Business news from Ukraine

UKRAINE DECREASES VODKA PRODUCTION IN 2020

The decrease in vodka production in 2020 by 6.7% compared to 2019, to 44.5 million liters (in terms of pure alcohol) with an increase in its consumption and alcohol production by 36%, to 9.3 million decaliters, indicates the growth of the illegal alcohol market, Head of the State Fiscal Service Vadym Melnyk has said at a meeting with business representatives. According to him, in 2013-2020 production of vodka decreased by 2.5 times, alcohol – 2.8 times, and the excise tax on these products increased threefold.

Melnyk recalled that in order to combat illegal excisable goods, the service launched the Alcohol operation on February 1, 2021, during which law enforcement officers seized 226 tonnes of alcohol, 134 tonnes of alcoholic drinks, 547,000 packs of tobacco products and more than 8,000 excise duty stamps.

He clarified that for the period from February 1 to February 25, 2021, the Fiscal Service identified 53 websites with offers of illegal alcohol, 21 Internet ads were removed from websites. The courts are considering 12 petitions to restrict access to almost a hundred websites, one court decision was received with an appeal to the provider to stop illegal trade.

The head of the service noted the prevalence of online sales of illegal alcohol and its transportation through delivery services. He informed about the plans of the State Fiscal Service to work out a solution to reduce transportation of illegal excisable goods, without restricting the activities of carriers.

According to Melnyk, most of the seized alcohol was produced under the brands of the producers Prime, Lubotinn, Oleksandriya and Zlatogor.

In addition, he noted the facts of repeated confiscation of the previously seized products with the same excise stamps, as well as cases of theft of illegal products from storage sites and their incomplete utilization.

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SOUTH KOREAN HYUNDAI CORPORATION READY TO START NEGOTIATIONS ON LOCALIZATION OF HIGH-TECH PRODUCTION IN UKRAINE

South Korean Hyundai Corporation is preparing to start negotiations on the possible localization of high-tech production in Ukraine.
“Hyundai also plans to begin detailed negotiations on the possibility of investing in Ukraine and transferring technologies to localize the production of complex technologies,” said Eun Soo Choi, Vice President of the Commercial Transport and Energy Division of Hundai Corporation, during the All-Ukrainian Forum “Ukraine 30. Infrastructure” on Monday.
He also stated that Hyundai Corporation is inviting Ukrainian President Volodymyr Zelensky and representatives of the Ukrainian government to visit Hyundai’s facility in Korea.
The South Korean Hyundai Corporation will allocate $2 million in grant funds for the development of a pre-feasibility study for the construction of a high-speed European-gauge railway network (1,435 mm).

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SEVERODONETSK AZOT INCREASES PRODUCTION OF MINERAL FERTILIZERS BY 2.2 TIMES

PrJSC Severodonetsk Azot (Luhansk region), part of the group of nitrogen business enterprises Group DF, in 2020 increased the production of mineral fertilizers by 2.2 times, to 843,160 tonnes, the press service of Group DF said on Thursday.
“Compared to 2019, we have more than doubled the production of mineral fertilizers. These figures are the result of the resumption of the full production cycle at the enterprise, the launch of ammonia production plant 1-A. We note growth in all products,” the press service said, citing the chairman of Severodonetsk Azot.
According to it, the production of ammonium nitrate last year increased by 19.5% compared to the previous year, to 444,380 tonnes, urea-ammonium nitrate (UAN) by 3.9 times, to 42,320 tonnes, and technical ammonia water by 2.7 times, up to 4,420 tonnes.
Carbamide production in 2020 amounted to 352,040 tonnes.
Group DF said that 432,860 tonnes of ammonia and 7,490 tonnes of liquid carbon dioxide were also produced in 2020.
“An important moment was the opportunity to include the capacity of the carbamide production shop in operation due to the resumption of its own ammonia production,” the press service said.
According to Group DF, the growth in production in 2020 was facilitated by the affordable price for natural gas (the main raw material in the production of mineral fertilizers), as well as the restoration of reliable power supply after the commissioning of the Kreminska substation. These measures made it possible to connect Severodonetsk Azot and entire Luhansk region to the Integrated Power System of Ukraine.
It is reported that in 2020 the company produced more than 19,000 cubic meters of medical gaseous oxygen in cylinders, which is supplied to hospitals in Luhansk region during the COVID-19 pandemic.
PrJSC Severodonetsk Azot is one of the largest Ukrainian chemical enterprises. It has been part of Dmytro Firtash’s Group DF since 2011. The core business of the enterprise is the production of mineral nitrogen fertilizers.

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LARGEST UKRAINIAN MINING AND METALLURGICAL HOLDING METINVEST INCREASES PRODUCTION OF STEEL BY 9% IN 2020

Metinvest, the largest Ukrainian mining and metallurgical holding, in 2020 increased steel production by 9% compared to 2019, to 8.268 million tonnes, cast iron by 7%, to 8.475 million tonnes, and total coke production by 3%, to 4.808 million tonnes.
According to a press release from the parent company Metinvest B.V. on the results of operating activities for 2020, the group in the fourth quarter of 2020 reduced the production of cast iron by 9% compared to the previous quarter, to 2.105 million tonnes due to a decrease in production at both Mariupol plants.
Thus, the decline at Illich Iron and Steel Works amounted to 137,000 tonnes, as blast furnace No. 3 was shut down for a major overhaul in November 2020 and at Azovstal to 63,000 tonnes amid less intensive blast furnace operations due to a planned overhaul of the air separation unit’s oxygen block and changes in the burden composition.
Steel production in the fourth quarter of 2020 decreased by 3% compared to the previous quarter, to 2.118 million tonnes, mainly due to an overhaul of basic oxygen furnace No. 2 at Azovstal in September-October 2020. At the same time, the volume of steel production at Illich Iron and Steel Works remained practically unchanged compared to the previous quarter as hot metal was reallocated to steelmaking.
In 2020, cast iron production increased by 7% compared to last year amid greater production at both Mariupol plants. At Azovstal, production climbed by 328,000 tonnes, as the highly efficient blast furnace No. 3 was launched following its major overhaul and upgrade in June 2019 and a planned major overhaul of blast furnace No. 2 in the fourth quarter of 2019.
At Illich Iron and Steel Works, output increased by 219,000 tonnes, mainly due to a low-base effect caused by the shutdown of blast furnaces No. 3 and 5 for planned overhauls in 2019.
Steel production in 2020 increased by 9% year-over-year mainly due to an increase in production at Illich Iron and Steel Works by 512,000 tonnes amid the reallocation of hot metal to steelmaking. The increase in production at Azovstal by 178,000 tonnes was caused by an increase in hot iron production.
In the fourth quarter of 2020, the production of semi-finished products decreased by 17% compared to the previous quarter, to 816,000 tonnes. At the same time, the decrease in cast iron production amounted to 107,000 tonnes as hot metal was redirected to make steel and downstream products at Illich Iron and Steel Works, and marketable slab to 57,000 tonnes due to the redistribution of slab in favor of flat-rolled products. In 2020, the production of merchant semi-finished products increased by 5% compared to 2019, to 3.313 million tonnes as Mariupol plants boosted merchant slab output by 329,000 tonnes in response to greater demand. Consequently, cast iron production declined by 14% y-o-y to 1.088 million tonnes.
In 2020, production of finished goods increased by 4% compared to the previous year, to 5.833 million tonnes. Namely: the production of flat products increased by 132,000 tonnes, to 4.809 million tonnes; the production of long products increased by 80,000 tonnes, to 794,000 tonnes; the production of rail products increased by 30,000 tonnes, to 79,000 tonnes amid an increase in orders from the Ukrainian railways; and the production of tubular products decreased by 4,000 tonnes, to 151,000 tonnes.
In the fourth quarter of 2020, coke production increased to 1.224 million tonnes.

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UKRAINIAN BIOPHARMA STARTS PRODUCTION OF POTENTIALLY EFFECTIVE DRUG AGAINST CORONAVIRUS

Biopharmaceutical company Biopharma (Kyiv) has started the production a hyperimmune globulin drug, potentially effective against coronavirus (COVID-19) disease, the drug is to be produced at the end of February.
The first fusion of plasma with antibodies against COVID-19 in the amount of 2,100 liters took place on January 25, the company said in a press release.
“The product will be supplied to the finished goods warehouse at the end of February. Further, the drug is tested in an independent French laboratory, which in March must confirm the antiviral activity of the drug,” the press release said.
The company said that in case of a positive conclusion of the European laboratory, Biopharma will be able to start clinical trials of the drugs in Ukraine.
The collection of plasma with antibodies against COVID-19 started in the spring of 2020 in cooperation with the CoVIg-19 Plasma Alliance, of which Biopharma is a member. The goal of the alliance is to accelerate the development and provide reliable and sustainable treatment for people with complex coronavirus disease.
In October 2020, within the framework of the alliance, the third phase of a clinical trial of inpatient treatment with anti-coronavirus immunoglobulin started.
The results of clinical trials are planned to be published in April 2021. If the trials are successful, the new treatment could provide hope for those suffering from serious health consequences from COVID-19.
“To date, thanks to caring donors in Ukraine, it has been possible to collect about 10,700 liters of plasma from those who have overcome COVID-19. This amount of plasma will save hundreds of lives of Ukrainians. We thank every donor who has shared his part of antibodies to help seriously ill patients. And we continue to appeal to those who are not indifferent, to become plasma donors for the creation of vital drugs,” President of the company Kostiantyn Yefymenko said.
As reported, the CoVIg-19 Plasma Alliance was formed in April 2020 to fight the COVID 19 pandemic and to help develop potential plasma therapy for people who are prone to serious complications from COVID 19.
Biopharma is a Ukrainian biotechnology company, the only plant in Eastern Europe that has modern technologies, has been producing and developing drugs from donor plasma for almost 50 years.
The company is focused on providing medicines to Ukraine and on a contract basis, supplies its products to more than 30 countries around the world. In the fall of 2019, Biopharma moved its production to a new research and production complex in Bila Tserkva.
The company is developing a network of its own plasma centers. The company’s investments in this area of activity amounted to more than $10 million.

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INTERPIPE CUTS PRODUCTION IN 2020

The international vertically integrated pipe and wheel company Interpipe in 2020 reduced steel output by 11.2% compared to the previous year, to 758,700 tonnes.
According the company’s monthly report, the production of pipes in 2020 decreased by 20.9%, to 464,000 tonnes and the production of railway products, by 8.3%, to 190,600 tonnes.
In December, steel output amounted to 61,800 tonnes, output of railway products to 16,500 tonnes, and pipes to 38,400 tonnes.
It is also reported that in 2020 pipes were sold in Europe (29%), the MENA (Middle East and North Africa) region (24%), Ukraine (22%), the CIS (11%), the American continent (11%) and other regions (3%). In December, pipes were sold in Europe (21%), Ukraine (28%), the MENA region (20%), the CIS (9%), the American continent (18%) and other regions (4%).
Railway products last year were sold in the CIS (43%), Europe (35%), Ukraine (14%), the MENA region (4%), the American continent (3%) and other regions (1%). In December, railway products were sold in the CIS (46%), Europe (27%), Ukraine (16%), the MENA region (5%), the American continent (5%) and in other regions (1%).
According to Interpipe’s commentary, sales of most of the company’s products rose in December amid a recovery in the global economy and markets, despite stricter lockdowns in some countries.
Total pipe sales in December 2020 grew 37.2% compared to November 2020, surpassing pre-coronavirus (COVID-19) monthly sales in the fourth quarter of 2019 and the first quarter of 2020. However, year-over-year sales for the 12 months of 2020 were still lower, less by 21% compared to 2019.
Oil country tubular goods (OCTG) sales, after a 142.4% rise in November versus October, grew by 29.8% compared to November amid intensive drilling activity worldwide and optimistic expectations for COVID-19 vaccines and exceeding the threshold of $50 per barrel of crude oil for the first time since March 2020.
Sales of general purpose pipes in December increased by 8.1% versus November due to sales growth in Turkey, the United States and Belarus, while sales of welded pipes fell by 34.1% compared to November in all regions due to unfavorable market conditions.
At the same time, sales of railway products in general over the past year decreased by 5.4%. At the same time, it is noted that the total sales of wheelsets in 2020 increased significantly by 32%.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries around the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe.

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