Business news from Ukraine

HEAD GROUP STARTS CONSTRUCTION OF PLANT FOR PRODUCTION OF EQUIPMENT FOR WINTER SPORTS IN UKRAINE

The Austrian HEAD Group has begun construction of a plant for the production of equipment for winter sports on the territory of the industrial park Winter Sport in Vinnytsia, the start of which was postponed a year ago due to the COVID-19 pandemic, the website of Vinnytsia City Council said.
At the same time, it is specified that the commissioning of the new plant, which will be one of the largest plants of the HEAD Group, is scheduled for 2023, it is planned to create at least 1,200 jobs.
As reported, the total investment in the project is EUR 80 million, the area of production facilities for the production of skis, ski boots and bindings is 43,000 square meters.
The total area of the industrial park Winter Sport, where the enterprise will be built, is 25 hectares.

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AZOVSTAL RAISES PRODUCTION OF ROLLED GOODS

Metallurgical plant Azovstal (Mariupol, Donetsk region), part of Metinvest Group, in January-April of this year increased the production of general rolled goods, according to recent data, by 6.8% compared to the same period last year, to 1.37 million tonnes.
A representative of the enterprise informed Interfax-Ukraine that during this period steel production increased by 7.1%, to 1.45 million tonnes, output of pig iron – by 6.2%, to 1.28 million tonnes.
In April, Azovstal produced about 370,000 tonnes of general rolled products, 400,000 tonnes of steel, and 340,000 tonnes of pig iron.
In 2020, Azovstal increased output of general rolled products by 2.7% compared to the previous year, to 3.9 million tonnes, steel by 4.5% – to 4.2 million tonnes, pig iron by 9.4% – to 3.8 million tonnes.
The company is part of Metinvest Group, the main shareholders of which are SCM Group (71.24%) and Smart-Holding (23.76%), jointly managing the company.
Metinvest Holding LLC is the management company of Metinvest Group.

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UKRAINIAN NAFTOGAZ RAISES OIL PRODUCTION IN EGYPT

At the beginning of April this year, Petrosannan Company – a joint operating company of NJSC Naftogaz Ukrainy and the Egyptian General Petroleum Corporation – performed hydraulic fracturing work on pilot wells in the concession area in the Western Desert of the Arab Republic of Egypt, thanks to which oil production increased more than 20%, or 600 barrels per day. According to a press release from the Integrated Communications Department of NJSC Naftogaz Ukrainy on Monday, provided that the achieved production volumes and current oil prices ($60 per barrel) are maintained, Naftogaz Group will thus receive additional income of $400,000 per month.
“Only the start of the current well stimulation campaign has allowed us to increase our oil production by 20%. We are planning to use this experience in the future, in particular, hydraulic fracturing of the wells, at other sites operated by Naftogaz Group in the Arab Republic of Egypt,” First Deputy Head of Naftogaz Serhiy Pereloma said.
Naftogaz Group implements hydrocarbon exploration and production projects in the Alam El Shawish East area in the Western Desert and South Wadi El Mahareeth and Wadi El Mahareeth areas in the Eastern Desert of Egypt.

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UKRAINE APPROVES HYGIENE REQUIREMENTS FOR PRODUCTION OF MINERAL WATERS

The Ministry for Development of Economy, Trade and Agriculture of Ukraine has approved the hygiene requirements for the production and circulation of mineral and spring waters that meet the requirements of EU legislation on their exploitation and marketing, the ministry said in a press release on Tuesday. According to the report, order No. 741 was signed by Minister Ihor Petrashko on April 13.
The document also defines the methods of processing mineral and mine waters and the requirements for the equipment used in their production.
The order, in particular, regulates the labeling of mineral waters and, among other things, prohibits the use of the indication on the labelling attributing prophylactic or medicinal properties to water. These requirements shall not apply to waters which are medicinal products, as well as to waters consumed by people at source or natural exit to the surface.
According to the Economy Ministry, the order meets the requirements of Directive 2009/54/EC of the European Parliament and of the Council of 18 June 2009 on the exploitation and marketing of natural mineral waters and will enter into force three months after the date of its official publication.
According to an explanatory note to the document, the implementation of the order will create uniform requirements for the production and circulation of natural mineral and spring waters, will have a positive impact on the health of the population and on the market environment in the circulation of this product.
“The order will introduce European requirements for natural mineral waters, remove barriers to investment in the production of such waters in Ukraine and create conditions for fair competition in the market,” Deputy Minister Serhiy Hluschenko said.

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SEVERODONETSK AZOT RAISES PRODUCTION OF FERTILIZERS IN Q1

PrJSC Severodonetsk Azot, part of Group DF of businessman Dmytro Firtash, in January-March 2021 increased the production of mineral fertilizers by 47.4% compared to the same period in 2020, to 265,620 tonnes, according to the company’s press release published on Tuesday.
During this period, the production of ammonium nitrate decreased by 9.2%, to 141,610 tonnes, urea increased by 3.7 times, to 119,600 tonnes, urea-ammonium nitrate (UAN) by 4.6 times, to 17,400 tonnes, and the production of ammonia water decreased by almost 94.7%, to 150 tonnes.
In addition, the enterprise produced 147,810 tonnes of ammonia; 1,590 tonnes of liquid carbon dioxide and 20,170 cubic meters of medical oxygen in cylinders.
“We managed to increase the utilization of the company’s production capacities from 30% to 50%. Further growth of production volumes will depend on the level of demand for mineral fertilizers and on how the ICIT [Interdepartmental Commission on International Trade] resolves the issue of limiting imports of nitrogen fertilizers in Ukraine,” Board Chairman of Severodonetsk Azot Leonid Buhayov said.
He said that the enterprise will be able to continue to load workshops and increase production if imports are limited due to quotas.
In May 2020, Severodonetsk Azot restored the full production cycle, it began production of its own ammonia and the production of ammonium nitrate, urea, and urea-ammonium nitrate, which made it possible to load production capacities by about a third. According to the company, all concluded contracts are fully implemented, despite the special working conditions during the quarantine period. The enterprise said that some workshops had been idle for more than seven years due to hostilities in the region, lack of reliable power supply and damaged infrastructure.
PrJSC Severodonetsk Azot is one of the largest Ukrainian chemical enterprises. It has been part of Dmytro Firtash’s Group DF since 2011. The core business of the enterprise is the production of mineral nitrogen fertilizers.

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AVANGARD AGRICULTURAL HOLDING HALVES EGG PRODUCTION

Avangard agricultural holding, the largest egg producer in Ukraine, cut monthly production by 50% over the past year due to pressure from law enforcement officers, largely due to the impossibility of organizing the export of its products in such conditions, owner of the agricultural holding Oleh Bakhmatiuk has said. “We now produce 170 million eggs a month, and we produced about 300 million, and in May – 350 million! Of which 170 million were exported in May, and this month we will send for export, maybe 20 million,” he said is in an interview with the Interfax-Ukraine agency.
Bakhmatiuk explained that the company used credit lines for $ 60-70 million for export, since delivery, for example, to Singapore takes 45 days and the supplier needs to be granted a delay.
“But thanks to the valiant actions of the NABU (the National Anti-corruption Bureau of Ukraine), all credit lines were closed to us, we were forced to almost completely close the export direction,” the Avangard owner said, adding that the coronavirus pandemic complicated logistics by making it longer and 30% more expensive.
According to him, out of seven trading houses – in Hong Kong, Singapore, Malaysia, Iraq, Liberia, Saudi Arabia and Dubai, the opening of which took six years and about $ 25-30 million, Avangard retained only one – in Dubai.
Talking about other reasons for the reduction in production, Bakhmatiuk named a painful rise in the price of raw materials, in particular, fat and oil, bagasse and cereals, common for the entire sector.
“This reputational war has been added to the general problems of the sector. In fact, 12 poultry farms have been closed, now the 13th will be closed,” he said, adding that there are 13 operating factories left.
As the businessman noted, such a reduction in production, taking into account fixed costs, led to an increase in the cost of an egg by about 20 kopecks.
Commenting on the rise in egg prices in Ukraine, he called it forced.
“We go to zero profitability and even with a small minus. Because feed prices are growing faster than the demand and the price of eggs are growing,” the businessman explained.

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