By Oleksandr SYRTSOV, The Day
Ukrainian cigarette demand is estimated at 75 billion cigarettes a year,
the Ukrayinski Novyny Agency reports. Neither the state nor private organizations
are waging anti-smoking campaigns. And Ukrainian legislation turned out
to be able to meet the requirements of tobacco investors as a result of
the latter's lobbying. Thus this industry has in fact been taken over by
foreigners. New jobs, decent wages, and budget revenues are the pluses
of the way of privatization chosen. But it has also brought its minuses.
This year, the Vynnyky tobacco factory was to celebrate its 220th anniversary.
However, Ukraine's by far oldest enterprise in this industry is going through,
to put it mildly, not the best of the times. A few years ago, the factory
faced a future that seemed almost rosy. About six years ago, it became
the first enterprise in this sector to catch the eye of a wealthy foreign
investor, the R. J. Reynolds Tobacco Company. The investor gradually bought
97% of this limited-liability company. Everyone was pleased. The investors
profited, the workers got good wages, and the city taxes.
Vynnyky became an island of prosperity amid the surrounding ruin. Public-sector
employees earned money there. Vynnyky Mayor Yaroslav Khamuliak estimated
that factory payments accounted for at least 60% of the town budget.
But then the investors had a stroke of bad luck. At first they transferred
the manufacture of filter cigarettes to their Kremenchuk facility. And
quite recently, they decided to decommission the plant altogether. The
investor has moved all cigarette-making equipment to Kremenchuk. A liquidation
commission is now working at the enterprise, all the workshops have been
sealed, and the factory is being guarded by Titan guards. Factory employees
were dismissed with a rather good severance pay: an 18-month wage equivalent,
according to unofficial information. The Vynnyky budget became aware of
the factory closure two months later. According to Mayor Khamuliak this
has radically reduced the number of sellers in the local marketplace, with
the trade turnover of stores and kiosks also plunging. Allocations to the
city budget have dropped in corresponding measure.
PS. By a recent decision of the oblast council, the shares of
R. J. Reynolds Tobacco have been made oblast communal property. The legality
of this decision is debatable, but it shows that local authorities are
seeking ways to save the situation.







