Annual Report 2007

14 A N N U A L R E P O R T REPORT BY THE BOARD OF DIRECTORS A record volume of production has also been recorded in the production of seamless hot rolled tubes, 189 250 tonnes. The 1.8% increase in performance, compared to the previous year, was only possible owing to the perfect organisation of work and a reduction of production line idle time. Of overall production 115 370 tonnes were sold to our customers, and the remaining volume was used for the production of precision tubes and welded tube elbows. Customer demand for precision seamless tubes exceeded our production possibilities, which are limited by the capacities of some production nodes in which we applied the permanent shift pattern. In 2007 we produced a total of 54 732 tonnes of precisely drawn seamless tubes, a 2.3% increase year-on-year. The other manufacturing units did not fully meet their business plans, however, in view of the overall results of the Company's operations, the reported differences are immaterial. In aggregate, we have produced and sold 72 tonnes of pipe reducers and 3 896 tonnes of welded elbows, which means a decrease over the previous year of 8.0%. In 2007, the production line of welded tubes with small diameters produced totally 4 898 tonnes of cold calibrated tubes and 1 082 tonnes of cold drawn tubes. After three years of new production line operation we have not fulfilled the project’s expectations. In the production mill for welded tubes with large diameters, we produced and marketed 3 070 tonnes totalling SKK 118.8 million. From the tubular product section focusing on the finishing treatment of precision tubes and hydraulic tubes, we supplied our customers with 3 962 tonnes of products totalling SKK 200.0 million. When evaluating production performance in 2007, we again demonstrated a significant improvement in the quality of products. This is a result of the implementation of several technological innovations in steel production and the metal shaping procedure, in hot processing and the extension of the useful life of shaping tools, which represent the achievement of the technical progress plan developed in long-term cooperation with Ústav materiálového výskumu (the Institute of Materials’ Research) at the Slovak Academy of Science in Košice, with Výskumný ústav zváračský (the Welding Research Institute) and Vítkovice – výzkum (Vítkovice – Research) company . The quality management system is certified according to ISO/TS 16949:2002, API Q1, and VDA 6.1 standards. Procedures standardised in accordance with the certificates allow us to deliver our products to all segments, including the automotive industry. The system of environmental management is certified according to ISO 14001:2004 and the occupational health and safety control system is certified under the BSi OHSAS 18001 standard. World must be nourished by reason and reason must be infinite. Confucius