business in other markets? Do you have any strategic development plans to expand production to America or other Asian regions?

Mr. Sergey Odegov: Our main market is Russia and the CIS countries - we are purposefully increasing production to provide domestic consumers. We also try to develop new directions in the structure of European supplies. Potentially interesting areas for us are Japan and the USA, where there is a high demand for magnesia-based products.


Refwin: Are you still insisting on 100% raw materials self-sufficiency? How do you manage and remain such a 100% self-sufficiency at a 100% (Its hard for any company to remain total 100% self-sufficiency at present)? What did you benefit from this strategy and what do you think it will bring to your future development?


Mr. Sergey Odegov: Over the past 10-15 years, the global market of refractory raw materials and end-products has been subject to high volatility in both price and production volumes. This was also influenced by the tightening of China's environmental and customs policies, the volume of production and consumption by specific producers, and so on. Having a full production cycle from mining to the final product, the company, of course, incurs huge costs for the maintenance of its infrastructure, but this allows you to have stability at every stage, which is of paramount importance for consumers in our time. Of course, small companies can be more mobile in terms of raw material prices, technologies, and production modes, but large companies can also consist of mobile modules, which will also allow them to react sensitively to the market and, at the same time, be able to get raw materials in the right volume, the necessary quality at a fair price.


Now we are rebuilding the production cycle in such a way as well as to respond flexibly to any customer request, as to develop our own direction, which will serve as an impetus for a new stage in the development of refractory technologies. Our new direction is our premium product line Russian Magnezit®. All that we discussed earlier - raw material independence, high-quality raw materials, and the latest technologies - give us the opportunity to grow and develop even in such difficult times, maintain our leadership in the industry and ensure the stability of supplies. Stability is the main value today. We are creating a high-class product that will allow our consumers to reach a new level of quality today and continue their development in a new reality.

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