The cost of construction and installation work in Ukraine has increased by 35% since the beginning of 2023 amid a shortage of personnel that has reached 40% in some companies, Oleksandr Nasikovsky, managing partner of DIM Group, told Interfax-Ukraine.
“There is a real shortage of highly qualified personnel. Today, there is an acute shortage of monolithic workers, crane operators, painters, and electricians. In some markets, the shortage in companies reaches 40%, which significantly affects the industry. Since the beginning of the year, the cost of construction and installation work has already increased by more than 35%, which is due to both inflation and a shortage of personnel. I think we will see growth of at least 5-7% in this category by the end of the year,” he said.
Nasikovsky emphasized that the availability of labor and skilled personnel is critical for the recovery of Ukraine, where more than 170,000 residential buildings, 19 airports, approximately 130 railway stations, 3,400 educational institutions and other facilities have been damaged or destroyed. Ukraine is facing an important challenge to ensure the availability of skilled construction workers to rebuild and develop the country, and this requires decisive action and support at all levels.
“We really need a system of motivation at the state level that would encourage young people to study for production specialties and support those who choose the construction industry for professional realization. It could be social incentive systems (social mortgage programs, for example) or additional financial incentives,” Nasikovsky said.
DIM Group was founded in 2014 and consists of six companies covering all stages of construction. To date, it has commissioned 12 buildings in six residential complexes with a total residential area of over 218 thousand square meters. Six residential complexes of “comfort+” and “business class” categories are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land, etc.
In 2023, the main areas of sales of Sweetondale products will be retail sales and low-rise housing construction, the company’s press service told Interfax-Ukraine.
The building materials manufacturer Sweetondale owns three plants in Ukraine that produce roofing and thermal insulation materials: a mineral insulation plant in Cherkasy, a polymer insulation plant, and a bitumen-polymer roll materials plant in Kamianske.
“Since the beginning of the full-scale invasion, we have seen a significant redistribution in sales channels. Previously, our main focus was on industrial and civil construction, but now retail sales (42%) and sales to low-rise cottage construction projects (47%) have come to the fore. The share of the professional segment has almost halved and now does not exceed 10%, but we hope that with the active launch of recovery programs and the emergence of new projects, this share will grow,” said Iryna Konotoptseva, Head of Marketing at Sweetondale.
According to the company’s analysts, just like before the war, Sweetondale holds leading positions in each of its production areas. Namely, mineral insulation accounts for approximately 47% of the market, polymer insulation for approximately 46%, and bitumen roll materials for approximately 55%.
Since the beginning of the full-scale invasion, the cost of polymer insulation and bitumen rolls, which have an imported raw material component of more than 80%, has increased significantly, by 40-45%.
“The main factors for this were the rising cost of raw materials, energy, fuel and the increased logistics leverage for the delivery of raw materials,” Konopoptseva explained.
“At the same time, the price of mineral insulation decreased by about 10%. This was achieved by partially using domestic raw materials.
“One of the main issues for us in recent years has been finding new suppliers of raw materials, and we have accepted this challenge. Currently, we supply the majority of raw materials for our products from Europe,” Konotoptseva said.
Logistics within the country has also risen significantly. Sweetondale delivers building materials throughout Ukraine, and the cost of transportation companies’ services has increased significantly. Konoptseva said that since the beginning of the war, the tariff for delivery from Kamianske to Kyiv and Uzhhorod has increased by 43%, and from Kamianske to Odesa by 54%.
The expert noted the high demand for manufactured goods from Ukrainians.
“Ukrainians continue to prefer domestic producers. In addition to the obvious support of the Ukrainian manufacturer, this is also a big benefit for customers, as traditionally European manufacturers are more expensive, and the logistics of these goods are longer and more expensive. Thus, according to our estimates, the share of Ukrainian producers in mineral insulation is 80%, in polymer insulation – 88%, and in rolled materials – 90%,” she said.
As for government programs (restoration, energy efficiency, etc.), their impact on the market is still insignificant.
“There are quite a few programs, but, in our opinion, they are still unstructured and the conditions for participation in them are not always transparent for business. In addition, we can note that such programs often use products with low characteristics,” Konotoptseva said.
According to Opendatabot, the authorized capital of Zavod “Sweetondale” LTD (Zavod “Sweetondale” LTD, EDRPOU code 32944149) is UAH 13.5 million, in 2022 the company received revenue of UAH 940.074 million, net profit amounted to UAH 112.112 million.
Sweetondale was founded in 2012 by Gary Alan Stern. Initially, it specialized in engineering and leasing of industrial equipment. Negotiations on the acquisition of plants owned by Russia’s Technonikol began in 2015 and ended in February 2018.
FC Shakhtar Donetsk and Patrick van Leeuwen have terminated their cooperation, with the club’s sporting director Dario Srna taking over as acting head coach, the club has announced.
“FC Shakhtar officially announces the termination of the contract with head coach Patrick van Leeuwen. Together with the coach, the coaching staff leaves the club,” reads a statement on the club’s official website on Monday.
As noted, van Leeuwen has been in charge of the Pitmen since July 2023. During this time, the team has played 12 official matches. “FC Shakhtar expresses its gratitude to Patrick van Leeuwen and his assistants for their professionalism and wishes them success and victories in the future,” the statement reads.
The team is led by the club’s sporting director Srna, who will reportedly “prepare Shakhtar for the next matches as acting head coach.”
On October 17, the Supreme Court of Ukraine will consider the cassation appeal of PJSC Cherkasyoblenergo in the case of illegal alienation of Steblivska and Korsun-Shevchenkivska HPPs from the company’s ownership.
“In February 2023 the Economic court of Cherkassy region the purchase and sale agreements of these HPPs were recognized invalid, however, already in April the Northern economic court of appeal by its ruling canceled the decision to return these HPPs to the state”, – stated in the press release of “Cherkasyoblenergo” on Monday.
As reported, the Economic court of Cherkassy region by the decision of February 20, 2023 satisfied the claim of “Cherkasyoblenergo” on the invalidation of the purchase and sale agreements of Steblevskaya and Korsun-Shevchenkovskaya HPPs between the company and foreign economic association (FEA) “Novosvit” in 2015.
“Property complexes of Steblivska HPP and Korsun-Shevchenkivska HPP were alienated under the disputed contracts without holding an auction, without notifying the State Property Fund of Ukraine in order to conceal illegal transactions, as a result of which Cherkasyoblenergo and the state suffered significant damage”, – said in the court decision.
As follows from the document, the assessment of the property alienated under the disputed contracts to determine its market value in violation of the requirements of the law “On Joint Stock Companies” and the charter of “Cherkassyoblenergo” was carried out without the decision of the Supervisory Board of the company to engage a subject of appraisal activity, as well as the approval of the market value of the property.
“As a result of illegal assessment of the property of Steblevskaya HPP and Korsun-Shevchenkovskaya HPP as integral property complexes, acting chairman of the company’s management board Kuzminskaya S.A., who concluded the disputed contracts on behalf of Cherkassyoblenergo, artificially underestimated the market value of these two HPPs in order to avoid the prohibition provided for by the charter of PJSC on her independent decision to make transactions on property, the market value of which exceeds 5% of the value of the company’s assets,” the court stated.
According to the lawyer of Tsypin & Partners Marina Sutkovych, who represented Cherkasyoblenergo in court, the total amount of losses of the company as a result of the sale and purchase of two HPPs amounted to UAH 139.5 million.
“However, already on April 11, the Northern Economic Court of Appeal overturned the decision of the court of first instance. The court of appeal refused to satisfy the claim of Cherkasyoblenergo because, in its opinion, Kuzminskaya S.A. did not exceed the powers granted to her by the charter, the transactions were not significant, and other arguments of the court of first instance are unfounded”, – stated in the press release.
However, as noted by Sutkovich quoted in the document, the case file lacks an independent, free from the influence of the parties, judicial appraisal and construction expertise, and the court refused to appoint it for unclear reasons.
“The Northern Economic Court of Appeal was one-sided and took into account mainly the evidence of VEA Novosvit, which violated the principle of equality and due to which the circumstances of the case were not established fully and comprehensively”, – argues the lawyer.
At the beginning of 2022, 46% of shares of PJSC Cherkasyoblenergo were transferred from the State Property Fund to the Ministry of Energy. Another 25% of shares are under the management of PJSC Ukrainian Energy Saving Service Company (UkrESCO).
In January-September 2023, the volume of commercial output of Kyiv Cardboard and Paper Mill (Kyiv Pulp and Paper Mill, Obukhiv, Kyiv region), Ukraine’s industry leader in this indicator, amounted to UAH 5 billion 566.3 million, up 6.1% compared to the same period in 2022.
According to statistics provided by UkrPapir Association to Interfax-Ukraine, the plant’s production of corrugated boxes increased by 23.7% in volume terms, to 168.3 million square meters. Cardboard output increased by 9.2% to 124.8 thousand tons, driven by a 15.5% increase in containerboard output to 102.7 thousand tons, while boxboard output decreased by almost 13% to 22.1 thousand tons.
At the same time, the output of base paper for sanitary and hygiene products maintained a negative trend: in January-September, it decreased by 24% to 33.3 thousand tons, and the production of toilet paper in rolls also decreased by 24% to 188.17 million units.
Despite the decline in toilet paper production, the plant maintains a strong leadership in toilet paper production in Ukraine. In total, in the first nine months of 2023, the country’s major enterprises produced 444.63 million rolls (down 1.4%).
According to statistics, in September of this year, Kyiv Pulp and Paper Mill increased production of corrugated boxes by 13.2% to 19.6 million square meters by September 2022, and paper and cardboard by 1.3% to 18.1 thousand tons.
According to the association’s data from major industry players, in January-September this year, Ukraine recorded a 9.8% increase in paper and cardboard production (up to 405.3 thousand tons) and a 17.7% increase in cardboard boxes (up to 379.6 million square meters).
Kyiv Pulp and Paper Mill is one of Europe’s largest cardboard and paper products producers, employing over 2,500 people.
As reported, in 2022, the mill produced UAH 7 billion 432 million worth of products, which is 3.5% less than in 2021.
In September, TAS Insurance Group (Kyiv) paid out a total of UAH 118.5 million under the concluded insurance contracts, which is 37.1% more than the amount of the company’s indemnities in September last year.
According to the company’s website, payments under hull insurance contracts increased by 37.7% to UAH 32.29 million compared to the reporting period of 2022, which is 27.25% of the insurer’s total payments for September this year, MTPL – by 31.1% to UAH 39.43 million (33.27%), Green Card – by 22.5% to UAH 27.35 million (23.08% of total payments).
At the same time, VHI payments increased by 86.4% to UAH 15.41 million, which is 13% of the total amount of payments made by the insurer for the reporting period.
Under other insurance contracts, TAS IG paid UAH 4.02 million in insurance indemnities for the month, which is 75% more than a year ago.
TAS Insurance Group was registered in 1998. It is a universal company offering more than 80 types of insurance products in various types of voluntary and compulsory insurance. It has an extensive regional network of 28 regional directorates and branches.
