Active launch of rehabilitation programs in Ukraine has led to an increase in the share of project sales of Sweetondale roofing and insulation products from 10% in 2023 to 38% in 2024, the company’s press service told Interfax-Ukraine.
According to Sweetondale sales directorate head Oleksandr Manuylo, the structure of demand has changed significantly compared to last year, when the main areas of sales were retail (42%) and sales to cottage low-rise construction projects (47%), as well as compared to the pre-war period.
“In late 2022 and early 2023, the main drivers of support for the construction sector were completions by large developers and commercial projects. In the second half of 2023, rehabilitation programs and some municipal programs began to take hold. According to our sales statistics, the share of project sales has gradually increased from 25% in 2021 to 38% year-to-date,” Manuilo said.
He added that due to the additional mobilization measures, the end-user flow in the retail and DIY channel has significantly decreased.
“It can be stated that investment uncertainty on the part of new commercial projects, limited funding of budget programs and lack of end-consumer activity lead to stagnation of classic sales channels. A significant shift of construction market volumes has begun, first from commercial construction to the public sector and then to military infrastructure development,” Manuilo said.
He noted that now it is extremely difficult to keep production costs at the pre-war level. The issues of supplying enterprises with electricity during blackouts, risks of missile attacks on production and storage infrastructure, border blocking by Poland, instability of supplies of raw materials and components, mobilization of certain categories of specialists have been added to the risk factors.
“We try to keep a competitive price level for our products, but forced price adjustments have occurred up to +15% depending on the direction of production,” Manuilo said.
According to him, despite the full-scale war, the company’s production units not only do not stop, but also actively develop. “Sweetondale’s team of experts and technologists have conducted research and improved products and systems. New insulation and waterproofing products have been developed taking into account all modern building regulations and European standards, which is confirmed by the relevant certificates. Updating the range of Sweetondale products is a strategic step that will improve competitiveness in the market by optimizing the range and focusing on the most effective technical solutions,” said Manuilo.
In particular, for industrial and civil construction the company presented professional lines: mineral insulation THERMOWOOL, polymer insulation CARBOLEX and bitumen insulation HYDROBASE. For private cottage and low-rise construction, ULTRAWOOL mineral insulation, STYROPLIT polymer insulation and WATERBIT bitumen insulation are recommended.
“Our internal analysis and some independent agencies state that we hold between 40 and 50% market share in our product lines. Right now, the mineral and polymer insulation product lines are operating at their potential maximum in line with seasonality,” Manuilo said.
Until 2022 Sweetondale sold 80% of its products in Ukraine. After two years of full-scale war, the export share dropped to a minimal 10% due to logistical problems as well as seasonal fluctuations in demand in European markets.
“The geography of our presence is Romania, Poland, Norway, Finland and the Baltic States. We have increased the number of foreign trading partners to utilize our production capacities. We plan to increase the volume of exports in future periods, but the share of exports will remain unchanged,” he said
According to Opendatabot, the authorized capital of Zavod “Sweetondale” LTD (“Zavod ‘Sweetondale’ LTD, USREOU Code 32944149) is UAH 13.5 million, for 2023 the company received revenue of UAH 1 billion 633.461 million, which is 73.7% higher than the results of 2022, net profit amounted to UAH 333.088 million, which is three times higher than the results of 2022.
Sweetondale was founded in 2012 by Gary Alan Stern. Initially specialized in industrial equipment engineering and leasing. Negotiations to acquire the plants owned by Russia’s Technonikol began in 2015 and were finalized in February 2018. Today, the company includes three plants for the production of roofing and insulation materials: a plant for the production of mineral insulation in Cherkassy, a plant for the production of polymer insulation and a plant for the production of bitumen-polymer roll materials in Kamenskoye.
In 2023, the main areas of sales of Sweetondale products will be retail sales and low-rise housing construction, the company’s press service told Interfax-Ukraine.
The building materials manufacturer Sweetondale owns three plants in Ukraine that produce roofing and thermal insulation materials: a mineral insulation plant in Cherkasy, a polymer insulation plant, and a bitumen-polymer roll materials plant in Kamianske.
“Since the beginning of the full-scale invasion, we have seen a significant redistribution in sales channels. Previously, our main focus was on industrial and civil construction, but now retail sales (42%) and sales to low-rise cottage construction projects (47%) have come to the fore. The share of the professional segment has almost halved and now does not exceed 10%, but we hope that with the active launch of recovery programs and the emergence of new projects, this share will grow,” said Iryna Konotoptseva, Head of Marketing at Sweetondale.
According to the company’s analysts, just like before the war, Sweetondale holds leading positions in each of its production areas. Namely, mineral insulation accounts for approximately 47% of the market, polymer insulation for approximately 46%, and bitumen roll materials for approximately 55%.
Since the beginning of the full-scale invasion, the cost of polymer insulation and bitumen rolls, which have an imported raw material component of more than 80%, has increased significantly, by 40-45%.
“The main factors for this were the rising cost of raw materials, energy, fuel and the increased logistics leverage for the delivery of raw materials,” Konopoptseva explained.
“At the same time, the price of mineral insulation decreased by about 10%. This was achieved by partially using domestic raw materials.
“One of the main issues for us in recent years has been finding new suppliers of raw materials, and we have accepted this challenge. Currently, we supply the majority of raw materials for our products from Europe,” Konotoptseva said.
Logistics within the country has also risen significantly. Sweetondale delivers building materials throughout Ukraine, and the cost of transportation companies’ services has increased significantly. Konoptseva said that since the beginning of the war, the tariff for delivery from Kamianske to Kyiv and Uzhhorod has increased by 43%, and from Kamianske to Odesa by 54%.
The expert noted the high demand for manufactured goods from Ukrainians.
“Ukrainians continue to prefer domestic producers. In addition to the obvious support of the Ukrainian manufacturer, this is also a big benefit for customers, as traditionally European manufacturers are more expensive, and the logistics of these goods are longer and more expensive. Thus, according to our estimates, the share of Ukrainian producers in mineral insulation is 80%, in polymer insulation – 88%, and in rolled materials – 90%,” she said.
As for government programs (restoration, energy efficiency, etc.), their impact on the market is still insignificant.
“There are quite a few programs, but, in our opinion, they are still unstructured and the conditions for participation in them are not always transparent for business. In addition, we can note that such programs often use products with low characteristics,” Konotoptseva said.
According to Opendatabot, the authorized capital of Zavod “Sweetondale” LTD (Zavod “Sweetondale” LTD, EDRPOU code 32944149) is UAH 13.5 million, in 2022 the company received revenue of UAH 940.074 million, net profit amounted to UAH 112.112 million.
Sweetondale was founded in 2012 by Gary Alan Stern. Initially, it specialized in engineering and leasing of industrial equipment. Negotiations on the acquisition of plants owned by Russia’s Technonikol began in 2015 and ended in February 2018.
