LLC Pobuzhsky Ferronickel Plant (PFC, Kirovograd region), which is part of the international investment group Solway, is forced to suspend production.
According to a press release from the company on Tuesday evening, as a result of the missile attack and global damage to the power grid, the company is unable to resume the operation of furnaces.
At the same time, it is specified that on the morning of October 22, the military forces of the Russian Federation carried out 3 missile strikes on an energy facility that provided power to the PFC, as well as a number of settlements in the Kirovograd and Nikolaev regions, including a water intake station on the Southern Bug (PS “Long Pristan” 35 kV).
As a result of power failure at PFC, the metallurgical process and water intake were stopped. PFC suffered significant economic damage, and production was forced to stop until the state-owned substation is properly restored and the necessary repairs to the main equipment are completed.
At the same time, the enterprise took all necessary measures to prevent situations that could have a negative impact on human health or the environment.
“Currently, power supply has been restored, but it is very unstable and barely enough for the needs of the population. Due to the impossibility of conducting the production process, the company is forced to suspend its main production activities,” the press release states.
The downtime start date is November 1, 2022.
It is also noted that since the beginning of the military aggression against Ukraine, the PFC has been operating at a loss due to high energy costs, logistical obstacles, lack of raw materials, and was subsidized by its Swiss investor Solway Investment Group, trying to fulfill its obligations to workers and the community as much as possible.
Given the forced decline in production by more than half, for 9 months of this year, the total volume of processed raw materials amounted to 0.643 million tons (62.8% compared to the results of 9 months 2021), which corresponds to 42.299 thousand tons of ferronickel (77.5% ) by 9 months-2021), or 7.4 thousand tons of nickel (63.5% by 9 months 2021).
During the specified reporting period, the plant paid taxes to the budget of Ukraine in the amount of UAH 113.8 million (7.9% more than in 9 months of 2021). Of these, UAH 56.1 million is a single social contribution (up 8.6% compared to 9 months 2021) and UAH 44 million are payroll taxes (up 9.1% compared to 9 months 2021).
According to the press release, despite the decline in production capacity with the start of full-scale armed aggression of the Russian Federation against Ukraine, wages and social benefits were maintained in full. In addition, with the participation of the parent company Solway, the employees of the plant carried out a complete set of first-aid kits for the military according to the standards of NATO and the Ministry of Health of Ukraine and established the process of purchasing and delivering the necessary funds and medical equipment from abroad. At present, the financial assistance of PFC and the Solway investment group in the acquisition of medical equipment for the Armed Forces of Ukraine amounted to about UAH 5 million.
The press service clarifies that during the period of downtime, jobs will be saved for all staff. Personnel involved in the maintenance and operation of critical infrastructure facilities and the protection of the plant’s facilities will be paid for the actual hours worked. In accordance with Article 113 of the Labor Code of Ukraine, employees who are not involved in the protection or operation of equipment will be paid for downtime in the amount of at least two thirds of the established tariff rate or salary.
“We remain on the ground and will try to keep the team, to be useful to society and the defenders of Ukraine for the sake of Our Victory,” says PFC General Director Denis Shevchenko, quoted by the press service.
During the period of forced downtime, PFC will continue to fulfill its social obligations to the society in terms of water supply, drainage, gas and heat supply.
Currently, PFC is fully integrated into the production process of Solway Investment Group. The total investment of the group in the plant amounted to more than $130 million.
International investment group Solway started its activity in 2002. It is a private company with a diversified business in the mining and metallurgical industries. The key companies of the group are registered in Switzerland, Luxembourg, Estonia and Malta. 100% of the share capital belongs to EU citizens. Solway’s main production assets are located in North Macedonia, Guatemala, Indonesia, Argentina and Ukraine.
The Solway Investment Group international investment group, owning Pobuzhsky Ferronickel Plant (PFP, Kirovohrad region), at the end of 2020, maintained its consolidated revenue at the level of 2019, $624.2 million.
According to the company’s report, its EBITDA was $167 million with a margin of 26.7% in 2020, the cost of production decreased by 6.3% yea year-over-year, to $438.9 million.
“Solway has a cash balance in excess of financial debt, and, as a result, the ratio of net debt to EBITDA at the end of 2020 is below zero,” the company said in a press release.
At the same time, it is noted: despite the problems due to the pandemic, the work of Solway remains stable and safe. They managed to prevent the closure of enterprises and avoid social and economic consequences in the regions of their activity. Continuous operation was maintained and some plants even exceeded production targets.
According to the statement, the group’s actions were based on two key priorities, protecting the health and safety of employees and local communities, and laying the foundations for sustainable development and long-term economic recovery.
Solway’s strategic vision creates circular economic returns and prioritizes long-term growth over short-term profits.
“We strive to reduce the impact of our production on the environment, to comprehensively assess its impact when planning investment projects. We effectively use natural resources, raw materials and energy locally,” the company said in the press release.
In 2020, Solway has been actively pursuing the issue of reducing its carbon footprint. One of the main assets of the group, PFP, has been implementing a project to rehabilitate gas processing plants for several years in order to reduce emissions by 99.9%. The advanced stage of the project was reached in 2020.
