On August 19, the Nomination Committee for the appointment of heads of enterprises that are especially important for the economy selected the director of the state-owned enterprise Ukrspyrt among five applicants, the Ministry of Economy reported on its website on Friday.
“Today we have selected the head of the state-owned enterprise Ukrspyrt, whose key task is to complete the program of demonopolization of the alcohol market, which is now being quite successfully implemented, and to prepare for privatization,” Deputy Prime Minister, Minister of Economy Oleksiy Liubchenko said.
The Ministry of Economy does not specify the winner of the competition.
It is clarified that at the suggestion of the recruiting company responsible for the selection of candidates, the members of the nomination committee heard the proposals of the applicants regarding their vision for the development of the enterprise and reforming the alcohol industry.
In addition, the Committee approved a list of requirements for candidates for independent members of the Supervisory Board of Ukrenergo, which will allow launching the selection process for candidates for this position.
As specified, the meeting was attended by Minister of Economy Liubchenko, Regional Manager of the International Finance Corporation (IFC) for Ukraine, Belarus, and Moldova Jason Pellmar, Head of the EU Delegation to Ukraine Matti Maasikas, First Deputy Minister of Finance Denys Ulyutin, Deputy Minister of Economy Kristina Holubytska, Deputy Minister of Energy on European Integration Yaroslav Demchenkov, Business Ombudsman Marcin Swiecicki, Head of IFC Activities in Ukraine Olena Voloshyna, Adviser to the Head of the EU Delegation to Ukraine on Competition Policy, State Aid, State-Owned Enterprises and Privatization Panos Stamoulis.
The State Property Fund of Ukraine (SPF) on November 4, 2020 announced the holding of auctions for the privatization of Dovzhok (Khmelnytsky region), Zaliztsi (Ternopil region) and Martynivka (Vinnytsia region) distilleries of the state-owned enterprise Ukrspyrt.
According to the SPF’s press service, the online auction for the privatization of Zaliztsi distillery will take place on December 2, Dovzhok distillery on December 3, and Martynivka distillery on December 4.
“The privatization of these assets is taking place within the framework of demonopolization of the alcohol industry and in order to create a market for alcohol on a competitive basis. Investing in alcohol assets through privatization is an opportunity for their future owners to obtain a license for the right to produce alcohol, which will become a significant competitive advantage for them in the market,” the fund said.
The state-owned enterprise Ukrspyrt increased net profit 1.6 times, up to UAH 28.1 million, in January-September 2020 compared to the same period last year.
According to acting director of the state-owned enterprise Ukrspyrt Serhiy Bleskun, alcohol production increased by 19.6% up to 4.72 million decaliters in the nine months this year.
“We have a great trend since 2019, but the pace in the third quarter has slowed down. This was influenced by such objective factors as demonopolization (since July 1, buyers can buy alcohol from other state-owned producers) and the rise in the price for raw materials such as maize and wheat. This led to deterioration in profitability in the third quarter,” Bleskun wrote.
He also noted that over the past two weeks, the State Property Fund (SPF) has privatized three objects of the state-owned enterprise Ukrspyrt totaling almost UAH 160 million.
As reported, President of Ukraine Volodymyr Zelensky on December 11, 2019 signed a law on the abolition of state monopoly on alcohol production from July 1, 2020, adopted by the Verkhovna Rada on December 3, 2019.
The State Property Fund expects to attract about UAH 2 billion from the privatization of alcohol producers of the state-owned enterprise Ukrspyrt and the concern Ukrspyrt. The first auction is scheduled for October 15, 2020.
State Enterprise Ukrspyrt has received another license for production of ethyl alcohol non-denatured for five years, until January 10, 2025, from the State Tax Service
“Our state-owned enterprise received, probably, the last license in its history for production of alcohol. It is issued for five years. After the successful completion of privatization, such licenses in Ukraine will be received by private distilleries. In the meantime, we are competing in the market with other state-owned factories, which, after demonopolization on July 1, are also fighting for buyers in the market,” acting director of Ukrspyrt Serhiy Bleskun said.
The issued license for production of ethyl alcohol will be valid until January 10, 2025. Over the next five years, Ukrspyrt can produce all types of non-denatured ethyl alcohol: rectified (food) raw ethyl alcohol, ethyl alcohol.
Head of the State Property Fund (SPF) Dmytro Sennychenko has announced the Fund’s readiness to begin the process of privatization of objects of the State Enterprise Ukrspyrt, the department has already received 12 proposals for privatization.
According to the Fund’s press release posted on Tuesday, the privatization of the alcohol industry at the first stage provides for the placement of Ukrspyrt facilities for transparent auctions. The total number of objects ready for the privatization process is 41.
The Chairman of the State Property Fund also drew attention to the fact that the key condition for the successful privatization of assets in the alcohol industry is the prompt approval by the government of the Program for the Reform and Development of the Alcohol Industry, which will provide for the procedure and conditions for the sale.
“Potential investors in the alcohol production industry are not only food alcohol producers, but also pharmaceutical companies, automotive fuel producers and agricultural companies that are interested in processing their own products,” the SPF’s press service quoted Sennychenko as saying.
According to him, until recently Ukraine, together with Belarus, were the only countries in the world with a state monopoly on alcohol production.
“This has led to the fact that over the past decade, the production of legal potable alcohol in Ukraine has decreased four times, and the share of its shadow turnover has increased from 10% of total consumption in 2007 to 55% in 2019,” said the head of the SPF.
State-owned enterprise Ukrspyrt has produced and supplied 3.3 million liters of raw materials for antiseptics to Ukrainian companies within three weeks from the start of production.
“Over three weeks, Ukrspyrt delivered 3.3 million liters of disinfectant to manufacturers. If we mathematically transfer this to products, then approximately 85 million pocket sanitizers of 50 ml or 17 million of 250 ml can be made from raw materials sold by Ukrspyrt,” the state enterprise said.
Today, raw materials are shipped from 12 Ukrspyrt plants.
“For efficiency, over the past few weeks we have additionally launched two plants in Lviv and Cherkasy regions,” acting director of Ukrspyrt Serhiy Bleskun said.
According to him, now 36 Ukrainian producers of antiseptics are buying raw materials at Ukrspyrt.
As reported, on March 30, the Verkhovna Rada voted for bill No. 3275, which, among other things, allows the manufacture of disinfectants (raw materials for antiseptics) at Ukrspyrt factories, and the president signed the law on April 2.
