Business news from Ukraine

KOKHAVYNSKA PAPER FACTORY INCREASES PRODUCTION

Kokhavynska paper factory (Lviv region), a tissue and toilet paper producer (the Kokhavynka trademark), in 2019 increased production by 1.6% compared with 2018, to UAH 547.64 million.
According to the Ukrpapir association, production of paper at the factory in kind increased 2.3%, to 37,900 tonnes. At the same time, production of toilet paper rose by 2.4%, to 113.69 million rolls (a total of 677.38 million rolls was made in Ukraine in 2019, a rise of 4.4%).
Kokhavynska paper factory has been operating since 1939. The factory producers base paper for hygienic goods, toilet paper and paper towels. The capacity of paper making machines is 19,000 tonnes per year, processing equipment 90 million rolls a year.
The factory exports about 40% of the products. The main consumers abroad are the Czech Republic, Romania, as well as companies from Belarus, Moldova, Hungary, and the Netherlands.
As reported, in 2018, the factory produced goods worth UAH 538.78 million, which is 27.8% more than a year earlier, paper production grew by 11%, to 37,050 tonnes.

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KOVALSKA GROUP COMPLETES PURCHASE OF PRODUCTION IN LVIV

The Kovalska industrial and construction group has finalized a deal to acquire Rozvadov Construction Materials LLC (Rozvadov, Lviv region), which owns a production facility located on around 140 ha, for UAH 63 million, the press service of the group reported on Tuesday.
The facility includes sand and limestone quarries, shaft furnaces for calcining limestone and a sand-lime bricks plant.
Sand deposits in the sand pit are estimated at almost 10 million cubic meters, the planned production volumes are 400,000-500,000 tonnes per year. Sand will be used to make Siltek dry mortar.
In addition, Kovalska plans to build another Siltek plant in the next two years on the acquired site. In addition, sand mined at the site will be sold in Western Ukraine.
According to the group, the limestone deposit has deposits at the level of 6 million tonnes. “Annually, it is planned to extract 200,000 tonnes of limestone, which will be processed at our own facilities and sold at enterprises throughout the country,” the press service added.
At the same time, to improve the quality, the sand processing and limestone calcining lines will be modernized, modern equipment for its pollution-free processing will be installed.
The Kovalska industrial and construction group has been operating in the construction market of Ukraine since 1956. The company is a leading manufacturer of building materials, developer and builder of Ukraine. The group unites nine manufacturers of building materials, which are known in Ukraine under the brands Concrete by Kovalska, Avenu, Siltek, and Granite by Kovalska.

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VELTA INDUSTRIAL AND COMMERCIAL FIRM WITH TITANIUM ORE PRODUCTION ASSETS IN UKRAINE SIGNS $100 MLN CONTRACT WITH LUXEMBOURG TRAXYS

Velta industrial and commercial firm LLC with titanium ore production assets in Ukraine (Kirovohrad region) has agreed to supply $100 million of ilmenite, a titanium feedstock, under a five-year supply contract with the Traxys Group, a global commodity trading group, aimed at meeting the needs of the North American market.
Velta said in press release that it has been working in the U.S. market for seven years.
“Given that North America is one of the most stable and fast growing markets, we have decided to enter a longer-term contract, which will ensure additional stability of the company’s operations,” CEO of Velta Andriy Brodsky said.
He said that the main competitive advantage of Velta is that the company produces high-quality high-titanium feedstock, which is currently scarce in the world and in great demand in the U.S. market.
“Titanium Dioxide pigment is a core business of our group. We are pleased to partner with such a high quality and reliable miner as Velta,” Traxys Head of Industrial Minerals Eli Skornicki said.
According to the press release, the ultimate consumer under the contract is Chemours. Chemours is a new kind of chemistry company driven by their purpose to create a more colorful, capable, and cleaner world through the power of chemistry. Chemours is one of the world’s largest manufacturers of titanium dioxide (TiO₂). The company’s Ti-Pure™ brand delivers industry-leading innovation to address the growing worldwide demand for high-quality TiO₂ by developing brighter, more efficient pigments for the coatings, plastics, and laminates markets. Its annual sales exceed $6.5 billion. Chemours employs more than 7,000 people worldwide.
Traxys, headquartered in Luxembourg, is a physical commodity trader and merchant in the metals and natural resources sectors. Its logistics, marketing, distribution, supply chain management and trading activities are conducted by over 400 employees, in over 20 offices worldwide, and its annual turnover is in excess of $7 billion. The group serves a broad base of industrial customers and offers a full range of commercial and financial services.
Velta LLC has been mining and processing titanium feedstock at Byrzulivske deposit in Kirovohrad region since 2012. The company also holds a license for the industrial development of Likarivske deposit with similar feedstock. From 2012 to 2019, Velta mined 1 million tonnes of ilmenite. The total number of jobs exceeds 500. Velta founded a research and development center Velta RD Titan that works on creating new methods for processing titanium feedstock.

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SUGAR PRODUCTION IN UKRAINE IN 2019/2020 MARKETING YEAR DECREASES BY 19%

Sugar production in Ukraine in the 2019/2020 marketing year (MY, September-August) decreased by 19% compared to the previous MY, to 1.48 million tonnes. According to the Ukrtsukor National Association of Sugar Producers, in total 33 sugar refineries were operating during the season, which processed 9.84 million tonnes of sugar beets, which is almost a third less than a year earlier.
“As we can see, a significant decrease in the amount of raw materials entailed a reduction in the operation of production capacities and, as a result, a decrease in sugar production in general,” the deputy chairman of the board of the association, Ruslana Yanenko, said.
According to her, such a result is quite predictable, because the global sugar surplus that has been observed over the past three years has also significantly affected the Ukrainian market – a 20% reduction in the area under sugar beets and a decrease in the amount of raw materials.
“In addition to the fact that nine processing plants did not start this year, the production season also decreased by almost a month, and this will certainly affect the cost of sugar production, because a sugar factory must work a minimum of 100 days to cover the launch costs,” she said.
The three leaders in sugar production in Ukraine remained Vinnytsia region with 331,900 tonnes, Khmelnytsky region with 192,800 tonnes, and Ternopil region with 186,400 tonnes.

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BIOSPHERE CORPORATION SEEKS TO LAUNCH DIAPER PRODUCTION EARLY 2020

The Biosphere Corporation, a leading manufacturer and distributor of household and hygienic products in Ukraine and the CIS, has started accepting a line for production of diapers in Italy and plans to start their production in Ukraine early 2020, the founder and CEO of the corporation Andriy Zdesenko has said.
“We plan to become number one manufacturer of private brands of diapers in Ukraine and several of our private labels,” he told Interfax-Ukraine on December 28.
Zdesenko said that on December 18-19 the first stage of equipment acceptance took place, and its final acceptance will be in Italy on January 13-17, after which the equipment will be installed at the production site in Dnipro.
Commenting on the unsuccessful attempts in the past of other domestic entrepreneurs to arrange the production of diapers in Ukraine, the founder of Biosphere noted the complexity of production technology and high competition in the market.
“But now there is confidence that we have gained enough expertise and brand recognition for the Biosphere. We also invited a specialist from Canada to lead this production, so we are ready to seriously compete with Western brands,” Zdesenko said.
The Biosphere Corporation has been operating in Ukraine for over 20 years. Its products are presented in about 20 markets in Europe and Asia. The product portfolio includes more than 2,000 items.

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UKRAINE REDUCES GAS PRODUCTION BY 0.8% IN 11 MONTHS

Natural gas production in Ukraine fell 0.8% year-on-year in January-November 2019, to 18.916 billion cubic meters (bcm), the Energy and Environment Protection Ministry has told Interfax-Ukraine.
Naftogaz group enterprises lowered gas output by 2.2%, to 14.722 bcm: Ukrgazvydobuvannia produced 13.653 bcm of gas, down 2.9%, Ukrnafta produced 1.062 bcm, up 8.1%, and Chornomornaftogaz produced 6.5 million cubic meters (mcm), down 10.3%.
Other producers boosted gas output by 4.4%, to 4.194 bcm in the 11 months. The biggest of them were Naftogazvydobuvannia with 1.509 bcm, Ukrnaftoburinnia with 670.03 mcm, and ESKO-Pivnich, which produced 486.59 mcm.

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