The war caused significant damage to all the main businesses of Smart-Holding, one of the largest in Ukraine: the total decline in production in metallurgy, agricultural and gas production exceeds 50%, but the company is alive and will be engaged in recovery in the future, CEO of Smart-Holding Julia Kiryanova has said.
“Throughout our portfolio [of Smart-Holding’s businesses], we see more than 50% down in production. However, there is good news – we are alive. By saying that I do not mean only that we are struggling every day and keep going with all our employees, I am saying that we are looking in the future,” she said at the Spirit of Resilience: Ukrainian Voices panel taking place these days in Davos at the World Economic Forum (WEF).
“When you stop thinking about the future – you are dead. And the enemy wants us dead. So, we are alive!” Kiryanova said.
She said that in 2021, the mining and smelting complex produced 23.5 million tonnes of steel products and iron ore, 80% of which was exported, and now it has fallen to nearly 8 million, 6 million of which will be exported.
The CEO of Smart-Holding recalled that the company owns a stake in Metinvest, whose two steel mills in Mariupol (Azovstal and Illych Iron and Steel Works) accounted for 53% of steel production, but now they are out of operation.
According to her, in the production of iron ore, the problem is blocking export channels, which is why Metinvest does not increase production to be able to export what it produces.
Regarding the agricultural sector, Kiryanova predicted that Ukraine’s key export crops – corn and wheat – that the company produced are 54% and 35% less, respectively. She added that the HarvEast agricultural holding from the group’s assets, which is among top ten largest agrarians in Ukraine, has lost 68% of arable land due to the war.
Regarding gas, she reported a 22% drop in production, and later added to reporters that more than 90% of fields in eastern Ukraine and 60% of reserves are under direct threat of airstrikes. “Therefore, it can be expected that this year production may decrease by 17%, to 16 billion cubic meters,” the CEO of Smart-Holding said, giving a forecast for the entire Ukrainian gas production.
“We, like Alice in Wonderland, we have to run quicker to stay where we are. And we are not staying where we are and you can see it by the numbers in the Ukrainian economy… The war impact is unprecedented. Looking back at 2014, we did not experience that much of a pressure on all industries in the country,” she said during the panel.
Kiryanova recalled all the hardships that Ukrainian business has recently experienced, including the economic crisis of 2008, the start of the war in 2014 and the pandemic of 2020. But the war impact, she said, led to a situation that Ukrainian business has not yet experienced.
At the same time, in an interview with reporters after the panel discussion, the CEO of Smart Holding said that she remains optimistic about the future of the steel industry. What has been destroyed will be restored, she said: “We will build new facilities, as efficient and environmentally friendly as possible, using the best industry practices and technologies, bearing in mind that decarbonization will be one of our guiding principles.”
According to her, in general, Smart-Holding looks to the future with optimism.
The Council of European Union has adopted two assistance measures under the European Peace Facility (EPF) that will allow the EU to further support the capabilities and resilience of the Ukrainian Armed Forces to defend the territorial integrity and sovereignty of the country, and protect the civilian population against the ongoing Russian military aggression.
“After having adopted three tranches of support totaling EUR 1.5 billion this year, a fourth tranche will add EUR 500 million to the resources already mobilised under the EPF for Ukraine, thereby bringing the total amount to EUR 2 billion, ” the press service of the EU Council said.
“The history of tomorrow is being written today, on the battlefields of Ukraine. With these EUR 500 million, the EU has allocated a total EUR 2 of billion to support EU member states’ supplies of military equipment to the Ukrainian Armed Forces. This support is just one part of European efforts to help Ukraine defend itself. The EU and its member states are determined to continue. We have done it since the beginning of the war and we will continue until the end,” Josep Borrell, High Representative for Foreign Affairs and Security Policy, said.
It is noted that the scope of the equipment to be provided in the new support package is in line with the current priorities as expressed by the Ukrainian government. In this light, the assistance measures consist of EUR 490 million for military equipment designed to deliver lethal force for defensive purposes, as well as EUR 10 million intended to cover the provision of equipment and supplies, such as personal protective equipment, first aid kits, and fuel.
Finance Minister Serhiy Marchenko and KfW Director for Eastern Europe, Caucasus and Central Asia Olaf Zymelka have signed an agreement on a EUR150 million loan for 15 years for budgetary support, the Ministry of Finance reported.
“The funds raised will ensure stable financing of priority areas and will be used for social spending, education and healthcare,” Marchenko said.
The loan is provided as co-financing of the International Bank for Reconstruction and Development (IBRD)’s Supplemental Financing of the Economic Recovery Development Policy Loan. The grace period with a deferral of repayment of the principal amount of the loan will be five years.
The Czech railway carrier ČD Cargo delivered the first train with 1,800 tonnes of corn from Ukraine to the German port of Brake for subsequent shipment to Egypt on a grain carrier ship.
Such a change in logistics routes is necessary to free up silos in Ukraine to receive a new crop, and to avoid starvation in North Africa and Asia that consume Ukrainian agricultural products, according to a posting on the website of the publication zdopravy.cz (the Czech Republic) on Tuesday.
“We see this as a help and at the same time a business opportunity. Due to the Russian invasion, Ukraine cannot export grain in the traditional way through the Black Sea ports. A new harvest is approaching, and the silos in Ukraine are still full. Therefore, it is necessary to decide how to get at least part of the stocks by rail across Europe,” Board Chairman of ČD Cargo Tomáš Tóth was quoted as saying.
The Czech railway carrier returned with a batch of corn from Ukraine, where it had previously delivered a batch of humanitarian aid and military equipment.
At the same time, railway exports from Ukraine are fraught with problems due to different gauges in the EU and Ukraine, as well as insufficient capacity of logistics routes.
“Firstly, these are different dimensions: carriers can either pick up wheeled carts or reload the cargo. However, transshipment options are limited. Another bottleneck is, respectively, border crossings. Their capacity is significantly limited, for example, in the Elbe valley between Děčín and Dresden. Unloading capacities in ports are also not unlimited,” the publication said.
Zdopravy.cz recalled that Ukraine is one of the main suppliers of grain and other crops to the world market. Due to the blockade of its seaports by Russian ships, wheat exports have stopped, the country needs to export about 20 million tonnes of grain to avoid starvation in the countries of North Africa and Asia, which traditionally purchase Ukrainian agricultural products.
Since the beginning of the war, Ukrzaliznytsia has transported more than 100,000 tonnes of humanitarian cargo by rail in passenger, freight cars and containers, Oleksandr Kamyshin, the head of the company’s board, said on his Telegram channel on Tuesday.
“Volunteers came to the first evacuation trains, which we used to transport our citizens from the east to the west, and brought humanitarian aid. Food, clothes, medicines. They loaded all this into passenger cars and the trains rushed back to the east,” he wrote.
Thus, in passenger cars, according to him, since the beginning of the war, transported more than 10,000 tonnes of humanitarian aid. There were days when 700 tonnes of humanitarian aid per day were transported in passenger cars.
“And then we brought humanitarian aid in freight wagons and containers. And our foreign partners have already joined here, first of all from Poland, and then from other countries. And as of today, we have already transported more than 5,000 freight wagons with humanitarian aid. Since the beginning of the war, we have transported over 100,000 tonnes of humanitarian aid by rail in passenger, freight wagons and containers,” Kamyshin said.
The Cabinet of Ministers of Ukraine will cooperate with Microsoft on documenting the war crimes of the Russian Federation, and the Xbox game service will be officially launched in Ukraine, Deputy Prime Minister – Minister of Digital Transformation Mykhailo Fedorov said.
According to him, Ukrainian accounts will appear on Xbox, and the Ukrainian language will appear on the consoles.
“This was agreed in Davos at a meeting with Microsoft President Brad Smith. In addition, the Microsoft team plans to help the digital industry of Ukraine during the recovery,” he wrote on his Telegram channel.
Fedorov noted that the Ministry of Digital Development has been cooperating with Microsoft for a long time, and they actively support Ukraine during the war: they became one of the first companies that suspended all new sales of products and services in Russia in early March and provided free cloud services for Ukraine until the end of 2022.
“Microsoft has supported and will continue to support Ukraine, it was very important to hear this from Brad Smith,” the minister added.
According to him, the company calculated that through their initiatives they provided Ukraine with digital support for $242 million. This includes financial grants, promotional campaigns, free access to the company’s products and services, and equipment.
