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Old 19th December 2017, 17:31
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The Cabinet of Ministers abolished about 300 state regulations over business on Monday. With more changes planned for 2018 on state control over business, Prime Minister Groysman said next year provides an opportunity to get rid of "this rudiment of the Soviet system of supervision and control."

Ukraine’s foreign trade deficit more than doubled through November, hitting $4.6 billion. Imports grew faster than exports: 27% vs 21%. Imports grew on higher oil prices and the need to import coal. Alexander Paraschiy of Concorde Capital writes: “For 2018, we anticipate the goods trade deficit to keep growing on the back of a steady recovery in domestic consumption, which translates into stronger imports. We project a $7.2 billion trade deficit in 2018.”

Farm exports accounted for 42% of all of Ukraine’s exports through October, according to Maksym Martyniuk, first deputy minister of Agrarian Policy and Food. For the recently completed marketing year, he said, Ukraine ranked first place worldwide in exports of sunflower oil; second - in barley; third – in corn, nuts and honey; and sixth – in wheat and oilseeds. Of the nearly $15 billion worth of produce exported through October, the top five buyers are: India, Egypt, the Netherlands, Spain, and China.

Wheat exports to the Middle East are up by 46 percent during the July-October period, compared to the same period last year, APK-Inform reports. Although Ukraine’s overall grain harvest is down 5% from last year’s record, Reuters expects the nation to draw on stocks to export this year a record volume of 44-45 million tons of grain.

Prometey Group, a major Mykolayiv agroholding, plans to increase its grain exports by 50% in 2018, to 1.5 million tons of grain, Rafael Goroyan, owner of the company, tells Focus magazine. For the 2017/2018 marketing year, he forecasts sales revenues at $240 million. With trading margins low, the company plans to continue investing in its storage capacity. With 18 silos, Prometey now has a storage capacity equal to its 2017 sales volume – 1 million tons.

Dnipro-based Interpipe has reached a milestone: delivering more than one million tons of pipe to Middle East customers over the last decade, TradeArabia News Service reports. Andrey Burtsev, Interpipe regional trade director, noted that since opening the office in Dubai a decade ago, 58.5% of pipe supplies have gone to oil and gas projects and 41.5% to construction.

Exports of steel building structures are up by 50% to 15,000 tons, topping the historic peak of 2013, Vyacheslav Kolesnik, executive director of the Ukrainian Steel Construction Center, tells Interfax. Internally, consumption of steel structures for non-residential real estate is up this year by 18-20%.

Ukraine intends to extend for one more year import duties on goods from Russia, Interfax reports. The duties were introduced in early 2016 in response to Russian trade bans and restrictions on Ukrainian goods.

Next year, Ukraine’s Export Credit Agency is to start work, Prime Minister Groysman said. A second agency, the Export Promotion Office, also opens next year, operating with technical assistance from Britain and Canada.

ArcelorMittal has reaffirmed its plan to invest $1.5 billion over the next three years to upgrade its Kryvyi Rih plant, the largest integrated steel plant in the country. Girish Sardan, deputy general director for supply, talked to reporters Monday at a supplier conference.

Kyiv’s Ukrplastic, the largest manufacturer of flexible plastic packaging for consumer goods in Eastern Europe, is to receive a EUR20 million loan from the World Bank’s International Finance Corporation. Approved in Washington on Friday, the IFC loan is to be matched by EUR20 million from commercial banks. The money is to be used to modernize processes and facilities at Ukrplastic, a privately-owned company which spreads over 34 buildings on an 11-hectare site near Livoberezhna metro station.

Ukraine needs to get back on track with its IMF program, otherwise it will face serious financing problems over the next three years, Vitaly Vavrishchuk, financial stability director of the National Bank of Ukraine, told reporters Monday. He warned: "Ukraine should refinance over $20 billion of foreign currency debts in 2018, 2019 and 2020, without active cooperation with multilateral financial organizations, this will be problematic." Without an IMF program, he said, Ukraine will face steep interest rates to win needed financing from the private sector.

Gosta Ljungman, the IMF country head, told Reuters last Friday that he sees real risks on the revenue and expenditure side of Ukraine’s 2018 budget. Later, in an email to UNIAN, Ljungman said the IMF wants domestic gas prices to be on a par with import prices. He wrote: “Market gas prices in the domestic market will stimulate the implementation of energy saving measures and promote the efficient allocation of resources…It ensures that the gas sector is able to recover costs, and has resources to invest in gas infrastructure.”

Non-performing loans account for 56 percent of the debt portfolio of the Ukrainian banking system, Vitaliy Vavryshchuk, director of the central bank’s financial stability department, told reporters Monday. At the same briefing, Deputy Bank Governor Kateryna Rozhkova said that more than 400 cases have been launched against the central bank, PrivatBank, and the Finance Ministry in connection with last year’s nationalization of PrivatBank.

The currently monthly $5 million limit on repatriation of dividends will be either raised or scrapped in coming weeks, Yakiv Smoliy, acting governor of the National Bank of Ukraine told the European Business Association. The central bank is gradually easing currency controls.

Yakiv Smoliy, acting governor of the central bank, is not a fan of crypto currencies, but does not mind if other Ukrainians hold them. He told the European Business Association: "I do not have bitcoins. Yet, I don't mind if others have them." The National Bank of Ukraine and other financial regulators issued a note Nov. 30 saying they were evaluating the legal status of crypto currencies, but were not considering a ban.

Biofarma, a leading Ukrainian pharmaceutical company, is investing $35 million in construction of a blood plasma fractionator plant. Importing equipment from Germany, Italy and the U.S., company president Kostiantyn Yefymenko plans to open the plant in July. Noting that it will have the capacity to process 500 tons of blood plasma a year, he writes on his Facebook page: “We have the ambition of being among the seven largest global producers of blood plasma.”

Seedstars World, an international start-up competition, has selected 12 start-ups to represent Ukraine at the Seedstars Summit in Lausanne, Switzerland, on April 12. Winners compete for a main prize of $500,000 of equity investment. All participants win exposure to international investors looking for new ideas.

By March, Ukraine is to introduce electronic visas for foreigners entering the country, Andriy Zayats, Secretary of State of the Foreign Ministry, told LB.ua.

Direct flights between Lisbon and Kyiv are to resume next year, under an agreement reached during President Poroshenko’s visit Monday to the Portuguese capital. About 50,000 Ukrainians work in Portugal, a foreign community second in size only to Brazil’s. Through September, bilateral trade increased 35%, Poroshenko wrote on his Facebook page.
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Old 20th December 2017, 12:35
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KEA plans to enter Ukraine, opening its first store in Kyiv by 2019, an executive of the Swedish-based retailer said Tuesday after meeting Kyiv Mayor Vitali Klitschko. Development of stores in Ukraine will be handled by IKEA South-Eastern Europe, which operates stores in Croatia, Romania, Serbia and Slovenia. Stefan Vanoverbeke, sales manager for this IKEA unit, said in Kyiv: “Our company will present in Ukraine a wide range of affordable home products to meet the high demand from consumers.”

Retail trade through November is up by 8%, compared to the first 11 months of 2016, the State Statistics Service reports.

Dragon Capital plans to attract to Ukraine up to $300 million in investments in 2018, Tomas Fiala, general director and founder of the investment house, told reporters Tuesday. Fiala said Dragon would work with co-investors: Goldman Sachs, George Soros, and OPIC. He said: "We have about 10 deals in the pipeline." Due to perceptions of country risk, he said, asset prices in Ukraine today are the cheapest since 2004. In the West, similar assets would be three times more expensive.

The Rada is to vote Thursday on whether acting central bank chief, Yakiv Smoliy, should become Governor of the National Bank of Ukraine. Vadym Denysenko, the government's representative to parliament, told 112 TV: “One candidate is being considered, and it's acting governor Smoliy.” Smoliy took over last May after Valeriya Gontareva resigned as governor. He has proved to be a supporter of Ukraine’s program with the IMF.

Ukrainian banks have set a 'world record' for the highest share of non-performing loans – 56%. Vitaliy Vavryshchuk, director of the Financial Stability Department at the National Bank of Ukraine, said a press briefing Monday: “We have established a somewhat unpleasant and very costly record for the economy and banking sector: the highest share of non-performing loans has been recorded in Ukraine in the entire history of world observations." Since 2014, the central bank has closed half of the nation’s banks and has ordered surviving banks to raise reserves. Looking forward, he said: "We need to do something with the bad debts. They need to be more actively handled by clearing up, writing off or restructuring."

The Finance Ministry sold $402 million in foreign exchange bonds Tuesday at 5-5.4%. At auctions, the government sold annual domestic bonds, or OVDP, for $378.46 million at 5% per annum and two-year bonds for $23.63 million at the previous rate of 5.4% per annum. All applications to buy were satisfied.

In 2018, the Finance Ministry will sell a maximum of $2 billion Ukrainian Eurobonds, the maximum agreed under the current Extended Fund Facility with the IMF, Deputy Finance Minister Yuriy Butsa said Tuesday at a press conference. In September, Ukraine placed 15-year eurobonds for $3 billion at 7.375 percent per annum. Demand for the eurobonds was $9.5 billion.

Ukraine’s gross foreign debt on Oct. 1 was $117.3 billion, or 3.3% higher than at the start of the year, according to the website of the National Bank of Ukraine.

Finance Minister Oleksandr Danylyuk predicted Tuesday that Ukraine will meet IMF conditions for ‘more’ than two tranches of fresh funding in 2018. Speaking at an end of the year press conference, he said: "There are a few key conditions that have not been fulfilled, but it is absolutely realistic that they will be fulfilled next year."

Without an IMF loan, the hryvnia will fall in 2018 below 30 to the dollar, predicts Tomas Fiala, general director of Dragon Capital and president of the European Business Association. He told reporters Tuesday: “If, from the second quarter of 2018, we can not resume IMF financing, we can forget about the stability of the hryvnia." So far this year, the hryvnia has been Eastern Europe’s worst performing currency, losing 2.5% to the dollar and 14% to the euro.

The new transparent and largely automatic VAT refund system has resulted in about $3.2 billion of VAT refunds paid to businesses since its launch on April 1, Finance Minister Danylyuk said Tuesday: "The launch of the transparent VAT refund register was one of the greatest anti-corruption achievements of the Finance Ministry over this year.”

A bill to simplify procedures for oil and gas companies to obtain land use rights passed its first reading Tuesday in the Rada. Prime Minister Groysman, who is trying to encourage investment in oil and gas drilling, tweeted: “The draft law adopted today is an important step towards the large-scale increase in our own production and the launch of new domestic projects in the gas sector."

Robert Whalley, a British board member of Ukrnafta, Ukraine’s largest producer of oil and gas, has resigned. Whalley, a 30-year veteran of Schlumberger, had been Ukrnafta’s executive vice president for Technology and Services for the last two years.

Portugal and Antonov may jointly develop a firefighting aircraft, President Poroshenko's press secretary Svyatoslav Tsegolko tweeted at the end of Poroshenko’s visit to Lisbon. In mid-October, almost 8,000 forest fires broke out in northern Portugal and Spain, killing 45 people in Portugal. On the worst day, firefighters battled 440 fires in Portugal.

Most of Ukraine was digging out Tuesday from a blizzard that dumped 30 cm of snow in parts of the nation. The snowfall caused massive traffic jams in Kyiv, delayed 30 trains, and delayed dozens of international flights in and out of Kyiv’s two commercial airports, Zhulyany and Boryspil. Wizz Air temporarily shifted flights to Boryspil. At London’s Luton airport, the flight cancellation and story switching by Wizz Air counter clerks so enraged 120 Kyiv-bound passengers that police had to escort them from the terminal.

Hutchison Ports, the world's largest container terminal operator, has applied to lease six berths at Chornomorsk port, 30 km south of Odesa city. Infrastructure Minister Vladimir Omelyan wrote on Facebook of the Singapore-based company: “There is still a tender, a ton of bureaucracy, but this is the most important step for Ukraine.”

Showcasing IT, Ukraine House will operate in Davos, Switzerland, during World Economic Forum's annual meeting, from Jan. 22-26. The goal is to promote investment opportunities in Ukraine’s IT and innovation sector to global business, technology and investment leaders. The organizers are: Ukrainian Venture Capital and Private Equity Association, Western NIS Enterprise Fund and Victor Pinchuk Foundation. The Ukraine Business Journal is preparing an in depth, forward looking IT Opportunity Supplement. For advertising, contact UBJ CEO Christian Kalkar at: christian.kalkar@theubj.com.
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Old 22nd December 2017, 14:33
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Ukraine Business Journal

Naftogaz plans to offer $1 billion in Eurobonds in a sale in the second quarter of 2018, Yuriy Vitrenko, the company’s chief commercial officer, told Bloomberg in an interview in Kiev on Monday. It would be the first time that the state gas company taps international markets since restructuring its debt a decade ago.

Naftogaz hopes the Stockholm Arbitration Chamber will order Russia’s Gazprom to pay $6.5-16 billion in compensation for losing a gas transit contract dispute with Ukraine’s state energy company, Yuriy Vitrenko chief commercial officer of Naftogaz Group, tells UNIAN. The ruling is to be made in February.

Noting that royalties on new gas wells have been cut in half – and guaranteed for five years -- a guest opinion writer argues in Wednesday’s Financial Times: “The new tax rules make Ukraine the most attractive country in the region for gas extraction investments.” Citing “de-monopolization and liberalization of our energy markets,” Rada energy committee member Nataliya Katser-Buchkovska says Ukraine now seeks $4bn in international gas investment. She concludes: “If achieved, this would set Ukraine on course to become energy independent by 2022.”

Planning to increase gas production by one third over the next three years, Ukrgazvydobuvannya, the state gas producer, has signed a contract with Germany’s Bentec to buy five drilling rigs for a total of $110 million. Scheduled for October delivery, the rigs are part of the gas producer’s three year, 20-rig expansion plan. By 2020, the company hopes to produce 20 billion cubic meters. This year. Ukraine’s gas consumption is 29 bcm.

Ukrnafta has conducted three successful hydraulic fracturing operations at its wells. The state oil and gas production company hopes to pump an extra 63,000 barrels through fracking in 2018. Ukrnafta is searching for foreign partners for fracking, a technology which is boosting oil and gas production in the United States.

Ukraine’s electricity exports are up 61% through November in dollars, compared to the same period last year. So far this year, Ukraine has earned $222 million selling electricity to its western neighbors, according to the State Fiscal Service. The top buyer is Hungary, accounting for 57.5%, followed by Moldova -- 23% -- and then Poland – 14.5%. Belarus’ decision to stop electricity imports in 2018 will not effect Ukraine. Sales north are negligible.

In a rail turnaround, Ukrzaliznytsia’s cargo transportation is up by 2% compared to 2016, according to Yevhen Kravtsov, the acting board chairman. Ukrinform reports he told a government meeting Wednesday: “This means that the Ukrainian economy is recovering. In this process, it is extremely important that Ukrzaliznytsia be able to transport Ukrainian goods and ensure the development of Ukrainian exports.”

Ukraine’s solvent banks posted $80 million in net profits through October, the National Bank of Ukraine reports. Retail deposits are up 13% through November, to the hryvnia equivalent of $8 billion.

The National Bank of Ukraine is liquidating Rodovid Bank, which was nationalized in 2009. Similarly, the central bank is listing Boguslav Bank as insolvent.

Through September, four million square meters of new apartments entered Kyiv’s housing market, a 35% jump over the same period last year, the National Bank of Ukraine reports. During the first six months of 2017, construction permits issued for new apartment buildings jumped 34%. Noting that construction costs are up 15%, slightly higher than the annual inflation rate, the central bank warns: “Lowering the market value of housing and increasing the cost of its construction led to the fact that today the price has practically reached the level of the cost price.”

About 200 state companies are listed for sale in 2018 by the State Property Fund. The list includes: Kyiv’s President Hotel, coal mines, 13 Black Sea ports, Ukrspyrt liquor manufacturer, Dniprovsky Electric Locomotive Plant, Ukrainian Danube Navigation, and shares in several regional power companies. The government hopes to raise almost $1 billion through privatizations in 2018. The full list appeared Wednesday in Vidomosti Pryvatyzatsii newspaper.

Rinat Akhmetov’s Metinvest, Ukraine’s leading steel holding, increased its EBITDA by 39% through September, to $1.4 billion. According to preliminary financial results, the Mariupol-based company increased capital investments - by 55% - to $308 million. Profits were boosted by mining, where iron ore sales to the EU rose by two thirds to nearly 5 million tons.

On GDP growth, Concorde Capital’s Alexander Paraschiy writes: “In light of the poor grain harvest (-6% as of Nov. 1), we still expect 1.5% yoy GDP growth in Q4. For 2018, we anticipate GDP accelerating to 3.5% yoy growth.”

Ukraine boosted chocolate exports to EU by 35% through October, to over 10,000 tons, Olha Trofimtseva, deputy minister of Agrarian Policy and Food, tells UNIAN.

Neighboring Poland is the top trading partner of Lviv region, accounting for 28% of exports and 27% of imports. Behind Poland, comes Germany, with 13% of exports and 18% of imports. For exports, next comes Czech at 7% and Denmark at 6.5%. Through October, exports to the EU increased by 30% to $1 billion, according to Daily Lviv news site. The region has a nearly $500 million trade deficit, but IT exports do not seem to be counted.

More than $1 billion a year moves through Ukraine’s underground lotteries, Finance Minister Oleksandr Danylyuk tells reporters. He said: “Not a single penny is paid to the budget. Everything is in the shadows, while the society suffers negative effects from this business." After the Rada failed to approve a law legalizing gambling, he now intends to issue at least two lottery licenses in 2018 to draw some of this untaxed economic activity out of the shadows.

Kyiv’s Premier Hotels and Resorts is overseeing construction of a ‘five star’, 130-room hotel in Bukovel, the nation’s biggest ski resort. The developer, Lev Development of Lviv, hopes to finish the two-year project in early 2019, in time for the tail end of the ski season.

A visa-on-airport-arrival policy for Chinese visitors is credited with boosting Chinese visits by 50 percent last year, to 20,555. Now, this e-visa system will be expanded to other nations to allow visa application online before traveling to Ukraine.
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Old 26th December 2017, 13:30
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Extracts from Ukraine Business Journal

Finance Minister Oleksandr Danilyuk accuses the Prosecutor General's Office of hindering an investigation into actions by former managers and owners of PrivatBank. Citing five cases presented earlier this year to the Prosecutor General, he said: “None of these cases have been submitted to the court for consideration, as pre-trial investigations in these industries are progressing very slowly, and in some cases, investigative actions are not conducted at all.” He noted an “accidental meeting in Amsterdam of Yuriy Lutsenko with I. Kolomoysky, just on the eve of the trial in London, raises even more questions." Danilyuk told reporters Thursday: "I demand the resignation of Prosecutor General Yuriy Lutsenko.”


Real, post-inflation salaries of Ukrainians are 19% higher than last year, Economic Development and Trade Minister Stepan Kubiv, told reporters Thursday, citing figures through October. At the same press conference, his deputy minister, Mykhailo Titarchuk, forecast that 2017 will close with inflation at 13.4% . Separately, Prime Minister Groysman predicts that real, average salaries will increase by 35% next year.

Ukraine is preparing international tenders for three oil and gas projects for production sharing agreements, Energy and Coal Industry Minister Ihor Nasalyk, told reporters Thursday. The projects are expected to require investments from $200 to 600 million. He said: "We expect that companies with medium and high level of technologies will enter the Ukrainian market."

Coal production is down 13.6% through November, the Ministry of Energy and Coal Industry reports. Of the 5.5 million ton drop, the biggest drops were in Donetsk region - 26.4% - and in Luhansk – down 62.7%. In March, DTEK announced loss of control over all its enterprises in the separatist-controlled portion of the Donbas, notably Sverdlovanthracite, Rovenkyantratsit and Komsomolets Donbassa. Before the armed conflict, these three coal companies were producing a total of about 18 million tons of coal annually, Interfax reports.

The EBRD is loaning EUR 25 million to convert chicken excrement into biogas, or methane, at a Vinnytsia plant of Myronivsky Hliboproduct, Ukraine's biggest chicken meat producer, MHP CEO Yuriy Kosyuk writes on Facebook. With a capacity of up to 20 MW, this will be MHP's second biogas plant. The first was launched in 2013 in Dnipropetrovsk region. According to the Ukraine Bioenergy Association, Ukraine, a major food power, has the potential to produce 9.5 billion cubic meters of biogas per year from agricultural and food waste. This is the equivalent to 2.6 billion cubic meters of natural gas, almost 10% of current national gas consumption.

Ukraine's exports to Canada in 2017 are increasing by 76%, and imports - by 93%, Foreign Minister Pavel Klimkin said Thursday at a joint press conference in Kyiv with Canada's Foreign Minister Chrystia Freeland. A Canada-Ukraine free trade pact went into effect last August.

Nordic countries will loan EUR30 million to increase energy efficiency at Ukrainian universities through 2022. The loan by Northern Environmental Finance Corporation, or NEFCO, will cover almost 20% of the program to modernize university buildings in Chernihiv, Kharkiv, Kyiv, Lviv, Poltava, Sumy, Kharkov and Vinnytsia.

Ukraine is doubling funds for film production in 2018, Prime Minister Groysman writes on Facebook. He wrote: “This means that Ukrainian children and adults will see more high-quality domestic movies and animation.” As an example, he noted “The Stolen Princess: Ruslan and Lyudmila” animation feature will be released in the spring.

Cyborgs goes into the Christmas season as Ukraine’s strongest film, earning $303,000 in its first weekend. About half of its $1.7 million budget came from the national budget. This war drama follows a Ukrainian unit doggedly defending Donetsk airport from assaults by mixed Russian-separatist troops in the winter of 2014-2015.

Uber is opening in Kyiv its regional headquarters for Central and Eastern Europe, Alexey Stach, regional general manager, told reporters Wednesday. He said: "All employees of the company from the countries of Central and Eastern Europe will move to Kyiv and will work here.” Focusing on regional development, Stach plans to double staff in 2018 at the new Uber headquarters, at 9 Naberezhne Highway, in Podil. Launched last year in Odesa, Lviv, Dnipro, Kharkiv, Vinnytsia, and Zaporizhia, Uber gradually raised rates five times in the capital. Stach said there had not been a dropoff in users. In time for holiday travel, Uber launches this week a new service, uberVAN, with vehicles capable of carrying six passengers.

US-based Marriott International Int. will open its second hotel in Kyiv on Feb. 15. Aloft Kiev, a 310-room hotel, stands at Esplanadna 17, next to the Olimpiskiy Sports Complex. Under its Design brand, Marriot also has 11 Mirrors hotel in Kyiv.

Ukraine’s air traffic control agency is starting to invest again in new equipment, ending a spending freeze imposed after the July 2014 shoot down of the Malaysian Airlines flight over eastern Ukraine. That event prompted a 55-60% drop in overflights and a 70% drop in revenue, Dmytro Babeichuk, director of the agency, UkSATSE, told Interfax. Now, $24 million dollars in equipment upgrades are scheduled, with about $5 million coming from European Bank for Reconstruction and Development and the European Investment Bank.

Ukraine's shortest commercial flight – between Kyiv and Vinnytsia -- will be launched March 25, avianews reports. Ukrainian International Airlines will use an Embraer 145 regional jet to fly twice a day from Vinnytsia to the airline’s Boryspil hub. A one-way ticket for the 200 km flight will be about $50.
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Old 27th December 2017, 15:43
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China’s CCEC trading firm is to loan $500 million to provide mortgage financing to build 30,000 low cost apartments for war veterans, military personnel, police and internally displaced people. Cabinet of Ministers approval of the loan was published Friday in Uriadovy Courier newspaper. In 2012, CCEC, or China Complete Engineering Corporation, signed a 15-year, $1.5 billion loan-for-grains deal with Ukraine’s state-run grain company GPZKU. CCEC also is interested in building light rail link to Boryspil airport and a big solar farm near Chornobyl.

The EBRD will provide a $350 million syndicated loan to ArcelorMittal Kryvyi Rih, Ukraine's largest steel mill. The loan supports a larger investment plan of $1.1 billion at the mill. Anton Usov, EBRD regional spokesman, wrote on Facebook: “It is the largest private sector investment program in Ukraine in recent years." The loan supports the mill's modernization and environmental upgrade, reducing CO2 and nitrogen oxide emissions as well as cutting yearly dust emissions from 14,700 tons to 3,000 tons. Francis Malige, EBRD regional managing director, said: “This particular investment brings to Ukraine the highest standards in corporate governance as well as advanced environmental practices and technologies."

Western support for free market changes in Ukraine must continue, Francis Malige, EBRD regional managing director, writes in a guest essay in the Financial Times. “While the pushbacks are real, they also show that reforms are biting,” writes Malige, a French national. Representing the largest lender in Ukraine, he writes: "International support is tangible and delivers results." Bolstering western resolve, he notes, in 2018, the G7 presidency “rotates to Canada, a country with a large Ukrainian diaspora and a vocal friend of Ukraine.” He concludes: “Now is not the time to give up on Ukraine. It is in the power of the international community to not allow the empire of vested interest to strike back.”

Pawel Jozef Stanczak, a Polish citizen, is to become the new president of Ukrtransgaz, the Naftogaz affiliate that moves gas across Ukraine. Previously, Stanczak was chief technology officer of PGNiG Technologie S.A., an affiliate of Poland’s state-controlled oil and gas company. The appointment was held up for five months pending a security check by the SBU, Ukraine’s State Security Service, Interfax reports.

Today through Friday, the newly reconstituted energy rate setting commission is to consider 100 issues, including approval of 2018 tariffs for Energoatom, Ukrhydroenergo, Ukrenergo and renewable, ‘Green’ energies. One month ago, the National Commission for Regulation of Energy and Utilities lost its member quorum through illness and resignation. Facing paralysis in the energy sector, President Poroshenko appointed on Friday Viktoria Morozova and Vadim Taratun as temporary members with 90-day mandates.

Applicants to provide 4G mobile service to Ukraine have until Jan. 26, to submit their documents. The tender is to be decided on Feb. 26, according to the National Commission for State Regulation of Communications and Information Technology. With six lots, minimum payments range from to $10 to $47 million.

KPMG-Ukraine increased revenue by one third in 2017 and increased staff, according to Andrey Tsymbal, managing partner of KPMG in Kyiv. By contrast, KPMG International increased global revenues by 5% in 2017.

President Trump is preparing to approve the supply of 210 Javelin anti-tank missiles and 35 rocket launchers, abcnews.go.com news site reports, citing anonymous State Department officials. This sale -- or gift -- of $47 million worth of lethal military equipment, requires U.S. Congressional approval. Separately, The Washington Post reports that the State Department has approved the sale of $41.5 million worth of Model M107A1 Sniper Systems, ammunition, and parts, made by Tennessee-based Barrett Firearms Manufacturing. In Moscow, Russia’s Deputy Foreign Minister Sergei Riabkov, complained that such arms are “not in the framework of commercial contacts.”

The National Anti-Corruption Bureau has been investigating reports of corruption in Ukroboronprom, the state-run conglomerate of about 130 defense production companies, according to an article in Foreign Policy.com. Askold Krushelnycky, a British journalist with Ukraine experience, writes that he was shown a NABU internal report alleging that two executives at UkrSpecExport, Ukroboronprom’s export arm, siphoned money from a $39 million contract to supply parts for Antonov AN-32 aircraft to Iraq’s defense ministry. In reply, Roksolana Sheiko, spokeswoman for Ukroboronprom, is quoted saying the prosecutor general's office investigated the allegations, but "there was no violation detected by the company or its officials."

The defense industry may become a driver of the economy in 2018, Prime Minister Groysman told reporters Friday. Citing a figure close to $600 million, he said: "We are allocating UAH 16.5 billion next year to produce new weapons and modernize [weapons]."

A state-owned Belarusian bank has applied to Ukraine's central bank to buy the Ukraine subsidiary of Russia's Sberbank. Paritetbank, the bidder, is the 15th largest of 25 lenders in Belarus.

Odesa port has accepted its first 5,000 container ship, the 294-meter long Zim Haifa from Israel. The Container Terminal was able to handle the ship last week thanks to investments by the German operator, HHLA International GmbH. Anastas Kokkin, CEO of the terminal, said his three new dockside gantry cranes can unload up to 90 containers an hour. He said: “For us it is a sign that the service we provide is close to the European level.” HHLA says it can now handle the Black Sea’s largest ships, the Bosphorus Max. Measuring up to 310 meters long, these vessels can carry 10,000 containers.

Starting Jan. 1, foreign ships are allowed to enter Ukraine's ports and to start unloading goods 24 hours after providing electronic information about the cargo, EU4Business reports. The new system will speed up customs procedures and reduce opportunities for corruption, the EU-funded project says in a press release.

Starting Monday, all foreigners arriving at Ukraine’s border posts will give their fingerprints through fingerprint readers as part of a biometric data registration system. Foreign Minister Pavlo Klimkin told UNIAN that “in the pipeline is monitoring the movement of Russian citizens throughout Ukraine.” This could be a modern version of Soviet-era visas, which were issued only for defined itineraries.

Kherson region officials are to travel to Dublin in January to talk with Ryanair about flights to Kherson International Airport. Currently Ukraine’s 8th busiest airport, Kherson and nearby Mykolaiv make for a combined passenger catchment area of 1 million people. After Crimea closed to domestic tourism, Mykolaiv-Kherson tourism boomed. With scheduled flights to Kyiv, Egypt, and Turkey, Kherson gains a Belavia flight on April 1 to Minsk, a transfer airport for flights to Moscow. Mykolaiv airport has not had commercial flights for several years.
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Old 29th December 2017, 14:29
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Ukrposhta has won permission to offer limited banking services to clients of the national postal service. The National Bank of Ukraine extended privileges on Wednesday “in order to increase access to financial services for the transfer of funds, in particular in rural areas and remote regions of Ukraine, stimulating the development of cashless payments.” Ukraine’s four big state-owned banks oppose the creation of a postal bank. But Igor Smelyansky, the US-trained acting CEO of Ukrposhta, argues that 10 million Ukrainians, many of them elderly, do not live within five kilometers of a bank branch.


The central bank has revoked the banking licenses of two more small banks -- Apex Bank and Industrial and Financial Bank -- under the new procedure of voluntary termination of banking activities. Kateryna Rozhkova, deputy chairman of the National Bank of Ukraine, praised the owners’ recognition that their banks had failed as “an adult step.”

UNIAN headlines: “PM Groysman to Ukroboronprom CEO: "Look for another job." The news agency reports that the Prime Minister is submitting to President Poroshenko a motion to dismiss Roman Romanov, CEO of the state-owned military industry conglomerate. The public pretext is Romanov’s failure to follow through on government order to pay back salaries to shipyard workers in Mykolaiv. Separately, Interfax reports that anti-corruption activists and “representatives of the Western military establishment” may be appointed to Ukroboronprom’s supervisory board.

Five Ukrainian rockets launched payloads into space this year – three for the European Space Agency, one for NASA, and one for Russia’s Roscosmos, from Baikonur, Kazakhstan. Roscosmos initially reported that Tuesday’s launch was successful, but later reported it lost contact with the payload, Angola’s first telecommunications satellite. Ukraine plans to launch its own communications satellite Lybid in the second half of 2018. The Space Agency of Ukraine estimates that Ukraine’s space industry expanded by almost one third in 2017.

Construction grew by 22.5% nationwide through November, compared to the same period last year. Of the $3 billion in building, the hot spots were: Zhytomyr +45%; Kirovohrad +41%; Odesa +40.3%; Dnipropetrovsk +29% and Kyiv city +31%. Building decreased in only four regions: Luhansk -27%; Sumy -4%; Volyn -0.6%; and Zakarpattia -0.2%.

Half of Ukraine’s elevators were installed during the Soviet era, making for an enticing modernization market, OTIS Ukraine general director Ladislav Zeman tells Interfax. With 500 employees and elevators in over 20 Ukrainian cities, the American company lifts 8 million Ukrainians a day.

Agrarian Fund, one of Ukraine’s largest state food companies, boosted its flour exports by 70% in 2017 to 17,000 tons, according to Novoe Vremya. Boosted by this results, Andriy Radchenko, director general the fund, said he is talking with a Turkish supplier of milling equipment. He told the business weekly: “We're considering the possibility of building a modern milling complex. We're trying hard to raise Turkish financing under the project.”

Sugar production is matching last’s year production of 2 million tons, reports Ukrtsukor, the National Association of Sugar Producers. Exports should hit 500,000 tons.

Norteda, a Lithuanian oil trader, plans to invest over $10 million in processing of Ukrainian grains and oilseeds. On opening an office in Kyiv, Igor Shklyarus, UAB Agrarinė norteda, said: "Today Ukraine is one of the most attractive agrarian countries of Eastern Europe. We are considering investment projects for the storage and processing of cereals, are also ready to finance and process oilseeds."

To jumpstart a year of privatizations, the State Property Fund plans to auction off shares in eight state companies, during the week of Jan. 17-23. Total sales may only net $1.4 million, but the Fund hopes it will spark investor interests. Interfax reports that minority holdings will be sold in: Ukrnafteprodukt, Stebnitsky mining and chemical enterprise, Polymineral, Ukrhudozprom, Boryspil Enterprise Sortasninnovoch, Scientific and Technical Test Center Spectrum-T, and Brailovsky base of storage and sale of plant protection products. A majority holding -- 89.5% of shares – will be sold in Bila Tserkva Rubber Technical Products Plant.

The Prosecutor General's Office of intends to recover in early 2018 another $180 million illegally obtained by runaway ex-President Viktor Yanukovych and his allies, according to Radio Free Europe/Radio Liberty. In September, Prosecutor General of Ukraine Yuriy Lutsenko reported that the state budget had received the first part of $200 million confiscated from Yanukovych and his team.

Low interest loans and technical expertise for renewable energy may flow from Ukraine joining the International Renewable Energy Agency. On Wednesday, President Poroshenko a law allowing to join the decade old association of 154 member nations.



AVentures Capital has invested $3.5 million in seven Ukrainian IT startups in the past 18 months. Andriy Kolodiuk, managing partner of the Kyiv-based investment firm, tells reporters that the average investment is $500,000. In the last year, the fund has invested in Spinbackup, Bookimed, Teamfusion, and Petcube. He said: “Three more deals for $500,000-$1.5 million remain secret, including with two companies at the growth phase with over 100 employees.” He said his firm is negotiating with a dozen companies and plans to invest in 2-3 in the first half of 2018.

Ukraine has issued a tender for dredging its two Azov Sea ports, Mariupol and Berdyansk, Xinhua reports. China’s news agency may have noticed the tender before Ukraine’s media because China Harbor Engineering Company Ltd. is dredging Ukraine’s busiest Black Sea port, Yuzhny, and is bidding to dredge a second port, Chornomorsk. On its website, Ukrainian Sea Ports Authority says the deadline for Azov Sea bids is Feb. 2. For what could be an $18 million contract, China Harbor has two advantages: it already has equipment in the region, and Russia, which now controls two thirds of the Azov coastline, is not expected to interfere with a Chinese company.

Ukraine should reassume its historic role as a transit country between east and west, says Boris Kolesnikov, co-chair of the Opposition Bloc party. Kolesnikov, a Donetsk native, expressed the feelings of many Eastern Ukrainians when he told reporters in Kyiv Wednesday that Ukraine’s trade war with Russia had left Eastern Ukraine at a commercial dead end. Referring to Russia, a country with an economy 16 times larger than Ukraine’s, he said: "The resumption of transit is the number one task. We lost all transit during political actions and applications. We lost aviation and automobile transit."

Infrastructure Minister Volodymyr Omelyan is confident the Ryanair will enter Ukraine next year. He told Priamy TV Channel Wednesday: "It will enter next year - 200%." Earlier, he told Expreso TV that he is talking with two other discount airlines. He predicted: “There is an 80 percent probability that they will enter the Ukrainian market next year.” These two airlines would have 49 percent foreign capital and 51 percent Ukrainian, an ownership structure that would allow them to conduct domestic flights.
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China and Ukraine have agreed to speed the construction of modern grain elevators, silos, port terminals, highways and railroads, according to an action plan posted Thursday on the website of the Ukraine’s Ministry of Economic Development. The plan calls for promoting renewable energy in agriculture and to strengthen interaction between customs authorities of both countries. China sees Ukraine as a major source of food for its population of 1.4 billion.

Three months ahead of schedule, China Harbor Engineering Company completed on Wednesday the dredging of 4.4 million cubic meters of soil from the bottom of Yuzhny, Ukraine’s busiest port. Andrey Stavnitser, founder of M.V. Cargo stevedoring company, wrote on Facebook that it is “the fastest dredging in the history of the Black Sea ports.” M.V. Cargo and Cargill, the American commodity trader, can now open in March the first phase of a massive, $150 million grain terminal. Capable of handling 10% of Ukraine’s actual grain exports, the terminal will have 14 silos and a warehouse for a total one time storage capacity of 290,000 tons. The EBRD and the International Finance Corporation are providing $74 million in financing.

President Poroshenko is opening the door to resuming imports of gas from Russia. On a trip to Odesa Thursday, he is quoted by Interfax saying: "What has happened in the past two years? We are energy independent. They [Russia] are knocking: ‘Can you take our gas?’ No, everything is fine in our country. If it's cheap and fair, not corrupt, then, please."

Ukraine’s state railroad has won the right to set rental rates for its hopper and gondola cars, used for moving grain and coal. Previously, state regulations set Ukrzaliznytsia’s rental rates at one third or below market rates. This led to a rail car black market, supported by exporters desperate to get grain to ports. Concorde Capital’s Alexander Paraschiy writes: “A price difference created a shadow market for state railcar rentals, which will likely vanish once railcar rent is liberalized… the negative effect from the liberalization won't be significant for Ukrzaliznytsia clients.”

Privatizations netted only 20% of the 2017 target, Vitaly Trubarov, acting head of the State Property Fund, posted on his Facebook page Thursday. Sales brought in only $125 million to the Fund. Although low, this is the largest amount since 2012. Trubarov hopes that a ramped up privatization program will net almost $1 billion in 2018.

Visa free travel to the EU is cutting unemployment in Ukraine, Social Policy Minister Andriy Reva told reporters Thursday. Over the last year, the total number of unemployed people in Ukraine has declined by 9%. Referring to the opening last June of the EU to 90-day visa free visits by Ukrainians, he said: “Opportunities to work in neighboring countries has led to a decline in applicants who live and desire to work in Ukraine."

The US has displaced Russia for the first time as the leading source of private money transfers from abroad to Ukraine, reports the National Bank of Ukraine. Overall, the transfers, largely wage remittances, increased by 30% to $5.2 billion during the first three quarters of this year. As tracked by the central bank the top five sources of transfers were: US - $547 million; Russia - $460 million; Germany - $252 million; UK $243 million; and Cyprus - $218 million. Largely uncounted are the hundreds of millions of dollars in cash that travelers carry across the land borders with Poland and other Central European countries.

The number of Ukrainians with incomes below the subsistence level fell sharply in 2017, from 54.5% to 39.4%, Minister of Social Policy Andrei Reva said at a press conference. He urged employers to raise salaries to compete with pay levels in Poland. Separately, the State Statistics Service said Thursday that in November real, post-inflation wages were up 21.4% compared to one year earlier.

Ukraine’s inflation is the highest in Europe and the CIS, according to year end research by FOREX CLUB. In 2017, consumer prices in Ukraine rose by 13.6%, far above the EU average of 2.6% and double the average for former Soviet countries, 6.7%. Wage hikes, higher prices for coal and oil, and poor weather contributed to Ukraine’s high level. In 2015, inflation hit a recent peak of 43.3%, then receded to 12.4% in 2016. Despite this year’s up tick, Andriy Shevchyshyn, senior analyst at FOREX CLUB, tells Expres.ua news site: “We expect that next year inflation will not exceed 10-10.5%.”

Ukraine’s hryvnia crossed the psychological barrier of trading at 28 to the dollar on Thursday. On the interbank foreign exchange market, the rate was UAH 28.09/$1.

The European Investment Bank is providing EUR12 million in loan guarantees to Raiffeisen Bank Aval for the support of small and medium-sized enterprises. Part of the EU-Ukraine free trade agreement, the loan project could grow to EUR140 million.

Credit Optima Bank is the fourth small bank this month to voluntarily surrender its banking license to the National Bank of Ukraine. An industry check in October found that Credit Optima was one of four banks that did not have the minimum registered capital of UAH200 million, about $7 million. The others were: Center Bank, UBRD, Polikombank, and Alpari Bank.

Saudi Arabia and Ukraine have agreed on a health certificate for the supply of processed food products to the Kingdom. This form will allow the export of about 80 types of processed foods according to the Gulf Council Regulation Guide, reports the website of Ukraine’s State Service for Food Safety and Consumer Protection.

Romania and Odesa will be connected by a modern highway by the end of 2018, said President Poroshenko. A final stretch of the M-15 from Odesa to Reni, on the Danube River, will be rebuilt next summer, he promised Thursday on a visit to Odesa. Poroshenko was born 30 km north of what is now the international highway. At present, speeds on the 318 km road average` 60 km an hour. "I am confident that next year we will complete the construction and repair of the last 90 km of the road and get the road to Romania and a large transport corridor that will give a second wind to business, tourism, and production in the settlements, towns and villages that are located along the road." Often seen as Ukraine’s forgotten neighbor, Romania does not have regularly scheduled air flights to Ukraine.

Visa free tourism starts Sunday between Ukraine and the United Arab Emirates. Citizens of each country will be able to stay for up to 30 days for each visit. In 2017, about 120,000 Ukrainians are believed to have visited the UAE. Flydubai has direct flights from Kyiv Zhuliany and Odesa to Dubai. From Kyiv Boryspil, Ukraine International Airlines flies to Dubai and Air Arabia flies to Sharjah.

UIA started flights Tuesday between Kyiv Boryspil and Krakow, Poland’s second largest city. Lasting 1h45 minutes, the flights become daily on Jan. 9. Playing catchup with LOT Polish Airlines, which now has flights to five airports in Ukraine, UIA will launch flights on March 2 from Boryspil to Gdansk, Poland’s third busiest airport, after Warsaw-Chopin and Krakow.
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