CRH Engulfed in Corruption Scandal in Ukraine, Accused of Continued Operations in Russia

The multinational corporation CRH, a major Irish-Dutch producer of construction materials, has become embroiled in a significant corruption scandal in Ukraine.

CRH Engulfed in Corruption Scandal in Ukraine

In mid-August, Ukrainian anti-corruption authorities arrested and charged the head of Ukraine’s Anti-monopoly Committee (AMCU), Pavlo Kyrylenko, with multi-million illicit enrichment.

Despite these charges, on August 29th, he was released on bail of 30 million hryvnia and announced that he had not been removed from his position and continues to perform his duties.

One of the most critical decisions currently awaited by the Ukrainian public from the AMCU under Kyrylenko’s leadership is the verdict on the acquisition of Ukrainian cement assets owned by the Italian company Buzzi, through its subsidiary Dyckerhoff GmbH, by the international corporation CRH.

If approved, this deal would give CRH control over more than 50% of Ukraine’s cement market, which violates the country’s anti-trust laws.

However, the AMCU has been slow to issue its decision.

What might seem like a straight forward situation has already sparked a loud public scandal that has been ongoing for over a year.

Serhiy Dorotych

According to public figure and leader of the Ukrainian entrepreneurs’ movement #SaveFOP, Serhiy Dorotych, this controversy could escalate into street protests.

Dorotych, who has repeatedly led thousands of entrepreneurs to protest outside Ukraine’s Verkhovna Rada, is actively campaigning for the AMCU to block the CRH deal.

He is convinced that CRH aims to monopolise the cement market to increase prices, which are currently two and a half times lower than the European average. Dorotych believes that the AMCU’s hesitation is linked to potential corrupt agreements and attempts to find ways to circumvent the law.

Corruption scandals are not uncommon in Ukraine, but for the first time, a multinational corporation of CRH’s magnitude is at the centre of such a controversy. According to Ukrainian media, CRH plans to invest $100 million in the country’s war-torn economy.

However, entrepreneurs from #SaveFOP believe these claims are manipulative and deceptive.

“The media is being paid to spread information about supposed cosmic investments of $100 million in Ukraine’s war-stricken economy by CRH following its purchase of Dyckerhoff GmbH cement plants.

“This is absolute lies and manipulation!

“Ukraine will never see this money or any taxes from this deal because it will be conducted in Ireland or the Netherlands!” Dorotych wrote on his Facebook page.

Dorotych further emphasises: “The Dyckerhoff GmbH cement plants have been operating in Ukraine for many years, generating profit and requiring no additional investment—these investments have already been made, and CRH is simply buying them up in the West.”

Previously, when CRH acquired ‘Mykolayivcement’ and ‘Cement’ (Odessa), the company promised modernisation funded by the EBRD and new jobs, but instead, they simply destroyed the production facilities, leaving only the cement packaging operations.

“WARNING! CRH is buying up and shutting down cement plants to manually regulate the volumes of cement produced in Ukraine, creating artificial shortages and driving up prices,” claims Dorotych.

He urges entrepreneurs, public figures, and politicians to unite and demand that the AMCU prohibits this deal.

Dorotych suggests that Buzzi’s exit from the Ukrainian market might be linked to its inclusion in the list of international sponsors of war due to its operations in Russia.

However, CRH, which seeks to acquire Buzzi’s assets for a fraction of their value, is no better.

Despite public statements about leaving the Russian market, CRH continues its operations in Russia through its affiliated entities, specialising in the production of cement, concrete products, lime, and aggregates, such as Fels Werke.

Dorotych also announced a detailed investigation into CRH’s activities in the Russian market, which will be presented in Brussels in the near future.