Business news from Ukraine

Ukrainian ice cream producer buys plant in Poland

Ukrainian ice cream and frozen semi-finished products producer Three Bears has acquired Nordis, which owns a plant for the production of semi-finished products and ice cream in Poland, the company’s founder Dmytro Ushmayev told the Ukrainian edition of Forbes.

“We have indeed acquired the Nordis plant in Poland. Nordis is similar in potential to Three Bears,” Ushmayev said.

The owner of the company refused to disclose the amount of the deal and clarified that the Ukrainian company plans to invest in the development of production in Poland.

According to the Ministry of Justice of Poland, in September 2023, the management of the Polish plant for the production of semi-finished products and ice cream Nordis changed. Dmitry Ushmayev, founder of Three Bears, became the new owner of the company. Andriy Tyshchenko, director of the Ukrainian manufacturer, has also joined Nordis’ supervisory board.

Nordis owns a plant in western Poland and warehouses. The company produces more than 100 types of ice cream and semi-finished products. Nordis also has a distribution network in 19 cities in Poland. The previous owner and CEO of Nordis was Slawomir Jankowski.

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Eurocar plant reduced net profit by 2.2 times

According to preliminary data, Eurocar JSC (Solomonovo, Zakarpattia region), which produces Skoda cars and is part of the Atoll Holding group of companies, ended 2023 with a net profit of UAH 37.25 million, which is almost 2.2 times less than in 2022.

According to the announcement of the annual shareholders’ meeting on April 30, as a result, retained earnings as of the beginning of 2024 increased by 16.5% to UAH 262.95 million.

The shareholders plan to use the net profit, as in the previous year, to replenish working capital, and not to accrue or pay dividends.

According to the publication, last year Eurocar increased its current liabilities by 85.4% to UAH 290.21 million, while its long-term liabilities increased slightly (by 3.2%) to UAH 1 billion 460 million.

Total accounts receivable amounted to UAH 707 million, down 22.7% over the year, while assets increased by 10.5% to UAH 2 billion 278 million due to a 2.5-fold increase in inventories to UAH 767.12 million and a 19.2% increase in cash to UAH 82.05 million.

“Eurocar has been producing passenger cars since December 2001. In June 2022, the plant resumed large-scale assembly (SKD) of Škoda cars, which was stopped with the start of Russia’s military aggression in Ukraine, but does not publish production statistics.

According to Auto-Consulting, in 2023, as in the previous year, Skoda cars took the fourth place in the rating of new passenger car sales in Ukraine, with an increase of 74.7% to 4.95 thousand units, while the market share increased to 7.61% compared to 7.08%.

According to the NSSMC, as of the third quarter of 2022, more than 68.84% of Eurocar’s shares are owned by Atoll Holding, whose beneficial owner is Oleg Boyarin, another 20% is owned by Prostir Capital LLC, and 10% by Iberia Motor Company of Poland.

According to Clarity-project, in 2023, the plant increased its net income by 73.6% year-on-year to UAH 4 billion 226 million.

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Igor Liski plans to build window glass plant in Ukraine

Businessman Igor Liski has announced the construction of a $240 million window glass plant in Kyiv region.

“I can now officially announce our new super-ambitious project, which we have been developing for over a year,” Liski wrote on Facebook.

Liski told The Wall Street Journal that he plans to invest about $80 million in the project. According to him, raising project financing is the main challenge when launching a project.

Liski is the owner of the investment holding EFI Group (Effective Investments). His investment areas include healthcare and medtech, paper, food, and woodworking industries, and agricultural supplies.

The company’s businesses include Feednova, an animal fats and feed additives producer, Medical Star healthcare network, Zhytomyr Cardboard Mill, Sam Ecopack, a cardboard packaging manufacturer, Forest Technology, an agricultural products supplier, Efi Agro, and, an online medical hub.

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Baykar starts construction of plant in Ukraine

Turkish defense company Baykar has begun construction of a plant near Kyiv that will employ about 500 people and produce TB2 or TB3 drone models, the company’s CEO told Reuters on Tuesday.

The Turkish-made Bayraktar drones gained widespread popularity worldwide after the Ukrainian military began using them to counter Russian forces, destroying armored vehicles and artillery systems.

Baykar said it has signed export agreements for its TB2 drone with 30 countries. Among them are Ukraine, Ethiopia, Libya and Azerbaijan since 2018, according to the SIPRI think tank.

“Our plant is under construction… we need about 12 months to finish the construction, and then we will move on to the internal machinery, equipment and organizational structure,” Baykar CEO Haluk Bayraktar said on the sidelines of the Riyadh World Defense Exhibition.

“The plant in Ukraine is large, we plan to employ about 500 people,” he said. Bayraktar noted that the production capacity will be about 120 units per year, but said it is not yet clear whether production at the Ukrainian plant will focus on the TB2 or TB3 drone model.

Asked if security issues related to the ongoing conflict would be a concern for the plant, he said that plans are “fully progressing” and “nothing” can stop them.

As reported earlier, Ukraine’s Defense Ministry and Turkish company Baykar Makina signed an agreement to build a service center for the repair and maintenance of unmanned aerial vehicles in Ukraine.

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Ostchem plants increase fertilizer production by 19.51%

In 2023, the plants of Ostchem, a nitrogen holding company that unites Group DF’s nitrogen business, produced 2.1 million tons of mineral fertilizers, up 19.51% year-on-year.

According to a Group DF press release, Azot, the group’s Cherkasy-based plant, produced 1.56 million tons of mineral fertilizers in 2023, up 39.63% year-on-year, while Rivne Azot produced 528 thousand tons (-10.81%).

Urea, UAN and ammonium nitrate were the key fertilizers produced by Ostchem’s businesses, Group DF said.

According to the group, in 2023, it produced 835.9 thousand tons of ammonium nitrate, up 60.47% year-on-year, UAN – 572.7 thousand tons (+130%), and urea – 447.1 thousand tons (+145%). Production of UAN, a traditionally exported fertilizer produced by Rivne Azot, halved to 102 thousand tons.

“The fertilizer market is recovering, but imports of nitrogen fertilizers, which have increased significantly, do not allow us to fully utilize our plants. Despite the difficult situation in the agricultural sector, forced shutdowns of plants due to the hostilities, still high gas prices and abnormally high volumes of imports to Ukraine at dumping prices, Ostchem started to restore production in 2023. We fully met the demand from farmers even during peak periods,” said Sergiy Pavliuchuk, Production Director of Ostchem’s nitrogen business.

In 2023, Ostchem Holding doubled its production of UAN, the most promising fertilizer in Ukraine, to meet the demand. UAN was ranked second in terms of production, and its share in Ostchem’s product portfolio amounted to 27.3%, according to Group DF.

“It is no secret that we are negotiating with global players to develop several industrial sites. Our strategic plans include the construction of new workshops and enterprises. We are talking about investing in new, energy-efficient fertilizer production facilities and launching new products such as AdBlue, industrial gases, and petrochemicals,” added Pavliuchuk.

Commenting on the state of the domestic fertilizer market in Ukraine, Group DF said that the main feature of 2023 was the critical growth in imports imported at dumping prices. Compared to 2022, imports of mineral fertilizers to Ukraine increased 1.9 times, reaching 1.99 million tons. For example, urea imports increased 3.7 times over the year, reaching 501 thousand tons.

“A huge flow of cheap Belarusian and Russian fertilizers enters Ukraine through two channels: the first is from the former Soviet Union countries friendly to the aggressor. The second new channel is the re-export of Belarusian and Russian fertilizers from the EU. According to Eurostat, the total volume of nitrogen fertilizer imports to the EU increased by 34% in 2022-2023, while Russia accounted for about a third of these imports. Despite the sanctions and the existing embargo, a significant portion of these fertilizers is also entering Ukraine, slowly “killing” the Ukrainian producer and Ukrainian jobs,” emphasized Oleg Arestarkhov, Group DF’s Head of Corporate Communications.

In his opinion, the new trend is driven not only by Russia’s desire to expand its sales markets, but also by its strategic plan to make the EU and Ukraine dependent on its fertilizers.

Unable to compete with cheap imports, many EU companies are shutting down, and Ukrainian chemical companies such as Odesa Port and Sumykhimprom are also idle.

“The US and EU countries have already developed measures to ‘reduce dependence’ on fertilizers, grain and other food products from Russia. Formally, Ukraine has an embargo on imports of Russian and Belarusian fertilizers. However, fertilizers from these countries, as well as countries that buy cheap gas from Russia, continue to be supplied. As a result, our market is flooded with cheap imports, and Ukraine is facing critical dumping. Unfortunately, in 2023, we did not see any clear, tough economic actions by the authorities to protect the Ukrainian market and national producers. Fertilizer imports to the country are growing much faster than domestic production. Domestic production grew by about 20%, while imports grew by almost 100%,” stated Arestarkhov, adding that Ukraine needs to learn to better protect its interests.

Group DF consolidates Dmitry Firtash’s assets in the gas distribution, chemical, titanium and port industries, as well as in agriculture and media.

Ostchem is Group DF’s nitrogen holding company that unites the largest mineral fertilizer producers in Ukraine. It includes Rivne Azot, Cherkasy Azot, as well as Sievierodonetsk Azot and Stirol, which are not operating and are located in the occupied territories.

Cherkasy Azot PrJSC (Cherkasy, Ukraine) is one of the largest Ukrainian chemical companies and has been part of Group DF’s nitrogen business since 2011. The design production capacity of Cherkassy Azot is 962.7 thousand tons of ammonia, 970 thousand tons of ammonium nitrate, 891.6 thousand tons of urea, and 1 million tons of UAN per year.

Rivne Azot is one of the largest Ukrainian chemical companies in Western Ukraine and has been a part of Group DF’s Ostchem nitrogen holding since 2011. Since its acquisition, Firtash has invested over UAH 1.3 billion in Rivne Azot.

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Honda considers building electric vehicle plant in Canada

Japanese automaker Honda Motor Co. is considering the possibility of building an electric vehicle manufacturing plant in Canada, the Nikkei newspaper reports.

Investments in the project could reach 2 trillion yen ($14 billion).

Honda is considering several sites for the construction of the plant, including a site near the company’s existing facility in Ontario. The project may include the creation of facilities for the production of electric vehicle batteries, Nikkei notes.

The automaker intends to make a decision on the site for the construction of the Canadian plant by the end of 2024. The plant is expected to start operating in early 2028.

Honda is preparing to start production of electric vehicles and batteries in the US state of Ohio in 2026, and the Canadian plant will become the second largest Japanese company in North America.

This region accounts for about 40% of all Honda sales.

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