Our friends invited us to Malyn, the paper capital of Ukraine. Malyn is located 100 km northwest of Kyiv and 68 km from the Belarusian border.
Malyn, an ancient city. Its founder, the Drevlian Prince Mal, even proposed to Princess Olga, albeit unsuccessfully. Once upon a time, the Malyn Paper Factory, established over 150 years ago, produced unique types of paper and cardboard. Today, Malyn has several paper manufacturing facilities, one of which makes banknote paper for our hryvnia.
The ‘Papir-Mal’ Factory maintains the glorious traditions of the city of papermakers, increasing the production of cardboard for flat layers (liner), paper for corrugating (fluting), cardboards for various purposes, and sanitary-hygienic paper and products made from it (tissue). Our journey took us through Bucha, Irpin, and Borodyanka. Before our eyes arose scenes of horrific battles and cruel war crimes. The enemy did not reach Malyn by 20 km, but the city was partially destroyed by aerial bombs, and enterprises suffered as well.
And here is our friendly host – the director of ‘Papir-Mal’, Viktor Khomenko. We asked him to tell us about everything he sees around him – in the country, in the city, at the enterprise – and turned on the camera. Action! Here is his story, in brief:
– We all know that we are currently at war with the aggressor, so there’s not much to say about that. We are all trying to do something to hasten our victory.
However, for this to happen, the economy also needs to function because it has been declining lately. The country needs taxes; they are the lifeblood of the nation. Of course, any enterprise is created to make a profit and improve the financial status of its employees. Currently, our enterprise produces about 8,000 tons of cardboard and 1,000 tons of paper for sanitary-hygienic products per month.
We produce cardboard as liner (cardboard for flat layers of corrugated cardboard), fluting (paper for corrugating), as well as universal cardboard, and also paper of 80g, 70g, we even tried 40g. For many, this is unprofitable considering the cost, but thanks to our new CRM2 machine, which we brought from Germany, such low-grammage types of paper turn out to be competitive.
This was a special order for us – we made “kraft” for the production of bags. But mainly, we produce raw materials for corrugated manufacturing. We sell all over Ukraine, and some of it goes abroad. But now, little goes across the border… You see for yourself what’s happening at the borders.
From abroad, we import waste paper, the same “Tetra Pak” waste, which we recycle – separating paper, plastic, and polyaluminum.
Among our main production capacities, we have three machines. The first paper machine produces sanitary-hygienic paper – tissue. The cardboard machines CRM1 and CRM2 produce liner and fluting. CRM1 was launched in 2010. On it, we produce many types of cardboard, top-liner with a white coating layer. CRM1 currently produces about 3,000 tons of cardboard per month.
CRM2 allows us to produce a wide range of cardboards. For CRM2, we built a completely new workshop from the ground up in two years, and before the war, we made the first launch of the machine, and the first paper came out. But then the war started, and everything stopped.
Today, we produce 5,000 tons of cardboard on this machine per month. And this is not the limit; we are constantly working on increasing the volume of output. We do everything to improve the quality of our products. Any machine is like a Lego constructor: constant modernization, replacement of units, testing new chemistry. On the CRM2 line, directly on the machine, we installed a press from Balmer company. The same company fully assembled the pulp cleaning line for us.
In terms of cardboard, we cover about 15% of the market, but we plan to take leading positions. Since we make the raw material for the production of corrugated cardboard, we are completely dependent on this market. In Ukraine, many enterprises have stopped now, and the demand for corrugated packaging has significantly fallen. The market is ‘difficult.’ To conquer it, both quality and price are needed.
In the occupied regions and where combat operations are being conducted, many enterprises are destroyed. We see that corrugated manufacturers, who used to take a certain amount of cardboard from us, are now taking less.
Our exports accounted for about 5%. The quality of our cardboard completely satisfies our foreign clients. But due to the fact that there is a collapse at the border, and this is not the first time it has happened, and the main method of transportation is road transport, we have slowed down development in this direction.
In the production of sanitary and hygienic products, we cover about 20% of the market. We produce 6 million rolls of toilet paper per month, and 300-350 tons of napkins (towels in rolls, V-folded for dispensers). Before the war, these napkins were called Zetka. But we started getting a lot of questions, and we abandoned this brand. When the war started, we ourselves did not understand why the letter Z was spoiled like that…
Specialists
About 600 people work at Papir-Mal. It’s difficult to maintain such a team. Almost 60 people have gone to defend Ukraine. Three of them have died. These positions need to be filled by someone. It’s hard to find people, but the youth are coming – some can do something, some can’t, but everyone is learning. We have a professional HR service that provides staffing for the enterprise.
We are partially an enterprise of critical infrastructure, as we produce sanitary and hygienic products, but this doesn’t help us much in reserving employees – we do not meet the reservation requirements in some respects. We try to reserve our specialists, and as you understand, the workers of the pulp and paper industry are a unique type of specialists, which are now hard to find in Ukraine.
Previously in Poninka, there was an educational institution that trained operators for the CPP. We cooperate with the Kyiv Polytechnic Institute. Teachers from KPI came to us with lectures to improve the qualifications of our specialists. We also send our people to advanced training courses. This year we plan to continue cooperation with educational institutions – specialists are needed. If people come to us from other industries, they usually do not have the appropriate level of qualification – one needs to understand what paper is, its mechanics, and how to achieve quality. Because our goal is to fill the market with quality paper.
We have created a special department of technical control, which has a laboratory – it is a kind of independent body within the enterprise that ensures that the product goes to the client with quality. Many consumers have their own requirements for the product. According to their requirements, we constantly modernize the laboratory, constantly purchasing new modern equipment.
The equipment is complex and requires highly qualified specialists. Specialists – machine operators of paper processing machines – came to us to get a job, who entered the workshop, looked at the speed at which the machine works, and said: no, I will not work here. They seem like specialists, but they did not dare to work on our fast machines. Nevertheless, we have prepared and are preparing our qualified specialists for our machines.
We have a department of social policy that works closely with the HR department. It is responsible for employee training, improving the living conditions of employees, employee insurance programs, financial support for employees in case of emergencies, illnesses. Of course, we help the city community, support sports events (sponsored a bike race), children’s clubs (purchased easels for the art school), help with road repairs, restoration of municipal buildings, and the like.
Thermal Energy
At one time, when we were working on natural gas, a decision was made to build a solid fuel boiler house. At that moment, gas prices began to rise, and everyone was refusing Russian gas, and we were among the first. We purchased a steam boiler with a capacity of 12 tons of steam per hour from the Turkish company ISIMEK. It showed very good results in terms of economy. The boiler house paid for itself in six months considering the gas prices. After that, we bought and installed another 12-ton solid fuel boiler. And when we were installing CRM2, we installed a 16-ton boiler from this company and now we are independent of gas. Gas is only used occasionally when some regulatory or repair work is carried out on the solid fuel boiler house. The boilers are automated, and the change of operating modes is smooth according to the needs of production.
We live in Polissya, a forested region. There are sawmills here, and accordingly, wood waste. Also, part of the timber from the forest goes for firewood. And in our group of companies, there is a company that deals with woodworking, and supplies us with chips, which we use as fuel for steam production. We are satisfied with the work of our Turkish partners who manufacture steam-generating equipment of European level, always nearby and always providing support.
Association
Papir-Mal itself is part of DK Group. This is an association of companies in various fields – transport, waste sorting, woodworking, security business, IT business, video surveillance, construction, advertising business, manufacturing of electronic devices – this is a company that deals with electronics for paper production, process automation. We cooperate with the companies of the group and do a common cause.
Hard-to-Recycle Waste
We collect ‘Tetra Pak’ waste for recycling from all over Ukraine and plan to expand the import of this raw material. Recycling ‘Tetra Pak’ packaging waste is a large niche that helps the ecology of the entire planet, not just Ukraine. We separate paper, film, and aluminum foil. We take the paper for our own production, and enterprises that recycle them buy the film and polyaluminum. ‘Tetra Pak’ waste contains about 30% primary cellulose, which means it is first-grade waste paper.
Certificates
We plan to get ISO certification. Currently, we have passed the certification and received an FSC certificate. Our products meet the requirements of the Forest Stewardship Council.
The Forest Stewardship Council (FSC) is a non-governmental, non-commercial organization that was founded in 1993 by a group of environmental organizations, forestry companies, traders, and forestry unions.
The audit conducted by FSC includes checking suppliers, consumers, and production against all European requirements – labor protection, environmental friendliness, and much more. When we first read their standards, we thought: how is it possible to achieve this. It required strong desire and effort. But communication during the audit with FSC specialists allowed us to improve many of our production processes. So it was a very useful experience.
Tissue Market
Despite the decrease in demand for cardboard in the market, we see an increase in demand for recycled sanitary and hygienic products. People’s incomes have decreased, utility costs have risen, and many people donate to the Armed Forces of Ukraine. I think those who bought cellulose products have now partially switched to recycled ones. We cooperate with national networks such as Auchan, Epicenter. Also with regional networks, distributors. We have our own brands, and all products are in demand and sell well. Our premium brand is called ‘Special’ quite a quality toilet paper. Sometimes we do Private Label, on customer’s order.
In the Combat Zone
Combat actions were about 20 kilometers away from us. There were no direct combat encounters in the city. However, the breath of war was very much felt. When the war started, some people evacuated, but we organized shifts at the enterprise. There were always duty teams of locksmiths, electricians, and security guards present.
Many people went abroad, especially women with children. But our HR department was constantly in touch with everyone. They knew where people were and in what condition they were. Later, we even sent buses to bring people back from Europe. Those who wanted to return.
Around us, everything was flying, booming, exploding. At the neighboring enterprise Weidmann, there was an airstrike – an aerial bomb hit the electrical shop. Thank God, it killed no one. The bomb that hit our bridge and destroyed it also blew out many of our windows. In my office, there were no windows left, and the neighboring offices also had their windows blown out by the explosion.
To relieve stress and anxiety from the workers, we decided: people cannot just sit at home. We began to call them to work. The production was not operating, but people worked a few hours a day: repairing, cleaning, adjusting equipment. Our workers gradually recovered from the shock psychologically, and by the end of March, we began to quietly produce something.
We had a base for sanitary and hygienic products, and we started to rewind it into rolls. And after April 1st, we launched paper production, first sanitary and then cardboard production. By that time, the Moscovites had already retreated, but the planes were still flying. And we began to release products.
Our railway station was bombed twice, and many houses in the city had their roofs blown off. There were two strikes two days apart – on the 20th and 22nd of May. Some people managed to repair their roofs in two days, but the next strike blew them off again. We allocated building materials to the people, whatever we had, whatever could be adapted, for example, ‘Tetra Pak’ raw material in rolls (essentially metallized film), to temporarily cover the roofs to prevent leaks.
With the onset of the war, any supply of goods to the population ceased. Somehow ATB was working, so there were products. But there was no supply of industrial products, and we organized something like a charitable distribution. We distributed toilet paper to the people. Every resident of Malyn could come to the enterprise and take a few rolls of toilet paper, which we transported from the warehouse on pallets outside the enterprise.
Malyn was defended by the 10th Separate Mountain Assault Brigade from Kolomyia, in honor of which Suvorov Street was renamed. Thanks to them, the orcs were driven away, and we were faced with the task of bringing people back from evacuation. Many of them did not believe that it was possible to work under such conditions. Especially the women who were abroad. Most men were here. The heads of departments were on the spot and managed the process of returning people and involving them in work. For the people, we set up a bomb shelter at the enterprise in a monolithic concrete building.
What calms us down and makes us happy is that we managed to save the team.
I keep track of how many enterprises are working in Malyn and how they are operating. Today we are the largest enterprise operating in the city, although there were enterprises of our level before the war. Currently, they have fewer people, and as far as I understand, smaller volumes. Many enterprises work periodically, many have stopped altogether — there are no orders. There are plenty of quarries around us, but no work. Sawmills have closed. People have nowhere to go… Indeed, where did those people go? As far as I understand, many men went to the front, some remained in evacuation.
Raw Materials
And there are also problems with raw materials. The turbulence is great — prices for waste paper ‘jump’ up and down. It has always been so, but lately, it’s been very much so. Understandably, imports have decreased, production volumes in Ukraine have decreased, less packaging, less waste paper, someone is trying to import, borders are closed due to blockades, someone’s deliveries have been disrupted and – prices start to jump. Many enterprises find it difficult to provide themselves with raw materials. For now, we are managing… Do you know the joke about BMW?
Joke about BMW. They ask a traffic cop: how long do you need to buy a BMW? He says: 3 years. They ask a tax officer, he answers: one year. They ask a customs officer, he answers: 6 years. They ask: why so long? He says: well, BMW, it’s such a big concern…
Strategy
For now, we remain in our niche of the products we release, and we do what we can do, improve. To plan ahead, you need to see what lies ahead. Everyone is waiting. When the market will stabilize, and how — is unknown.
Environment
Regarding ecology, we are located in the city center. Ecology is our top priority. All our boilers are equipped with filters. We install silencers on noise sources where possible, so as not to disturb the residents. We do not completely purify the wastewater ourselves but pass it on to purification facilities for further cleaning.
The population of Malyn once was 25 thousand. Now it’s unclear, many people have left. When the bridge was bombed, we allocated pipes for the construction of a temporary crossing. However, it was later destroyed by floodwaters, and we had to rebuild it several times.
We also participated in the restoration of the sluices of the dam, which was built on the reservoir by the Malyn Paper Factory. The sluices were deteriorating, the water level was dropping, and the city could have been left without drinking water.
I am from Malyn. In Malyn, everyone is in the paper industry, and I come from a dynasty of papermakers.
My grandfather worked as a wireman on the paper machine at the Malyn Paper Factory. Even now, Papir-Mal is located in these very workshops. My father also worked here. My mother worked at the Malyn Paper Factory in the chemical water treatment department. I graduated from Zhytomyr State Technological University with a degree in engineering mechanics. In 2005, I came and got a job. My children went into IT business, analytics, and my son is still studying.
Since 2012, I have been heading the Papir-Mal enterprise, which emerged as a result of the privatization of the Malyn Paper Factory. The legal successor of the factory, the Swiss company Weidmann, a manufacturer of electrical insulating transformer board, kept the capacities that interested them, and the rest of the property was acquired by the Society.
Thus, the production of ‘Papir-Mal’ appeared. Since 2012, the Society has moved to new owners. About a year before the change of owners, the enterprise was in a deep crisis; we worked for a month, then stood idle for a month. The new owners not only started modernization but also introduced a new system of relationships, changed the standards of social policy, changed the priorities of investment, and significant changes also occurred in the sales and supply system.
This is how they revived the factory.
Recorded by Igor Tkalenko and Kostyantyn Shabunevych
corruga.expert
