Sales of Belarusian solvents to Ukraine increase dramatically

Solvents can be used for illegal fuel production /​
Solvents can be used for illegal fuel production /​

In the first quarter of 2021, imports of solvents to Ukraine were 85% more than in the first quarter of 2020, the consulting group "A-95" reports.

The largest supplier also changed. While at first, it was Russia, now most of the products come from Belarusian producers.

Thousands of tons from the private sector

In the first quarter of 2021, the largest suppliers of paint solvents alone delivered 12.2 thousand tons of products to Ukraine. This is almost half of the total imports of solvents to Ukraine, which amounted to 27.2 thousand tons.

Several Belarusian companies are increasing their supply. Among them are Belenergomashexport, Arkadakhim, Estica-Invest, and Lesokhimik. All of them are private, and their possible ties to the state or to businessmen close to the authorities are not obvious. The owner of Estika-Invest presents the most interest.

The company is officially owned by MANEWAY INVEST CORP. registered in the British Virgin Islands. A company with an identical name (MANEWAY INVEST CORP.) and the same "registration" was listed in the Panama dossier. Behind it are citizens of Belarus who have connections with several other offshore companies. One of the beneficiaries is TSYPLAKOV MIKHAIL. A man with that name, Mikhail Tsyplakov, worked as commercial director of LUKOIL-Belorussia in the late 1990s. Even before that, he owned the Estonian LUKOIL Eesti AS. Also among the owners of MANEWAY INVEST CORP. is ALFIYA TSYPLAKOVA. At the end of 1990s, she and TSYPLAKOV MIKHAIL tried to get residence permit in Latvia after they were denied an Estonian visa.

Беларусь резко нарастила продажи растворителей в Украину

Let's move on to the other vendors. The owners are private individuals who have no open ties with offshore or government agencies. The most exciting thing about the "Arkadakhim" company is that it works closely with Russian oil companies.

"Lesokhimik" used to be a monopolist on the turpentine and rosin production market and was almost raided in the early 2010s. Today the company is doing very well, with a net profit of 2.3 million rubles in 2020. By comparison, in 2019, the figure was much more modest - 390 thousand rubles. The company's partners include Naftan, Sibur, and other specialized organizations.

Беларусь резко нарастила продажи растворителей в Украину

Who buys solvents and why?

The leader in buying Belarusian solvents is the BRSM group of companies. It is directly connected with the financing of Ukrainian politician Anatoliy Shariy, who is often called pro-Russian.

Small Ukrainian companies supported by local middle-ranking businessmen are also involved in imports. 

But why the increase in solvents supplies to Ukraine? According to the Ukrainian portal enkorr, at least 60% of all solvents for the paint industry imported into Ukraine are a mixture of octane-boosting components. They go to companies involved in the production and retail sale of petroleum products.

At the same time in Ukraine, they say that some of the importing companies are connected with illegal mini-refineries and "underground" networks of gas stations that sell counterfeit automotive fuel.

Why bother with solvents? They are not subject to excises; therefore, it is much cheaper to buy them. It means that the profitability of petroleum products made from them is much higher.

It would be even more profitable to bring fuel to Ukraine under the guise of unlicensed solvents. But it is very hard to catch somebody red-handed, even though there was a big scandal because of the supplies of such "solvents" coming from Belarus in 2012. It was about the smuggling of Belarusian oil products under the guise of other products.