Business news from Ukraine

SEED CORP OPENS PLANT IN UKRAINE

Seed Corp (Cherkasy), the Ukrainian division of the American company Remington Seeds, on September 15 launched the first stage of a corn seed production plant in the village of Helmiaziv (Cherkasy region), a project worth $ 30 million and a capacity of 2.2 MW was connected to the power grid in a short time – in two months, according to the website of PJSC Cherkasyoblenergo.
“For the first time in my practice, a contract was signed, and exactly two months later, as they say, on a day-to-day basis, the 2.2 MW plant was connected to electricity. This was the result of a lot of joint work, when any approvals were carried out quickly and efficiently,” co-founder of Seed Corp Serhiy Tereschuk said.
According to the data of Cherkasyoblenergo, the construction of the first stage of production lasted 3.5 months. To provide the plant with raw materials, Seed Corp uses 3,960 hectares of irrigated land, and the company also purchased more than 20 units of special equipment for crop production. About 150 people were employed at the enterprise.
During the opening of the plant, Deputy Minister of Agrarian Policy and Food Taras Dzioba noted a favorable investment climate in Cherkasy region, as investors increasingly choose Cherkasy region to open their enterprises.
“Such events really inspire me more than the opening of grain terminals. This is much more important because it makes it possible to increase supply chains, increase added value in the Ukrainian agricultural sector. This is exactly what we must work on,” the official said.
Cherkasyoblenergo specified that about 20 organizations were involved in the construction of the first stage of the project.

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DUTCH COMPANY OPENS PLANT IN UKRAINE FOR MANUFACTURING FEED ADDITIVES FOR ANIMALS IN LVIV REGION

The Koudijs Group of Companies (Koudijs, the Netherlands, a subsidiary of the Dutch Royal De Heus) has launched a plant for manufacturing mineral and vitamin supplements for agricultural animals in the village of Khylchytsi (Lviv region) with an estimated production capacity of 1,500 tonnes of finished products per month, investments in the project amounted to EUR 7.8 million, according to a posting of the website of the Ministry of Agricultural Policy and Food.
“The new plant is eight floors of new specialized equipment from the world’s leading companies, automated control systems, an automatic packaging line and robotic technology,” the ministry said.
According to the ministry, the new plant in Ukraine is part of the Koudijs group of companies – an international producer of animal feed, concentrates and premixes, which has more than 90 plants in 60 countries of the world.
The Ukrainian branch of Koudijs Ukraine LLC, in 2020, increased its net profit 1.4 times compared to 2019, to UAH 38.46 million, revenue 1.6 times, to UAH 593 million.
According to the unified public register of legal entities and sole proprietors, the ultimate beneficiaries of Koudijs Ukraine LLC are Hendrik Anthony de Hois (the Netherlands, owns 51% in the charter capital of the company) and Fedir Shopsky (49%).
The company’s website states that the plant’s capacity at the level of 1,500 tonnes of finished products is able to fully meet the needs of Ukrainian livestock and poultry farms. The enterprise will produce mineral and vitamin supplements for the domestic market, but they also could be exported in the future.
“In order for the economy in the state to develop, the authorities must create the necessary conditions for this. Today, we are building roads, improving infrastructure, building schools and sports grounds and opening new powerful enterprises. For example, yesterday, the first innovative seed-breeding center in Western Ukraine was launched in the region, and today we are opening a modern plant for the production of feed,” the Ministry of Agrarian Policy said, citing Head of the Lviv Regional State Administration Maksym Kozytsky.

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UKRAINE TO SELL DNIPRO ELECTRIC LOCOMOTIVE PLANT

The Cabinet of Ministers of Ukraine has transferred Dnipro Electric Locomotive Plant to the list of objects of big privatization from objects of small privatization, which means sale at a tender with conditions.
The corresponding order on the plan to sell 100% of the plant shares was adopted by the government at a meeting on September 15.
An explanatory note to the draft resolution states that the value of the company’s assets at the end of 2020 was UAH 420.3 million, while small privatization objects have assets of up to UAH 250 million.
The plant in 2018-2019 was included in the list of objects of small privatization, but the sale did not take place. In August 2020, the government agreed on the transformation of the state enterprise Dnipro Electric Locomotive Plant into a joint-stock company, and the corresponding changes were registered in March 2021.
Dnipro Electric Locomotive Plant specializes in the production of main-line electric locomotives of direct and alternating current, industrial electric locomotives for opencast mining of minerals, as well as mine contact electric locomotives for mining and coal industries.
According to information in the SPARK system, the plant’s net loss in 2020 increased by 18.8% – to UAH 78.5 million, and revenue fell to UAH 4,000 from UAH 35.6 million a year earlier.

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UKRAINIAN LEKHIM PLANS TO LAUNCH PHASE ONE OF ITS PLANT IN UZBEKISTAN

The pharmaceutical company Lekhim plans to launch phase one of its plant in Uzbekistan in 2023 and open ampoule production, Chairman of the supervisory board of the Lekhim Group Valeriy Pechaev has said.
“In 2020, we created the Lekhim enterprise in Tashkent to sell domestic medicines and to organize production in Uzbekistan. The main thing was to find a site for production,” he told Interfax-Ukraine.
According to Pechaev, the company managed to find a plot of 3 hectares on the outskirts of Tashkent for the construction of the plant. The site is located three kilometers from the territory where the Uzbek government plans to organize a pharmaceutical cluster, but does not apply to it.
“We have selected a site, received a permit for perpetual use of land, developed and agreed on a project to master the entire territory and started construction in the spring of this year,” he said.
Pechaev said that since 2020, Lekhim has invested $2.5 million in this project, the total investment until 2023 will be about $10-12 million, and the total cost of the project is about $ 40 million.
“Now, we are financing the project from our own funds, but in 2023 we are planning to attract investments from the EBRD. We have long-standing good relations with them. We think that in 2022, when the buildings and structures are ready, we will attract them to buy equipment,” he said.
Pechaev said that Lekhim plans to attract financing from the EBRD, which will amount to about 30% of the charter capital. In the future, Lekhim plans to use EBRD loans in construction.
The project includes the creation of an ampoule production with an annual capacity of 150 million ampoules, the production of cephalosporin antibiotics with a capacity of about 15-20 million bottles and the production of solid forms of drugs (tablets, capsules) with a capacity of up to 1 billion pieces.
“The first stage, I think, will be launched at the end of 2023. It will be ampoule production. In addition, first of all, we will introduce an administrative building, a central laboratory of the plant, an energy workshop and a production workshop itself with an area of 4,500 square meters for three lines of injectable drugs. Each line produces 50 million ampoules. We will launch one line,” he said.
Pechaev said that in 2024, Lekhim plans to start building a facility to manufacture solid forms and antibiotics.
The company plans to annually produce products worth about $60 million in Uzbekistan. The plant will focus on the regional market, its products will be supplied, in particular, to Uzbekistan and Afghanistan and other countries of the region.
Pechaev said that “Uzbekistan today is a country with almost 35 million people, rich in natural resources, cheap gas and oil and, what is important, with a favorable investment climate and the protection of foreign investments declared by the state.”
“Therefore, today in Uzbekistan there is such a boom in investments and a fairly low cost of production,” he said.
Pechaev said that Lekhim also has a trade office in Lithuania, but there is no talk of organizing a production facility there yet.
In addition, the chairman of the supervisory board said that the company is currently also implementing two projects in Ukraine: the construction of a plant for manufacturing cephalosporin antibiotics in injectable and solid forms in Obukhiv (Kyiv region), as well as the launch of vaccine production at the Kharkiv Lekhim plant.
“I think that we will launch the plant in Obukhiv by the end of 2021. We plan to launch vaccine production in Kharkiv in the first quarter of 2022,” he said.
Pechaev said that the capacity of vaccine production will be about 40 million syringes per year.
The facility will produce vaccines against COVID-19 and influenza vaccines using technology transferred to Lekhim by China’s Sinovac Life Sciences.
“China has transferred both technologies to us – for the production of a vaccine against COVID-19 and for the production of a vaccine against influenza. We have already declared this in the Ministry of Health and asked to make a state procurement order with us for 2022 for 17 million doses of vaccines against COVID-19 and 3 million doses flu vaccines,” he said.
Pechaev said that further plans for the development of vaccine production will depend on the epidemiological situation. “I think the coronavirus will never end, and we will just do the annual flu vaccinations,” he said.
At the same time, Pechaev suggested that over time, the technology of inactivated vaccines against COVID-19, which is used to produce the CoronaVac vaccine, will replace the technologies by which other vaccines against COVID-19 are produced.
He said that since the beginning of the COVID-19 epidemic, Lekhim has delivered 10.2 million doses of CoronaVac vaccine to Ukraine, including 1.9 million vaccines purchased through the state-owned enterprise Medical Procurement of Ukraine and 8.3 million doses purchased through the U.K. procurement agency Crown Agents.

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ZAPORIZHIA IRON ORE PLANT RAISES IRON ORE PRODUCTION

Zaporizhia Iron Ore Plant (Dniprorudne, Zaporizhia region) in January-July this year increased iron ore production by 7.5% compared to the same period last year, to 2.84 million tonnes (in January-July 2020 – some 2.642 million tonnes).
The company told Interfax-Ukraine that during this period, 2.705 million tonnes of products were shipped to consumers. At the same time, 423,000 tonnes of ore were mined in July, and 385,900 tonnes were shipped to consumers.
Zaporizhia Iron Ore Plant sells its products to metallurgical enterprises in Slovakia, the Czech Republic, Austria and Poland, as well as to Zaporizhstal metallurgical plant in Ukraine.
The main shareholders of the plant are Slovak company Minerfin, a.s. with 51.1697%, Zaporizhstal with 29.5193%, and Czech KSK Consulting, a.s. with 19.0632%.

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SNACK PRODUCTION ACQUIRES KHERSON FRUIT AND VEGETABLE PLANT

Snack Production (Dnipro) has completed the purchase of Kherson Fruit and Vegetable Plant LLC, the deal was accompanied by the international investment company Millstone & Co with offices in Ukraine and Poland, the investment company reported on its website on Tuesday.
“Kherson Fruit and Vegetable Plant Kherson is one of the largest private fruit and vegetable factories in Ukraine. Its average annual revenue from product sales is about UAH 60 million. The combine has established sales channels: distribution (more than 15 regular partners in all regions of the country); retail chains (for production products under its own trade marks). It also exports products to 20 countries of the world,” director of Millstone & Co in Ukraine Maksym Shynkarenko is quoted as saying.
The parties did not comment on the financial details of the deal.
According to Millstone & Co, the production area of Kherson Fruit and Vegetable Plant Kherson is 9,530 square meters on the territory of 5.2 hectares. The plant can process 300 tonnes of tomatoes per day, its capacity for sterilization and packaging of tomato paste is 3 tonnes per hour, the bottling of tomato juice into glass containers is 3.5 tonnes per hour, the production of juices and puree is 4-5 tonnes per day.
According to the Unified State Register of Legal Entities and Individual Entrepreneurs, after the purchase of Kherson Fruit and Vegetable Plant, its ultimate beneficiary was Larysa Omelchenko, who indirectly owns the asset through Closed Nondiversified Venture Capital Investment Fund Omelia Invest.
According to Snack Production, the group is engaged in the production of snacks under its own brands and their distribution through a network of 42 branches across Ukraine. It delivers products to the wholesale and retail segments of retail and HoReCa under the TM Khutorok, La Pasta perprimi, Zeffir, Morskiye (Marine), Frumi, Zubby, EVO home, SoHo, Glint, and Zeffir baby.
Millstone & Co is a private investment company providing investment services to clients. It has offices in Warsaw, Krakow and Kyiv.

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