Despite Russia’s ongoing war, Western sanctions and trade restrictions involving Russia, sales of railway parts and metal pipes between Ukraine and Russia appears to be firmly on the right track – at least for one company in Ukraine.
The Ukrainian metallurgical company Interpipe, owned by Victor Pinchuk, the controversial oligarch and second richest person in the country – exported pipes and railway wheels to Russia worth Hr 1.36 billion, or $54 million, through the first five months of 2019 alone.
The details were revealed on July 29 by the RFE/RL investigative project, Schemes.
“If we talk about the main business of Pinchuk, it’s getting much better than a few years ago,” said Alexander Paraschiy, head of research at Concorde Capital, according to RFE/RL. “His production of pipes and wheels revives. In particular, the supply to Russia is getting better.”
Interpipe says in official statements that the company has pivoted some its trade to North and South America, 19 percent of it exports, it claims.
But it appears the company’s Russian market remains a priority, despite sanctions and the Kremlin’s war against Ukraine, which has killed 13,000 people.
According to Paraschiy, Russia is buying nearly half of Interpipe products.
Interpipe could be playing an important role in Russian infrastructure. The Russian railway transportation market has a shortage of wheels for freight wagons, around 280,000 pairs, the Center for Transport Strategies reported on April 8, 2019.
Russia uses its vast railway network to transport goods, equipment and its military forces around the country.
“As we see, the sale of railway wheels continues. And Pinchuk’s wheels feel rather good on the markets of the CIS and Russia, because there is a certain deficit there,” said Paraschiy.
Interpipe did not respond to a Kyiv Post request for comment.
No sanctions?
Nearly nine months ago, Russia imposed a sanctions list on individuals and companies from Ukraine, in response to the country’s “unfriendly actions” against Russia, Moscow argued.
Pinchuk, who also controls the largest Ukrainian media group, StarLightsMedia, which includes five TV channels and Bank Credit Dnipro, was on that list.
“We can say that those sanctions that were imposed, they did not really hurt Pinchuk’s business,” Paraschiy said.
Further boosts to trade could be coming down the pipeline, too.
On July 23 the Eurasian Economic Commission of Belarus, Kazakhstan and Russia suspended the anti-dumping duty on steel wheels from Ukraine imported to the territory of these countries.
That decision comes into force in 30 days and is valid until June 1, 2020, according to the commission’s official website.
