Steel-frame construction is used for the majority of industrial and commercial buildings in the West. But it’s still a novelty in Ukraine, according to Atlas Ward Building Systems Ukraine Director John Marsh, who says concrete remains the building material of choice for Ukrainian customers.
The steel industry is not developing quickly, he said, because contractors and consumers are not educated about steel’s utilities and benefits.
“People do not know much about steel buildings. We need to convince them of their advantages,” Marsh said. Atlas Ward, a British company, has built the majority of Ukraine’s steel-frame buildings.
“There’s room for both materials in the industry,” Marsh said. “The selection of building materials should depend on the situation, type of site, and a country’s resources.”
There are big steel producers in Ukraine, and for that reason, it makes sense to develop this market sector, Marsh said.
He added: “On the high-rise block, for sure, steel is the quickest and the best solution. But it is not right to say that steel should always be used.”
Steel versus concrete
In contrast to block-like concrete structures, steel buildings tend to be more aesthetically attractive. But the real advantage, of paramount importance for clients, is the speed with which steel buildings can be delivered.
“The construction of Coca Cola’s almost 30,000-square-meter bottling facility is a great example,” Marsh said, referring to a project completed in Brovary several years ago.
“We started in September, and in four months had erected 15,000 square meters. It allowed the contractors to start installing equipment, and that was an obvious advantage. If Coca Cola’s plant had been built from concrete, it would have taken twelve months to complete the same thing.”
Marsh said that when companies choose steel, they’re able to more quickly turn around their investments.
Valery Babushkin, engineer for Ukraine’s Avertek trading company, for which Atlas Ward has constructed four warehouses, emphasized not only the speed of steel construction, but also its efficiency.
“Steel buildings are more or less ‘temporary’ facilities,” he explained. “Their parts are bolted, and if the company has to move from one place to another, it can disassemble its buildings and assemble them again. You don’t have to build an entirely new facility, and can save huge money as a result.”
There are no significant differences in price between the two types of materials, Marsh said. The difference in cost comes down to the type of building, its size, and where it’s built.
First on the market
Atlas Ward Building Systems Ukraine, a subsidiary of Britain’s AWDS Holdings, was the first company to introduce steel-framed buildings on the Ukrainian market, when Coca Cola Amatil contracted it to erect a bottling facility in 1996.
At that time, Atlas Ward imported all the equipment it needed – from steelworks to bolts – to Ukraine from the United Kingdom. In 2001 the company acquired a share in Zhytomyr’s Atmashbud metal plant, and started producing steel skeletons and frames there.
Today his company is focused mainly on the local market, Marsh said, and uses building materials produced in Ukraine.
Among the company’s major projects in Ukraine are Coca Cola’s truck maintenance workshop, a sunflower seed processing facility for Cargill, a workshop for John Deere, a food factory for Galina Blanca and a cigarette factory for Japan Tobacco International.
Additionally, Atlas Ward is currently constructing a warehouse for IVK, and working with JTI to expand its premises and install new lines.
Although the bulk of Atlas Ward’s clients are foreign firms, Marsh said some Ukrainian companies, like Obolon, have adopted Western building practices. Atlas Ward was contracted for Obolon’s production facility and beer brewing hall, and is currently building another brewing facility for the company.
Wide-open future
Marsh said he is confident that Ukrainian companies will begin making the switch to steel-framed buildings for their industrial and commercial needs.
“[Steel] is not a huge business today. It is actually a very small business in Ukraine, but we expect it will grow dramatically.” He stressed, however, that “the future of the industry will depend on economic growth.”
More foreign investment will inevitably result in the growth of the steel construction sector, Marsh said. “Our main field will be construction of warehouses, factories and sports complexes.”
He said there is currently no significant competition for Atlas Ward on the local market, as no other firms are as large and have as much experience as his company. Local firms have emerged, however, and could become Atlas Ward’s rivals in the future.
“Our advantage is that we fabricate workshops in Zhytomyr, while other companies import them. We operate as the single-source supplier of complete package buildings,” he said.
The company plans to strengthen operations on the market, but its future here will depend on the outcome of a legal dispute between Atlas Ward and the steel-building enterprise Ukrmetalokonstruktsia over ownership of Zhytomyr’s Atmashbud.
The relationship between Atlas Ward and Ukrmetalokonstruktsia soured following two years of squabbling over ownership rights to the metal fabricating firm. The dispute has now snowballed into a full-fledged battle for control of the business.
Ukrmetalokonstruktsia claims that the Atlas Ward group has cheated it out of a 25 percent stake in a new company, which was supposed to have been established using Atmashbud’s metal shop as a basis. Instead, Ward Building Systems Ukraine inherited the plant’s major assets, and has operated the business for the last 18 months without transferring a share to Ukrmetalokonstruktsia.
The Kyiv Pechersk court ruled that the production assets the British firm was using be returned to Atmashbud, which is majority-owned by Ukrmetalokonstruktsia. The British company is expected to appeal.
“We had big plans to invest a lot of money in Ukraine, but our plans have been postponed. We are under pressure at the moment, and the outcome of this case will determine our future,” he said.
Marsh said that if the court doesn’t appeal the decision, the firm would diminish its presence in Ukraine.
“We will not invest any more in the country until this issue is resolved,” he said.
“As long as companies like us are threatened by large local businesses who aim to destroy us, there will not be more investments in Ukraine.”
