Production of AdBlue, a special additive for diesel engines used to reduce NO (nitrogen oxide) emissions, was launched by Ostchem on the basis of Cherkassy Azot
“Today, Cherkassy Azot is capable of producing volume that provides 80% of the Ukrainian market and, if necessary, can ramp up production to cover all domestic consumption and for export to EU markets,” the company said in a press release on Friday.
It is specified that the market volume in Ukraine in 2022 was 23.4 thousand tons, and it decreased by more than 10 thousand tons due to military actions. Growth potential of Ukrainian market after introduction of standard Euro-4, Euro-5, Euro-6 exceeds 250 thousand tons, as the company believes.
Project on AdBlue production at Cherkassy “Azot” was announced in February 2022, in May 2022 the plant began to produce the first batches of product, and today the volume of urea solution production accounts for 30% of Ukrainian market needs.
“We are capable of becoming a major national player and gradually displacing imports. Our plans are to become a strong player in the EU markets, where demand for AdBlue is at a high level,” said Sergey Pavlyuchuk, head of Ostchem’s nitrogen business.
According to the release, the new production facility passed an international audit and this week received all required certificates confirming the quality of the product and allowing to use the AdBlue trademark and enter the EU markets, where, according to Ostchem, Ukrainian AdBlue has good prospects.
It is stated that at the first stage the company intends to fill the Ukrainian market by planning wholesale sales of AdBlue directly from the facility, as well as sales through retail chains, service stations and petrol stations and is already negotiating with a number of petrol stations to install their own AdBlue stations.
According to Ostchem, a large consumer of AdBlue will also be the agro-industrial complex, which uses modern machinery of the new generation.
A separate direction will be sales of the product in small containers of 10 and 20 liters.
The second stage will involve export to the neighbouring EU countries – Lithuania, Latvia, Romania, Hungary and Poland, as well as major AdBlue consumers – Germany (consumption level of 2.4 m t/year), France (2.1 m t/year), Italy (1.3 m t/year) and Turkey (726,000 t/year). According to Group DF estimates, the European market volume exceeds 7.2 million tons per year.
It is also stated that Cherkasy Azot will be the only Ukrainian producer of AdBlue by “direct method”, i.e. method of urea melt production, while the other producers use so called “blending” method, i.e. technology of mixing granulated urea with water. According to the company, its method ensures very high and stable quality at a low price, and in order to distinguish its AdBlue reagent on the Ukrainian and European markets, Ostchem has already registered its own trademark “Ukrblue”.
The use of the reagent is stipulated by EURO 6 standards and is aimed to reduce emissions of harmful substances. VDA (Verband der Automobilindustrie e.V., German Automotive Industry Association) owns the rights to the AdBlue trademark.
Group DF consolidates assets in the gas distribution, chemical, titanium and port industries, as well as in agriculture and media. The founder and owner of Group DF is Ukrainian businessman Dmitry Firtash.
Ostchem is the nitrogen holding of Group DF. It includes Rivneazot, Cherkasy Azot, as well as Severodonetsk Azot and Stirol (not operating and located in the occupied territories).
Cherkasy Azot PJSC has been a part of Group DF since 2011. The design production capacity of PJSC “Azot” is 962.7 thousand tons of ammonia per year, ammonium nitrate – 970 thousand tons per year, urea – 891.6 thousand tons, UAN – 1 million tons per year.
Ukrainian cat and dog food manufacturer Kormotech is investing EUR14 million to expand its production in Ukraine and Lithuania during 2022-2023, the company’s press service told Interfax-Ukraine.
Reportedly, some of the projects are already being implemented and some are planned to be implemented by the end of 2023. Investments in the Lithuanian plant in 2022-2023 will total EUR 5.4 million, and in Ukrainian plants for wet and dry feed by the end of this year will be about EUR 8.5 million.
The wet fodder production capacity at the Kedainiai Kormotech plant in Lithuania is expected to increase by 25%, and at the Ukrainian plant by 65%. At the Lithuanian plant, the company has integrated new technology for the production of wet feed in the premium and super-premium segments.
In Ukraine, the company is expanding the capacity of its wet feed factory, modernizing 50% of its existing equipment and automating manual processes, the company said. In addition, it plans to modernize its dry feed plant in 2023.
According to the press release, Kormotech continues to improve the efficiency of existing production and business processes.
According to the press release, last year it began working on a “zero losses” program to reduce all irreversible losses at the plant to zero or to recycle them. A complete energy audit of the production in the areas of heat recovery, thermal insulation and the system of monitoring of energy consumers in the processes was carried out. Kormotech began implementing the SAP ERP system in the cloud, which will help focus on innovation, reduce operating costs and improve process efficiency.
Kormotech’s 2022 results show a 12 percent increase in turnover to $124 million from $110 million in 2021. The goal in 2023 is to reach a turnover figure of $150 million and increase the export/Ukraine ratio to 30%/70% from 24%/76% previously through synchronous growth of markets, the report said.
LLC “Kormotech” is the leading Ukrainian manufacturer of food for cats and dogs, occupies the 51st position in the world ranking of petfood producers and the seventh in the ranking of the most dynamic petfood brands. Kormotech sells its own brands and partner brands in 40 countries.
The company has two dry and wet food plants in the Lviv region and a plant in Lithuania. The company produces products for cats and dogs under its own brands Optimeal, CLUB 4 PAWS (TM “Meow!” and “Woof!”) and in private label direction. The assortment has more than 650 items.
The ultimate beneficiaries of Kormotech are Elena and Rostislav Vovk.
Germany’s largest manufacturer of military equipment, Rheinmetall, intends to open production of armored vehicles in Ukraine, in particular Fuchs armored personnel carriers, Rheinmetall CEO Armin Papperger said in an interview with Bild.
“We will start with the maintenance and repair of emergency vehicles and want to produce armored vehicles such as Fuchs armored transport vehicles as soon as possible,” Papperger said.
According to him, Ukraine is also interested in combat tanks of modern modifications.
“Ukraine is also interested in a modern Panther battle tank and Lynx infantry fighting vehicle. However, the first step is to provide for the country’s urgent needs in its defensive struggle,” Papperger noted.
A major Ukrainian producer of corrugated board – Poninkovsky Cardboard and Paper Mill-Ukraine (PKBF-Ukraine, Khmelnitsky region) in January-April increased the production of corrugated board on 38.3% compared with the same period in 2022 – up to 26.33 million square meters.
According to statistical data provided to Interfax-Ukraine agency by UkrPapir association, thus, the factory continues to be in the top three after Kyiv Cardboard and Paper Mill and Trypillya Packaging Mill in terms of production of these products.
As reported, in January-March the factory increased corrugated packaging output by 30.4% compared to the same period last year.
According to statistics, in January-April 2023 it also increased the production of paper at the factory – by 30.5% to 0.25 thousand tons, and containerboard – by 36.0% to 22.9 thousand tons.
At the same time in April, production of corrugated boxes Ponikovsky CBF increased by 64.5% compared to April 2022, up to 7.25 million square meters, and paper and cardboard – by 38%, to nearly 7 thousand tons.
According to “UkrPapir” statistics, in January-April Poninkovsky CBF-Ukraine produced goods for nearly 805.13 million UAH – by 46.8% more than a year earlier.
As reported with reference to the data collected by the Association from the major enterprises of the industry, for four months in Ukraine produced 172.76 thousand tons of paper and cardboard (almost 14% more), and 155.30 million square meters of cardboard boxes (+26.3%).
Poninkovsky factory (formerly – Poninkovsky Cardboard and Paper Mill), once the largest manufacturer of school notebooks, now has one main production – paper and cardboard, mainly produces corrugated cardboard and corrugated packaging, as well as wrapping, waste paper.
The plant is part of the United Carton Company-Ukraine (UCCU, Lutsk), whose production assets include, in particular, the Lutsk Paper Mill-Ukraine (Volyn Region), which in January-April (according to “UkrPapir”) produced 17.7 thousand tons of various cartons – 52.2% more.
Businessman Mykola Lobov is listed in the state register as the beneficiary of JCC.
As reported, in 2022 Poninkovska CBF-Ukraine produced goods worth 2 billion 446 million UAH – 6.5% more than a year earlier.
In January-April this year, Kokhavynska Paper Factory (KPF, Lviv region), which produces hygienic paper products (TM “Kokhavinka”), increased production volume by 33.7% compared to the same period last year – almost to UAH 368 million, according to statistics from “UkrPapir”.
As reported, at the end of the first quarter, the increase in this indicator was 39% compared to the same period of 2022.
According to statistical data provided by Association to Interfax-Ukraine, in physical terms the production of paper-base for sanitary products at the plant increased by 5.1% to 13.8 thousand tons.
Including in April, its output rose slightly to 3.49 thousand tons, compared to April 2022.
The output of toilet paper in rolls for the four months of this year increased by 4% – up to 43.88 million pieces, and the KBC factory confidently holds second place in its production after the Kiev KBC (almost 78 million pieces), which reduced the production of this product by 29.6% during this period.
The Kokhavinsk Paper Mill, which has been in operation since 1939, produces base paper for sanitary and hygienic goods as well as toilet paper and paper towels.
The capacity of the paper machines is 19 thousand tons per year, the processing equipment is 90 million rolls per year.
The factory has hardly stopped production since the beginning of Russia’s full-scale aggression in Ukraine.
As reported, last year KBF produced 975.3 mln hryvnia – 44.8% more than a year earlier. Net profit decreased by 12.7% to UAH 52.4 mln, income increased by 46.5% to UAH 978.9 mln.
Commodity output of Kyiv Cardboard and Paper Mill (Kyiv CPM, Obukhiv, Kyiv region), the leader of Ukrainian industry according to this indicator in January-April 2023 amounted to 2 billion 457.5 million UAH, which is 21.7% more than the same indicator of the first quarter of 2022.
According to statistics from UkrPapir association, provided to Interfax-Ukraine news agency, the plant has slowed down a little bit the growth rate of this index compared to the same period last year (in January-March the increase exceeded 27%).
In terms of volume production of corrugated boxes at the plant increased by 47.8% – to 70.06 million square meters. Production of cardboard increased by 26.3% to 55.37 thousand tons, due to the growth of containerboard output by 55.2% to 36.38 thousand tons, while the production of cardboard boxes decreased by 34% to 7.54 thousand tons.
At the same time, the output of backing paper for the manufacture of sanitary and hygiene products retains the negative trend, although slowed down – in January-April it fell by 27% to 14.29 thousand tons, while the production of toilet paper rolls fell by 29.6% to 78 million pieces.
Combine, despite the reduction in production of toilet paper, retains leadership in the production of toilet paper in Ukraine: a total of 180.9 million rolls (9% less) were produced by the main companies in the industry over four months.
According to the profile association, received from the major enterprises of the industry, a total of 172.76 tons of paper and cardboard (almost 14% more), and 155.30 million square meters of cardboard boxes (+26.3%) were produced in Ukraine in January-April 2023.
At the same time, the increase in these figures compared with the same period last year is largely due to the low comparative base of March 2022 – the first full month of full-scale invasion by Russia, when many companies have suspended their work.
Interfax-Ukraine Agency in the press-service of the plant, describing the current situation in the markets of branch products, explained that the market of corrugated products has decreased by 35-40%, taking into account the fall in demand for it in conditions of war.
“The situation with sanitary products is similar. In addition, in addition to the overall level of the economy, its demand is influenced by the number of people – the main consumer. Today, a large number of people have left Ukraine, many remain in the occupied territories, therefore, accordingly, the market has also decreased. The reduction in market volume is, depending on the segment from 18 to 35%,” – the company said.
In addition, there is a redistribution of demand in the segments of these products – the consumer saves money, so it reduces costs in the non-basic categories (napkins, towels) and focuses on the main – toilet paper.
“It has become much more difficult to export products: high logistics costs virtually eliminate the possibility of selling to the Middle East and North Africa. It is difficult to compete in Europe, because the cost of logistics “eats up” the possible earnings. In addition, because of the war, few companies are ready to sign long-term contracts, because because of all the possible risks it is difficult to guarantee a regular supply from Ukraine,” says the company.
At the same time, the plant is active in humanitarian work, including the allocation of more than UAH 0.5 million monthly in support of medical and educational institutions, public and volunteer organizations. Earlier it provided thousands of mobile corrugated beds and corrugated stools for the displaced people in Cherkasy, Znamenka, equipped hospital shelters and, in particular, the Kharkiv metro.
Among recent initiatives is the purchase of warm kits for children in the territories of active fighting and a humanitarian mission to deliver food kits to the liberated Izyum.
Besides, according to the press service, despite the cancellation of the employer’s guarantee for the average wage in July last year, the plant continued paying the mobilized employees, which is the 10th part of the whole workforce.
Kiev KBC is one of Europe’s largest cardboard and paper companies, employing over 2.5 thousand people.
As it was reported, in 2022 the mill produced 7 billion 432 million UAH, which is 3.5% less than in 2021.
Pulp Mill Holding (Austria) owns 100% of shares of KKBK PJSC.
