Focusing on reconstruction: Where construction factories are opening across Ukraine.

In 2021, Ukrainian enterprises produced construction materials worth $16 billion. This market experienced annual growth of 10% and supplied 95% of its output to domestic buyers. However, following the onset of the large-scale war, purchasing demand plummeted by 70%, and many factories and raw material sources were either destroyed or occupied by Russian forces.

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Currently, Ukraine is forced to import a significant portion of construction products, even though experts state that it can produce 90% of the goods required for post-war housing and infrastructure reconstruction. However, investment is necessary for this.

Surprisingly, entrepreneurs have been investing in the industry since the spring of 2022. Businesses are preparing for the reconstruction, which is estimated to cost 486 billion dollars. Already, 4,000 recovery projects with a budget of 4.7 billion dollars are being implemented in Ukraine.

What was produced in Ukraine before the full-scale war

Before 2022, 130,000 officially registered workers were employed in the production of building materials in Ukraine, according to a study by the Kyiv School of Economics, initiated by the European Business Association (EBA). This sector was actively developing and included the extraction of building raw materials and the production of materials and equipment.

Ukraine's main imports included sheet glass, bitumen, sandwich panels, window profiles, artificial finishing materials, and construction chemicals. Critical items were those that the country did not produce, such as elevator, pumping, boiler equipment, and equipment for internal electrical networks.

According to KSE Institute, Russians destroyed 15% of the industry’s production capacities. The sectors most affected were metal rolling and dry gypsum mixes.

Which factories opened after the start of the full-scale war

The French group of companies Saint-Gobain began constructing a plant for the production of dry building mixes near Ivano-Frankivsk in October 2023, close to the Khotymyr gypsum deposit. The deposit is being developed by its subsidiary "Trojan Gypsum." The investment in the plant amounts to 9 million euros. Saint-Gobain is one of the oldest building materials manufacturers in the EU, founded in 1665.

The German company Kreisel has started building a plant for the production of dry building mixes and decorative coatings in the territory of the Shchyrets community near Lviv. For this, it received a loan from the German bank KfW for 12 million euros and investment insurance from its government.

The Irish company Kingspan Group is initiating an investment project exceeding 280 million dollars. A campus with six production zones will be built near Lviv. The company specializes in the production of insulation materials, building panels, and solutions for centralized heating. The project includes the creation of a "green" production with low carbon content, which will positively impact the environment.

The Ukrainian company Oberbeton, owned by Israelis, will build a factory in the Mykulyntsi community near Ternopil. It will specialize in the production of large reinforced concrete structures for buildings of various complexities. Investments in construction will exceed 25 million dollars.

For the "Great Reconstruction". Who will receive the building materials factories and quarries taken from the Russians

The Ukrainian development company City One Development of Valeriy Kodeckyi started building a glass factory in the town of Berezan in Kyiv region in 2022 in the industrial park "City of Glass." Its capacity will be 15-16 million square meters of glass per year. The total declared investment is 100 million euros.

City One Development also plans to build a similar glass factory in one of the regions in central Ukraine. The total capacity of the two factories will be 30 million square meters, covering a significant portion of the needs of Ukrainian consumers.

The Ukrainian investment company EFI Group of Ihor Lisky announced the construction of the first float glass and special coated glass factory for industrial and household needs in Zhytomyr. The expected investment volume for the "Novasklo" plant is 232 million euros.

Ukraine exports 300-350 thousand tons of high-quality sand annually – a component of glass. This volume is sufficient for the production of 25-30 million square meters of glass per year. Several deposits of quality sand are not being developed due to the lack of demand for it.

"Ivano-Frankivsk Cement" is installing additional kilns for firing clinker (a type of ceramic tile), while the "Kryvyi Rih Cement" plant is investing 10 million dollars in modernizing its facilities and is building a kiln worth 15-20 million dollars.

The Irish company CRH acquired "Volyn-Cement" and "Pivden-Cement" from the Italian company Buzzi, which is exiting the Ukrainian market, for 100 million dollars. The company is modernizing its network of concrete plants in Kamianets-Podilskyi, Odesa, and Mykolaiv.

The trillion-dollar problem. What will Ukraine do with the hundreds of thousands of tons of waste created by the Russians

In 2023, a plant for the production of construction mixtures by the company ACTU, part of the Turkish group Onur, began operations. The company produces adhesive mixtures, mixtures for plastering works, thermal insulation systems, flooring, and primers. The investment amount for this project was 20 million dollars.

Two factories are being built in the Vinnytsia industrial park "Vinindustri": the company "Smart Line", specializing in equipment for powder coating and metalworking, and the enterprise "Vizardy", which will produce metal structures.

In Drohobych, entrepreneurs Tetiana and Yurii Chyhyriny created the industrial park "Yadro Indastrі". There, they will produce plastic windows, clay building materials, porcelain and ceramic products, cement, lime, and gypsum mixtures. The total declared investment in the new industrial park is 561 million UAH.

The agricultural holding KSG Agro is seeking investors for the construction of a construction waste recycling plant in the Kherson region, with an investment amount of 8 million dollars. Similar projects are being pursued by the Israeli GreenMix and French Neo-Eco.

According to estimates by EP, the total expected investment in facilities being created since the beginning of the full-scale war exceeds 850 million dollars.

Which building materials will restore Ukraine

Ukrainian manufacturers can provide 90% of the building materials necessary for the restoration of destroyed housing and infrastructure facilities, provided there is regular access to electricity. This is stated in a study "Localization of Recovery in Ukraine," conducted by the Institute of International Economic Studies and Ukrpromzovnishekspertiza on behalf of USAID.

According to the calculations of the head of the parliamentary committee on state governance, local self-government, regional development, and urban planning Olena Shuliak, over 100 billion dollars worth of building materials will be needed for the country's recovery. The largest expenses will be incurred for the purchase of rebar, concrete, bricks, doors, windows, insulation, paints and varnishes, individual heating points, and elevators.