Business news from Ukraine

Kyiv Pulp and Paper Mill increased production by 9%

In January-August 2023, the volume of commercial output of Kyiv Cardboard and Paper Mill (Kyiv Pulp and Paper Mill, Obukhiv, Kyiv region), Ukraine’s industry leader in this indicator, amounted to UAH 4 billion 941.4 million, up 9% compared to the same period in 2022.

According to statistics provided by UkrPapir Association to Interfax-Ukraine, the plant’s production of corrugated boxes increased by 25.2% in volume terms, to 148.7 million square meters. Cardboard output increased by 10.4% to 111 thousand tons, driven by a 16.6% increase in containerboard production to 91 thousand tons, while boxboard production decreased by 11.2% to 20 thousand tons.

At the same time, according to UkrPapir, the output of the base paper for sanitary and hygiene products remains negative: in January-August, it decreased by almost 27% to 29 thousand tons, while the production of toilet paper in rolls decreased by 25.6% to 194.95 million units.

Despite the decline in toilet paper production, the plant maintains a strong leadership in its production in Ukraine. In total, in the first eight months of 2023, the country’s major enterprises produced 393.84 million rolls (down 2%).

According to the industry association’s data from the main industry enterprises, in January-August this year, Ukraine recorded a 10.2% increase in paper and cardboard production (up to 361.56 thousand tons) and an 18.3% increase in cardboard boxes (335.19 million square meters).

Kyiv Pulp and Paper Mill is one of Europe’s largest cardboard and paper products producers, employing over 2,500 people.

As reported, in 2022, the mill produced UAH 7 billion 432 million worth of products, which is 3.5% less than in 2021.

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Ukrgazvydobuvannia ensures increase in production

JSC Ukrgazvydobuvannia has completed the drilling of several new wells since the beginning of 2023 and put into operation the necessary infrastructure at one of the new fields, which allows an additional 1.2 million cubic meters of gas to be produced per day, the company said in a press release.

According to acting general director of Ukrgazvydobuvannia Oleh Tolmachev, after confirming the presence of significant gas reserves at the new field, the company developed a program for its intensive development.

“We have drilled new wells and equipped the necessary infrastructure, which now allows us to produce a significant amount of blue fuel and transport it to the gas transportation system of Ukraine. This is another component of our plan to increase the production of our own fuel for the needs of the country,” he noted.

More than 250 workers from all 11 structural divisions of Ukrgazvydobuvannia and about 80 units of special equipment are involved in the implementation of the gas production project.

As reported, the company has a goal of increasing natural gas production by 1 billion cubic meters in 2023 – up to 13.5 billion cubic meters. In 2022, it produced 12.5 billion cubic meters of natural gas (commercial), which is 3% less than in 2021.

NJSC Naftogaz Ukrainy owns 100% of the shares of Ukrgazvydobuvannia.

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Ukraine ranks 28th in world in wine production

Ukraine ranks 28th in the world in wine production according to data for 2022, reported in the center of socio-economic research “CASE Ukraine”.

“We produced as of 2022 660 thousand hectoliters, or 0.26% of the world wine market,” – stated the experts.

According to the report, the first place belongs to Italy with 49.843 million hectoliters, which is 19.3% of total world production, the second – France (45.59 million hectoliters, 17.65%), the third – Spain (35.7 million hectoliters, 13.83%).

The analysts attributed the reasons for Ukraine’s low wine production to the destruction of vineyards in the Soviet Union during the fight against alcoholism, the Russian Federation’s transformation of the wine-growing regions of Kherson and Mykolaiv regions into a frontline zone since the occupation of Crimea in 2014, as well as the absence of a land market until 2020 and the existence of restrictions on land acquisition by legal entities and foreign investors.

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China sharply increases imports of equipment for chip production

China has increased its imports of semiconductor component manufacturing equipment to a record level ahead of the entry into force of export restrictions by Japan and the Netherlands, the Financial Times reports.

According to the General Administration of Customs of the People’s Republic of China, the volume of imports of equipment for the production of chips in June and July amounted to about $ 5 billion, which is 70% higher than the figure for the same period last year ($ 2.9 billion).

China purchased the bulk of the equipment from the Netherlands and Japan. These two countries announced in January of this year that they would join the U.S. export restrictions on China’s semiconductor equipment.

In Japan, these restrictions will come into effect on July 23, and in the Netherlands – on September 1. Once they come into effect, buyers of equipment will have to obtain special licenses from the governments of these countries.

As the FT notes, the increased imports of chip-making equipment shows that China wants to avoid any disruption to its plans to expand semiconductor production.

“This is one of China’s responses to export restrictions imposed by the Netherlands and Japan,” notes Lucy Chen, vice president at Taiwanese analyst firm Isaiah Research. – Beijing is stockpiling equipment in advance to negate potential supply chain problems.”

China’s imports of Dutch chip-making equipment doubled in June and July compared with May due to increased shipments by ASML Holding NV, FT industry sources said.

ASML chief executive Peter Wennink said on an investor conference call last month that there was strong demand for equipment designed to produce non-advanced chips from Chinese buyers.

Imports from Japan also rose. In addition, there has been an increase in shipments to China of chip-making equipment from Singapore and Taiwan, the FT notes.

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Ukrainian parliament legalizes production of GMO products

The Verkhovna Rada has passed in the second reading and as a whole the law “On state regulation of genetically engineered activities and state control over the placement of genetically modified organisms and products on the market”.

The corresponding bill №5839 was supported by 276 people’s deputies at the plenary session on Wednesday, a member of the faction “Golos” Yaroslav Zheleznyak reported in Telegram.

According to the explanatory note, the document defines the legal and organizational basis for the state regulation of genetically engineered activities, ensuring environmental, genetic, food and biological security of the state and state control over the placement of genetically modified organisms and products on the market.

It defines the terms “genetically modified organism”, “genetically modified products”, “GM products as a food product”, introduces state registration of GMOs, etc.

Before the law was adopted in the second reading, it was amended to prohibit the cultivation and import of GM corn, as well as the cultivation of genetically modified sugar beets and rapeseed for five years.

The document introduces a comprehensive regulation of the legal and organizational foundations of genetically engineered activities by means of state supervision (control) over the use of genetically modified organisms and the turnover of GM products.

The bill also delimits the powers of state authorities to avoid duplication of functions in the sphere of GMO handling; improves the system of GMO risk assessment with regard to possible impact on human health and the natural environment; introduces European mechanisms for state registration of GMOs; improves requirements for labeling of GM products and introduces rules for their traceability; strengthens state control in the sphere of GMO handling and establishes liability for violation of legislation in this sphere.

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Sukha Balka mine increased crude iron ore production by 32%

Sukhaya Balka mine (Kryvyi Rih, Dnipro region), part of Aleksandr Yaroslavsky’s DCH Group, increased crude iron ore production by 32%, or about 300 thousand tons, in the second quarter of this year.

The mine’s chief engineer, Igor Piltek, told DCH Steel’s corporate newspaper on Thursday that the production is short of workers in key job specialties. Therefore, the mine was forced to stop the technological process at the Frunze mine. The lack of a market for products also had a negative impact.

In addition, Yubileynaya mine is not yet being used to its full capacity, and the workforce is working depending on the situation with product shipments and the availability of qualified personnel.

“However, if we compare the performance of the first and second quarters of this year, we see an increase in production in the second quarter. Crude ore production increased by 32% to about 300 thousand tons, and commercial ore production by 42% (260 thousand tons) (…) This growth is primarily due to an increase in working hours. While at the beginning of the year the company’s team worked a reduced working week, in the second quarter, employees of the leading mining professions (sinking, mining, mine construction) returned to a full working week,” explained the chief engineer.

He also said that after the occupation of Mariupol and the destruction of Sukhoi Balka’s main consumer of ore, the company reoriented to another market: ore is being sold to Western partners, metal producers. The mine’s ore is consumed by steel mills in Slovakia, the Czech Republic, Hungary and Serbia.

“This spring, sales volumes increased, but in the summer, due to the crisis in the steel industry, we are seeing a decline. The shutdown of four blast furnaces at European steel mills reduced the need for raw materials. Sales volumes of the mine’s products decreased. We hope that the situation will improve in September,” said Piltek.

Commenting on the water situation, the chief engineer pointed to the shortage of water after the destruction of the Kakhovka hydroelectric power station. In particular, the lack of water affects the operation of the Central Compressor Station: the unit usually uses about 300 cubic meters of water, but in the current conditions, given the lack of resources, the company has developed a number of measures to reduce consumption. Significant savings have been made at Frunze mine, the industrial site of Yubileynaya mine, and auxiliary units. Water consumption was reduced by 30%.

It is also noted that difficulties with the company’s energy supply are expected in winter, so this year a new powerful generator was installed at Tsentralnaya mine to ensure the withdrawal of miners from the mine in case of a power outage.

“In the near future, we expect to receive five 20 kW generators to create a reserve and meet the needs of surface facilities,” added Piltek.

Sukha Balka mine is one of the leading mining companies in Ukraine. It produces iron ore by underground mining. The mine includes Yubileynaya and Frunze mines. DCH Group acquired the mine from Evraz Group in May 2017.

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