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We have summarised the results with Dr. Heinz Zinner. A year and a half of constant work and development – despite the war and external pressure. In the autumn of 2022, during the martial law and economic crisis in Ukraine, the Austrian Pulp Mill Holding, the sole shareholder of Kyiv Cardboard and Paper Mill, changed its owner. How has the change in the parent company affected the work of Kyiv CPM? We have summarised with Dr Heinz Zinner the first results of his management.

Dr. Heinz Zinner is a Doctor of Economics, businessman and manager with over 60 years of experience. He has made a career from a sales representative to a top manager of the largest European paper and cardboard companies. Since 2003, he has been the CEO and, since October 2022, the ultimate beneficiary of Pulp Mill Holding GmbH (Austria). He received the Award of the President of the Republic of Austria for services to the country and business development.

– How do you assess the performance of Kyiv Cardboard and Paper Mill at the beginning of 2024?

– A stable one. After obtaining the ownership of Pulp Mill Holding in October 2022, which includes Pulp Mill Holding, the company stabilised, taking into account the situation at the time: economic relations and logistics chains were restored, and production and sales increased. Thus, last year, the mill increased its commercial output by 1.8% compared to the previous year. I would like to note that products under the Kyiv CPM brand are in high demand both in the B2C and B2B segments.

The company responds promptly to the challenges posed by the war in Ukraine, and our strategy includes appropriate anti-crisis solutions. In 2023, even under martial law, we invested over €4 million in production and social activities.

Given all the positive developments over the past months, despite pressure from some law enforcement agencies and the reasonable sanctions policy of the Ministry of Justice, I have decided to invest €12.5 million in the modernisation of Kyiv CPM in 2024.

These plans were unanimously supported by the Supervisory Board and the Management Board. We hope for support from the Ukrainian authorities. The government and we realise the importance of the mill’s uninterrupted operation. After all, sometimes abrupt moves lead to unexpected consequences.

– Modernisation plans for 2024: what do they involve and are external financing being attracted?

– As for the approved 2024 budget of Kyiv CPM and the main technical development programmes, they will be financed exclusively from the company’s own resources and the parent company.

Indeed, over the past years, Kyiv CPM has gained significant positive experience of cooperation with European financial institutions. However, the full-scale war and challenging logistics are causing problems – investments in fixed assets of Ukrainian enterprises are now highly risky.

In our situation, it involves fairly significant investments to partially replace outdated equipment with newer one. It’s no secret that most Ukrainian cardboard and paper companies are still using production lines of 1980s and 1990s. Kyiv CPM is no exception, although the mill has modernised its process and updated its equipment several times in recent years. However, Asian and European industries are not standing still, and if we, as a Ukrainian industry, want to remain competitive at the global market, it is unavoidable to replace outdated units with modern ones. This is a rather difficult task in terms of logistics, considering the destruction of the usual sea transport routes. Respectively, the risks of plan disruption are significant.

However, even now, despite all the regional threats, we continue to negotiate with international financial institutions to resume cooperation. But in the meanwhile, we are relying solely on our own strength.

– Kyiv CPM is one of the largest taxpayers in the capital region. Is it your principled stance to operate legally?

– Yes, payment of taxes in full and contribution to the budgets of various levels is our principled stance as a socially responsible European business in Ukraine.

During our work in Kyivska oblast, the mill has become a centre which unites the local community. Therefore, we simply have no moral right to let these people down at a difficult time in their lives.

In 2022, we remitted a total of about UAH 1 billion to the budget, and in 2023 we reached the same figure in the first 10 months. At the end of November, Kyiv Cardboard and Paper Mill was awarded a very valuable “Handshake” symbol by the Association of Taxpayers of Ukraine. Before that, only four people in the history of the country’s independence had received such an award.

– What about social standards at the mill? Could you tell us more about the financial support and social guarantees for your staff?

– Kyiv CPM is one of the largest industrial enterprises not only in the capital region but also in Ukraine, which provides jobs for 2,500 employees. This includes more than 20 internally displaced persons. That is why Kyiv CPM is not just the workforce, but about our large production family.

The highest value for the company is not machines, but a team of like-minded people. Therefore, we do our best to make people feel protected and motivated. Kyiv CPM has its own outpatient clinic, health insurance system, sports complex and canteen with attractive prices.

One of the most important motivation factors is competitive remuneration. As Ukraine is going through difficult economic times, we are constantly reviewing the amount of remuneration for our employees. At the end of August last year, the Supervisory Board of Kyiv CPM made a decision to increase salaries with a higher percentage than planned in the budget for 2023. The approved budget for the current year also provides for a gradual increase in salaries.

In addition, on its own initiative, Kyiv CPM decided to hold employment positions and pay salaries to employees who are defending Ukraine in the Armed Forces of Ukraine, despite the fact that this requirement has already been cancelled at the regulatory level.

– Please tell us more about the charity initiatives of Kyiv CPM.

– Traditionally, every Thursday, the mill holds a meeting of the charity committee, which allocates funds for humanitarian purposes. The specific amounts and areas of support are determined based on the vital needs of the applicants.

This includes both monetary assistance and free provision of our products, as well as charitable initiatives such as replenishing the blood bank. I would also like to note our cooperation with diplomatic missions, in particular the Austrian Embassy in Ukraine, and partner logistics companies (Nova Poshta) in delivering humanitarian aid to the affected frontline regions.

In total, last year we spent about UAH 90 million on charitable projects. I can assure you that Kyiv CPM and Pulp Mill Holding GmbH will continue to expand the humanitarian initiatives we have launched in Ukraine.

– What are your expectations for the next year and a half?

– I believe in our team and the staff of the mill. I am confident that despite all the financial difficulties and uncertainty in the country, Kyiv CPM will continue not only to operate steadily but also to continuously improve all parts of the production cycle through planned investments and increase the competitiveness of its products. I hope for the support of the national business from the Ukrainian state.

And, of course, I wish the entire country to bring about peace, prosperity, overcome the crisis and recover economy as soon as possible!

Based on the materials of mind

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