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Summarized last year’s results with the head of the Association of Ukrainian Pulp and Paper Enterprises.
Finally, we have met with Eduard Leonidovich, the acting director of Ukrpapir. Tell us, how did the industry fare in 2023?
If we look at the table, we see that not a single enterprise that is part of the association has ceased its production activities. Out of the 31 enterprises that are part of our association, six are equipped with paper equipment.
Here is the table of enterprises that are not part of the association. The enterprises that are not operational are highlighted in red. This is primarily the Rubezhansky CPM, which ceased its production activities due to military actions in the Luhansk region.
A number of enterprises were halted even earlier. The main reason is the changes in the regime of enterprises caused by the state of war.
We have made a comparative sample of the production of paper, cardboard, and corrugated boxes in 2021, and in 2022-2023. And I must note that the largest decline occurred in 2022.
Thus, the decline in paper production was 25%, and for cardboard, it was 54%.
The largest drop occurred in 2022
Let’s recall the events that took place in 2022 when the entire territory of Ukraine was under attack. Almost all enterprises of the pulp and paper industry stopped their production activities. And only in the third and fourth quarters did they begin to slightly resume production.
In 2023, it can be noted that there was some stabilization of production. Enterprises of fast food, which require additional packaging, began to develop. This includes post offices, internet parcels. All this contributes to an increase in the volumes of consumption of packaging materials. Well, accordingly, sanitary hygiene products.
Therefore, the paper industry enterprises, despite the absence of pulp production in Ukraine, found themselves in a favorable position regarding the formation of the product range and specialized in the use of secondary fiber.
In doing so, they perform a dual role. The first is to meet the market’s needs for packaging and hygiene products. Almost all of this production is of Ukrainian manufacture.
The second is environmental protection. The enterprises work with secondary raw materials. They use waste paper, but unfortunately, the volume they collect is not enough. Therefore, our industry enterprises are making every effort to create additional opportunities to increase the efficiency of secondary raw material collection.
Moreover, despite the problems caused by military actions today, our enterprise is developing its technical base, modernizing, updating equipment, and expanding the range of products manufactured.
Examples include the Kyiv CPM, Zhydachiv CPM, and the Kohavynska PF, where they are mastering new types of products and are very actively entering the consumer market with their products.
The most important thing is that the industry did not panic. This is primarily because the enterprises were able to retain their employee potential. This is also very important because it takes years to train a paper industry specialist. So, that’s the second fact.
The third point is that all enterprises actively engaged in searching for new markets for their products.
We see problems. Unfortunately, this is related to the fact that our colleagues, our partners as we call them, do not always adequately approach supporting Ukraine under current conditions, not understanding, or not wanting to understand, that these military actions could encompass a number of other territories of other countries.
Are you referring to the border blockade?
The border blockade affects Ukraine’s economy. We hope that our governments will come to an agreement and that ways of normal cooperation will be found.
Who has the association admitted to its ranks during this time?
Last year, despite such turbulent events, we admitted Blumi, an Odessa-based sanitary hygiene manufacturer, to our ranks. This year we have admitted the company Zeleniy Park in the Khmelnytsky region, the city of Iziaslav – a producer of cardboard and paper from waste paper.
Unfortunately, we lost such a major manufacturer as Rubezhansky CPM.
So, these are losses…
Probably around 30%. In total, it includes containerboard, plus paper for corrugating.
As for the Trypillya Packaging Plant, it operated using cardboard and paper produced by the Rubezhansky CPM. However, when the combine stopped, the Trypillya PP faced a severe problem with the supply of semi-finished products, namely cardboard and paper.
They have a corrugator and a die-cutter. They were looking for a new supplier. One such real supplier became the Zeleniy Park paper factory.
Today, they produce testliner and fluting and supply them to the Trypillya Packaging Plant at about 20,000 tons per year.
According to the results of 2023, all enterprises that are part of the association and provide their information produced about 540,000 tons of paper and cardboard. All others produced only about 40,000 tons last year.
Those who are not members of the association actually produce less than 10%
It turns out to be 7%. Members of our association produce 93%. I want to note the most important thing: the industry continues to work.
The industry has somehow survived and continues to work
The Roganska factory started up last year. For three years, that is from 2019 to 2021, it was idle. Now the management has changed, a new director has come – an ambitious young man who is confident that he can start the enterprise and make it operational.
They are not yet members of the association. I had negotiations with the director at the end of last week. I hope that the factory will join the association in the future.
Dunapak in Khodoriv acquired a corrugator and has already launched it…
The corrugator has already been launched. It is working. They have, I believe, even evacuated from Oleshky.
Did they remove the corrugator from there, right?
I had such information that they took it.
How did that happen? Incredible
Well done!
If that’s the case, then, of course, it’s a story worthy of a movie
As they say, we have our “own movie” too. We bow our heads to the actions of Mikhail Fedorovich Tytykalo, who managed to solve the problem of developing the production of sanitary products at the Kokhavinskaya Paper Factory under these conditions.
As you probably remember, the factory had two paper-making machines that worked on 100% waste paper, that is, they produced the base, converting it into toilet paper, into paper towels.
And then Mikhail Fedorovich set the task to develop production. Fortunately, there was a site where it was possible to settle. And he practically created the production of the sanitary product base and converting lines from 100% cellulose out of nothing.
Today the converting line is working, although so far on an imported base. And the machine has already been assembled, launched, and the first roll has been received. But now they are finally resolving issues with the equipment supplier, with the Italians, on putting it into operation.
Last year, when the border with Poland was closed and waste paper was not imported, then Romania. Then Slovakia too. What solution do you see? That is, I understand that there is still a shortage of waste paper in Ukraine, depending on external supplies
Here’s my point of view. Polish farmers blocked the export of grain from Ukraine. I ask the question: who is the buyer? We are not going to carry this grain in our pocket to the market. So, contracts are concluded in advance. With some of the Polish consumers, for whom it is profitable to buy grain in Ukraine, not in Poland. The question to the Polish farmers: determine what prevents you from reducing the cost of your domestic production so that your producer buys your product, and not the Ukrainian one, for example. That’s the solution.
Or diversify the markets
It’s easier to block. Use the geopolitical factor and that’s it.
Regarding the blockade on paper products imported from Poland. They are not allowed here either.
Tell me, why? The Poles are suffering losses. Contracts have been concluded for the products, for offset paper, for example, paper that is not produced in Ukraine. And we cannot bring it in because the border has been closed.
Previously, one of the major consumers of our products was Russia. And Russian products were also in Ukraine. But almost all the cellulose came from Russia. Of course, this has changed. But at the same time, today we also import cellulose in small quantities, about 40,000 tons last year. We mainly work on waste paper. We bring cellulose from Argentina, from Uruguay, from Brazil. Can you imagine what these transit costs are like?
Eduard Leonidovich, thank you for the interview!
Thank you for your visit. See you soon!
corruga.expert
