Ukraine increased export of beef in January-May 2023 by 3.6 times, to 9.6 thousand tons and increased revenues from export operations by 2.6 times, to $38.1 million, according to the press service of the Ukrainian Club of Agrarian Business (UCAB).
The press-release notes that May was the most effective in this period: Ukrainian producers sold abroad 2.5 thousand tons of beef, which is 42% more than in the previous month.
“With the start of a full-scale war, opportunities to export meat and meat products from Ukraine became very difficult. Before the war, the share of beef transported by road was only 22.4% (77.6% was exported by sea). However, even under such difficult conditions, the geography of supplies has not changed. If Ukrainian exporters keep the deliveries at the same level till the end of the year, we will be able to approach the volumes of 2021”, – forecasts Maxim Gopka, analyst of UCAB.
The largest importers of Ukrainian beef in January-May this year were China – 5.8 thousand tons, Uzbekistan – 1.04 thousand tons, Azerbaijan – 1.06 thousand tons and Kazakhstan – 590 tons.
At the same time, UCAB notes that access to European markets is important for the Ukrainian beef market, because of the closed ports logistics is very expensive, which does not allow the industry to operate efficiently.
The report indicates that beef prices in the EU countries are at a high level, although the consumption of this type of meat by the population is gradually decreasing. This trend is expected to continue in the coming years. According to forecasts by the European Commission, cited by analysts, beef production in the EU may decrease by 1.6% in 2023, which will keep prices steadily high even further.
The UCAB believes that if Ukrainian products are allowed to enter the EU market in the near future, it will, on the one hand, support domestic consumption in the EU and, on the other hand, stabilize the domestic industry. In particular, Ukrainian producers will be able to recover by working more efficiently in compliance with all phytosanitary norms and implementing a policy of decarbonization, the business association believes.
At the same time, due to small export volumes of Ukrainian beef compared to other countries, it will not hurt local players in the EU market. In addition, it will help European producers to steadily export their own products to global markets, the UCAB believes, as the supply of beef in the world remains low against high demand.
The international vertically integrated pipe and wheel company Interpipe in January-March this year increased EBITDA by 5.2 times compared to the same period last year – up to $79 million, but reduced revenues from sales by 4% – to $229 million.
According to the first quarter press-release of the company, steel output went up 13% to 184 thsd mt, pipes output increased 12% to 105 thsd mt but railroad products output decreased 13% to 20 thsd mt. In this case, the sales of products decreased by 23% to 108 thousand tons, including pipes – by 20% to 82 thousand tons, railway products – by 27% to 19 thousand tons, steel billets – by 50% to 6 thousand tons.
Net leverage ratio strengthened to 0.7x.
The press-release notes that at the beginning of 2023, production at all Interpipe enterprises was negatively affected by tight limits on electricity consumption by industrial consumers. However, already in March the situation improved due to the removal of these restrictions. As a result, and due to the effect of low comparison base due to last year’s downtime, steel output increased by 13% and tubes – by 12%.
At the same time, Interpipe’s sales continued to decline as external market conditions have already begun to show the first signs of cooling. In particular, the sales of OCTG-pipes (oil and gas variety – IF-U) decreased by 37% and line pipes – by 12%. The fall in the railway division is also continuing and the company is trying to compensate for it by increasing sales to the promising markets of North and South America, the Middle East and the Asia-Pacific region.
The decline in operating performance, in turn, led to a decrease in financial results. Specifically, its sales revenues decreased by 4% to $229 mn, while EBITDA went up 5.2 times to $79 mn, which significantly improved its net leverage to 0.7x.
Andriy Korotkov, Interpipe’s CEO, states that since the middle of the quarter the company’s plants have returned to work steadily, without any “broken” schedules. This made it possible to increase production at the end of the quarter and in some segments, for example, in the pipe division, to get somewhat closer to the pre-war level.
“Even under difficult military conditions, Interpipe continues to fulfill all orders and delivers products to customers quickly and on time. Significant support is provided by the extension of the cancellation of all quotas and duties on Ukrainian goods by the US and the EU,” says the top manager, who is quoted by the press service.
As earlier reported, Interpipe posted net profits of $204.441 million in 2022, which is 2.2 times more than in the previous year ($91.316 million). Last year’s pre-tax profit was $220.579 million compared to $110.907 million in 2021. The revenue in 2022 decreased by 13.4% to $981.330 million from $1 billion 132.9 million a year earlier. At the same time, Interpipe has increased its free cash flow from $109.627 mln to $153.777 mln during the year.
“Due to the war, in 2022, Interpipe reduced EBITDA by 11% compared to the previous year – up to $204 million. Steel output in 2022 decreased 39% to 595 thousand tons, pipes – by 36% to 393 thousand tons, railway products – by 51% to 84 thousand tons.
Sales of products in the reporting period decreased by 37%, to 524 thousand tons, including pipes – by 36%, to 384 thousand tons, railway products – by 50%, to 87 thousand tons. Its sales revenues decreased by 13% to $981 mln, while net leverage remained at a strong and stable level of 1.1x.
“Interpipe is a Ukrainian industrial company producing seamless pipes and railroad wheels. The company supplies its products to more than 80 countries all over the world through a network of sales offices located in the key markets of the Middle East, North America and Europe. In 2022, the company sold 384 thnd mt of tubes and 87 thnd mt of railroad products. The company sells its railroad products under the KLW brand.
Interpipe has 10 000 employees. In 2022 the company transferred 2.8 billion hryvnias to the budgets of all levels.
The company has five industrial assets: “Interpipe Nizhnedniprovsk Tube Rolling Plant (NTZ)”, “Interpipe Novomoskovsk Tube Plant (NMTZ)”, “Interpipe Niko-Tube”, “Dnepropetrovsk Vtormet” and the electric steelmaking complex “Dneprostal” under the “Interpipe Steel” brand.
The ultimate owner of Interpipe Limited is Ukrainian businessman Viktor Pinchuk and his family members.
The Association “Union of Ukrainian Poultry Farmers” calls for a moratorium on raising energy tariffs for the duration of martial law, so that the producers of poultry products could maintain the existing production volumes and not raise the prices of poultry products.
The industry association in the message on the site pointed out that the National Commission, which carries out state regulation in the field of energy and utilities (NKREKU) May 31, 2023 approved the decision to cancel the price limits on electricity for businesses from June 30 and released a draft resolution “On establishing the price limits of the market “day ahead”, the intraday market and the balancing market”, which provides for an increase in marginal prices of electricity to industrial consumers from June 30, 2023 by 35%.
“In the structure of the cost of production of poultry, electricity takes from 7 to 12%, and some types of products – up to 30%. (…) Production of poultry consists of different stages and therefore at each stage we will have an increase in the cost of components and respectively the cost of the final products of the industry will grow in “geometric progression”, – explained in the report of the Union of poultry farmers.
The business association points out that an increase in the cost of electricity will have a chain reaction and lead to an increase in the cost of most consumer goods. According to them, the producers will have to transfer the increase of electricity costs to the end users of their products, because “our own reserves for restraining the growth of selling prices have already been exhausted.
The Union of Ukrainian Poultry Farmers also pointed out that starting July 1, 2023, Ukraine is planning to return taxes on fuel to the pre-war level. Accordingly, “absolutely all goods and services that use fuel in the cost of production” will become more expensive.
In addition, the poultry industry will be negatively affected by rising prices of cereals, oilseeds and their processed products, which are the basis of animal feed and the largest share in the cost of poultry production. There will also be the same chain reaction to increase the cost of other components that form the cost of poultry meat and eggs production.
It is obvious that under implementation of the above initiatives the industry will face the consequences of increased energy costs due to the negative changes in the structure of the cost of production in July and in August the producers will have to raise wholesale prices for the poultry products to cover their own production costs, the industry association stressed.
The Poultry Breeders’ Union pointed out that all this is happening against the background of the gradual recovery of the volumes of poultry meat and eggs production, which were considerably reduced last year. At the same time, the industrial poultry sector continues to invest in production.
“The situation with the expected rise in energy costs may not only offset the long-awaited gains, but also return the industry to stagnation and a reduction in the number of poultry kept in agricultural enterprises,” argued the business association.
The report notes that the prices of poultry products are actually tied to the purchasing power of the population, which was and is low. Constant growth of production costs leads to a significant decrease in profitability. The result is a decrease in working capital, reduced competitiveness in foreign markets, unprofitability and reduced production volumes.
“Raising the selling prices of their own products is not a way out of the situation, for producers it is a forced step, because the consequence will always be a decrease in demand for products and accordingly the need for further expansion of production disappears,” – explained the association and called for a moratorium on raising energy tariffs.
“Metinvest Digital, the IT expertise center of the largest Ukrainian mining and metallurgical holding Metinvest, became a new resident of the “Dia.City” application, which allows to receive public services online.
According to the company’s press release on Thursday, Metinvest Group supports modern technologies, contributing to the digitalization of Ukrainian business and the establishment of the state at the level of the most developed countries in the world. That’s why the company’s exclusive IT partner, Metinvest Digital, became a resident of the application.
Moreover, it is noted that the implementation of a unique legal and tax environment is an important event for the Ukrainian IT-sector. In particular, the City Action offers the IT-companies favorable taxation conditions, modern tools to protect investments and intellectual property, the ability to attract specialists and improve competitiveness on the market. An additional plus is that the state guarantees the stability of these conditions for 25 years.
As of June 26, more than 600 companies have already become “Dia.City” residents.
“We are glad to become the residents of Diya.City in order to develop and strengthen Ukrainian market of talents, educational technological sector and economy of the country together with strong IT-industry players”, noted Sergey Detiuk, IT director of Metinvest Group, quoted by the press service.
According to him, thanks to Dia.City this process will become even more effective and coherent, it will stimulate the development of high-tech industry, to attract skilled professionals, investors and individual entrepreneurs.
The press release specifies that in order to get all these advantages, an IT-company must be registered according to the Ukrainian legislation; engage in qualified activities; meet the conditions of entry into the “Dia.City”.
“Metinvest Digital” is a Ukrainian IT company that specializes in the digital transformation of large businesses and implements projects in Ukraine, Europe and North America. The company designs, implements and supports complex IT solutions in the field of technological infrastructure building, information systems development, strategic outsourcing, data migration, system integration, cybersecurity and information security. “Metinvest Digital is an IT business partner of Metinvest Group, servicing more than 30 enterprises of the holding worldwide. The company is a certified partner of Microsoft (Gold Certified Partner) and SAP (Silver Partner).
“Metinvest Digital is a Microsoft Gold Partner and SAP Silver Partner. In 2023 the Company obtained the Certificate of conformity of information security management system in accordance with ISO 27001.
More than 800 employees of Metinvest Digital serve the group’s enterprises and 70000 employees in Ukraine, Europe and the USA.
Metinvest Digital’s annual portfolio of digital initiatives currently includes over 100 projects. The company includes five IT expertise centers, the Project Office and the Center for Advanced Development (R&D), and its main activities are aimed at the digitalization of the group’s production and business processes.
“Metinvest is a vertically integrated mining group of companies that manages assets in every link of the production chain, from iron ore and coal mining and coke production to the production of semi-finished and finished steel products, pipes and coils, as well as the production of other high value-added products. The Group consists of mining and metallurgical enterprises located in Ukraine, Europe and the USA and has a sales network covering all key global markets.
The major shareholders of Metinvest are SCM Group (71.25%) and Smart Holding (23.75%) that jointly manage the company.
Metinvest Holding LLC is the managing company of Metinvest group.
The Verkhovna Rada supported in the second reading and as a whole the bill No. 5762 on simplification of conditions for the production of distillates by small business entities, the head of the parliamentary committee on finance, tax and customs policy Daniel Getmantsev said.
“The law should bring the current legislation in the sphere of production and circulation of alcoholic beverages and distillates in line with EU requirements, as well as relax the regulation in this sphere for small business entities,” he wrote in Telegram on Thursday.
In the law ¹ 5762 “On amendments to the TCU and some laws of Ukraine on the simplification of the conditions of production of distillates by small business entities” the definition of small producers of distillates and requirements for their material and technical base are presented.
Small manufacturers of distillates are allowed to report on the volume of products manufactured and sold quarterly (instead of monthly), as well as reduced fines for failure or incorrect submission of such reports from 17 500 to 1 020 UAH.
The document reduced the cost of licenses for wholesale of alcoholic beverages for small producers of distillates from 500 thousand UAH to 30 thousand UAH, it is also allowed to use all alcoholic distillates, derived from agricultural products for the production of alcoholic beverages.
The law cancels the mandatory certification of alcohol, distillates, bioethanol, alcoholic beverages, explained the head of the financial parliamentary committee.
Investment company BGV Group Management in 2024 plans to begin construction of a plant to produce graphite concentrate and spherical granite on the basis of Balakhovskoye deposit (Kirovograd region).
“BGV’s team is currently performing the second stage of pilot tests of the processing plant and completing the design of the production complex and graphite pilot tests on the Balakhovskoye project. Next year, the company plans to start building one of the largest production complexes in Europe,” BGV Group Management said in a press release.
According to its data, the facility’s potential capacity will be 50,000 tons of graphite concentrate per year and 19,000 tons of spherical graphite for lithium-ion batteries. The company expects that such volume will be able to cover a significant part of the European Union market demand.
BGV is also working on a pre-feasibility study for the Perzhansky complex beryllium deposit (Zhytomyr region) and expects to present the results to investors soon. According to its data, the deposit has reserves of 2.34 million tons of ore. In addition, it also has reserves of zinc, rare earth elements and other materials.
Investments in extraction and further processing of raw materials are one of the main focuses of the company, BGV Group Management board member Sergii Voytsekhovskii said during the presentation of projects at Ukraine Recovery Conference 2023 in London. According to him, the investments of the group and its founder Gennady Butkevich in the Ukrainian mining projects amounted to over $100 mln in eight years.
BGV Group Management is an investment company, which develops businesses and projects in mining, processing, energy efficiency, retail and development. Its founder Gennady Butkevich is also a co-owner of ATB Corporation
