Ornamental stone can play a key role in goods
It is also important for Ukraine’s survival as an independent state that the economy continues. Oleg Majewski, a specialist in the country’s stone sector, currently a market researcher and former editor-in-chief of KAMІНЬ (Stone) magazine, has analyzed the situation there. His article appeared in the Polish journal Nowy Kamieniarz (May 2022). We reproduce the article in a summary.
Majewski highlights the support provided by the EU, the UK, the USA, and Canada and thanks especially the Poles: “Poland deserves special attention and great gratitude for supporting us with its entire society and for hosting millions of refugees. Currently, 85% of our exports, imports, war materials, and humanitarian aid flow through Poland.“
Looking at his own country, he points out the special role that the economy currently plays there: “In the current situation, it is crucial that domestic companies can work and export their goods abroad.“
We note: The stone sector can indeed play a special role in such difficult situations. After all, the material is there by nature, it just needs to be extracted and, in the case of Ukraine, primarily processed into paving stones or slabs.
Granites are the defining rock of Ukraine. There are many varieties, famous are the Labradorites with their mysterious shine or also colored variants like the red Lezhniki (Maple Red). The fact that labradorite is rather associated with Scandinavia has to do with a geological peculiarity: from Norway to the south of Ukraine an underground mountain plate reaches the surface only at its northern and southern ends and dives into the depths under the Baltic Sea and Belarus.
Ukrainian mining areas for natural ornamental stone are located in the regions west of the Dnieper River in Zhytomyr, Vinnitsa, Cherkassy, Kirovohrad, Dnipropetrovsk, and Mykolaiv regions. “All these areas are under full control of the Ukrainian authorities,“ Majevski stressed. In the map of Novy Kamieniarz the regions are colored green:
Contrary to what one might expect, companies in those regions do not seem to have problems with their stock of employees because of martial law. Andriy Pavliuk, owner and director of LLC Largostarh in the Zhytomyr region, at least, says in an interview with Majewski: “Some employees were called up to the army to defend the country, but at the moment we can work and fulfill orders.“
The elimination of Russia as a destination for exports is not an insurmountable problem either, says Olexander Budas, export manager for the EU at Unikom-Prom (Zhytomyr): “In recent years, we had reduced our granite exports to Russia anyway (to about 30% of the total before the war), while we increased exports to the European market to 70%. For us, the EU market, especially Poland, is very important.“
However, transportation poses major problems, he said, in several respects.
As elsewhere, costs have multiplied. Says Olexander Budas of Unikom-Prom, “If it used to cost €1,000 to transport blocks to Wroclaw in Poland, now you have to pay around €2,100. And if you divide this amount by 6 cubic meters of granite block load, the price of one cubic meter of Ukrainian granite makes it unattractive on the market.“
At some point, he said, a limit is reached where the country can no longer compete.
What’s more, until now the Baltic countries have been important buyers, but suppliers from Portugal and Spain are increasingly appearing there. Poland, actually the most important buyer country for stones from Ukraine, is becoming a competing supplier there.
“We are really afraid that our stone will be pushed out of the markets,“ Budas said.
Of course, transports in times of war are not the same as before. For example, truck returns often can’t be stocked because Ukraine is importing fewer everyday goods right now than before.
Conversely, the PKP LHS porridge railroad has practically disappeared as a transport route for stones: “Today, this transport route can only be used for strategic goods such as metals and grain,“ says Budas.
Andriy Pavliuk of LLC Largostarh points to the new situation at the border with Poland: “Before the war, there were queues of 2 to 3 days, with the start of the Russian invasion and the imposition of martial law, today a truck can queue for more than 5 days at the border alone.“ He describes the situation similarly to Olexander Budas: “The cost of transporting stone to Poland has doubled.“
In addition, he says, since the domestic market has collapsed, stone companies that were once only active at home are now focusing on foreign countries: “They are starting to look for customers in Europe and advertise there.“
Despite the difficult situation, however, both are optimistic: “We believe in victory on all fronts of this war,“ Olexander Budas said. Competitor Andriy Pavliuk, looking abroad, adds, “We look forward to working with you!“
Oleg Majewski (Mail)
Nowy Kamieniarz (Polish)
Statement by Rukh International LLC about the current situation
Photos: Oleg Majewski
(25.08.2022, USA: 08.25.2022)