KYIV. Dec 20 (Interfax-Ukraine) – The largest Ukrainian enterprise of the pulp and paper industry in Ukraine JSC Kyivsky Cardboard and Paper Mill (Obukhiv, Kyiv region) posted a loss of UAH 233.4 million from its economic activities in the first nine months of this year, Deputy Head of the Supervisory Board of the plant Oleh Dubrovka has said.

"In 2012-2022, the plant received a net profit of more than UAH 2.5 billion, which was reinvested in the development of the enterprise, and only UAH 6 million was paid as dividends. This year, the financial result is affected by both the large-scale invasion of the Russian Federation into Ukraine, and seizure of assets and funds as part of the initiated criminal cases," he said at a press conference in Kyiv on Tuesday, answering a question from Interfax-Ukraine.

According to him, in particular, after the Russian invasion of Ukraine, the implementation of the project to launch the production of corrugated packaging in Verkhniodniprovsk, where it was planned to create 250 jobs, had to be suspended.

"It was planned to launch a workshop for the production of cast containers (packaging for eggs) with 123 jobs, but with the narrowing of the market capacity for these products, and the destruction of large enterprises in the south, the direction of cast containers for this year is predicted to give us a loss of UAH 24 million, and the plant had to be suspended," Dubrovka said.

Also, before the start of the full-scale war, Pulp Mill Holding (the sole shareholder of the plant) planned to upgrade the entire fleet of Pulp Mill Print equipment – both cardboard packaging and flexography.

Among other things, he said that with the start of the full-scale war, the Kyivsky Cardboard and Paper Mill faced problems with the departure of personnel, problems with logistics, the supply of finished products, and they had to look for new ways to supply raw materials. Dubrovka also noted the staff problem and said that all requests from the plant for reservations for staff were not supported.

"But the image of the company is also negatively affected by the ongoing seizure of assets. Partners do not understand why sanctions, why seizures and why there is no reaction to our requests to law enforcement agencies. Therefore, both war and criminal proceedings lead to problems for the enterprise and, as a result, to the loss," he said.

According to the deputy head of the supervisory board of the plant, the launch of an environmental project for the incineration of waste from the enterprise was scheduled for 2022. He said that the financing of the projects had not been stopped, but the company was faced with the fact that Western specialists did not want to go to Ukraine to install equipment.

"Therefore, last week the supervisory board decided to budget EUR 75 million for equipment, and we will look for ways and Ukrainian specialists to install it," Dubrovka said.

He said that the modernization of production requires bank financing, and the plant mainly works with subsidiaries of foreign banks (Raiffeisen, Credit Agricole). "An important step was cooperation with the European Bank for Reconstruction and Development (EBRD), but we had to repay its long-term loan ahead of schedule. Resuming work with this respected bank will require a lot of effort," he said.

At the same time, Dubrovka expressed the opinion that the goal of all criminal proceedings against the plant is the transfer of assets to the Asset Recovery and Management Agency (ARMA), which will actually lead to the shutdown of the plant.

"The law enforcement agencies need to understand that stopping the enterprise is not a shopping center (like the closed Ocean Plaza), this will lead to the loss of jobs (about 3,300 people in the group of companies), and Obukhiv may be left without water and heating, which is currently provided by the Kyivsky Cardboard and Paper Mill," he added.

Kyivsky Cardboard and Paper Mill is one of the largest enterprises in Europe for the production of cardboard and paper products (corrugated packaging, sanitary and hygienic products) with a staff of about 2,200 people.

In 2021, the plant increased production by 34.2% compared to 2020, to UAH 7.699 billion, and in January-September of this year it produced products worth UAH 5.4 billion, which is 3.2% less than a year earlier.

In January-September 2021, the net profit of the mill amounted to UAH 488 million.