Production results
The total volume of processed ore at PFP LLC in the first half of 2021 amounted to 666,278 tons (86.4% compared to the first half of 2020), which corresponds to 32,291 tons of ferronickel from ore raw materials (74.4% compared to the first half of 2020) or 7,375 tons of nickel (90.6% compared to the first half of 2020). The decrease in production volume, compared to the corresponding period of last year, is caused by the completion of the overhaul of DTP-2 (Distribution Transformer Substation) in the first quarter (repairs were started in November 2020).
Financial results
For the first half of 2021 financial result before tax (profit) amounted to UAH 0.2 million (taking into account tax differences – UAH 6.0 million), income tax of UAH 1.1 million was calculated.
During the reporting period taxes of PFP LLC, transferred to the budget of Ukraine, amounted to UAH 69.0 million, which is 11.9% more than in the same period last year. Of these, the payment of a single social contribution is UAH 33.6 million (12.1% more than in the first half of 2020), personal income tax and military duty – UAH 26.9 million (11.0% more than in the first half of 2020)
The average salary in the first half of 2021 is UAH 12,998, which is 10.3% higher than in the same period last year. Since 01.01.2021, under the agreement with Solway Group investor, the management of the Pobuzhsky Ferronickel Plant decided to increase wages by 5%.
Ecology, social support, corporate management systems (ESG)
Ecology
In 2017, as part of the sustainable business development plan, the PFP investor approved a program to reduce the environmental impact of production, setting the task to increase the level of emissions purification to 99.9% in accordance with European standards. At the same time, the plant started a long-term project of reconstruction of the third stage of gas cleaning equipment on tubular rotary kilns No. 1 and No. 2. In 2018 the first stage of construction (UAH 48.1 million) was completed – the transfer of gas cleaning VPT-1 to a temporary scheme with the installation of a smoke exhauster, as well as the transfer of gas pipes to the chimney, which will allow the second stage of construction without stopping the main production. In 2019 a second smoke exhauster was purchased and construction and installation works were performed. In 2020 construction and installation works were carried out for the foundations of the smoke exhauster and bag filters in the amount of UAH 8.4 million. The total amount of expenses (the cost of purchased equipment and works performed in 2018-2020) amounted to UAH 66.4 million, and investments for the first half of 2021 amounted to UAH 20.2 million.
Investments to support the production potential (purchase of equipment, machinery, construction, etc.) in the first half of 2021 amounted to UAH 35.0 million.
Social support
Within the activity of the Charity Foundation “Development of Pobuzhye” (operating since 2013 on the basis of PFP) in the first half of 2021, financial resources were directed to the improvement of the community, including schools, kindergartens and cultural institutions (Cultural Center and Youth creative activity Center). In particular, repairs were carried out (asphalt on the school grounds, replacement of windows) and in the premises (roof repair, installation of underfloor heating), household appliances (boilers, TVs, vacuum cleaners, air conditioners) were purchased. Consumables for creative activities, stationery, gifts for holidays and competitions were also purchased.
Assistance was provided to local medical institutions – for the village hospital (a developer for an X-ray machine, X-ray films and cassettes, a dental X-ray machine, protective masks, detergents and stationery were purchased; the basement was repaired) and for the ambulance station (a tonometer, detergents and stationery were purchased, windows were installed). In addition, targeted treatment assistance was provided to employees and residents of the village;
Fire hoses and paint were purchased for the station of the Ministry of Emergency Situations.
To improve the infrastructure of the village lamps for lighting were purchased, video surveillance, forged benches, and curbs were installed, a children’s playground was repaired, funds were allocated for landscaping. Also, on an ongoing basis, financial assistance will be provided to the municipal enterprise for the removal of household garbage.
In addition the company provided assistance to the adjacent settlements, included in the united territorial community: heating for the Culture Center and the Club of Veterans of the village of Kapitanka, children’s slides and swings were installed in the village of Pushkovo.
Expenses for the maintenance of the social sphere in the first half of 2021 amounted to UAH 2.2 million (90.8% compared to the first half of 2020).
The costs of sponsorship, cultural and mass work and rehabilitation of employees amounted to UAH 3.4 million, which is twice the cost of the corresponding period last year (222.1% compared to the first half of 2020).
Education
One of the main goals of the sustainable business development program for PFP is to improve the overall quality of education among residents of the districts adjacent to the enterprise as well as employees of the plant.
In total, in the first half of 2021, 83 people received education at the training and course plant for new professions and 67 people improved their qualification. There are 13 employees that study at universities: 3 of those people are full-time students, and the other 10 do correspondence study.
The cost of training the personnel of PFP LLC in the first half of 2021 is UAH 0.4 million (223.0% compared to the first half of 2020).
In addition, a scholarship program is being implemented in the field of education, which, together with the Salzburg International Festival, was created in 2016 for talented young people living in the Kirovograd region. The updated and expanded @creative.fellowship program aims to help young men and women to master skills that will further give them an advantage in finding work or developing their own business.
In autumn 2020 PFP launched an interactive project “PICh”, the purpose of which is to acquaint teenagers in an accessible and exciting way with the opportunities offered by the mining industry, and ideally to increase the number of applicants who in the future will choose technical or specialized disciplines.
Editorial:
Pobuzhsky ferronickel plant is the only enterprise in Ukraine that produces ferronickel on an industrial scale from poor oxidized nickel-containing ores. The company is the main employer not only in the largest settlement of the Golovanevsky district, but also in the Kirovograd region. Currently, more than 35% of the population of the village of Pobugskoye is employed at the plant.
In 2003, after a long downtime, a large international company Solway Investment Group acquired the assets of the enterprise and a year later restarted it. Pobuzhsky ferronickel factory was transformed into Pobuzhsky ferronickel plant and the production of ferronickel was resumed. The main raw material base for the production of ferronickel is imported ore.
PFP is now fully integrated into Solway Investment Group’s production process. Diversification of the group’s assets reduces the risk of the impact of foreign economic problems on the operating activities of individual objects that are part of the group, due to synergy within the group. In particular, this applies to the nickel production segment. The total investment of Solway Group in the Pobuzhsky ferronickel plant amounted to more than 130 million US dollars.
The plant is located on the territory of the Golovanevsky district of the Kirovograd region, two kilometers from the Yuzhnyy Bug River, on the border with the Mykolaiv region.
Solway Investment Group
Solway International Investment Group started its activities in 2002 and is a privately owned company with diversified business in the mining and metals industry. The group’s key companies are registered in Switzerland, Luxembourg, Estonia and Malta. 100% of the authorized capital belongs to EU citizens. Solway’s main production assets are located in North Macedonia, Guatemala, Indonesia, Argentina and Ukraine.