The Ukrainian research and production enterprise ENERGO-PLUS is expanding its capabilities by becoming a co-founder of one of the oldest and most experienced electrical equipment companies in Poland.
This strategic step became possible due to the launch of joint activities with the Polish company TWERD Energo-Plus Sp. z o.o. The partnership resulted in the creation of the Ukrainian-Polish company TWERD Energo-Plus, which will allow promoting the equipment of SIC ENERGO-PLUS and Conversion Technology LLC on the European and global markets. This will create an alternative to the de facto monopoly on the global market of Chinese manufacturers of high-voltage frequency converters for 6 and 10 kV motors.
“Today, the company is investing resources in energy technologies to become one step closer to building an energy-independent economy in Ukraine. We are planning to use the latest developments from TWERD Energo-Plus Sp. z o.o., relying on their unique expertise and many years of experience in developing flagship equipment that has proven itself in the world. Thanks to our joint efforts, we will be able to offer high-voltage frequency converters for motors that drive pumping equipment and conveyors, mine hoists and other equipment at industrial and mining enterprises, water utilities, water supply systems, etc. Our own production in Ukraine will allow us to reduce the cost of this equipment and become competitive in the market, competing with Chinese and Taiwanese manufacturers, especially taking into account the full and qualified technical support provided by TWERD representatives in Ukraine,” commented Yevhen Korf, Director of RPE ENERGO-PLUS LLC.
The newly created consortium allows expanding the production base to 5000 square meters and combining the efforts of the two companies’ own electrical laboratories. In addition, this cooperation allows us to combine production facilities and a professional certified team that can provide installation and service faster than competitors in Ukraine, Poland and other countries.
Cooperation with the Polish company is already helping the Ukrainian company to manufacture and service frequency converters for medium and high voltage with the effect of recovery, inverters for alternative energy sources and storage devices, charging stations for electric vehicles.
Reference:
RPE ENERGO-PLUS LLC is one of Ukraine’s leading enterprises in the energy sector. Its core business is the design, development, and implementation of industrial automation, power supply, and various electrical systems for Ukrainian enterprises and private companies.
The international group of companies combines the efforts of the Polish manufacturer TWERD Energo-Plus Sp. z o.o. and the Ukrainian consortium ENERGO-PLUS, which includes SPE ENERGO-PLUS LLC, NV LLC Conversion Technology and LLC High Voltage Technologies Group.
Official websites of the companies: https://energo-plus.com.ua/ and https://twerd.pl/uk/
PrJSC United Mining and Chemical Company (UMCC), which has taken over management of Vilnohirsk Mining and Metallurgical Plant (VGMK, Dnipropetrovs’k region) and Irshansk Mining and Processing Plant (IGOK, Zhytomyr region), has resumed shipments of titanium raw materials (ilmenite) from its Irshansk branch to the European market.
According to the SPF press release, in October, UMCC started shipping ilmenite concentrate from IGOK to the Czech Republic. Under the contract, the company is to supply 30 thousand tons of finished products to the European market by the end of 2023. The customer is a company that produces titanium pigment TiO2, which is widely used in various industries for the production of consumer goods.
At the same time, it is explained that these are the first shipments of ilmenite from the Irshansk branch in 2023. Due to the martial law, destroyed logistics and constant shelling in 2022, the products accumulated in previous periods were stored in the company’s warehouses for almost more than a year, which was an obstacle to the resumption of new ore production.
One of the main tasks set by the State Property Fund for the new management board of UMCC is to establish exports and expand the geography of direct supply contracts. By the end of the year, our company plans to ship about 105 thousand tons of ilmenite concentrate to the European and American markets,” said Yegor Perelygin, First Deputy Chairman of the Board of UMCC, as quoted by the press service.
The United Mining and Chemical Company began its actual operations in August 2014, when the Ukrainian government decided to transfer the property complexes of Vilnohirsk Mining and Metallurgical Plant (VMMC, Dnipropetrovska oblast) and Irshansk Mining and Processing Plant (IGOK, Zhytomyrska oblast) to its management. Previously, these plants were leased to Firtash’s structures. Then the company was transformed into a PJSC and then into a PrJSC.
In August 2016, the government included UMCC in the list of companies to be privatized in 2017. Its deadline was postponed several times, and the tender was disrupted twice.
UMCC used to sell its products to more than 30 countries and was one of the world’s largest producers of titanium raw materials, accounting for 4% of the global market. The company mines titanium ore.
Ukrainian tour operator Join UP! has entered the markets of Estonia, Latvia, Lithuania, Kazakhstan, Poland and Romania in 2022 amid war and a sharp decline in demand in Ukraine for its services, the company said in a statement Friday.
“Entering the new markets allowed us to retain a team in Ukraine. We also believe that our work in foreign markets will build confidence in Ukrainian travel brands, and after the war we will be able to significantly increase the flow of inbound tourism, which will have a positive impact on the country’s economy,” regional director of Join UP! Anton Savchenko said in the release.
As for Ukraine, the tour operator pointed out that the incomplete two pre-war months of last year accounted for 41% of total travel in 2022.
According to the release of the company, July, August and September were the busiest months of the military last year, but if you compare with similar months of last year, the total number of tours in these months fell by almost a third – to 48.6 thousand from 140.6 thousand.
In addition, as shown in the materials, the situation in the country has significantly affected the portrait of Ukrainian travelers in 2022: the number of women who traveled during the year was 4-5 times more than men. At the same time the tours are now booked more often for one person, and 77% of all travels are exclusively for adults.
In Join UP! also said that the average travel check of Ukrainians in 2022 increased by 23% compared to 2021, due to complicated logistics and rising costs of tourist services in the resort countries.
The company also said it offers transfers to Chisinau and Poland’s Rzeszow with departures to popular destinations.
“Now it is the capital of Moldova remains the most popular departure point for tourists traveling from Join UP. Since the beginning of the flights almost 51 thousand travelers traveled from there. However, the popularity of Rzeszów is also growing,” said Join UP!
Ukrainian networks of filling stations have managed to master the European market of motor fuel after losing Russian and Belarusian fuel with the beginning of full-scale invasion of Russia thanks to the offer of competitive prices and fast contracts, Vasyl Danilyak, СЕО of OKKO group, said.
“Ukrainian companies did not enter their supply market, where everything was contracted a long time ago. Accordingly, they could outbid on price and fast contracts. Despite the unacceptable price, we started contracting 100 percent of possible resources in all corners of Europe,” he said at the Kiev International Economic Forum on Thursday.
At the same time, Danylyak noted that such decisions were made, among other things, emotionally, although they were not always economically justified.
He explained that the European chain of deliveries is much longer than the ones from the East and North directions, when “pipe deliveries were 3-4 days, by rail from the nearest Belarusian refineries to the average tank farm, the fuel took seven days at most.
“And in Europe the chain could stretch for two months or more. For example, we bought in the region of Amsterdam-Antwerp a fairly expensive resource. Supply logistics are complicated: first by small (because of the low level of the Rhine) barges to Germany, then it pours into big terminals, and then you wait for shipping windows because there are queues. So, in the middle of April we made an advance payment, and the last shipment arrived, if I’m not mistaken, in October,” Danilyak described the situation.
He noted, however, that even if the company had known in advance how difficult the delivery would be, it would still likely have made the contract.
“There was such a shortage that the decision was obvious. The fact that it would not be very profitable was not thought of then,” the CEO of “OKKO” assured.
He also stressed that changing the logistics of petroleum products as the war began was the biggest challenge not only for OKKO, but for the entire industry.
“It was the biggest challenge in the first month of the war that companies focused on. The whole market was confronted with the fact that on one day all deliveries were zeroed out, everyone fixed their losses at the time of February 24, who had prepayments, to whom the goods had not arrived in large quantities. Accordingly, everyone began to refocus on Western supplies. And in about three months, in June, the consumers felt a significant improvement, and in July everything was as if nothing had happened,” said Danilyak.
In addition, he expressed the opinion that dispersed business has more flexibility in crisis situations.
“Big and in one place is not always a good thing, although perhaps more cost-effective. Our business, where there are a lot of small businesses, has proven to be more resilient to stress than, for example, the steel industry, when the loss of two key businesses took out seventy percent of the business,” he argued his opinion.
In this connection Danilyak marked that “OKKO” would adhere to the policy of diversification in future too, that, in principle, the essence of the company business allows.
He also paid attention that war experience will teach many companies to follow fire safety rules strictly in accordance with all the requirements that “earlier they looked through the fingers” to some extent.
Exclusive interview of co-owner of the RDS road construction group Yuriy Shumakher for Interfax-Ukraine
The first question is about your rebranding. Has the company completed it, or is it in progress? What are your goals? Why did you decide to rebrand the company?
Today companies have to monitor the market and the latest technologies not only in their business areas. We and our brands have gone through a long way of transformation. Initially, the company was created as the Rost (Growth) investment group for construction of housing and commercial real estate. Actually, that is from where the name came from – to grow. When we decided to invest money in roads in 2005, we named the project Rostdorstroy.
Now we work in the field of road construction and are already in the top three companies in this market. We monitor worldwide trends not only in the sphere of road construction. Ubiquitous digitalization and a huge flow of information make brands and companies to grow more rapidly and keep up with the time. Therefore, their visual and media image changes. Everything is becoming more simplified, easy. That is why we decided that the name of the company Rostdorstroy is long and heavy, especially for the European market, in which we, in addition to the Ukrainian market, want to be represented. We decided to move to a new level and rebrand the company, starting from the name, changing it to RDS, and ending with a new approach to advertising.
In general, we want to take the company’s image to a whole new level. Our rebranding is in progress. We have created the company’s accounts on Facebook and Instagram. This is connected with numerous factors.
The main thing is that since the new president had been elected, we can see in general how the approach to road construction has changed. It has become a priority of the state. A planned approach is being used, and it is planned to double the financing of roads in 2020. We can see that big and powerful foreign companies are entering our market. We need to keep up with their level, to purchase high quality equipment so as to save our positions in the market. Technologies are upgrading every year. When we visit trade shows in Dubai or Germany, we can see that road construction equipment, construction materials and specialists’ skills are getting better year after year.
Anyway, I call all of them partners, and not competitors, because we are together in construction of modern roads. Therefore, we should hold relevant talks, properly introduce ourselves and stand for the company’s position. That is what we need rebranding for.
In December 2019, the Cabinet of Ministers allocated additional UAH 15.2 billion to close 2019. How much public funding will the sphere receive in 2020? And do you find it acceptable for the country?
I find them not just acceptable, but really sufficient. Even we are sometimes surprised by the fact that such money is allocated for roads. Over UAH 30 billion has been allocated, the Verkhovna Rada backed this decision. Moreover, the Verkhovna Rada also voted in favor of another UAH 20 billion, which will allow the government to attract extra loan funds. And this means that more than UAH 50 billion will be allocated for roads.
As the heads of both the Infrastructure Ministry and Ukravtodor say today, it is planned to attract additional UAH 10-15 billion from other sources so as to, let’s say, complete a record number of kilometers of roads this year. The money has been allocated and we have to do our job next. We have to do it both in quarries and on railway. This is very important, because not any spot can be reached by vehicles in the country. Today there is no comparison between the possibilities of motor vehicles and the possibilities of railways. Therefore, we are very concerned about proper arrangement of logistics.
In previous years the work of railways was really tough – the cars fleet was outmoded and it was poorly upgraded by Ukrzaliznytsia, taking into account that, thank God, the country had a record harvest and, as a result, there was a lack of cars for both the road business and grain transportation. That is what concerns us.
The main thing, which makes today’s government of the country in general, the ministry, Ukravtodor, etc., significantly different from the governments of past years, is the fact that today we have got an adopted resolution. Usually we saw the following picture: the national budget is adopted, but they issue the list of roads only in April (if we are lucky!). Tenders take a long time and it was not until June that a road company could start its work. As of today, the budget had been adopted by January, we have the list of roads, hence this helps the customers and Ukravtodor’s services to carry out tender procedures and us, as contractors, to bid, win or lose. And, above all, we can start our activities from late February if weather allows. Today, to spend UAH 60 billion of budget funds (not including the money from the European bank, which are allocated separately), a symbiosis of the customer and the contractor is necessary, as well as various types of road repairs. There is intermediate road maintenance – a simplified system of tenders and, respectively, of types of work which do not require licenses and expert assessment for projects at all, although some customers make it. Speaking about overhauls and construction of new roads, they require expert assessment and state licenses. We know that with regard to many aspects these agencies and expert assessments are unable to change rapidly just like many other institutions did under the new president and government. Therefore, there is a lot of bureaucracy which has to be defeated by stipulating the procedures in the legislation. We have some problems here so far.
Is the structure of Ukravtodor effective today? Can your company propose some innovations as a market participant?
They are already being implemented. Let’s say, the current structure of Ukravtodor, in my opinion, completely meets modern requirements. It is a state mechanism when the automobile roads service is the distributor of public funds. Naturally, there are various mechanisms and, probably, Ukravtodor could hold all tenders in all regions on its own. But it was created to reform a bulky machine which was supposed to be headquartered in Kyiv. Now each region has its own automobile roads service.
So, you mean the distribution of Ukravtodor’s powers in regions was effective?
Yes. But today in the composition of Ukravtodor there is the so-called SJSC (state joint-stock company), which unites the operation of roads. It is also a bulky machine with lots of employees, numerous, if you remember, DEUs (road maintenance sections), RaiDUs (district road authorities) in every district, which were in charge of road maintenance. A serious confrontation is under way in this area, and in their time they used to win all tenders for road operation in all regions, which included patching repairs, road maintenance, snow cleaning, road marking, guard rails, etc.
They used to win billion worth tenders and ‘operated’ these roads, because constructing a road is half the trouble, one has to operate it. And operations add at least 50% to roads’ durability. The state companies won tenders and used outmoded equipment which had not been upgraded for decades. They always lacked funds and faced other problems. The situation is changing today.
Firstly, private companies (like us) have been invited, and due to a new bidding system they are ready to invest money in machinery and equipment. I mean very expensive equipment for snow cleaning, blades, sand spreaders and other modern staff. All these guard rail pile drivers and various other equipment used for road operation. They never invested in this before, because they did not want to take a risk. I think the fact that today tenders are held for three years in advance is a serious renovation, which is being implemented in Ukravtodor. Tenders are held normally in the ProZorro system. Such an establishment like SJSC can be eliminated without any troubles.
Should there be a system of government audits in the sphere? What should it be like? What part can public control play in this system?
I think that the current format of road checks is the main sticking point, which in many aspects hinders us, as a road company, from development. The system of checks in the sphere of road construction is ineffective and outdated. The number of checks in the sphere is much higher than in any other spheres, which have them at all.
I think that reform of this system is one of priority tasks of the National Association of Road Builders of Ukraine today. It appears that road builders in Ukraine work in line with one system when money is received from the European Bank for Reconstruction and Development (EBRD), but switch to a different system while working through public procurement. This is nonsense.
Our major initiatives are related to the necessity for a unified system of tenders and performance quality checks. So, if we have the ProZorro system and a company wins a tender in this system, one should not say that something was wrong about it. This system was created to carry out all procedures transparently. Secondly, all tenders should be held only with firmly fixed prices. Why they used to be held with variable prices? That is because there was no financing, it was divided into tranches for four years. Obviously, the prices could change during these three years and that is why the customer held tenders with variable prices. A variable price is a reason for all law enforcement agencies to think that we are deceiving the government.
Today almost every law enforcement agency has a department in charge of controls in the road construction sphere. Inside the automobile roads service, there is a technical service which checks us when we submit forms. In the structure of Ukravtodor, there are the DerzhdorNDI (the State Road Research Institute) and the DorCenter (the State Center for Road Quality Check and Certification), which additionally check us. Ukravtodor always has the right to schedule its audit in order to check one or another road. There is also the accounts chamber, which can come to audit road builders. This is wrong. I think one independent agency should carry out road audits. An absolutely independent expert, who won the customer’s tender for engineering support, carries out checks abroad or when the construction in Ukraine is financed by Europe. It is like an audit company that signs every conclusion and stakes its reputation, which it had been building for decades, on it.
An independent audit system, in which not public officials, but independent experts audit road construction, should be developed. That is what we created the National Association of Road Builders of Ukraine for. It works very effectively, although we have been working for less than a year, and the law on public procurement has been amended due to our initiatives. We are ready to keep working in this direction.
You are building your company as a part of Ukrainian business. Do you or others have ambitions to move to the international level? Have you made any attempts to bid for foreign tenders, and are you also preparing the company for the international environment?
We already have been participating in international tenders in Ukraine for five years. International tenders have their own problem. We also have raised it in our national association. We are trying to make our government hear us. We prepare for tenders in line with international standards as long as money from international institutions are involved there. Today, we have signed a contract worth $12 million for the construction of the M03 highway.
Moreover, we have ambitions to participate in tenders abroad. Unlike Ukraine, tenders in Europe have very strict criteria. A mandatory requirement, in particular, is experience in the European Union for at least three to five years. We participated in tenders in Moldova several times, but having no experience, we lost. Now, we are trying to analyze the market and participate in tenders in Moldova and Romania. We also plan to try to enter the Polish market as a subcontractor.
We have to stand in the market, therefore we plan to improve our profitability. It should be higher in the countries with higher risks. If risks in the country are smaller, then profitability is lower too, however they pay better there. We want to try to enter the European market. In addition, we are already buying almost all machines abroad. Ukraine practically does not produce its own machines. We also can buy Belarusian machines. Leasing packages are cheaper there, thus we will have lower cost price for project implementation. That is why we are trying to enter that market too.
How much did you spend on machine fleet in 2018-2019?
In general, the acquisition of modern machines, mechanisms and vehicles cost the company UAH 167 million. We annually invest about $8 million in the renewal of our fleet of road machines. In 2019, the company’s fleet was expanded with 114 units of road machines and equipment.
RDS uses its own funds, funds borrowed from Ukrainian banks and leasing companies to upgrade its fleet. Also, part of the equipment is bought through financing of manufacturing companies such as Wirtgen and Zeppelin. We purchase mainly foreign equipment from leaders in modern machine building.
There is an interactive map of road repairs on Ukravtodor’s website. Both the repaired roads and the sections which are yet to be repaired are marked on it. If you glance at this resource, you will see a noticeable imbalance in the volume of repairs in certain regions: while large-scaled works are being carried out on dozens of sections in Kyiv region, for example, in Khmelnytsky region only four sections with completed works are marked, and repairs on two of them took more than ten years. We have the same situation in Cherkasy and other regions. Does this mean that roads in Khmelnytsky or Cherkasy regions are better than in Kyiv region?
Today, the government’s approach to the distribution of funds for road construction is different from the schemes that were used in past years. Unfortunately, everyone and their dog participated in it before. This referred, in particular, to making decisions on which regions should receive financing. The issue passed through the Verkhovna Rada committee in which relevant parliamentarians worked and each of them wanted to not offend the regions from which they were elected to the Verkhovna Rada. Therefore, in fact, if we look even at the last year’s budget, the distribution looked as follows: let’s say, there were UAH 10 billion for 20 regions and each region received UAH 500 million.
Such an approach makes it impossible to develop the strategy of transport corridors, which, in turn, stimulate tourism, logistics and development of ports. They started to build a road in Khmelnytsky region and, respectively, they made a section worth UAH 500 million. For this the contractor built a big expensive plant and they failed to provide it with a normal amount of orders then. Next year new lobbyists came, this region was deprived of lobbying, hence no money was allocated for it. That is what this approach looked like. Any other contractor in Ukraine can tell you.
The situation has changed now. Since the new management had been appointed at the Infrastructure Ministry and Ukravtodor, a consistent policy has been carried out for the development of priority transport directions. One or another region may suffer [in terms of financing] this year in connection with this policy. For instance, local roads, which are financed under an individual program from the automobile road fund, will be constructed there. Meanwhile, national roads will be constructed to a lesser extent. It is because we have a strategy. I believe it is the right thing to do, as we will have one completed road, instead of several unfinished. We will certainly have all of the roads completed, not in a year, but in five years, as the president said, and all of them will be real, finished roads. Thus, roads will be built by areas in the coming years. There is an obvious imbalance, but it is linked with the strategy. I find it absolutely correct.
