Kyiv, Ukraine, March 22, 2006—The
International Finance Corporation, the private sector arm of the World
Bank Group, announced the launch of its project to develop a strategic
development plan for Ukraine’s pulp and paper industry. The project is
funded by the International Finance Corporation, the Ministry of Foreign
Affairs of Finland, and the Association of Ukrainian Enterprises of Pulp
and Paper Industry (“Ukrpapir”).
Per capita consumption of paper and board in Ukraine is currently well
below European averages. Anticipated growth in the country’s economy thus
offers significant growth opportunities for local production and sales.
The strategic development plan will address key private and public sector
issues facing the industry over the next 15 years, from 2006 to 2020. The
plan will also provide a basis for private industry’s discussions with
the government, helping create an environment attractive to future investment.
The project will analyze the technical, financial, and environmental
status of the industry, assess key issues affecting its growth, identify
regulatory changes needed to improve the investment climate in the sector,
develop strategies to improve the current state of the industry, and identify
new investment opportunities.
At the project launch ceremony, Finland’s Ambassador to Ukraine, Ms. Laura
Reinila, said, “The Ministry of Foreign Affairs of Finland has cooperated
closely with IFC on private sector development since the early 1990s. The
Ministry welcomes the opportunity to continue this cooperation now in Ukraine,
together with Ukrpapir. Finland is a country with a long history
and extensive experience in forestry and related industry. Through this
project we have a chance to share our know-how as well as develop contacts
with Ukrainian counterparts in the sector.”
Christian Grossmann, Director of IFC’s Private Enterprise Partnership,
said, “Ukraine is a key country for IFC in terms of both advisory work
and investments. The pulp and paper sector presents strong potential for
growth. We look forward to the outcome of this important study and are
very pleased to be working with the Finnish government and Ukrpapir on
this exciting project."
Evgeny Lobanov, Chairman of the Presidium of Ukrpapir, said, “Ukrpapir
is very keen to implement this project for a strategic development plan,
in cooperation with IFC and the government of Finland. The plan will
create a fundamental base for growth of Ukraine’s pulp and paper industry.
It will also be a good base for attracting investments into the industry,
a strategic sector for Ukraine.”
The Ministry of Foreign Affairs of Finland has promoted economic
and social development in Eastern Europe and northwestern Russia since
the early 1990s through the Finnish Neighboring Area funding mechanism.
This has been done in close cooperation with other Finnish government departments,
nongovernmental organizations, private industry, and educational institutions.
Key values pursued by Finland in its neighboring area cooperation are respect
for democracy, human rights, and the rule of law. The purpose is to enhance
relations between neighbors and to promote regional stability as well as
balanced economic and social development. Special emphasis is placed on
the environment, agriculture and forestry, social welfare and health, the
judiciary, energy, transport, education, and nuclear safety.
The International Finance Corporation is the private sector arm
of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries provide
its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.
Ukraine became a shareholder and a member of IFC in 1993. As of January
1, 2006, IFC has invested around $480 million in 23 projects. IFC expanded
its investment program in Ukraine significantly in 2004-2005, committing
$255 million in the agribusiness, financial, and general manufacturing
sectors. IFC has also been conducting an extensive advisory program since
1992, which initially focused on the privatization of small businesses,
land, and idle construction sites. Current donor-funded programs offer
advice on corporate governance, leasing, and agribusiness. Programs also
seek to improve the business environment and promote the growth of small
and medium enterprises.
Association of Ukrainian Enterprises of Pulp and Paper Industry (“Ukrpapir”)
unites the 23 most significant businesses in the Ukraine cardboard and
paper industry, and it functions as a representative body for the industry.
Members of Ukrpapir accounted for UAH 2.38 billion (or 68 percent) of the
industry output of paper and cardboard in Ukraine, which totaled UAH 3.5
billion in 2005.