Business news from Ukraine

SMG KHERSON SHIPYARD PUTS INTO OPERATION DRY CARGO SHIP UNDER SAINT KITTS AND NEVIS FLAG

Shipbuilding Smart Maritime Group (SMG) of Smart Holding, which unites Kherson and Mykolaiv shipyards, has modernized and put into operation dry-cargo vessel Gelius 1 (under Saint Kitts and Nevis flag).
According to a Wednesday press release of SMG, during the modernization, the vessel was extended by 25.35 meters with an insert and became a two-hold vessel. At the same time, the total volume of the holds increased by more than 64%, to 7,377 cubic meters.
In addition, there are hydraulically operated Folder-type hatch covers. The weight of the insert together with hatch covers was 393 tonnes.
Thanks to the modernization, carried out according to the project of the Marine Engineering Bureau (Odesa), the deadweight of the vessel at a draft of 4.85 m (summer waterline) increased by 54%, or by 1935 tonnes, to 5,492 tonnes.
The vessel Gelius 1 (project 003RSD04/ALB02, Caspian Express type) was built at the Ceksan shipyard, Tuzla (Turkey) in 2007. Its initial design dimensions were 89.95 x 15.87 m, depth 5.75 m, deadweight was 3,640 tonnes.
Smart Maritime Group is the largest shipbuilding company in Ukraine, uniting the shipbuilding assets of the industrial and investment group Smart Holding: Mykolaiv and Kherson shipyards. The production facilities of SMG allow building medium-tonnage full-scale vessels and carrying out complex ship maintenance works. The customers of the shipyards are companies from the Netherlands, Norway, Great Britain and other countries of the world.
In 2020, the company modernized and repaired 55 vessels, built two chemical tanker hulls.

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UKRAINIAN SMG TO MODERNIZE SIX VESSELS OF DUTCH HANDELSKADE SHIPSALES

Smart Maritime Group (SMG) of Smart-Holding, combining Kherson and Mykolaiv shipyards, will modernize six coastal vessels of the Koster class (a vessel with a limited navigation area from the coast) by order of the Dutch company Handelskade Shipsales B.V.
According to a SMG’s press release on Wednesday, under the terms of the contract, each vessel’s length will be increased by 12 meters during the modernization by installing an insert and a partition. The shipyard specialists will also paint ballast tanks, outer hull and cargo holds, lay new piping systems and install new hatch covers.
In addition, a self-ejecting boat will be installed in the stern of the vessel. About 190 tonnes of metal will be used to modernize each vessel.
At the same time, it is noted that the modernization will significantly improve the technical and economic characteristics of the ships, they will become two-hold (now one), the deadweight will increase, on average, by 20%.
The first two vessels are expected to be delivered to SMG for repairs in the second decade of January. It is planned to complete the modernization of all vessels by July 2021.
The total cost of the contract will be about UAH 100 million.
“The company has already started cutting and processing high-quality metal purchased for this order at the enterprises of the Metinvest holding,” the press release said.

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SMART MARITIME GROUP PLANNED REVENUE GROWTH BY 20% IN 2020, BUT PRODUCTION MAY DECLINE

Smart Maritime Group (SMG) of Smart-Holding, combining Kherson and Mykolaiv shipyards, earlier planned in 2020 to increase revenue from sales of products by about 20% compared to 2019, to UAH 600 million from more than UAH 500 million, however, due to the deterioration of the situation production volumes may decrease.
According to Dmytro Krasnikov, the CEO of Smart Maritime Group, the key task was to develop an updated business development strategy in two main areas: maintaining and developing the company’s main profile – shipbuilding and ship repairs, as well as diversification of activities involving all the existing potential of our shipyards.
According to him, the company has expertise in the manufacture of large metal structures, its specialized unit previously participated in a number of projects for the development of road infrastructure in Ukraine, was involved in the manufacture of equipment for mining and processing plants. This is one of the promising areas. The development of the strategy is at the final stage, in the near future it will be submitted for approval to the management company Smart-Holding.
The company strengthens the team, expects the arrival of several top managers in sales and human resources.
Concerning the influence of coronavirus on the company’s work, its head pointed to a decrease in economic activity, there is a lack of liquidity in the market, many clients do not have funds to finance repairs and work. The volume of orders is declining, many contractors, especially from Europe, took a break. General uncertainty leads to the fact that investment projects are frozen.
Given this, SMG adopted a cost-cutting program if the situation drags on for a long time, although it is forecasted that by the third quarter the economic activity of all entities, including the company’s customers, will begin to recover.

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SMART MARITIME GROUP BELIEVES COURT DECISIONS TO DECLARE CHORNOMORSKY SHIPYARD BANKRUPT IS EVIDENCE OF DESTRUCTIVE POSITION OF PGO

Smart Maritime Group (SMG) of Smart-Holding considers the decision of the business court in Mykolaiv region about declaring Chornomorsky Shipbuilding Yard (Mykolaiv), part of SMG, bankrupt a consequence of the destructive position of the Prosecutor General’s Office (PGO). SMG is preparing a petition to the Security Service of Ukraine (SBU) on the issue, the press service of SMG reported on Thursday. Explaining their position, SMG recalled: since July 2017, at the request of the PGO investigators in the investigation of the case “about the alleged failure to fulfill investment obligations in the privatization of the Chornomorsky Shipbuilding Yard in 2003-2012,” all property of the enterprise and the shares issued by it are seized.
This circumstance made it impossible to implement the readjustment plan of the Chornomorsky Shipbuilding Yard, which includes, inter alia, the sale of the shipyard’s non-production assets to meet creditors’ claims. However, the readjustment head Oleksandr Ostapenko in June personally appealed to Prosecutor General Yuriy Lutsenko with a request to remove the arrest for the readjustment measures, which expired on July 1, the SMG said.
At the same time, the press service said that the working group set up under the Ministry of Defense to solve the problematic issues of the state corvette program, implemented with the participation of the Chornomorsky Shipbuilding Yard, as a promising option for separating a new enterprise from the PJSC and transferring all the responsibilities for the project to it. “The relevant measures were included in the readjustment plan and approved by a court decision binding its execution on the entire territory of Ukraine from the moment of its entry into force,” the press service said.
“Thus, the position of the prosecutor’s office led to the liquidation of the leading enterprise of the military shipbuilding of Ukraine and losses to the national budget. Some 74 million UAH of advance payments will be lost on contracts with nonresidents,” the press service said.
However, the recognition of the Chornomorsky Shipbuilding Yard as a bankrupt and its liquidation call into question the probability of implementing the state Corvette program: “The built corvette hull will be included in the liquidation mass for further implementation,” the press service said.
The company prepared an appeal to the SBU with a request “to deal with the anti-state position of representatives of the PGO,” the press service said.

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SMART MARITIME GROUP STARTS BUILDING TANKER HALL FOR DUTCH VEKA SHIPBUILDING

Smart Maritime Group (SMG) of Smart-Holding starts implementing a contract to build two chemical tanker hulls under an order of Dutch VEKA Shipbuilding WT B.V. The press service of SMG reported that the ribbon-cutting ceremony for the start of building the first hull for the Dutch customer was held at the Kherson Shipyard on Thursday. According to the contract signed in May, SMG will build hulls, install pipeline network, deck equipment and paint the tanker hulls. The cost of the contract is estimated at over UAH 145 million (some $5.6 million). It will take 11 months and a half to build one hull. The second tanker hull will be built at Mykolaiv Shipyard belonged to SMG.
“This is really an important event for Ukrainian shipbuilding, since it is the first foreign contract in the industry since 2013. We have made great efforts to convince the customer, to convince Ukrainian and European banks to finance this project. Today we have good prospects for work and the conclusion of new contracts,” the press service said, citing Director General of SMG Vasyl Fedin.
Tankers are designed for transportation of petroleum products and chemicals on the inland waterways of Europe. The vessel’s overall length is 110 m, width is 13.5 m, the height of the side is 6.59 m, the hull is 1200 tonnes, and the cargo capacity is 5,320 tonnes.
According to the press service, SMG and VEKA Group cooperate in the shipbuilding market for more than 10 years. During this period, SMG has built eight hulls for chemical tankers for VEKA. In total, 12 vessels of the same class were built for the Dutch market.

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