Ukrainian market of straw pellets: high potential - slow growth
In the beginning straw pellet production in Ukraine was focused on exports to the EU. The reasons are quite obvious - the neighborhood of our country with the largest European consumers of solid biofuels and also a poor infrastructure of our own market. After more than ten years the domestic market of straw pellets is still in its infancy. However, if earlier the Ukrainian producers didn’t really care about such state of things, then now, after a sharp decline in prices of fuel pellets in Europe, the situation changed dramatically.
Today the domestic companies selling straw biofuel are forced to develop the domestic market feverishly. Maybe it is to the good as it would be better for Ukraine with its constantly increasing prices for gas to accelerate the shift to alternative energy sources. However, it's not all that simple. According to the producers of straw fuel, Ukrainians wish to buy their production, but just desire appears to be not enough.
The experts of Ukrainian Biofuel Portal http://pellets-wood.com turned with this matter to the owners and representatives of straw biofuel plants contained in the database of straw pellet producers 2009-2013. As a result, it was repeatedly heard that in the country the market of straw pellets is still not formed. As Evgeniy Panchenko, the representative of the commercial department of PE "Bison-Tech 2006" (Zaporozhe), said, after the price drop for straw pellets in Poland and other European countries their company tries to enter the Ukrainian market, yet so far they are not very successful with this. According to Mr. Panchenko, the main problem is that in our country it is difficult to purchase and install the equipment for burning straw fuel. The boilers must be acquired at high rates and brought from abroad because they are almost not sold in Ukraine.
The marketing specialists of Ukrainian Biofuel Portal also found out, that another problem on the way to conducting straw pellet production business in Ukraine is the growing number of intermediaries in the domestic market, who constantly run down the prices and hinder from working with real buyers directly. In addition, today in Ukraine there is the redistribution of the market, as a result most tenders for heating budget organizations are won by large companies from Donetsk region, at the same time small and medium-sized enterprises stay out of work.
This situation often makes domestic producers close or suspend their pellet plants. This is especially true when the companies are located far from the border with Europe and for them the business ceases to be profitable due to the additional transport costs.
