Business news from Ukraine

Kronospan opens logistics center near Kiev worth EUR20 mln

Kronospan Group, which has woodworking enterprises Kronospan UA (Volyn region) and Kronospan Rivne (Rivne region) in Ukraine, has invested more than EUR20 mln to establish a logistics center in Kalinovka village, Kyiv region, which was put into operation in May this year, said Natalia Pokinska, general director of Kronospan UA.

“In conditions of a full-scale war, disruption of logistics routes and other unfavorable conditions, we are investing more than EUR20 million logistics center near Kiev, the purpose of which is to receive road and rail freight from foreign Kronospan companies and our territorial divisions,” Pokinskaya said at the forum “FIT for Ukraine (Forum on Investments and Transformations): Furniture Cluster”.

According to her, the main stage of investments has been completed and the logistics center is currently located on 15 hectares of area, has facilities and capacities that it can provide to partners. Its construction was launched in 2019.

Pokinskaya emphasized that during 19 years of Kronospan Group’s work in Ukraine, the total volume of investments in the Ukrainian woodworking industry exceeded EUR900 million (both own funds and financial institutions, including the European Bank for Reconstruction and Development (EBRD)), and since the beginning of the full-scale war of the Russian Federation against Ukraine – EUR122 million.

She reminded that the construction of the plant in Rivne region, investments in which started in 2019 and where the first particleboard production line was commissioned in 2021, is one of the largest investment projects in Ukraine in recent years (more than EUR400 mln).

In total, more than 700 jobs have been created at the company’s enterprises.

Kronospan Group, established in Austria in 1897, today is a major global manufacturer of wood-based sheet materials. It includes more than 40 production plants in many countries.

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Kronospan company plans to launch the production of particle boards (chipboard) at a new site in Horodok of Rivne region in November this year, Executive Director of Kronospan Rivne Pavlo Piltiay has told Interfax-Ukraine.As reported, the plant was previously expected to start operating in late October.The expert recalled that Kronospan is investing EUR 200 million in the new plant, and the same amount is planned to be invested in the implementation of the second stage of the project – the production of oriented strand board (OSB).As reported, the estimated launch date for this production is the third quarter of next year.Kronospan began investing in a new site back in 2018, but only in mid-2020 received permission to start architectural and construction work, and it took another six months to obtain various permits.The new enterprise is introducing an ecological system/filters to protect the environment from dust and other chemical contamination. It also installed a special module for monitoring the environment around the factory (formaldehyde, steam, other pollutants). Chipboard production in Horodok is designed to produce 900,000 cubic meters of products per year, it is planned to create 200 direct jobs and about 2,000 in related industries, the average salary is UAH 18,000 per month. Some 40% of the production is planned to be exported.



The European Bank for Reconstruction and Development (EBRD) organizes a syndicated loan of EUR116 million for the manufacturer of sheet materials based on wood Kronospan UA (Novovolynsk, Volyn region), which is part of Kronospan Group, for the construction of a new plant, according to a bank press release.
“The EBRD will be the lender of the record for the amount of EUR116 million, while EUR50 million out of the total will be syndicated to commercial banks Raiffeisen Bank International AG and Raiffeisenlandesbank Oberösterreich under an A/B loan structure,” the report says.
“The funds will finance investments in new production facilities in compliance with relevant EU standards and regulations. The company plans to expand its production in Ukraine with the construction of a new facility in Novovolynsk, western Ukraine,” it reads.
“Specialized energy efficient equipment, including a 45 MW biomass boiler energy plant, a new transformer unit and a new precipitator filter will provide an alternative power supply solution, cut energy losses and help reduce dust emissions. High value-added products manufactured at these facilities are expected to lead to oriented strand board (OSB) imports substitution and more exports from Ukraine to the EU single market and other countries,” according to the document.
Kronospan was created in Austria in 1897. Currently it is the leading European manufacturer of wood-based sheet materials, operating in 21 countries. Total sales exceed EUR2.7 billion per year.

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