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“Almost all enterprises under the Association are working or restoring their production,” says Eduard Lytvak, head of the Association of Ukrainian Pulp and Paper Enterprises. Top managers of Ukrainian companies join him
“In H1 2022, the production of paper and cardboard in Ukraine made 55.3% of the same period last year. For corrugated boxes, the volume of actual production amounted to 43.3%, corrugated sheet – 51.4%, liner and fluting – 53.8%, boxboard – 55.3%.
“I think that this is a pretty good indicator in the current conditions. The industry has not fallen, efficiency, jobs, wages have been preserved,” continues Eduard Lytvak.
“At the same time, Rubizhansky Cardboard and Packaging Mill (Luhansk region), Dunapak-Tavria (Kherson region), Rogan Cardboard Factory, Zmiyov Paper Factory, Brisk Notebook Factory (all located in Kharkiv region), Dnipropetrovsk Paper Company are stopped.”
“Rubizhansky CPM alone produced about 30% of the total volume.”
“Right. In the first half of 2022, a subsidiary of Rubizhansky CPM, Trypilskyi Packing Plant, produced about 20 million square meters of corrugated boxes. Last year, their total semi-annual production with the RCPM amounted to 135 million square meters.
“Today, the main concern of this company is to provide its facilities with raw materials for the production of corrugated cardboard. Under the direct supervision of Gennady Minin (ex-CEO of RCPM. – Ed.), things are moving forward. In particular, the company is establishing permanent cooperation with Zeleny Park, the manufacturer of liner and fluting in Izyaslav, Khmelnytsky region.”
“What other dynamics do you see?”
“The development of Kokhavynskaya Paper Mill is underway. Its head of the board, Mikhaylo Tytykalo, is actively working on the installation of the third paper machine. The Vinnytsia Torgtekhnyka company under the leadership of Anatoly Shevchenko is also about to install a paper machine.
“Mena Pak company (Chernihiv region) under the leadership of Sergiy Artyomov has resumed work since May.”
“We need to get in touch.”
“Talk to Zhydachivsky Pulp and Paper Mill, they are the only ones who managed to grow output compared to last year (+29.6% in corrugated boxes, including a voluntary donation of 278,000 sqm of corrugated packaging for humanitarian needs; currently the plant continues volunteering. – Ed.).
“Poninkivska Cardboard and Paper Mill produced 78% of corrugated boxes compared to last year, Kyiv CPM – 71%, Izmail Pulp and Paper Mill – almost 60%. The average rate for liner and fluting production among the operating enterprises of Ukraine reaches about 55% compared to H1 2021.
“I would like to take this opportunity to thank the heads of enterprises who, despite the difficulties, responded to our appeal and supported the Association in difficult days. We continue to work!”
We contacted some top-managers of the companies.
Sergiy Sukhyna, Director General, Lutska Cardboard and Paper Mill:
“What do you see on the market now?”
“With the outbreak of hostilities, the enterprise did not work for two weeks, but since customers needed our products, we launched corrugated production on March 9 and since then have stopped only for maintenance (about 70% of the produced cardboard is further processed at the factory. – Ed.).
“At the same time, demand for corrugated board and boxes fluctuates significantly. This month, for example, we are seeing a decline, which is most likely associated with hot weather and the fact that customers now prefer vegetables and fruits. Products that are traditionally packaged in paper packaging are consumed less.
“For the same reason, the enterprise is provided with orders for half a week or a week in advance, and not for a month, as before. At the same time, in July we plan to produce at least 3.3 million square meters of packaging (this will make about 65% of the plant’s capacity. – Ed.).
“There are logistical problems: at first due to the state of transport routes, fuel shortages, and now – the tariffs announced by the carriers. In this regard, we are not yet able to compete with Poland and other European countries, but we are looking for opportunities.
“Like other enterprises, we have adapted to the growth of natural gas tariffs by including the increase in the cost of production. My opinion: let the price of natural gas be high, but stable, without sky-high jumps.
“I am sure that with the beginning of autumn the demand for corrugated products will resume. Life goes on, you need to adapt to the current conditions.”
“Do you continue to produce palette board?”
“This market has its own specifics. About 70% of consumers are located in Kharkiv and therefore have stopped operation for the time being. But recently several have re-launched and are trying to restore production. We hope that they will receive a state order for school textbooks. At present, the level of orders of our factory for palette board is 5-6% of the usual one; we are looking for an export.”
“What is your progress in containerboard production?”
“We almost reached the pre-war level – 5.5 thousand tons per month. We carried out some modernization of equipment and now we can produce more. According to the schedule, we are going to make 6 thousand tons.
“In addition, we launched the production of cardboard corner protectors, making about 300 tons per month. Almost 95% of the volume is exported to the EU.”
“The currency is coming in, that’s good.”
“We continue to work, all employees are involved, we hope for an early stabilization of the situation and reaching the pre-war figures: 6 million square meters of corrugated products, 6 thousand tons of containerboard, 700 thousand tons of palette board and some 500 tons for corner protectors.
“I want to say that Ukrainians have changed a lot, began to appreciate life, work, relationships. This also rubbed off on the quality of our products.”
“What is the situation with spare parts?”
“There are some problems, but we are gradually solving them. We replace the parts that we used to purchase in the Republic of Belarus (in particular, cardan shafts) with European ones. They are more expensive, but also better in quality.
“There are difficulties with the supply of spare parts from China. Currently we cannot deliver them directly to Ukraine by sea, so we import them through Poland and other countries. This increases the delivery time, so it is better to stock them up for future use.”
“What about waste paper?”
“Sometimes it is not enough, which is actively used by procurers. In May, waste paper was in short supply at a price of almost UAH 10,000 (EUR 300) per ton, and scrap metal was at UAH 5,000.
“Given the problems with fuel and tariffs for trucking, we brought waste paper from Europe by rail. This is additional time and risks, but in this way we closed about 40% of the need for raw materials in June and even managed to reduce the price of products.”
“Thank you, and all the best to you!”
Denis Dovgal, Co-owner, Papir-Mal Factory (Malyn):
“We are working, despite the intense hostilities that took place 10 km from our city. One of the main tasks at that time was the preservation of the team – we fulfilled it.
“There were battles nearby, the city was bombarded. A large bomb exploded near the factory – windows flew out, the building was partially damaged. But, despite this, most of the workers did not leave the production and did everything to maintain the viability of the factory.
“At the beginning of April, we announced the collection of the team, and from Apr. 16th, we began to work at full capacity. In terms of production, they reached the pre-war level. We produce about 3,200 tons of cardboard and one thousand ton of tissue per month.
“We are launching PM-2, currently getting products in test mode. By the end of the month, we plan to switch to working mode. We are thinking of starting with 3,000 tons and bringing it up to 8,000 tons.
“Work is in full swing, we are gradually completing projects launched before February 24. The main one is the third stage of the boiler house, which is necessary to ensure the operation of the second machine.
“For the most part, we buy Ukrainian waste paper, but we also import. There was a period of surplus, then a shortage of raw materials, now prices are leveling off. In my opinion, in difficult conditions of hostilities, this situation is logical and quite normal. If the price of waste paper changes, the price of finished products also changes.
“The situation with spare parts has become a little more complicated in terms of warehouse availability, logistics, but it is far from a disaster. If you plan, you can work normally.
“Our main clients also continue to work, new niches are emerging. If you seriously deal with the issue of sales, then everything is more or less acceptable.
“Despite the difficulties, we lead an active social life, actively help people, together bringing our Victory closer! We believe that the paper industry will become one of the main drivers for the development of the Ukrainian economy.”
Kostiantyn Turygin, CEO, Dunapak-Tavria:
“In the corrugated board market, I see both recovery and decline. After the outbreak of hostilities, all manufacturers stopped, but subsequently almost all resumed production, although not in full. Unfortunately, for the six months of 2022, compared to the previous year of 2021, I estimate the overall decline in the corrugated packaging market at 45–50%. Some have more, some have less.”
“What makes you happy, what bothers you?”
“Everyone has the same excitement: we, Ukrainians, have worked conscientiously for many years, put our experience and soul into work, and now the results of our work are being destroyed for the sick ambitions of sick people.
“I am glad that we are adapting, finding a solution. I personally see this in my team, we take care of all its members, we pay salaries to everyone without exception, we continue to find solutions on how to provide the client with quality packaging and appropriate service.
“The situation with spare parts and consumables is stable and controlled. The team works fully, colleagues from other countries and the head office help. In general, Dunapak is a big friendly family. Our team worked 100% in the conditions of destruction and crisis, we were always proud of it, and now there is one more unconditional reason for this.”
“Are you facing a corrugated board shortage?”
“I do not see such a deficit, since the drop in demand significantly exceeds the decline in production capacity. Unfortunately, we will be in such conditions for at least the next six months.
“The trouble highlighted us all, there was no doubt who is a friend and who is an enemy, who is a real partner, and who was only considered such. But it’s for the best. I believe in the restoration of the country and the industry, because I believe in people next to me!”
https://youtu.be/VXAvLAaxcVw
Dmitry Rymashevsky, CEO, Zhydachivsky Pulp and Paper Mill:
“The plant operates a cardboard making machine, a corrugator, converting lines, and the production of egg packaging (trays for 30 eggs). In six months, we produced about 9 million square meters of corrugated packaging and the same quantity of corrugated sheet. This is almost a third more than last year.”
“We appreciate your success! How do you get enough raw materials?”
“The waste paper market directly depends on the volumes of production and consumption of various goods. Given the situation in Ukraine, today it has significantly decreased and there are interruptions in supplies.
“But we were glad that we had the right strategy for creating a reserve of recyclable materials and concluding contracts. We work with old proven suppliers, provide them with timely payment and constantly monitor the market in search of new ones. At the same time, we pay great attention to the quality of the supplied waste paper, which we test in our laboratory.
“We also import raw materials. Imports have taken place before, but now they are becoming much more relevant.
“We mainly buy spare parts and consumables abroad. We cooperate directly with foreign manufacturers – this guarantees optimal delivery times, quality control and the best prices.
“At the moment, the staff of the plant is full. Glory to Ukraine!”
https://youtu.be/S7BOAo2XKhY
Mikhaylo Tytykalo, Head of the Board, Kokhavynska Paper Mill:
“What’s new with your company?”
“We continue the EUR 20 million project to build a third PM. We have completed the preparatory works and are ready to receive and install equipment from Italy.”
“You will need more pulp then?”
“To this end, we negotiated with a European company. They are ready to provide us with pulp, and then buy all the paper.”
“Congratulations, great news!”
Valery Petrenko, Director General, Savil (Kropyvnytskyi):
“We continue to work at about 65-70% of the previous volumes, we pay taxes, wages, and we are engaged in volunteer activities. There are no problems with raw materials, we work with Ukrainian factories for brown cardboard, and with foreign ones – for white and coated cardboard. Logistics costs have grown, but recently there has been a downward trend.”
Another head of the enterprise from the northern part of Ukraine, who wished to remain anonymous:
“We are working at half strength compared to the volumes before February 24. The situation with raw materials is normal, but orders are scarce.”
gofro.expert
