Wednesday, September 3, 2014

Ukrainian industry ravaged by war — Novorossiya News Agency

The Russian-backed insurgency in the Donbass region of east Ukraine is forcing numerous industrial giants to suspend operations. With the region accounting for over 25% of Ukrainian exports, the effect will hit hard currency revenues and the embattled hryvna.

The flashpoint marking the start of the industrial collapse in Donbass was the Lysychansk oil refinery, which in mid-July went up in a huge pillar of black smoke. Symbolic as that explosion at Ukraine's second-largest refinery was, however, it will actually have little impact since the facility had already been mothballed for over two years.

More troubling is the eerie emptiness in regional capital Luhansk, a formerly bustling industrial centre home to over 400,000. Half the population is estimated to have fled, with water, food and power shortages only compounding the constant shelling in recent weeks. Alongside hundreds of other companies, locomotive maker Luhanskteplovoz - the town's largest employer with a work force of around 6,000 - closed its doors early August after its power was cut.

Gorlivka, an industrial town of around 250,000 about an hour's drive from the city of Donetsk, is another industrial centre turned ghost town as it is surrounded by Ukrainian forces laying siege to rebels. The country's largest chemicals producer, Stirol, halted production in early May due to the risk of an environmental catastrophe, according to owner Ostchem - the holding group of oligarch Dmitro Firtash.

Ostchem categorically denies statements made on August 12 by the locally-based press secretary of Stirol, who spoke of a potential toxic disaster if Kyiv were to continue its offensive. Ostchem claims he spoke under pressure from the local rebel leadership.

Complete story at - Ukrainian industry ravaged by war — Novorossiya News Agency

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