Sweets Success

Located in the industrial left bank of Kiev (Kyiv), Ukraine's bustling capital city, Ukrplastic is the nation's largest flexible packaging converter. The city's art and architecture are world treasures; however, the newer sections stretch out on the flat left bank. These are characterized by large housing developments and the newer industrialized neighborhoods where Ukrplastic is located.

Ukraine's fragmented flex-pack industry has more than 100 converters with an estimated $125 million volume. Clearly dominated by Ukrplastic, Ukraine also is one of the poorest countries in Eastern Europe, and few international firms operate there. It has been reported that Amcor is looking to build a flex-pack converting plant in Ukraine; it already has a tobacco carton packaging plant in Kharkiv, the nation's second largest city.

Most of Ukraine's flex-pack production is used in the confectionery industry, since the nation is a large manufacturer and exporter of confectionery items. After confectionery comes snack foods. Russia (flex-pack volume of $700 million) is a major customer of Ukrainian flexible packaging material.

Built upon the foundation of an old Soviet Union polyolefin converter, Ukrplastic started its free market climb in 1998. Oleksander Galkin, the company's dynamic CEO, told me in Prague during an exclusive PFFC interview, “There was essentially no Ukrainian flex-pack industry during Socialism, and now we are poised for outstanding double-digit growth in Ukrplastic. We have purchased new equipment to compete with all worldwide converters.”

Investment in Technology

Over the past seven years, Ukrplastic has grown revenue from $24 million to more than $80 million and now employs about 650 workers. An estimated $100 million has been invested in technology and new equipment from international sources.

The spotless plant is quality certified and produces biaxially oriented polypropylene (BOPP) films and three-, five-, and nine-layer coextruded blown films. It houses six flexo presses, including three wide web Fischer & Krecke (eight-, 11-, and 12-color). There are also three ten-color gravure presses and two additional in startup now. There are four laminators: Nordmeccanica supplied two solventless and one solvent-based, and Windmoeller & Hoelscher supplied the remaining solventless laminator.

Metallization is done in-house with equipment supplied by Galileo and Applied Films. Most metallized film is used in-house; however, a significant amount is exported to neighboring nations.

Complementing this wide range of converting equipment is a state-of-the-art prepress department, fully laser-based, where all flexo and gravure preps are done. The plant also has three stand-up-pouch machines and two three-side-seal baggers. More than 90% of all production is geared toward food, with about 30% exported to Russia and 5% to the Baltic nations. Printed BOPP twist wraps and stock for the confectionery industry are at a monthly volume of more than 600 tons. Confectionery package production during the Socialist era was highly concentrated at Chemosuit in Slovakia; however, now it is produced at a wide range of plants all over the former Soviet Union, particularly Ukraine.

Ukrplastic's products are marketed to the huge multinationals such as Nestlé, Coca-Cola, and Kraft, and domestic confectionery plants such as Roshen, AVK, and Konti. Representative constructions produced at Ukrplastic include polyethylene terephthalate (PET)/polyethylene (PE), PET/metallized PE, PET/aluminum foil/PE, BOPP/metallized BOPP, etc.

Innovative Packaging

It is likely that as Ukraine develops into a larger self-service supermarket economy, more and more multinational food producers will enter the market. Both production and packaging will be done domestically. Already firms such as Nestlé, Heinz, and Damone are in Eastern European markets, with many more to follow.

As a new market, the Ukrainian consumer shows an enhanced reception toward innovative packaging. Already Ukrplastic products have captured international honors such as the World Packaging Organisation's “WorldStar,” Gravure Assn. of America's “Golden Cyclinder,” European Rotogravure Assn.'s ERA Packaging Gravure Award, and FlexoTech Intl.'s Best Print Award.

When asked if Ukrplastic is planning to expand into new markets, Galkin told me, “Yes! Ukrplastic continuously renews its production, always trying to anticipate the market's demand, and works with innovative technologies and materials. For example, we are now introducing our new products, such as packages for keeping food in diverse atmospheric conditions, new packages for beef and fish, and many others.

“In terms of our high-tech achievements, we now can offer our customers transparent, metallized, and twist films for confectionery wrapping in ten colors, obtained with flexographic or rotogravure printing, stand-up pouches with barrier films, BOPP films and laminates with cold seal, and barrier polymer coextruded films. We predict the Eastern European market for packaging material will keep growing in the future. We plan to keep growing alongside this and to reach a turnover of $150 million to $200 million a year in the near future.”

Former Socialist Bloc Nations Flexible Packaging Volume
Country 2008 Volume* ($ Million) International Converters Present
Russia $700 Amcor Flexibles, Tetra Pak, Alcan, Constantia
Poland $650 Amcor, Alcan, Sealed Air Cryovac, Constantia, Rexham
Hungary $600 Sealed Air
Ukraine $120
Czech Republic $100
Slovakia $90
Romania $90
Bulgaria $85 Alcoa
*Estimates by The Packaging Group

Ukraine: Ready for Change

Ukraine (pop. 48 million), a former Soviet Republic, is all spruced up and ready for the future. The Orange Revolution of 2004 ushered in a new era, and a rousing sense of rebellion and thirst for change still linger in the air. In the frantic capital of Kyiv, citizens flaunt bold fashions and fresh attitudes as they smoke, drink, dance, and sing whenever and whatever they want.

Kyiv is Ukraine's largest city. It is an important industrial, scientific, educational, and cultural city of Eastern Europe. It also is home to many high-tech industries, higher education institutions, and world-famous historical landmarks. The city has an extensive infrastructure and highly developed system of public transport, including a Metro system. During World War II, the city suffered extensive damage but quickly recovered in the post-war years, becoming the third most important city in the USSR.

CONVERTER INFO

Ukrplastic

1, M. Raskova Str., Kiev, 02002, Ukraine; +380 44 517 36 83; www.ukrplastic.com

SUPPLIER INFO

Fischer & Krecke — PFFC-ASAP 302. www.fischer-krecke.com

Nordmeccanica — PFFC-ASAP 303. www.nordmeccanica.com

Windmoeller & Hoelscher Corp. — PFFC-ASAP 304. www.whcorp.com

Galileo Vacuum Systems — PFFC-ASAP 305. www.galileovacuum.com

Applied Films — PFFC-ASAP 306. www.appliedfilms.com


Subscribe to PFFC's EClips Newsletter