OREANDA-NEWS. September 13, 2013. Prime Minister of Ukraine Mykola Azarov ordered to define measures of state support of enterprises of the chemical industry. The corresponding task he set at a meeting of the Cabinet of Ministers of Ukraine.

The Prime Minister said that yesterday he took part in the resumption of proceedings of one of the largest chemical enterprises in Ukraine, KarpatNaftoKhim, which again reaches its capacity after long break.

“This is a truly holiday for workers of the enterprise and for the town of Kalush. And it is certainly an event for Ukraine,” Mykola Azarov noted.

KarpatNaftoKhim is a modern, recently modernized taking into account European standards enterprise, which produces polyethylene, polyvinyl chloride resins, vinyl chloride, chlorine, caustic soda. Three thousand jobs have been created here. This company is a major budget revenue generating enterprise for the city of Kalush. Due to business interruption Ukrainian has lost industry seven billion UAH of production volume every year and people and the city lost of vital revenues.

The share of KarpatNaftoKhim in total chemical production of the country is nearly 18%. Accordingly, the idle period of such a powerful enterprise has negatively marked on the general index of production of chemical products and on industrial production of Ukraine in whole. Mainly due to the stop of KarpatNaftoKhim, imports of primary plastics and plastic products grew by 8% in the first half of 2013. The share of imported products of this segment in the structure of domestic commodity market from the early 2013 reached 67%. The country has defrayed tangible currency costs.

“We could not tolerate having our own production facilities as we are able to almost completely and efficiently replace imports, Mykola Azarov said. - So the Government has made every effort to recover the enterprise and create long-term prospects for production on it, both for the domestic market and for export. Restore production at KarpatNaftoKhim is a successful example of the implementation of the program to revitalize the domestic economy and public-private partnerships”.

At the same time the Head of the Government stressed that providing the rhythmical operation of KarpatNaftoKhim this is not a one-time decision, but sustained work. Conjuncture of markets is quite difficult, so the Government should constantly assist Ukrainian companies to withstand competition.

PM has instructed the Minister of Industrial Policy Mr. Korolenko to take under personal control the solving of problems that have been accumulated at the enterprise and to prepare proposals regarding the protection of the domestic market.

At the same time he noted that a careful work is also needed concerning other domestic manufacturers. State of the chemical industry remains challenging. Significant part of structural and major budget revenue generating enterprises, which involved in the intra-branch and inter-branch balance (such companies as "LINIK", "DniproShyna", "Chernihiv KhimVolokno" and others) are not operating.

“I am extremely concerned that structural changes in the field are frozen,” Mykola Azarov said and expressed concern that some of the alleged investment projects on import substitution are not implemented.

“The problematic issues of the industry should also include the need to harmonize the existing national standards for the production of chemical products with EU standards (primarily in the sectors of production of mineral fertilizers, especially pure chemical compounds, paints and varnishes, packaging polymer products, construction polymeric materials and products). This is the most promising sectors of the chemical industry as consider the needs of the internal market, and taking into account the export opportunities that the FTA with the European Union will open up,” Mykola Azarov said.

Mykola Azarov has ordered Vice Prime Minister Yuriy Boyko together with Minister of Industrial Policy Mykhailo Korolenko and Minister of economic Development and Trade Igor Prasolov to make a deep sectoral analysis of the situation and identify measures for State support of enterprises in the chemical industry, which would have ensured the recovery of production, first of all, organic products, rubber products, primary plastics, complex mineral fertilizers, etc.
“Main attention should be paid to stimulus and measures that will ensure the competitiveness of Ukrainian products,” Mykola Azarov said.