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In March 2024, Kyiv Cardboard and Paper Mill (СPM) celebrated the 42nd anniversary. During this time, the company has obtained the status of a well-known manufacturer and is known not only in Ukraine but also abroad. Despite the war and economic instability, the mill has never stopped working.

Nowadays, it is not a typical post-Soviet factory, but a powerful production facility with foreign investments, a city-forming enterprise that is a leader in tax payments. Delo.ua talked to Iurii GOLOVCHENKO, Chairman of the Board, about the current state of Kyiv CPM.

How has the full-scale war affected the work of CPM?

– We have not slowed down and continue to fulfil all our obligations, both in the social sphere and in re-equipping the enterprise. Recently, there have been some problems connected with the mobilization of our employees. No one considers that shutdown of the enterprise due to a lack of workers means reduction in the tax burden or tax payments to the budgets of all levels, and, also an unforeseen situation in the city for which the enterprise is city-forming. Therefore, it is very difficult to predict what the consequences may be if the issue of mobilization is not regulated to the limits within which it will ensure the normal functioning of the region.

How many employees are currently working in production and how many of them are mobilized?

– In general, we have about 2,500 employees at our enterprise. Approximately 250 of them have been mobilized. We help each of them and their families. Thanks to the decision of the Supervisory Board of our company, which was supported by the Management Board, we pay their average monthly salary to all employees who are defending our borders.

Are workplaces kept for people returned from the war?

– Today, there are very few cases of returning to work – there is no demobilization. But we keep their workplaces and wait for our soldiers with hope. However, it is difficult to say about this, but 16 employees have already returned home on the shield.

You said that the company did not suspend operations after the full-scale invasion. What problems did CPM face besides the mobilization of employees?

– Since last autumn, despite external challenges, we have managed to stabilize the company`s operations by restoring part of both economic and logistics chains. However, the lack of access to the capital market remains a challenge. Investments require cheap long-term loans and the full operation of export credit agencies in the countries where the equipment is manufactured. We are a large capital-intensive enterprise with a very multi-stage and complex structure of processing products from waste (secondary raw materials) into goods.

Access to capital is always important for large enterprises. Before the full-scale invasion, Kyiv CPM had always cooperated with both domestic and foreign financial institutions. In recent years, the mill has invested more than €360 million. These are the funds that allowed us to maintain the production process and output at a sufficiently high level.

At the beginning of the full-scale war, we did not have the opportunity to invest in the development of production or modernization of the enterprise. However, over time, the Austrian shareholder decided to continue investing in the modernization of CPM – this year, €12 million is planned to allocate for this. As a result, in 2023, we paid more than UAH 1.5 billion for taxes and obligatory payments to the budgets of various levels.

You have mentioned the lack of employees. How do you handle the situation?

 – It is difficult for us to cover the personnel shortage because they are narrowly specialized. We addressed to higher education institutions and the recruitment system, and hire IDPs. We create all comfortable working conditions for our employees – provide housing and transport for them to their workplaces, as well as offer a large social package. But so far, we are closing the issue by involving the entire workforce in the processes. People want to work here, and that`s great. Another interesting fact is that 60% of our employees have been working for more than 10 years, and 20% have been working for more than 20 years.

How have your financial figures been changed?

– In 2023, figures increased, but they are far from pre-war levels. We used to export products to 35 countries, but now, due to the destabilization of the situation in the Black Sea, we cannot ship goods to many foreign customers. Sales in the domestic market have also decreased due to the deteriorating demographic situation (many buyers of our products have moved abroad). Let me give you a simple example: before the full-scale war, we had two cardboard machines producing almost 300,000 tonnes of cardboard and two paper machines producing almost 100,000 tonnes of products per year. Today, due to the lack of load, they are operating at 60% capacity.

Could you tell us how blackouts affect your work?

– Our production is very energy-intensive, but thanks to many years of investment in equipment, we have been able to reduce our energy dependence and improve the energy efficiency of our equipment.

What environmental initiatives does the mill have?

– One of our values is to care for the environment. We recycle a thousand tonnes of waste paper (secondary raw materials) per day.

As a socially responsible enterprise and market leader, KCPM has become a trendsetter in the implementation of eco-friendly practices in the production of containerboard, e-commerce packaging and hygiene products from waste paper.

At the beginning of 2023, the Austrian shareholders of PJSC Kyiv Cardboard and Paper Mill initiated the creation of an environmental strategy, the implementation of which will enable the company to recycle production waste instead of disposing of it at a landfill. KCPM achieved this by adding fiber waste as a raw material in the technical process of building materials production, and polymer waste – for use in alternative energy.

By 2024, we also planned to launch a line for recycling polymer products and plastic, but the war has so far disrupted our plans.

Nowadays, it is difficult for large enterprises to overcome challenges on their own. How do you interact with the state authorities? Are they aware of your problems and requests?

– It seems to me that the government has more important tasks than a separate enterprise, unless it is a military one. We, like the whole country, are working in spite of obstacles. Ukrainian resilience and Austrian responsibility amid military and economic challenges make Kyiv Cardboard and Paper Mill stronger. We not only create workplaces and pay decent salaries to our 2,500 employees, but also replenish the state treasury.

Moreover, we understand current challenges – the state cannot help everyone. Therefore, we need to be strong and help those who are in difficulties. Today, for example, we have significantly expanded our charitable activities. We have a charity committee that conducts meeting every week. Over the past year, we have donated almost UAH 100 million to charity programs, including medical institutions, preschool activities, and defenders of our country.

Tell us, which CPM products are currently in the highest demand? Who are main Ukrainian and foreign customers?

 If we talk about paper products, the Obukhiv 65 waste paper roll has always been and remains a clear favorite.

As for the tubes, having various brands in our assortment, including private label products for retail chains, we can meet the needs of any consumer. In the low-cost segment, it is Obukhivska TM, the demand for which is growing every day. In the premium segment, Dyvo Premio is a powerful competitor to foreign analogues. This is especially evident in the towel category, where Dyvo Grande XL is consistently the leader according to many researches.

As for sales channels, we are focused on national and local chains, small retailers, wholesalers and non-standard sales channels.

We are also a major producer of corrugated packaging. We foresaw the global trend in advance – consumers want comfort. This is the main driver of all our innovative developments, both in SRP packaging (literally `shelf-ready packaging`) and in new forms of mail order and e-commerce packaging.

So far, the convenience and benefits of these innovations have already been appreciated by the leading logistics operators (Nova Poshta, Meest Express) and online markets (MAUDAU).

We recently conducted an interview with Dr Heinz Zinner. I would like to ask you how you work with him and what his qualities you appreciate. 

– Dr Zinner has a great experience – he has been working in the industry for almost fifty years. He has known our company for a long time – all its needs and challenges. That`s why we have a very close and fruitful cooperation within the framework of the objectives set for us by the Supervisory Board.

What innovations have been implemented since he became the owner?

– First of all, we have resumed modernization of the enterprise. Thanks to this, we remain competitive on the global market. As for new productions, in 2023, Kyiv CPM entered the cast container market, offering an alternative solution for Ukrainian poultry farms.

What are your plans for 2024?

– First and foremost, I believe in our management team and our workforce. I am confident that despite all the difficulties we face today, Kyiv Cardboard and Paper Mill will not only operate steadily, but will also constantly improve in all spheres of the production process, both through investments and by increasing the competitiveness of our products. I hope we will also receive support from the government. It is extremely important today.

In conclusion, I would like to wish our entire country, all our citizens, peace, prosperity, to overcome the crisis and recover economy as soon as possible.

Based on the material of delo.ua

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