The war in Ukraine is set to continue, with both sides committing more manpower and resources to fighting, while a peace agreement seems some way off.
It is having a devastating effect on the lives of those closest to the battlefield, but its impact Production, Logistics, and Trade extends far beyond the borders of Ukraine.
To learn more about this topic, read How the Two Ukrainian Chemical Companies Are Reacting to the War or A Snapshot How the Ukraine War Is Affecting Supply Chains
Like the waves on a pond, the impact of conflict is worse in the center, but has many aspects that reach many different regions. Here are some of the ways conflict is affecting chemical business,
Impact on a chemical business in Ukraine
“Before the war, Ukraine was a thriving one” synthetic chemistry fieldUK based report Chemistry World, This included thousands of novel compounds that were being produced extensive chemical industry, ,[For example,] About 80% of all screening compounds used in drug R&D were made in Ukraine or Russia.
All that was interrupted at the beginning of the war.
“When the invasion started, we stopped all work,” explains Ivan Kondratov, head of medicinal chemistry Enamine – a manufacturer chemical manufacturing unit, ,[We] Prioritized the safety of our employees and their families. Then we tried to ensure the safety of our facilities and warehouses. Our managers continue to work, keep in touch with customers, and process inquiries and orders. ,
His company was fortunate to be able to move all of its screening compounds (more than three million of them) to a new facility away from the fighting.
Despite these efforts, production and distribution of chemical materials Was impossible during the first few weeks. Things have stabilized since then, with most employees able to return to work. But the conflict is still having a massive impact on various industries and economies.
impact on truck drivers
An example of this is the growing shortage of truck drivers in Lithuania.
“Ukrainian drivers are going to defend their homeland,” says Risardas SartavisiusHead of the Lithuanian Confederation of Industrialists. “It cannot be otherwise. Those who can defend it should do so.” While some Belarus drivers are being used as replacements (ironically leaving Belarus to avoid being prepared to fight in Ukraine), the shortfall is still evident.
impact on the supply of raw materials
the war is on shortage of raw materials at a time when delivery method After the global pandemic had already spread.
The countries most affected are those closest to the fighting, such as Romania, Moldova and Poland. However, the sanctions imposed by Western economies against Moscow have also affected businesses that have historical and cultural ties to neighboring Russia, particularly. This has greatly troubled the manufacturing sector in Lithuania, Latvia and Estonia.
“The biggest problem we face is raw material supplySartavisius says during a discussion in the Parliamentary Committee on Economic Affairs. “This is because most raw material came from Ukraine, which is fighting for its independence, and some raw material Came from Russia too.”
Sartavisius further described how some production had already been halted entirely due to lack of raw material, In response, governments are looking to the larger Western economies for aid. For example, cooperation between the European Union and the Baltic states would allow for better bargaining conditions for substitute products – a position favored by a number of related manufacturers closer to Russia.
A triple effect on business
Aurelijs Dabusinskas, head of the economics department at the Bank of Lithuania, believes that the full impact of the war in Ukraine will come from three key areas.
“The first effect will be that which comes through foreign trade. through the second commodity prices, mostly through energy prices, but also through agricultural products or food prices. The third channel,” notes the economist, “will increase uncertainty about the economic future.” This has a negative impact on both domestic consumption trends and investment plans of companies.
The ministry also believes that the discovery replacement supplier and substitute raw material Possible, but not without paying a very high price.
The Russian offensive is hindering more than just Ukrainian production. Instead, it’s hurting comprehensive supply chain, chemical product pricescost of manufactured goods, and raw material deliveryS around the world.
It is expected that soon the cooling will increase and the economic situation may return to normal soon. Until then, nothing in chemical industry will be easy.