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IFC Launches Strategic Development Plan for Ukraine’s Pulp and Paper Sector


In Moscow
Ian Luyt
Tel. +7 495 4117555
E-mail: iluyt@ifc.org

Svetlana Pletneva
Tel. +7 495 4117555
E-mail: spletneva@ifc.org

In Kyiv
Oksana Varodi
Tel.: +38-044-490-64-00
E-mail: ovarodi@ifc.org


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.”

Additional Information:

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.