Project details
The purpose of the Project is to solve the global problem of Ukraine associated with the influxof excess phosphorus into surface water bodies, which leads to the eutrophication process (avalanche-like growth of blue-green algae);
Ferric chloride is an effective primary reagent (coagulant) based on ferric iron (Fe3+). Ferricchloride is used in the preparation of drinking water, and in the purification of household(sewer) and industrial wastewater;
Existing wastewater treatment plants in Ukraine (with rare exceptions) do not use chemicaltreatment of phosphorus and other associated pollutants;
On the territory of Ukraine, there are no plants for the production of a similar type of product.
The nearest competitive production facilities are located in Romania (Kemcristal), Hungary (Donau Chemie), Poland (Kemipol);
The proposed construction location is Chernivtsi, Chernivtsi region, 50 km from the borderwith Romania.
Advantages of the project
• The project will use local iron-containing raw materials of high purity, which are available in Ukraine -magnetite (produced by Poltava Mining and Processing Plant, as well as mining and processing plantsin Kryvyi Rih region), if necessary, scale and scrap is also generated in sufficient volumes atmetallurgical plants in Ukraine;
• The only production of primary iron-containing products in Ukraine, which makes it possible to usethe products both for the preparation of drinking water and wastewater treatment;
• Investment in Ukraine now will allow us to capture the market and guarantee large volume of sales,primarily to municipal enterprises;
• Production of the entire line of iron-containing coagulants, which will satisfy the demand of themarket;
• Local production, according to logistics conditions, will successfully compete with Europeanmanufacturers and have no restrictions on deliveries in winter;
• There is an opportunity to obtain special prices for magnetite produced in Ukraine (-50% of marketprices), as well as for hydrochloric acid by guaranteeing stable volumes of consumption;
• The use of hydrochloric acid instead of chlorine will reduce the danger of production and will allowthe use of local and imported acid (Fortischem and Chimcomplex Borzesti);
• Production capacity is 45,000 tons per year, which covers 80% of the current market demand,providing for a share of import.
Brief market overview
The main potential users belong to the category of municipal facilities (the so-called "sewage"), since theenterprises of this category receive wastewater from the population and enterprises of various types of activity, andafter, most often, only biological treatment, they discharge treated wastewater into surface water bodies.
The entry into force of the Agreement on the Association of Ukraine and the EU ("Agreement"), datedSeptember 1, 2017, led to increased requirements for environmental standards and norms in Ukraine, in particular inthe sector of municipal and industrial wastewater treatment.
As part of the Agreement, Ukraine undertook the following obligations:
• implementation of EC environmental standards at the legislative level;
• creation of centralized water treatment and water treatment systems in all settlements with more than 2,000inhabitants;
• introduction of tertiary wastewater treatment from nitrogen and phosphorus compounds;
• reconstruction of water and sewage networks;• replacement of existing equipment of water treatment and water treatment systems;
• reconstruction of wastewater treatment plants;
• greenfield construction of wastewater treatment plants at industrial enterprises of Ukraine.
The indicated trends and processes represent a significant platform for the creation and maintenance ofsustainable growth of the iron chloride market in Ukraine.
The marketing analysis shows (see Table 1) that 70% of sales will be made to enterprises of themunicipal sector, 30% - to enterprises of the industrial and agricultural sectors.
Expected results of the project:
• Since in Ukraine there is practically no infrastructure to solve the problem of eutrophication of water bodies, and theimplementation of Directive 91/271/EEC will set strict deadlines for meeting quality standards for wastewater treatment,the demand for reagents will be explosive. Due to logistical challenges for importers of such large volumes of products andpeak demand for reagents, investing now will allow us to achieve a sustainable leadership position in the market whileensuring long-term profitability;
• The main client base belongs to the category of life support enterprises (sanitation services), municipal or state forms ofownership with stable payment discipline;
• The consumption of reagents for this market will show steady growth taking into account the industrial development ofthe country, without any seasonal dependence;
•It will be ensured that the products necessary for the introduction of CEPT technology (Chemically Enhanced PrimaryTreatment) for the removal of suspended solids, various organic pollutants, hydrogen sulfide and phosphates to the stageof biological treatment will be brought to the Ukrainian market, which will effectively prevent the processes ofeutrophication of water bodies;
• The consumption of reagents is taken from the calculation of the largest regional centres, excluding tens of thousands ofmedium and small (2,000 people) settlements, which are also subject to the directive, which means an additional at least30% market growth;
• Performance of the indicators of the European standard COUNCIL DIRECTIVE concerning urban wastewater treatment(91/271/EEC) will be guaranteed, which obliges all wastewater treatment plants to ensure the required level of degree ofpurification before discharge into surface water bodies.
