An Overview Of The Corrugated Packaging Industry in Ukraine, And An Overview Of Its Large Domestic Corrugated Packaging Groups!

An overview of the corrugated packaging industry in Ukraine, and an overview of its large domestic corrugated packaging groups!

Recently, the global focus has been on Ukraine. Today, we focus on Ukraine from the perspective of corrugated packaging, and visit the overview of the corrugated packaging industry in Ukraine, as well as the largest domestic corrugated packaging, and related containerboard and corrugated paper manufacturers. Generally speaking, several large-scale corrugated packaging enterprises in Ukraine are basically first-class factories, with both papermaking business and corrugated packaging business.

First of all, from the overall domestic situation in Ukraine, according to relevant published data, compared with the same period last year, in the first month of 2022, the industrial production of paper and cardboard in Ukraine decreased slightly, reaching 95.4% of the same period last year. Including the output of corrugated paper and containerboard paper decreased slightly, the decline ratio was 8.8%, but compared with last year, the output of containerboard paper decreased more sharply, which was 12.9%. If January 2022 is compared with December 2021, paper and board production fell by 18.4% to 64,000 tonnes overall. Corrugated box production in January 2022 increased by 3.5% year-on-year to 48 million square meters, but compared with December 2021, corrugated box production in January 2022 fell by 25.2%.

Next, let's look at several well-known corrugated packaging companies in Ukraine. Number one in corrugated packaging is Rubizhne cardboard and packaging mill (together with subsidiary Trypilsky packaging mill), which has been successful in the packaging market since 1991, it has become the leader in the production of corrugated transport packaging in Ukraine, and export its products abroad. PJSC RKTK is also a member of the Ukrainian Association of Corrugated Board Manufacturers (UACBM), which, in cooperation with the Federation of European Corrugated Board Manufacturers (FEFCO), is trying to use European standards in its work. Its main production site is located in Lubizhno, Luhansk Oblast.

In 2002, PJSC RKTK acquired CJSC Tripolye Packaging Company (TUK) located in the Kyiv region of Ukraine, which is now an established corrugated board and corrugated packaging manufacturer. Thanks to this, the company's production potential is greatly increased and its customers receive an additional guarantee of timely production and delivery of products.

DS Smith, a UK-listed company and a world-renowned corrugated packaging production group, is a shareholder and partner of Rubezhnoye Cardboard and Packaging Mill. All this makes it possible to achieve the quality of products made in Europe. This level of quality is recognized by many well-known companies such as Procter & Gamble, Johnson Kyiv, Philip Morris, Кraft Foods, Sun Interbrew, ВВН, Dnipropetrovsk Petroleum Exploration Company, Sandora, etc.

According to the information that can be found, from January to July 2021, together with the products of its subsidiary Trypilsky Packaging Plant (Kyiv region), 157 million square meters of corrugated boxes were produced, a year-on-year increase of 13.7% (calculated on an average, annual The production of corrugated boxes is about 270 million square meters). During the period, the mill's corrugated board production increased by 14.1% to 138,330 tonnes. At the same time, the total value of corrugated packaging and papermaking products of the two factories increased by 40.6% in currency terms to 3.068 billion UAH (equivalent to about 663 million yuan), and the average annual output value was about 1.1 billion yuan. .

The second-ranked company in corrugated packaging is Kyiv Cardboard and Paper Mill (KCPM), one of the largest producers of paper products in Europe, which is owned by the Austrian company Pulp Mill Holdings. In terms of total output, the mill accounts for about 30% of all paper products produced in Ukraine, and waste paper is the main raw material used in its production. The mill processes more than 1,550 tons of waste paper per day.

At present, the company is mainly composed of three production units: a board mill that produces coated and uncoated paperboard and containerboard, including paper for corrugated boxes, with a total annual output of 240,000 tons; the production of sanitary ware for mass consumption The tissue material of the products, as well as the tissue factory that produces finished products such as toilet paper, napkins and paper towels, has a total output of 70,000 tons per year; the corrugated packaging factory that produces corrugated boxes is equipped with the most advanced equipment from European companies. The total annual output of corrugated packaging reaches 70,000 tons. 300 million square meters.

About 700 Ukrainian companies and a range of CIS countries buy KCPM products every year. KCPM's corrugated packaging is also used to package goods for many leading Ukrainian and multinational companies. The carton and packaging board produced at the plant are used to manufacture packaging for a variety of consumer products. Manufacturers of hygiene and household products recognize the superior quality of KCPM toilet paper, and the Divo, MyLova and Soffione brands are household names along with the well-known Obukhov65 toilet paper brand.

According to data provided by the Ukrainian Association of Pulp and Paper Industry Enterprises, in January 2022, the output value of KCPM was about 668.31 million UAH (equivalent to about 144 million yuan at the current exchange rate). The annual output value is about 1.7 billion RMB. In terms of product output, only the production of base paper for hygiene products increased slightly by 1% to 7,570 tons; the output of corrugated packaging decreased by 7.5% to 15.65 million square meters (calculated on an average, the annual output of corrugated boxes is about 188 million square meters) , cardboard decreased by 6.4% to 17,830 tons; roll toilet paper production fell 8.2% to 33.19 million rolls.

Last September, KCPM announced that it would be the first packaging producer in Ukraine to install the BHS Star of Excellence. The equipment is installed at KCPM's new corrugated box plant in Upper Dnepropovsk, where it mainly produces five-layer corrugated cardboard. The equipment is designed for a maximum speed of 300m/min. The Star of Excellence is the third corrugated board line from BHS to be installed by KCPM. "As part of our growth strategy, we plan to increase our presence in these regions and double our production over the next five years," KCPM board chairman Igor Oleshchuk said in a statement.

In addition, according to the information that can be found, the output of PJSC Zhydachiv pulp and paper mill (Lviv region), which is also a subsidiary of Osnova holding company in Ukraine, increased by nearly 100% from January to August 2021 compared with the same period in 2020. 2.1 times, reaching 256.3 million UAH (equivalent to approximately RMB 55 million). According to data provided by the Ukrainian Association of Pulp and Paper Industry Enterprises, paper production in the eight months increased by 2.3 times to 4,470 tons. The output of containerboard and corrugated paper increased by 32.3% to 9,520 tons, but the output of corrugated box decreased by 2% to 9.56 million square meters. The Zhydachiv pulp and paper mill was commissioned in 1951 and has a paper production capacity of 40,300 tons per year including corrugated and cover paper, 50,000 tons of color box board, and 100 million square meters of corrugated board and corrugated packaging.

In contrast, Russia's paper and board production increased by 6.7% in 2021 to 10.4 million tons, the overall capacity of corrugated packaging increased by 12.4% to 7.2 billion square meters, and the pulp industry of wood pulp and other fibrous materials Production reached 8.8 million tonnes, up 0.7% from 2020. In Russia, paper production is concentrated in the northwest of the country, with leading players including Mondi Syktyvkar LPK, Arkhangelsk Pulp and Paper Mill, as well as Karelia Pulp and Knauf Petroboard.

The well-known Ilim Group in Russia will produce a record 282 million square meters (131,000 tons) of corrugated packaging in 2021. The production of corrugated packaging increased by 9% compared to 2020. Over the past three years, Ilim's corrugated packaging line has been showing high growth rates of around 10% per year. The Ilim Group includes two corrugated packaging companies located in the Leningrad (Kommunar) and Moscow (Dmitrov) regions, producing many types of products, including shipping, retail, industrial packaging, corrugated pallets, and packaging for postal items and online trade.

In 2021, the EBITDA of the corrugated board business of the Ilim Group will increase by 2.2 times compared to 2020, reaching US$16.3 million. “Last year was the most successful year in the history of Ilim’s packaging business,” commented Vladimir Shoshin, Ilim’s sales director for corrugated materials. “We set out our plans for 2021, recognizing that competition in the corrugated material market will intensify and raw material prices will rise. The company Expanding our customer base through increased order volumes in late 2020 will allow our corrugated business to ramp up production from early 2021."

Pavel Alekseev, COO of Ilim's Packaging Business Unit, said: "The main drivers for the development of the corrugated material market today are the positive development of e-commerce and global environmental trends and conscious consumption." According to Ilim's estimates, the demand for corrugated products will grow by 4% in 2022- 5%.