Business news from Ukraine

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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UKRAINIAN PLANT TO MODERNIZE 55 LOCOMOTIVES FOR EGYPT

Mykolaiv Locomotive Repair Plant has entered into a cooperation agreement with the official representative of the Egyptian National Railways for the modernization of 55 locomotives of the AD Tranz series, the enterprise’s press service said on Facebook.
“The modernization will be carried out both at the facilities of our plant and at the facilities of Egyptian colleagues and partners who own locomotive repair plants in Egypt,” the report said, citing Director of Mykolaiv Locomotive Repair Plant Serhiy Roi.
According to him, a deep modernization of locomotives will be carried out with the installation of new diesel engines, new power and support equipment and microprocessor control systems, which will significantly improve the performance of locomotives and reduce the cost of their service.
“The partnership is planned for a long-term, since the declared number of locomotives in the future can be increased to 200 units,” Roi said.
The agreement, the value of which has not been disclosed, also provides for further maintenance of locomotives, in particular, the creation of a service department in Egypt, where representatives of Mykolaiv Locomotive Repair Plant will carry out engineering work for servicing locomotives.
The report notes that Egyptian locomotives are “younger” than those operated in the post-Soviet space and those the plant previously dealt with – they were produced in 1996-2010.
Mykolaiv Locomotive Repair Plant, established in 2010, specializes in maintenance, minor repairs and overhaul of locomotives, as well as other locomotive parts and assemblies.

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HEAD GROUP STARTS CONSTRUCTION OF PLANT FOR PRODUCTION OF EQUIPMENT FOR WINTER SPORTS IN UKRAINE

The Austrian HEAD Group has begun construction of a plant for the production of equipment for winter sports on the territory of the industrial park Winter Sport in Vinnytsia, the start of which was postponed a year ago due to the COVID-19 pandemic, the website of Vinnytsia City Council said.
At the same time, it is specified that the commissioning of the new plant, which will be one of the largest plants of the HEAD Group, is scheduled for 2023, it is planned to create at least 1,200 jobs.
As reported, the total investment in the project is EUR 80 million, the area of production facilities for the production of skis, ski boots and bindings is 43,000 square meters.
The total area of the industrial park Winter Sport, where the enterprise will be built, is 25 hectares.

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KPMG TO PREPARE BILSHOVYK PLANT IN UKRAINE FOR PRIVATIZATION

KPMG Ukraine consulting firm has won the tender for the selection of an advisor for the preparation for privatization and sale of 100% of the charter capital of JSC First Kyiv Machine Building Plant (formerly Plant Bilshovyk, Kyiv), the press service of the State Property Fund of Ukraine (SPF) has told Interfax-Ukraine.
“The winner was KPMG Ukraine. There were three applications in total. KPMG won, as it scored the most points. The agreement with KPMG has already been signed. Documents are being prepared for the approval of the privatization adviser by the Cabinet of Ministers,” the press service told the agency.
As reported, at the end of September 2020, Head of the State Property Fund Dmytro Sennychenko said that Bilshovyk Plant was included in the list of objects for privatization formed by the fund for next year.
According to the information on the SPF’s website, the tender for the selection of a privatization adviser was announced in August this year. At the same time, the tender committee made a number of decisions for the successful privatization of this asset.
“Despite resistance, attempts to alienate property by raider methods and political pressure, we are moving privatization forward. At a transparent tender, an advisor will be selected who will qualitatively prepare the privatization object to attract an investor,” Sennychenko said.

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