Demand for domestic products has risen as the deterioration in the hryvna's value has priced imports beyond the reach of most consumers. In addition, there has been a steady flow of foreign investment into the country, especially in the food and drink sectors such as cigarettes, confectionery and beer. This has resulted in demand for larger quantities and better quality of packaging and mills are now increasing their output. Some mothballed mills have even restarted production. However, most mills are still in a very difficult financial situation and lack the working capital needed to finance purchases of raw materials and raise production levels.
Raw materials are generally in short supply, especially wastepaper.
Pulp production is particularly depressed with only one of the three pulp mills actually operating. The other two need major modernization work before they can produce competitively again. Sack production has been a recent success story in the Ukraine, with the startup of two new production units backed by foreign partners. In the corrugated sector, the newspaper publisher, Kievskiye vedomosty, has taken major stakes in both Zhidachev and Izmail mills. The new owner intends to merge the companies into a major modern production unit to rival Rubezhansky.