Kyiv Cardboard and Paper Mill suffered UAH 233 mln of losses in 9 months, but intends to invest EUR75 mln in equipment
The largest Ukrainian enterprise of the pulp and paper industry of Ukraine, JSC “Kiev Cardboard and Paper Mill” (Obukhov, Kiev region) following the results of nine months of the current year received a 233.4 million UAH loss from economic activity, said the deputy head of the board of the mill Oleg Dubrovka.
“In 2012-2022 the combine received a net profit of more than 2.5 billion UAH, which was reinvested in the development of the enterprise, and only 6 million UAH was paid as dividends. This year’s financial results are affected by both the large-scale invasion of Ukraine by the Russian Federation and the seizure of assets and funds as part of criminal cases,” he said at a press conference in Kiev on Tuesday, answering a question from Interfax-Ukraine.
According to him, in particular, after the Russian invasion of Ukraine had to suspend the project of launching the production of corrugated packaging in Verkhnedniprovsk, where it was planned to create 250 jobs.
“It was planned to launch a shop for the production of cast containers (packaging for eggs) with 123 jobs, but with the narrowing of the capacity of the market of these products plus the destruction of large enterprises in the south, the direction of cast containers for this year is projected to give us a loss of 24 million UAH, and the plant had to suspend”, – explained Dubrovka.
Also, before the start of a full-scale war, “Pulp Mill Holding” (the only shareholder of the mill) had planned to renew the entire equipment fleet of “Pulp Mill Print” – both carton packaging and flexography.
Among other things he noted that with the beginning of full-scale war the Kiev Mill had problems with the departure of the personnel, problems with logistics, delivery of the finished products, we had to look for new ways to supply the raw materials. Dubrovka also noted the staffing problem and said that all requests of the mill for reservations for personnel were never supported.
“But the company’s image is also negatively affected by the ongoing asset seizures. Partners do not understand why sanctions, why arrests and why there is no reaction to our requests to the law enforcement agencies. That is why both war and criminal proceedings lead to problems for the company and, consequently, to losses,” he summarized.
According to the deputy head of the Works, the environmental project of the plant’s waste incineration was to be launched in 2022. He stressed that the financing of the projects has not been stopped, but the company has faced the fact that Western specialists do not want to go to Ukraine to install the equipment.
“That is why last week the Supervisory Board decided to budget EUR75 million for the equipment, and we will look for ways and Ukrainian specialists to install it,” Dubrovka said.
He stressed that the modernization of production requires bank financing, and the mill mostly works with subsidiary banks of foreign banks (Raiffeisen, Credit Agricole). Cooperation with the European Bank for Reconstruction and Development (EBRD) was an important milestone, but had to repay its long-term loan ahead of schedule. “Resuming work with this respected bank will require a lot of effort,” he concluded.
At the same time Dubrovka expressed the opinion that the task of all criminal proceedings against the combine is the transfer of assets to the National Agency of Ukraine on the detection, search and management of assets derived from corruption and other crimes (ARMA), which will actually lead to the shutdown of the combine.
“The power structures need to understand that to stop the enterprise is not a shopping center (like the stopped Ocean Plaza), it will lead to the loss of jobs (about 3.3 thousand people in the group of companies), and Obukhov may be left without water and heating, which today provides Kyiv KBK,” he added.
Kiev KBC is one of the largest enterprises in Europe for the production of cardboard and paper products (corrugated packaging, sanitary products) with a staff of about 2.2 thousand people.
In 2021 the mill increased the production volume by 34.2% compared to 2020 – up to 7 billion 699 million UAH, and in January-September this year it produced goods for 5.4 billion UAH, which is 3.2% less than last year.
In January-September 2021 the net profit of KKBK was 488 million hryvnias.
