Ukrainian retail giant Epicenter K will invest an additional $800 million to develop its businesses by the end of 2022, on top of the $1.2 billion it had already announced, the chain’s director general Petro Mykhailyshyn told Interfax-Ukraine on Feb. 26.
Investments will include $100 million for grain elevators, $96 million for ceramics factories, $46 million to produce construction material and $100 million for solar panels on the roofs of the retailer’s hypermarkets.
“Since we have about 1.5 million square meters of roofs, which are empty from the point of view of energy efficiency, we want to start arranging solar panels there,” Mykhailyshyn said.
The developments will be carried out with the company’s own funds and credit from foreign banks. Mykhailyshyn said the European Bank for Reconstruction and Development and the World Bank are ready to help the retailer install the solar panels with low-interest ‘green loans.’
The company couldn’t be immediately reached for comment to provide more details.
Epicenter K, a leading construction materials and home improvement retailer previously announced plans to invest over $1.2 billion in its own development over the next two years.
One of the investment targets is a logistics center in Kyiv Oblast, as well as fulfillment centers in Ukraine’s biggest cities: Lviv, Khmelnytsky, Dnipro, Kharkiv and Odesa.
On Jan. 14, the company’s CEO said the company intended to raise a loan from Dutch investment bank ING and insurer Atradius for these projects.
The planned loans will have an effective rate of up to 3% per year for a period of seven to 10 years, conditional upon Epicenter K investing up to 30% of its own money in the projects, Mykhailyshyn said at the time.
The company, which employs over 25,000 people in 64 stores in Ukraine, made $1.8 billion in revenues in 2020 despite the March–May lockdown imposed on furniture and other non-essential stores to stop the spread of the coronavirus.
In 2019, Epicenter K announced it would ramp up its presence in the agriculture sector and increased its farmland bank to 1,364 hectares.
The company stuck to that plan in 2020, using a $70 million loan from Black Sea Trade and Development to buy 40,000 more hectares of land. The company exported $86 million worth of grain in 2019 and aims to become a major player in Ukraine’s agribusiness.
Oleksander and Halyna Gerega own the Epicenter K chain.
Oleksander Gerega is a lawmaker and entrepreneur whose fortune was estimated at $930 million in a 2019 rating conducted by Ukrainian magazine Novoe Vremya. He used to be a lawmaker with the Party of Regions, the political party of ousted President Viktor Yanukovych.
In 2018, journalists at Radio Free Europe/Radio Liberty’s Schemes investigative program revealed the couple was still running its business in Russian-annexed Crimea, but Gerega denied the claim.
In May 2020, the company got in trouble. After the government imposed a strict lockdown in Ukraine in March, the company continued to operate, claiming its furniture stores sell essential products.
In response, the Anti-Monopoly Committee of Ukraine opened an investigation against the company in May, claiming that it violated the quarantine restrictions and profited while other home improvement stores were closed. The investigation did not produce any results.
The chain defied quarantine restrictions once more in November 2020, staying open during the three weeks of the so-called weekend lockdown. The retailer hasn’t faced any legal consequences so far.
