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  #29 (permalink)  
Old 25th January 2018, 14:32
Gotno Gizmo Gotno Gizmo is offline
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Russia is funding groups to protest natural gas production in Ukraine, Naftogaz CEO Andriy Kobolyev told Channel 5 TV. “It's no secret that Gazprom and Russia are spending money by sponsoring certain forces in Ukraine that block new deposits, gas production, and who lie to the local residents about the environmental consequences, " he said. He cited Kharkiv region where "negative people, who have nothing to do with the local residents, tried to block talks on the development of new sites." According to The New York Times, Russia has funded protest groups opposed to shale gas production in Bulgaria, Romania and elsewhere in Eastern Europe. Naftogaz is implementing its "20/20" program, a $1 billion a year push to increase gas production by one third, to 20 billion cubic meters, in 2020.

Naftogaz stands to lose $7 billion over the next four years if household subsidies are extended, Kobolyev told Channel 5. A draft resolution has been prepared that could extend the subsidies through April, 2021.

By Feb.1, all interested foreign companies are to apply to work as partners with Naftogaz to manage the nation’s massive gas transportation system. The pipelines linking Russia with Europe have an annual revenue of $ 2-3 billion. Memorandums of intent have been signed by: Snam (Italy), Eustream (Slovakia), Gasunie (Netherlands) and GRTgaz (France). A German group also has expressed interest. A management agreement is to be signed this summer. At this stage, Naftogaz is “excluded” from talks, company CEO Kobolyev told Channel 5.

Azerbaijan, Ukraine’s largest source of imported oil, wants to invest more in energy projects here, the nation’s Ambassador to Ukraine, Azer Khudiyev, tells Ukrinform. SOCAR, the state oil and gas company, has already invested $300 million in Ukraine, most visibly in gas station. The ambassador said: "In the near future, we expect the visit [to Kyiv] of the management of this oil company to discuss with [Ukraine’s] Energy Ministry the prospects for a number of very profitable projects."

In March, Azerbaijan Trade House will open in central Kyiv, Ambassador Khudiyev says. The goal is to promote Azeri investment in Ukraine and bilateral trade. At present, Azerbaijan has a trade surplus with Ukraine, largely due to monthly exports of about 250,000 tons of oil to Ukraine.

German investment in Ukraine increased by $213 million through September, Ukraine’s Economic Development and Trade Ministry reported Wednesday at the start of the Ukraine-Bavaria Economic Forum. Minister Stepan Kubiv led Ukraine’s delegation to Bavaria, a southern German state with an economy larger than 21 EU states. Strong in auto parts for such Bavarian companies as BMW, 61% of Germany’s $1.8 billion investment in Ukraine is for industry. With an eye to future car markets, Kubiv said it is four times more profitable to make electric cars in Ukraine than in Germany. Through September, Germany-Ukraine trade increased by 27% compared to the same period in 2016, hitting $6.6 billion.

Christine Lagarde, IMF Managing Director, said Ukraine should take advantage of the “current favorable external environment to accelerate reforms and transition to stronger growth.” In a statement after meeting with Ukraine President Poroshenko Wednesday in Davos, she said they discussed “the implementation of measures that will pave the way for the completion of the pending review under the IMF-supported program.” Timothy Ash writes: “Don’t see this as a change in the IMF position. Poroshenko still has to deliver Venice Commission compliant law on anti-corruption courts. Key to getting program back on track. Ball in Poroshenko’s court.”

Sugar exports were up 29% year over year in 2017, hitting nearly 600,000 tons, reports Ukrtsukor, the National Association of Sugar Producers of Ukraine. With the EU market largely blocked by high tariffs and preferences for former colonies, Ukraine’s top five markets were: Sri Lanka, Turkey, Azerbaijan, Sudan and Libya.

Due to educational mismatch with employer needs, almost half of unemployed Ukrainians registered at the State Employment Service have attended universities, Valery Yaroshenko, head of the service, tells Interfax. In Kyiv, Kharkiv, Zaporizhye, the figure is above 80%. Behind the problem, Yaroshenko said, 80% of high school graduates go to universities and only 20% go to vocational schools. In Europe, he said, the situation is the reverse: 70% go to vocational schools and 30% to universities.

Ukraine’s highest average monthly salaries are in Kyiv – 11,643 hryvnia, or $400. In a second group, Kyiv region, Dnipropetrovsk, Zaporozhye, Poltava, salaries are $255. Close behind is a newcomer: Zakarpattia, with $231. Valery Yaroshenko, head of he State Employment Service, told reporters Wednesday: “The salary level in the Zakarpattia region began to grow because of the desire of employers to retain qualified employees." Zakarpattia borders on four EU states.

The State Statistics Service estimates that Ukraine’s population is 42.4 million people, the same level of 1960. Ukraine’s population peaked in 1993 at 52.2 million. The current estimate is not based on a new national census. It does not include the 2.2 million people living in Crimea. Reporting by Ukrinform did not say how the national estimate accounted for the 1.5 million people displaced by the secessionist war in Donetsk and Lugansk. The population of Kyiv – city plus region – was estimated to be nearly 3 million. Skeptics say that, due to the war, labor migration and low birth rates, Ukraine’s real population is in the 35-40 million range.

Antonov Airlines has opened an office in Houston, Texas, the company reports. Headquartered at Kyiv’s Gostomel airport, Ukraine’s cargo airline has 13 Antonov aircraft and specializes in ‘outsized’ cargo. A few days ago, Elon Musk chartered an AN-124-100 cargo jet to fly a rocket nose cone across the US for his Space X Falcon9 rocket program. Antonov recently also carried Abu Dhabi’s Al Yah 3 satellite from Washington to the European space port in French Guiana.

Ukraine has the cheapest Big Mac hamburger of all 42 countries and the Eurozone surveyed by The Economist. A Big Mac costs the hryvnia equivalent of $1.64, less than one third of the US price of $5.28. For a Big Mac in Kyiv to be on a dollar parity with New York, the exchange rate would have to go back four years, to February 2014, when it was 8.9 hryvnia to the dollar. For now, Ukraine’s cheap currency boosts tourism and exports.

UIA passengers at Kyiv Boryspil now are greeted by scales and the invitation to weight their own bags. Passenger who do not want to weigh their bags – or who have overweight bags -- can check their bags the traditional way, at the counter, for a fee.
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Old 27th January 2018, 12:59
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President Poroshenko predicted to Bloomberg TV that Ukraine will unfreeze its $17.5 billion IMF bailout loan by April. Asserting that Ukraine has “already fulfilled 80 percent” of its commitments, Poroshenko said: “Probably, ‘fingers crossed,’ before April we will have a mission and have the next tranche.” He intimated that his government would raise gas prices toward market levels in the spring, when the heating season is over. Interviewed in Davos, Switzerland on Thursday, Poroshenko said: “We, my government and my people, are ready to continue cooperation with the IMF." The day before, he had closed door talks with Christine Lagarde, the IMF Managing Director. Timothy Ash comments: “Fully meeting all IMF criteria? Why would you say that? The program had been off track for nine months.”

The National Bank of Ukraine expects to receive about $2 billion in financing from the IMF this year, according to a press release by the central bank. Issued before President Poroshenko’s statement to Bloomberg, the report said that Ukraine’s government also expects to receive loans from the EU and the World Bank.

World Bank President Jim Yong Kim discussed the creation of an independent anti-corruption court with President Poroshenko in Davos. Poroshenko’s press service said: "The interlocutors supported the need to create an independent anti-corruption court in accordance with the Constitution of Ukraine and taking into account the recommendations of the Venice Commission."

The central bank has raised its forecast for 2018 GDP growth to 3.4%, from 3.2%, according to National Bank of Ukraine’s website. As the same time, the bank worsened its 2018 inflation forecast to 8.9%, from 7.3%. Looking further ahead, the bank forecasts that 2019 inflation will be 5.8%, and in 2020 it will slow to 5%.

Addressing foreign investors in Davos, President Poroshenko said that in coming weeks the Rada will approve a law to exempt from taxes profits that are reinvested in Ukraine. Speaking at the Ukraine House, he said: “When you invest in Ukraine, you do not pay taxes.” To protect investors, he said Ukraine’s new National Bureau of Financial Investigations “will be the only analytical service. None of the other law enforcement agencies will even be able to knock on the door of business." Finally, he said Ukraine is “finishing” the process of cleaning “dirty banks” from the financial system.

Ukraine is turning the corner for attracting foreign investors, President Poroshenko told the World Economic Forum in Davos on Thursday. "This is the first time that I have so many requests for a meeting from the top players of the investment market,” said Poroshenko, who has been president for 3.5 years. “This has never happened, so many top investors." According to the National Bank of Ukraine, Ukraine attracted $1.4 billion in foreign investment during the first nine months of 2017, 15% more than during the same period in 2016.

Thursday’s decision to raise the prime rate from 14.5% to 16% will have little impact on the central bank’s determination to liberalize foreign exchange rules, Yakiv Smoliy, acting head of the National Bank of Ukraine, told a monetary briefing Thursday. “The restrictions that we still have today are deterrent to the inflow of foreign direct investment into the Ukrainian economy,” he said. “So we will soon submit a currency law, which is almost ready, to National Council of Reforms. We will bring it to the parliament as a priority."

Switzerland’s new President, Alain Berset, discussed with President Poroshenko in Davos on Thursday the issue of “the return of frozen assets to Ukraine, which were illegally withdrawn by former Ukrainian officials,” an official communique said. Meeting in Davos, Poroshenko thanked Switzerland for mobilizing aid, such as the Geneva-based International Committee for the Red Cross, to help in the Donbas, and for starting a visa-free regime for Ukrainians last year. Switzerland is not a member of the EU. Swiss presidents serve one year terms, starting Jan. 1.

Protecting intellectual property is key to nurturing Ukraine’s innovation and IT industries, Prime Minister Groysman said Thursday at a government meeting in Kyiv. Calling for lower prices charged for registering patents, he said: “A lot of modern solutions in the world have either full participation of the Ukrainian intellect, or partial, and the issue of protection is reaching a very important level."

To renovate Ukraine’s seaports and airports, the government should attract foreign investors through privatization or modern concession contracts, Infrastructure Minister Volodymyr Omelyan told Interfax at Davos. He said: “We want to bring strategic world companies to Ukraine and fully integrate into the world economy.”

The Donbas economic blockade cut Ukraine's industrial production by 4% in 2017 by hampering production of steel, coke, coal, iron ore and electricity, calculates Olena Bilan, chief economist at Dragon Capital. Offsetting this drag, were recoveries in the food industry (+2.7 %), mechanical engineering (+ 7.3%) and chemicals (+ 17%). Overall, industrial production closed the year down 0.1%. For this year, Bilan forecasts that industrial production will grow by 3% and the GDP will grow by 3.3%.

Ukraine’s state railroad intends to rent locomotives from Lithuanian Railways, under a protocol signed in Vilnius by Ukrzaliznytsia Board Chairman Evgeny Kravtsov and his Lithuanian counterpart, Mantas Bartushka. Faced with seasonal shortages of locomotives after summer grain harvests, Ukrzaliznytsia is talking with the railroads of Belarus, Latvia and Kazakhstan about renting locomotives. All five countries have Soviet-era, 1,520mm gauge tracks.

To cut highway deaths, the government is adopting a “500-500-1,000” safety plan. This means building 500 traffic rotaries, 500 security islands, and 1,000 pedestrian crossings. Last year in Ukraine, about 3,000 people were killed in traffic accidents. Unveiling the program Thursday, Prime Minister Groysman said: “When we make good roads and they drive at the speed of airplanes, we get a disaster.” He said higher traffic violation fines would help pay for a national road safety program.

One month after UIA launched daily flights from Kyiv Boryspil to Krakow, Yanair is applying for permission to start regular flights to Krakow from Kyiv Zhuliany and from Odesa. From each Ukrainian city, flights would go four times a week to Krakow, Poland’s second largest city, after Warsaw. LOT Polish has a flight from Odesa to Warsaw.
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Old 29th January 2018, 16:07
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The U.S. sees Russia’s Ukraine bypass pipeline as a threat to Europe's energy security, Secretary of State Rex Tillerson said Saturday in Warsaw. Ukraine, Poland and Baltic states fear the planned Nord Stream 2 gas pipeline between Russia and Germany would increase Europe's dependence on Russian gas and deprive Ukraine of billions or dollars in gas transit fees. "Like Poland, the United States opposes the Nord Stream 2 pipeline. We see it as undermining Europe's overall energy security and stability," Tillerson said at a joint news conference with Poland’s foreign minister, Reuters reports. "Our opposition is driven by our mutual strategic interests.”

Ukraine, Estonia and Georgia are the only former Soviet nations cited on a list of 14 leaders in block chain innovation by Dan Tapscott, Canadian author of ‘Blockchain Revolution.’ At Davos, Tapscott talked about the world’s key hubs for blockchain innovation. The other countries are: US, Canada, Brazil, Australia, Israel, Dubai, UK, France, Germany, Sweden and China.

Executives from Black Iron, the Canadian iron ore exploration and development company, negotiated with officials in Krivyi Rih last week about conditions for starting their Shymanivske mining project. If approved, Shymanivske would be a $1.1 billion investment, the largest for a Canadian company in Ukraine.

Nibulon plans to increase its river shipments of grain by 50% during the next marketing year, according to Oleksiy Vadatursky, CEO of the food logistics company. Aided by European loans, Nibulon is building 10 loading terminals on the banks of the Dnipro, Southern Bug and other navigable rivers. Vadatursky predicted: “We will take more than 125,000 truckloads off Ukrainian roads and save budget funds for road repairs."

Due to Ukraine’s soft grain harvest this year, Russia will displace Ukraine as the world’s second largest grain producer after the US, according to the International Grain Council. Russia is to export 44 million tons, slightly more than Ukraine’s 41 million tons.

Margarine output was up 24% through November, hitting 203.200 tons of the imitation butter spread. UkrAgroConsult reports. Modern margarine is made mainly of refined vegetable oils, of corn, sunflower and canola (rapeseed).

Ukrainians came home from the World Economic Forum in Davos buoyed by positive receptions. Several events at the new Ukraine House were standing room only. President Poroshenko said that executives from more than 80 companies asked for meetings with him. He said: “This is a good indicator how popular Ukraine is among the investors and how confident they are about our success.” Poroshenko predicted that Ukraine would soon be ranked among the 50 easiest in the world for doing business. In the current ranking, maintained by the World Bank, Ukraine ranks 76 out of 190 countries.

Envelopes with offers for 4G cell service will be opened on Wednesday, according to President Poroshenko. He said in Davos: “When I was elected president, Ukraine didn’t have 3G connection, because of corruption. Shortly, we will open the envelope for 4G connection. We have many companies ready to invest in that.”

Prime Minister Groysman predicted on Friday that Ukraine could receive the next tranche of IMF aid by June. The day before, President Poroshenko predict the IMF money would be unblocked by April. If this tranche is approved, it is expected to be about $1billion.

An IMF mission is expected in Kyiv in mid-February, Bohdan Danylyshyn, head of the Council of the National Bank of Ukraine told Channel 5 Friday night. He said the impact of Ukrainian officials’ meetings at Davos is that Ukraine is now seen as “active negotiator” with the IMF.

The central bank’s decision last week to hike the prime interest rates to 16% from 14.5% may “lead to a set of negative consequences,” said Danylyshyn, of the National Bank’s Council. He warned of “the slowdown in GDP growth due to a decrease in demand for loans by enterprises in the real sector.”

On Tuesday, Italy’s Foreign Minister Angelino Alfano is to inaugurate in Kyiv a Ukrainian-Italian business forum. at the Ukrainian Chamber of Commerce and Industry, at 33 Velyka Zhytomyrska Street.

Croatia’s Prime Minister Andrej Plenkovic met in Davos last week with President Petro Poroshenko. Ukrinform reports they discussed the launch of a “bilateral working group on the study of the unique experience of Croatia in the peaceful reintegration of the temporarily occupied territories.” Plenkovic also met with Ivanna Klympush-Tsintsadze, Ukraine’s Deputy Prime Minister for European Integration. They agreed that a bilateral commission on trade and economic cooperation will meet in Zagreb April 16. She praised the work of Crosco, a Croatian company that has EUR 47 million in contracts to drill for oil in Poltava for Ukrgazvydobuvannia.

Ukraine’s Windrose airline will double flight frequencies this summer to Pula and Split, Croatia’s two main destinations on the Adriatic Coast. Starting in June, there will be two flights a week to each city from Kyiv Boryspil, according to Avioradar, a Croatian news site.

Latvia’s airline airBaltic will expand flights to Ukraine on March 25, offering six flights a week from Riga to Odesa and twice a day from Riga to Kyiv, reports Wolfgang Reuss, the airline’s senior vice president for network management. This expansion comes after airBaltic’s passenger flow to Ukraine increased 54% last year, to 113,564 passengers.

Ukraine’s new ambassador to the Philippines, Olexander Nechytaylo, is asking authorities in Manila to extend visa free or visa on arrival to Ukrainians, The Manila Bulletin reports. To bolster his argument, Nechytaylo, who also is accredited to Malaysia, said that 15,000 Ukrainians visited Malaysia last year, a visa-free country for Ukrainians. By contrast, he said only 200 Ukrainians visited the Philippines last year. Ukraine’s foreign ministry to pushing to expand Ukrainians visa-free access to 20 more countries by 2020.

As e-shopping grows, 41% of rail tickets last year were purchased online, up from 34% in 2016. From 22 million tickets bought on the internet in 2017, Ukrzaliznytsya expects the number to grow further this year.

Detectives from Rosselkhoznadzor, Russia’ Federal Service for Veterinary and Phytosanitary Surveillance, suspect that 25% of all cheese in the Russian market is from Ukraine. It is repacked in Belarus and then exported to Russia as produced in third countries, RBC news agency says, citing Julie Melano, spokeswoman for the Russian agency. Interviews with officials in four suspect countries -- San Marino, Macedonia, China, and Iran -- found that none of these countries had exported cheese to Russia. With Belarus supplying 84% of Russia’s imported cheese, Sergey Dankvert, head of Rosselkhoznadzor, concludes that Belarusians are “legalizing cheese,” also known as “cheese-laundering.” Russia banned the import of Ukrainian cheese in autumn 2014. Since then, it has had a hard time making its own.
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Old 30th January 2018, 14:15
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Ukraine Business Journal

Energoatom has signed a nuclear supply contract that will keep Russia as the majority supplier of fuel to Ukraine through 2025. Although President Poroshenko declared in Washington last June that “it is time for Westinghouse to be the majority supplier,” the new contract allows Westinghouse Electric Co. to supply its Swedish-made fuel to only seven of Ukraine’s 15 nuclear reactors, from 2021 to 2025. Nationalists in the Rada question why Energoatom wants to continue spending $400 million a year on fuel from Russia’s Rosatom.

Electricity exports jumped 55% last year, to $235 million, reports the Ministry Energy and Coal Industry. The top three buyers were: Hungary -- $136 million; Moldova -- $54 million; and Poland -- $34 million. In kilowatt hours, the increase was 29%, to 5.2 billion kWh. Ukraine’s imports – from Russia and Belarus – fell by 39%, to 48 million kWh. This is less than one percent of exports.

Ukraine has 3.2G in planned wind projects, 10 times the current installed amount, Andriy Konechenkov, board chair of the Ukrainian Wind Energy Association, tells UNIAN. Ukraine has 505 MW of installed wind projects, but almost half of that capacity is in Crimea and secessionist-controlled areas of the Donbas. High ‘green’ electricity tariffs expire Dec. 31, 2019. To beat the deadline, new wind farms are to be built this year in Ivano-Frankivsk, Kherson, Mykolaiv, Odesa and Zaporizhia regions.

Ukraine's food exports rose 16% last year to $17.9 billion, the highest level in five years, reports the Ministry of Agrarian Policy and Food. Top three staples of food exports were grain crops -- 36%; vegetable oils -- 25%; and oilseeds --11%. The top five buyers are: India, the Netherlands, Egypt, Spain and China. Exports to Asian countries totaled 43%, to the European Union – 32%, African countries – 14%, the CIS – 8%, and the US – 0.4%.

Increasing farm subsidies, Kyiv will supply $10 million to fruit growers to buy planting stock, $35 million to grain growers to buy equipment and $140 million to livestock farmers to expand herds.

Ovostar Union, a leading egg producer, increased its egg exports by 72% last year, to 529 million eggs. In a posting on the website of the Warsaw Stock Exchange the company says it raised egg production last year by 12%, hitting 1.7 billion eggs. This increase came about as the number of laying hens increased by only 1.2%, to 6.6 million.

BSH Home Appliances plans to increase sales in Ukraine this year by 20-30% Sergey Maksimov, CEO of the company’s Ukraine distributor, tells reporters. Last year’s growth was also 20%. Biggest selling items are dishwashers, refrigerators, and vacuum cleaners. Growth is partly due to demand pent up since 2014, the year the market dropped by one half. It also is partly due to stable prices – 5% last year, compared to inflation of 13.7%. This year, the company plans to open five more Bosch and Siemens stores in Ukraine, a 10 percent increase. In addition to sales through Foxtrot, Eldorado, and Comfy, the company now sells about 25% of its appliances online, a high level for Europe.

In secessionist-controlled Donbas, 36 mines are completely flooded and cannot be restored, reports Ostap Semerak, Minister of Ecology and Natural Resources. He said: "The flooding is approaching the critical limit, which can result in an ecological tragedy: contamination of groundwater, rivers and soils. Lost mines cannot be restored. They pose a serious threat to the environment and the health of the people living there."

In the American Chamber of Commerce in Ukraine’s annual member survey of corruption perceptions, 91% of respondents said they had faced corruption while doing business in Ukraine, but 76% said they saw no need to engage in corruption to achieve success. Of the 184 respondents, 36% of respondents believe the level of corruption has decreased, a drop from last year’s level of 47%. In the Corruption Perception Survey, 71% of respondents said the most corrupt state institutions are the courts, followed by tax and customs authorities at 54%, and local government authorities at 34%. With 80% of respondents representing multinational companies, 89% of the total believe that combating corruption is a priority for improving Ukraine’s business climate.

About 700 foreign companies now work in Ukraine, offering modern working conditions and decent salaries, Prime Minister Groysman writes this on his Facebook page. Because this he wrote: “It is extremely important to create favorable investment climate in Ukraine. First of all, this means thousands of new jobs."

Pharmaceutical sales, measured by volume, increased by 12%, to 1.5 billion packets, Business Credit company tells Interfax-Ukraine. Retail sales of medicines in 2017 in monetary terms increased by 12%, to 943 million packets.

Fitch Ratings predicts Ukraine will receive $1.9 billion in IMF loans this year. Fitch, one of the Big Three credit rating agencies, writes: "Constant interaction with the IMF and other international partners remains key to ensuring Ukraine's access to official and external financing for servicing the public debt in 2020-2021." Fitch also said the nomination of Yakiv Smoliy to run the National Bank of Ukraine should reduce uncertainty about stability and independence of the central bank.

Alfa-Bank and Ukrsotsbank, both owned by ABH Holdings SA, will be merged into one bank operating under the same brand, reports Ivan Svitek, CEO of the Alfa Group banking group in Ukraine, tells Interfax. The merger will take place over the next 18 months. The brand name has not been decided.

Qatar is interested in investing Ukraine’s Black Sea ports, either through privatization or concession contracts, Infrastructure Minister Volodymyr Omelyan says after meeting in Doha Monday with Jassim Al Sulaiti, Qatar’s Minister of Transport and Communications. After a separate meeting with Akbar Al Baker, CEO of Qatar Airways, Omelyan posted on his Facebook account: “We hope that the geography of flights will not be limited to just Kyiv-Doha.” He was accompanied on his trip by the directors of Lviv and Kharkiv airports.

Kharkiv Airport is negotiating with Ryanair about flights to eastern Ukraine’s largest airport, Vladislav Ilyin, the airport’s commercial director, tells the Center for Transport Technologies website. Infrastructure Minister Omelyan predicts that Ryanair, Europe’s largest discount airline, will start flying to Ukraine this spring. In April, Wizz Air starts flying from Kharkiv to Dortmund, Germany, and in June to Katowice, Poland. Catching the eye of Europe’s airlines, traffic to Kharkiv last year jumped 34% to 806,200, the highest level in a generation.
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Old 31st January 2018, 18:47
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Renewable energy projects are to draw almost half a billion dollars in new investment this year, according to Yuriy Shafarenko, renewable energy director at the State Agency on Energy Efficiency. This would be a 25-30% growth over last year’s level of $370 million. His agency announced Tuesday a EUR6 million renewable energy project fund, supported largely by Finland and the Nordic Environmental Finance Corporation.

A consortium of Canadian companies plans to build solar power plants in the Kyiv-controlled half of Luhansk Region, stabilizing power supplies on Ukraine’s de facto eastern edge. Representatives of Canadian companies S2E Technologies, DAI, GoldLeaf EGF, and Capital Hill Group visited Kyiv and Luhansk this week, Anna Gopko, head of the Rada Foreign Affairs Committee, writes on her Facebook page.

Ukraine will increase production of natural gas by 5-7% this year, predicts Roman Opimakh, executive director of the Ukrainian Gas Producers Association. Last year, production increased by 4%. Stimulating more drilling, Opimakh told reporters Tuesday, is a new 50% cut in production royalties and a new law to cut bureaucratic red tape. Ukraine met 72% of its own gas needs in 2017. Prime Minister Groysman has set a goal for 100% self sufficiency by 2020.

Italferr, the engineering arm of Italian State Railways, is to study the feasibility of building high speed railways on the heavily trafficked Lviv-Kyiv-Odesa triangle. Ricardo Maria Monti, president of the Italferr, made the announcement Tuesday during a joint press conference with Transportation Minister Volodymyr Omelyan. The Ukrainian minister said: “This is a mega-project, the implementation of which will not only change the railway sector, but also positively affect the economic condition of a number of regions.”

Ukraine is starting a 5-year, $11 billion program to build 1,000 km of highways and to repair 9,100 km more, the Cabinet of Ministers reports. The goal is to dramatically upgrade road links among the 24 regional capitals. This public works program should provide 55,000 jobs. About half of financing comes from the state budget, and about half from international financial institutions.

Justice Minister Pavlo Petrenko expects the Rada to pass a bill setting up a special anti-corruption court by March. An independent court is essential for Ukraine to revive its loan program with the IMF. Speaking to reporters on Tuesday, the minister said: “I am convinced that, without exception, all the recommendations presented by the Venice Commission will be taken into account.”

Privatbank, Ukraine’s largest bank, will be reshaped this year as management of the newly nationalized bank seeks to improves its finances. Bank branches will be cut by 7% to 2,061. The bank’s ATM network will grow by 3%, to 7,800. Point of sale terminals will grow by 13%, to 170,000.

Non-performing loans account for 71% of the loan portfolios of Ukraine’s four major state banks, the central bank reports. At Privatbank, the ratio is 87%; Oschadbank is 64%; Ukreximbank is 60% and Ukrgazbank is 22%. At the four subsidiaries of Russian state banks -- Sberbank, VTB and Vneshekonombank – NPLs account for 69% loan portfolios. Concorde Capital’s Alexander Paraschiy writes: “Ukraine’s banking system, excluding the state-controlled banks of Ukraine and Russia, looks relatively healthy. But the problem is that the “excluded” banks account for 62% of the Ukrainian banking system’s total assets and 59% of its deposit base.”

All future timber sales are to be through open, electronic auctions, according to the State Agency for Forest Resources. The agency reports that its enterprises cut 15.9 million cubic meters of wood last year, 2.5% less than in 2016. Working largely in the Carpathians, the companies planted ​​35,000 hectares, 10% more than planned. The agency says that illegal logging last year accounted for 26,000 cubic meters of wood, worth about $5.5 million.

Soybean exports to the EU have almost doubled over the last year, World Grain news site reports. Today, about one third of Ukraine’s soy crop goes to Europe. Over the last three years, Ukraine’s soy crop increased by 52%, to 4.2 million tons, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.

Kormotech, Ukraine’s largest pet food producer, increased sales last year by 17%, to 31,500 tons. With about one third of Ukraine’s market, the Lviv region company plans to increase exports this year to France, Poland, Lithuania, Latvia, and Romania – and to start exporting to Chile.

Three Ukrainian startups won 2017 Golden Kitty Awards, a prize decided by international online voting. Petcube Bites won the Product Hunt Golden Kitty Awards in the nomination "WTF Product of the Year". Designed for pet owners at work, this gizmo allows pet owners to watch, talk, play, and feed treats to their shut in dogs or cats. PatentBot, which automates trademarks applications, won in the category Bot of the Year. Setapp, which is a single subscription with a wide collection of apps for macOS, became the Consumer Product of the Year.

“Will we have enough Ukrainians to work for us? Poland's central bank head wonders” headlines a Reuters report from Warsaw. Adam Glapinski, governor of Poland’s central bank, worries that labor shortages cloud the future of a country with an aging population, labor migration, and an economy growing by 4.5%. Of Poland’s 38 million citizens, only 16 million work. By some estimates, Ukrainians already account for 8% of Poland’s work force. Reuters writes: “With the EU visa regime easing for Ukraine, there is a concern that fewer of them will make Poland their work destination.”

Polish exports to Ukraine increased by 26.5% through November, Poland’s Puls Biznesu business news site reports. Radoslav Jarema, director of a Polish company, Akcent International, says that Ukraine and Romania are now considered the most promising export markets for Poland.

Ukrainian passenger jets were more crowded last year as flight growth did not pace passenger growth. Passengers carried by Ukrainian airlines companies jumped by 27.5% - to 10.6 million. But commercial flights increased by only 17%, to 93,000. Passenger traffic in 2017 was 30% over the pre-crisis year of 2013, the State Aviation Service reports. With budget travel on the rise, the number of passengers on charter flights increased 49%, to 3.8 million people. The fastest growing airline passenger counts were at: Windrose, up 2.5 times; Atlas Jet Ukraine, up 74%; Bravo up 50%; Azur, up 17%; and Ukraine International Airlines, up 16.5%. The airport growth champions were: Kiev Zhuliany, up 64%; Lviv, up 46%; Kharkiv, up 35%; Zaporizhie, up 26.5%; and Odesa up 19%.
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Old 1st February 2018, 17:11
Gotno Gizmo Gotno Gizmo is offline
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Ukraine Business Journal

4G mobile service could start in Ukraine as early as March, telecom providers said after winning licenses at auction Wednesday. Kyivstar, Vodafone and Lifecell together will pay $85 million to provide the services. At first, according to AIN.ua, service will be launched in Ukraine’s five largest cities -- Kyiv, Kharkiv, Lviv, Odesa and Dnipro. By 2022, 4G service is to be available in all Ukrainian cities with populations over 10,000.

On 4G, Olha Ustinova, general director of Vodafone Ukraine, told Ukrinform: "We are ready. We are testing it so far. And we’ll start in March-April." Kyivstar, the nation’s largest mobile provider, prepared for the auction by erecting more than 500 4G towers in Ukraine’s largest cities, sea resorts, and border crossing points, the company said. This year, it plans to double that number, erecting another 600 towers. Additionally, the operator has 7,300 3G towers.

In February-March, a second tender is to be held to sell 4G licenses for 150 MHz frequency band. The starting price is to be $137 million. Concorde Capital’s Alexander Paraschiy writes: “The purchase of the licenses will stimulate mobile operators' investments into new technologies and may have an overall positive effect on Ukraine’s economy in the mid-term. This also may improve the country’s investment attractiveness.”

Ukraine’s grain harvest fell 7% last year, to 61.3 million tons, according to the State Statistics Service of Ukraine. Last year, Ukraine threshed 26 million tons of wheat, down from 26 million tons in 2016. The corn crop fell to 24.1 million tons, down from 28 million tons. Barley fell to 8.3 million tons, down from 9.4 million tons. Poor rains and lack of irrigation reduced crops from the levels of 2016, a bumper crop year.

Indonesia has unexpectedly traded places with India as the world’s largest buyer of Ukrainian grain, UkrAgroConsult reports. Indonesia is taking 16% percent of Ukraine grain sales, while India’s take has plummeted to 4%. India’s wheat harvest has recovered making the country more self reliant. Ukraine competes with Russia, which is pumping cheap grain from a bumper crop into international markets, Bloomberg reports. Russia has dominated this season’s tenders in Egypt, the world’s biggest wheat buyer.

Ukraine’s trade deficit in good and services increased by one quarter last year, to $6.8 billion. The trade deficit in goods jumped 32%, to $9.2 billion, according to the State Statistics Service. This was offset by a surplus in trade in services – largely IT – which increased 60%, to $2.3 billion.

Imports from Russia jumped last year 40%, to $7.2 billion, largely due to imports of coal, oil products and fertilizers. Exports increased by only 10%, to $3.4 billion.

The U.S. displaced Russia last year as the leading source of official private remittances to Ukraine, the National Bank of Ukraine reports. The rise in payments from the US was largely due to the increase in the export of IT services. Overall, remittances to Ukraine – largely from US, Eastern Europe and Russia – increased last year by 30%, to $5.2 billion.

Ukrainian workers in Poland may have sent home $5 billion last year, equivalent to 5% of Ukraine’s GDP, Deutsche Welle reports from Warsaw. Work permits more than doubled last year, to 250,000. Another 1 million Ukrainians work temporary jobs on the 90-day visa free regime. Almost half of employers sought Ukrainians because no local hires were available and 40% of firms in sales and services rely on Ukrainians, according to a survey of 300 companies in January by Work Service, a Warsaw recruitment company. Analysts cite labor shortages as the major threat to Poland’s continued high economic growth.

One week after the central bank raised interest rates, Prime Minister Groysman called on the bank to cut interest rates. Groysman said Wednesday at a televised cabinet meeting that Ukraine should target annual economic growth of 5-7 percent. Groysman said: “At the moment we’re thinking that the interest rate on loans needs to be lowered, as loans need to be available for the national economy.” Last Thursday, the National Bank of Ukraine raised the main interest rate 1.5 percentage points, to 16%, to contain inflation, was 13.7% last year.

Ukraine’s digital economy can create 300,000 to 400,000 new jobs and over 50 new professions, according to the Economic Development and Trade Ministry. At present, only 17% of Ukrainian industries use digital innovations, far below the EU indicator of 49%. Through public-private partnerships, Ukraine can reach 80% broadband coverage in five years.

Ukraine’s government has fired tax and customs service chief Roman Nasirov 11 months after he was suspended from his post after his arrest on suspicion of embezzlement. Nasirov is being investigated on suspicion of defrauding the state of the hryvnia equivalent of $70 million. After his arrest, Nasirov was released on bail, but ordered to wear an electronic bracelet and barred from leaving Kyiv. He is one of a handful of high officials to face prosecution after Ukraine’s 2014 Revolution of Dignity.

Denmark’s Maersk and Ukrainian Railways started Wednesday what is to be a twice a week container train running 500 km between the TIS terminal at Yuzhny port and the Kyiv Liski container park on the Dnipro left bank. In practical terms, this will take 12,000 tractor trailer trucks off the Kyiv-Odesa highway each year, Egor Grebennikov, co-founder of TIS, tells Interfax. The train will take 19 hours, three times as long as a truck. But shippers can load 28 tons in each container, 17% more than the 24-ton truck limit.

Container traffic by rail is set to grow in Ukraine, Ukrzaliznytsia CEO Yevhen Kravtsev tells Interfax. Ukrainian Railways plans to build container terminals in Vinnytsia and on Ukraine’s EU borders. Last year, rail container traffic grew by 10% to 291,900 containers. Next summer, the TIS stevedoring and logistics company plans to start a container rail line from Yuzhny to Dnipro, a 600 km distance.

Work is to start next year on a 5-year, $500 million ski resort in the 1,000-meter high Carpathian mountains surrounding the village of Verkhnia Rozhanka, 145 km south of Lviv. The resort “should become the best one in Ukraine,” asserts Volodymyr Beha, head of the Slavske united territorial community, which includes the village. The project is being financed by Galnaftogaz Concern, owner of Ukraine’s 400 Okko gas stations. Vitaliy Antonov, chairman of Galnaftogaz, is a rock climber, mountaineer, and native of Lviv Region.
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Old 2nd February 2018, 18:38
Gotno Gizmo Gotno Gizmo is offline
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An informal poll of 400 attendees of an American Chamber of Commerce in Ukraine meeting Thursday night found that 83% said they plan to expand their company operations in Ukraine this year. Voting electronically and anonymously, 15% said their operations would remain the same, and 2.5% predicted cuts. Asked about last year, 64% of respondents said their company grew, 28% said it stayed the same, and 9% said operations declined.

At the meeting, Prime Minister Groysman urged attendees to look for opportunities among the hundreds of state companies to be privatized this year. He said the government has 35 pro-business “laws in the pipeline,” including laws to protect intellectual property and to allow concessions in public service areas. He said: “I believe economic growth of 5 -- or even 7 percent -- is absolutely possible.”

Speaking at the AmCham, US Ambassador Marie Yovanovitch, argued that cutting corruption would boost economic growth. She said: “Business investment and growth in Ukraine is not where it needs to be. It is stunted by an unreliable judicial system…accelerating the fight against corruption would be the most transformative path. It could add 2% to GDP.”

To get back on track with the IMF, Ukraine must adopt market prices for gas and must create an independent Anti-Corruption Court, Goesta Ljungman, the IMF’s Resident Representative in Ukraine, told the European Business Association on Thursday. He predicted that Ukraine's economy may grow by 3% to 3.5%, this year, well within the consensus range.

A British company, Stopford Projects Limited, is to build an $85 million waste recycling plant for Dnipro, Ukraine’s third largest city with almost 1 million inhabitants. The project is self-financed and will be the property of Stopford for 15 years after completion.

The Czech government agreed to admit 19,600 Ukrainians as fast-track migrant workers this year, five times the quota of 2016. With the EU’s lowest unemployment rate – 2.3% -- companies see labor shortage as their biggest business obstacle, Reuters reports from Prague. The Czech Republic already has 117,000 legally residing Ukrainians, the largest foreign community. The EU is suing Czech for refusing to accept Muslim asylum-seekers. Prague will also fast track admissions of workers from Mongolia, a Buddhist country, and the Philippines, a largely Catholic country.

Boosted by wheat crops in Canada and Russia, world grain production will set a new record, predicts the UN Food and Agriculture Organization. In this agricultural year, July 2017-June 2018, world production will be 2.64 billion tons, 1.3% more than in 2016. At the same time, grain consumption is to grow by 1.4%. Softening prices, the ratio of stocks to consumption will be 28%, the highest level in 16 years.

New car sales were up 41% in January, compared to the same month one year ago, to 6,620 according to AUTO-Consulting. Analysts say jitters over the exchange rate prompted some buyers to speed up purchases. In 2017, sales of new cars were up 24.5% compared to 2016. Analysts predict a repeat of this growth this year.

Ukraine crude oil output continued its decline, dropping by 4.2% in 2017 to 2.1 million tons, Energy and Coal Industry Ministry reports. In 2016, oil production also dropped, falling by 7.5%.

Russia will need Ukraine’s gas pipelines to send gas to Europe for years to come, according to a report “Ukraine Needed after Nord Stream 2” in Platts, the energy news service. Russia wants to stop sending gas through Ukraine after its contract expires at the end of next year. But London-based Platts cites reasons for keeping the Ukraine transit route: high volumes passing through Ukraine in 2017, US sanctions risk against Nord Stream 2 investors, planning issues that could force route changes, and uncertainties about EU regulations.

Internet advertising rebounded by 40%, to $93 million last year, reports the All-Ukrainian Advertising Coalition. While still below the 2013 peak, advertising increased across the board last year: TV up 29%; radio up 20%; and newspapers up 18%. On the Internet, half the spend was for banner adverting.

By June, Ukraine is to have an Export Credit Agency, according to the Ministry of Economic Development and Trade. The agency will provide finance and insurance cover to Ukrainian exports.

Ukraine has opened a facility in Bangladesh to maintain, repair and overhaul Russian-made Mi-17 military helicopters for the Bangladesh Air Force. Although the helicopters are made in Kazan, Ukraine has maintained them for four decades. Bangladesh has 31 Mi-17s and five more on order from Russia. According to UkrOboronProm, the repair facility has been created by two Ukrainian firms, Aviakon and Ukrinmash.

Container trains will expand across Ukraine this year, alleviating truck traffic on highways, Yevgen Kravtsov, acting CEO of the Ukrainian Railways, predicts to the UBJ. On Wednesday, Kravtsov inaugurated a new weekly container train between Odesa and Kyiv. Later this year, he said, container trains will start from Odesa to Dnipro and from Kharkiv to Kyiv. One 56-container train replaces 56 tractor trailer trucks.

Antonov would like to convert its Gostomel airport into a major cargo hub and aircraft service center, Oleksandr Krivokon, Antonov’s president, told Liga.net. At present, Gostomel serves both functions, but in lesser capacities. The airport’s major attraction is its 3.5 km concrete airstrip and its location -- 36 km northwest of central Kyiv. With about 10% of Ukraine’s population, Kyiv is the destination for 40% of international cargo. Prime Minister Groysman proposes turning the airport, a 45-minute drive from central Kyiv, into a center for discount and charter flights.

Fresh from Doha, Infrastructure Minister Volodymyr Omelyan predicts to the UBJ that Qatar Airways will start flying this year to Lviv. He notes that the airline doubled its flights to Kyiv within weeks of launching service last August. Last year, Lviv’s airport passenger flow topped 1 million for the first time in memory. The airport’s 3.3 km concrete runway can handle the kind of long range Airbus or Boeing needed for the 5 hour Lviv-Doha flight.

Last weekend, the tourist potential of Ukraine was presented at “The New York Times Travel Show” in New York City. Representative from Kyiv City and the Lviv Tourist Office made the presentation at the show which was held at Manhattan’s Jacob Javits Center, and attended by 4,500 travel agents.

Kyiv Mayor Vitali Klitschko says Starbucks will come to his city. To date, the barrier has been price. In New York, the cheapest and simplest Starbucks coffee costs $2.42. In Kyiv, it’s equivalent, an ‘Americano,’ can be had for 42 cents. Nevertheless, Kyiv’s mayor tells NewsOne TV channel: "Starbucks will definitely come to Ukraine, to Kyiv. I have no doubt about this. It’s only a matter of time.”
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