A New Work Force for Efficient Steel Mini-Mills in Russia

Antony Faulds
Director, ElectroSteelMelting Facility
Chelpipe

“Two of the most fascinating sights to behold are hot metal in motion and a group of people in headlong pursuit of a shared purpose.”

 — Ken Iverson (mini-mill pioneer)


With the revival of production growth in Russia, large industrial companies today face a new challenge — how to attract a smart and motivated work force to single-industry towns away from Moscow or other major cities.

The pipe business is a perfect example of an industry facing this issue.

Since 2005, the Russian pipe industry has seen one or two new major production sites open every year, with each site requiring hundreds of highly qualified and motivated people.

Russian pipe makers have spent some $8 billion on constructing new plants — be it large diameter pipe plants, finishing plants or steel melting plants to provide pipe feedstock. Up to 50 percent of pipes produced in Russia today are produced at facilities that are less than five years old.

On average, new projects in the pipe industry require about 2,000 new people a year, usually highly qualified workers or young engineers from the best metallurgical universities in Russia, and in some cases foreign specialists.

The task of finding new people is getting harder, since most of the modern production units — tube factories, steel melting units and so on — are located in single-industry towns, and the skill sets required to operate these facilities are becoming increasingly sophisticated. The three largest pipe makers have their production plants located in five single-industry towns, scattered across Russia from the Azov Sea to the Ural Mountains.

So, how can prospective employees be enticed to these locations?

The answer lies in a combination of factors.

• Salary. A competitive salary must be provided. A facility intent on attracting talent could expect to offer base salaries that are 15 percent to 20 percent higher than employees would receive at similar jobs in production units nearby.

• Entrepreneurial culture. It is desirable to develop a culture where people are expected to work with minimal supervision, where flexible work practices are used, where people are paid for performance and where people are constantly looking to improve operation. People should work in an environment where their ideas are important.

• Constant learning. The organization should offer personnel the opportunity to learn new skills and qualifications, and consequently personnel should be willing to develop their skills.

• Good living conditions. Programs that enable people from other towns to live in corporate flats or dormitories, work out in modern fitness centers and get treatment in medical centers are absolutely necessary.

So, what type of people should a steel plant be looking for?

To answer this question, we can look to the most efficient mini-mill steel companies in the world. We see a consistent theme in the qualities most desirable in new personnel.

1) young;

2) multiskilled;

3) multifunctional;

4) want to be paid for what they produce;

5) do not need to be supervised all the time;

6) prepared to make decisions.

The current standard for meltshop efficiency in Russia is about 1,100 tons per employee, while many of the best mini-mills in the United States produce 6,000 tons per employee. We think that a viable, effective meltshop with 300 personnel could produce about 3,400 tons of steel per employee.

This goal can be achieved by providing a modern mini-mill working environment and employing personnel that are suited to this way of working.