German Construction Giant Knauf to Invest €150M in a New Factory in Ukraine After Russia Destroyed Previous One

In 2023, Knauf lost its plant in eastern Ukraine when Russian forces repeatedly bombed the facility before occupying Soledar, the city where it was located. After exiting the Russian market following three decades of operations, Knauf announced an ambitious plan for Ukraine—a new large-scale production facility.

A new plant

Knauf’s leadership has committed €150 million to construct a new factory in Borshchiv, Ternopil region, in western Ukraine. The location was chosen due to its gypsum stone quarry, which will supply the plant with raw materials. According to reports, the reserves in the area are sufficient to support at least 20 years of operation.

The new facility will produce gypsum boards and dry construction mixes. The planned production capacity is significant—30 million square meters of gypsum board and 320,000 tons of mixes annually.

This will be Knauf’s second operational plant in Ukraine. The other facility, located in Kyiv, has smaller production volumes: 25 million square meters of gypsum board and 200,000 tons of dry mixes annually. The Kyiv plant employs over 400 workers, but staffing levels for the Borshchiv facility have not yet been disclosed.

The new plant will serve both domestic and export markets. While demand for construction materials has declined due to the ongoing war, Knauf anticipates a surge in demand as Ukraine begins reconstruction efforts.

Why this investment matters

Knauf’s €150 million investment is one of the largest private-sector commitments to Ukraine’s economy since the start of Russia’s full-scale invasion. Importantly, the funds are directed toward manufacturing infrastructure rather than military or defense-related industries. This investment underscores Ukraine’s potential for business development and highlights its abundant natural resources, which can support value-added production.

Knauf is a prominent global player in the building materials industry, operating in nearly 100 markets worldwide.