E-Malt.com News article: Ukraine will still import malt

Ukrainian breweries are expected to lobby for the privileged import of malt this year in spite of the fact that national malting plants plan to increase production, according to ukrbeer.kiev.ua. The phenomenon is caused by two factors. The first one is pessimistic expectation regarding barley crop. The second one is that malting industry of Ukraine is physically unable to provide the increasing demand of brewers. Now the import duty for malt is 30%.

Ukrainian malting plants started developing in 2000 year, when Ukraine harvested a good crop of barley. By the end of 2000 malt production reached the volumes of 15 thousand tons per month.

In 2001 Belgian brewer Interbrew, the owner of three Ukrainian breweries through Sun Interbrew, signed a contract with Greencore and Malteurop about providing its European brewing plants with malt. A part of the project was building a malting plant in Ukraine. Malteurop plans to launch it at a production capacity of 46 thousand tons per year (project capacity is 105 thousand tons per year) at Rogani brewery by the end of this year. Moreover, Malteurop has purchased from Sun Interbrew the malting plant of Desna brewery and is to increase its production capacity from 22 thousand tons to 44 thousand tons per year.

The biggest Ukrainian malting plant with a production capacity of 80 thousand tons per year is Slavutsky plant owned by BBH Ukraine. BBH Ukraine has recently posted its intention to sell Slavutsky malting plant in order to concentrate its attention of beer output (brands like Slavutich and Lvovskoe). Analysts suppose Malteurop might buy the plant.

The development of small producers of malt is not so impressive, nevertheless it is proving a positive tendency of malt industry. In the first half of April Mukachevo Brewery (Mukachevo town, Transcarpathian region) launched a mini malting plant with a production capacity of 2.5 thousand tons. Ivan Lukecha, the director said they planed to raise the malt output to 5 thousand tons per year. Mukachevo sells its malt to Lvov brewery, owned by BBH and Sarmat brewery, based in Donetsk.

However, the problems of malt quality and quantity are still unsolved. The problem of quantity could be solved by the next year, when several malting plants will be launched in Kharkov and the production capacity of the other plants will be raised. However, the prospects of solving the quality problem are hardly considered, as Ukrainian barley is rather worse than the foreign one. That is why, beer makers will be obliged to import malt in order to produce international beer brands, available in Ukraine.

In 2002 Ukraine produced 173.301 thousand tons, 13.5% or with 20.551 thousand tons more than in 2001. In 2002 Ukraine imported 44.219 thousand tons (USD 9.739 million), 10.9% or with 5.423 thousand tons less than in 2001. According to analysts this year Ukrainian brewers are importing not less than 50 thousand tons of malt.

In thousand tons	2001	2002	%	2003 forecast
Ukrainian malt production	152.750	173.30	13.5%
Ukrainian import of malt	49.642	44.219	-10.9%	50

14 May, 2003