Kyiv, Ukraine, May 29, 2007—IFC,
the private sector arm of the World Bank Group, jointly hosted a seminar
on key results of a strategic development plan for Ukraine’s pulp and
paper industry, which helps identify opportunities for growth. The
project was financed by IFC, the Association of Ukrainian Enterprises of
Pulp and Paper Industry (known as UkrPapir), and the Ministry of Foreign
Affairs of Finland.
The study, conducted and presented by
Finland’s Poyry Forest Industry Consulting, addresses the current state
and future development potential of the industry in Ukraine, the availability
of raw materials, energy issues and potential savings, investment opportunities,
and legal and regulatory issues. It also provides an implementation plan.
“The forest industry is a key pillar
of Ukraine’s economy. It also represents over 20 percent of Finland’s
exports, and our government is happy to promote and support this important
study. This will lead to new opportunities for cooperation between
the Finnish and Ukrainian governments and the private sector,” said Lauri
Pullola, First Secretary at the Embassy of Finland in Ukraine.
Consumption of paper and board in Ukraine
is about 28 kilograms per capita (1.4 million tons), compared to 40 kilograms
in Russia and 100 in Poland. Thus there is great potential for market
growth in the country. The study projects 5 percent GDP growth in
Ukraine by 2020, and paper consumption is expected to reach 3 million tons
“This is an exciting period of growth
and development for Ukraine’s pulp and paper industry. We believe
the industry has the skills and commitment to achieve its full potential,
but there are still significant improvements needed in the regulatory environment
to aid this development. The strategic development plan is an important
basis for planning and implementing the investment to meet future needs,”
said Ian Luyt, IFC Senior Operations Manager for Europe and Central Asia.
Ukraine is an importer of all main paper
grades except for tissue paper, with consumption growing faster than production.
As a result, the import gap widened to 700,000 tons per year in 2005,
and local production must more than double by 2020 to keep pace with demand.
Environmental implications are also
significant. According to the study, several mills operate high-quality
wastewater treatment systems, some more advanced than the normal environmental
levels in Western Europe. The pulp industry in Ukraine is based largely
on recycled paper, which significantly reduces the volumes of solid wastes
in the country. With proper forest management, wood pulp production
could be increased easily without endangering the forests. Also, by using
wood waste from sawmills, the pulp industry would create additional environmental
“We have a long and challenging road
ahead to develop a robust and profitable domestic market for pulp and paper
in Ukraine. The collaboration between IFC, UkrPapir, and the government
of Finland to create this strategic plan is an important step in this direction,”
said Evgeny Lobanov, UkrPapir’s Chairman.
The event in Kyiv was attended by key
players in Ukraine’s paper and pulp industry. Speakers included Pavlo
Shinkarenko, Deputy Minister for the Ministry of Industrial Policy of Ukraine;
Lauri Pullola, First Secretary for the Embassy of Finland in Ukraine; and
Evgeny Lobanov, Presidium Chairman of UkrPapir. Representatives from IFC
included Elena Voloshina, head of operations in Ukraine, and Ian Luyt,
Senior Operations Manager for IFC Advisory Services, Eastern Europe and
IFC, the private sector arm of the World
Bank Group, promotes open and competitive markets in developing countries.
IFC supports sustainable private sector companies and other partners
in generating productive jobs and delivering basic services, so that people
have opportunities to escape poverty and improve their lives. Through FY06,
IFC Financial Products has committed more than $56 billion in funding for
private sector investments and mobilized an additional $25 billion in syndications
for 3,531 companies in 140 developing countries. IFC Advisory Services
and donor partners have provided more than $1 billion in program support
to build small enterprises, to accelerate private participation in infrastructure,
to improve the business enabling environment, to increase access to finance,
and to strengthen environmental and social sustainability. For more information,
please visit www.ifc.org.
UkrPapir, an association of pulp and
paper manufacturers and traders in Ukraine, was formed in 2003. The
association represents about 85 percent of installed manufacturing capacity
in the country and functions as a representative body for the industry.
About the Ministry of Foreign Affairs
Since the early 1990s, the Ministry
of Foreign Affairs of Finland has promoted economic and social development
in Eastern Europe and northwest Russia. It works in close cooperation
with other Finnish government departments, nongovernmental organizations,
private industry, and educational institutions. Its key values include
respect for democracy, human rights, and the rule of law. Its purpose is
to enhance relationships between neighbors and promote regional stability
and balanced economic and social development. Priorities include
the environment, agriculture and forestry, social welfare and health, the
judiciary, energy, transport, education, and nuclear safety.