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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert
30 March, 1999 - 00:00

In 1925 the granite quarry in the village of Leznyky in Ukraine was crowded
with somber and reticent representatives of the secret police. In an atmosphere
of top secrecy a large consignment of first-class granite was quarried
and sent to Moscow. After that the quarry was blown up. The granite was
for the Mausoleum, the grave of "dear Vladimir Ilich."

Seventy years later in Moscow demand for Ukrainian granite has again
risen. Since the mid-1990s, a waterfall of oil, gas, other raw materials
and dollars has been pouring on the Russian capital. Intensive building
and reconstruction started - of the best material and to last for centuries.
The Cathedral of Christ the Savior, Moscow Zoo, Luzhniki subway station,
the Pushkin Museum, the Grand Theater, and many more other objects have
been built of Ukrainian granite that was supplied by the Ukrainian Stone
Processing Company headquartered in Kyiv.

The choice of granite as mass building material was no accident. The
last decade has been marked by resumed interest in developed countries
for this beautiful material resistant to unfavorable conditions. Asphalt
is too soft; in the heat it gives off bitumen and tar. Marble is too porous:
it easily absorbs water and can be destroyed by harmful waste. Granite
paving and facades are ideal options for a city that wants to be both neat
and modern.

The choice of Ukrainian Stone Processing as the main supplier for the
renovation of Kyiv (the reconstruction of Cabinet's and Kyiv City Administration
buildings, and of the square in front of Mykhailivsky Cathedral) and many
other world cities is no accident either. Ukraine has the largest reserves
of granite of the former Soviet states, 129 confirmed deposits.

Unfortunately, the 12 to 15 deposits that are being mined these days
are neglected. Italian specialists think that maintaining a granite quarry
properly requires $2 million a year. To keep the stone undamaged, quarry
workers use diamond cables instead of blasting. Thus money - big money
- is needed. And processing the quarried granite requires no less in investment.
As a result, now there are only 16 companies in the stone-processing market,
and only five or six are worth mentioning. Ukrainian Stone Processing is
one of the leaders. It started in 1995 by selling granite goods and now
owns two deposits in Mykolayiv and Zhytomyr oblasts and several factories.
Among its equipment there are unique machine tools worth $250,000-300,000
each. Recently the company bought an Italian machine with five directions
of operation, which is the first in Eastern Europe and the fourth in the
world.

To avoid dependence on outside conveyers the company has its own vehicle
pool with twelve new Renault trucks.

The company's general director Oleksandr Hinzburh, who considers himself
to be the successor of Ukrainian stonemason traditions, explains: "For
the restoration of old buildings often many handmade architectural details
and complex ornaments are needed. To decorate the Cathedral of Christ the
Savior fifty specialists were required. When we started looking for them
and turned everything upside down we hardly found ten, who were about 60
years old. It is very hard to restore things that are lost. At the same
time, the granite goods market is very large: it is one of few markets
in the world that steadily grows by 8-10% annually. The consumption of
granite in France alone reaches $340 million per year, and this is not
the biggest market. In 1997 Ukraine exported granite for $12 million, and
in favorable conditions in five years it could export for $70 to 80 million."

Of course, this is impossible without massive capital. The company's
main partners are in Great Britain, France, and Italy. The partnership
started based on trust, on a word of honor. Now the company is negotiating
with financial institutions with worldwide influence on investments in
stone quarrying and processing. The company exports approximately 92-96%
of its production. It plans to supply a third of it to CIS countries and
the rest to Europe and the USA. "It is very difficult to break into the
world market. Ukrainian granite has been well known since Soviet days but
then it was sold by Italians. And they registered it under their own trademarks.
Now we are registering our own Ukrainian trademarks," says the 32 year
old general director. It should be noted that Ukrainian Stone Processing
exports finished goods such as stone tiles, building details, and paving
stones.

Ukraine inherited tremendous stores of natural resources, and all we
have to do is to manage them well. Unlike our intrepid agrarians and heroic
miners who are tell us over and over about the best chernozem in the world
and whine that "priority sectors are badly financed by the government,"
Mr. Hinzburh admits that he does not see any special obstacles to his work.
The main problems are that the delays of VAT return from the budget are
so long - about 10 months - and it is impossible to get loans on acceptable
conditions inside the country. But both of them can be solved. The most
important thing is not to waste time. For China has recently carved out
for itself at least 12% of the granite market. And whether or not Ukraine
will be the main supplier on this market depends on Ukraine itself - and
on its citizens who work in the Ukrainian Stone Processing Company.

By Roman KHIMYCH, The Day

 

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