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  #36 (permalink)  
Old 5th February 2018, 14:03
Gotno Gizmo Gotno Gizmo is offline
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Backed by an R&D facility in Dnipro, Britain’s Skyrora plans to launch a suborbital test flight from Scotland before the end of this year. With offices in Edinburgh and Glasgow, Skyrora plans to launch small satellites from Scotland next year. Daniel Smith, Skyrora’s business development manager, tells Spacenews: “As a British company, it’s helpful [for us] to have access to Ukrainian knowledge…we outsource some design tasks to a team over there that has a mixture of real launch experience and young dynamic university graduates.”

Nord Stream 2 AG has received permits to build the Ukraine bypass gas pipeline through the territorial waters of Germany and the land area near Greifswald, a total of 55 km. A Nord Stream 2 press release writes: “Procedures for obtaining permits in the other four countries along the pipeline route - Russia, Finland, Sweden and Denmark, are on schedule. Nord Stream 2 has met all the requirements and expects to receive permits before the start of construction in 2018.”

Ukraine’s economy grew by 2.1% last year, slightly down from the 2.3% recorded in 2016, the National Bank of Ukraine reports. Growth tailed off in the third and fourth quarters due to irregular rains that depressed harvests, the central bank says. Two weeks ago, the bank raised its forecast for GDP growth this year to 3.4%, from 3.2%. Concorde Capital’s Evgeniya Akhtyrko writes: “In 2018, we see GDP growth accelerating to 3.5% yoy fueled by consumption, investments, and a low comparative [level] from industry and farming.”

With corn export prices half of their 2011 peak, a recent bump in prices is not motivating some of Ukraine’s biggest corn growers to expand production, Bloomberg reports. Facing strong competition from Brazil, Ukrainian farmers also are hurt by a 14% harvest drop, caused by poor rains. For the next season, Mriya and Nibulon plan to reduce plantings by at least 17%. For this season, Ukraine’s corn exports are down 16%.

Ukraine has adopted about 400 EU agricultural regulations since the free trade agreement provisionally went into effect three years ago. Mykola Tochytskyi, Ukraine’s representative to the EU, tells Ukrinform that a major task for coming years is to continue to align Ukraine’s sanitary and phytosanitary standards with those of the EU. During the first 1l months of 2017, Ukraine's exports of agricultural products to the EU jumped by 38%, to $5.2 billion.

Business complaints to Ukraine’s Business Ombudsman Council jumped at the end of last year. In Q4 2017, the Council received 729 complaints - more than the total for the previous three quarters. "Nearly three quarters of the complaints received related to tax issues," the Council reports, alluding to tax inspections and openings of criminal proceedings. The crescendo of complaints may be partly due to business executives losing patience with tax authorities during the course of the year. In Q4, the Council opened a record 519 investigations. Of the 429 investigations it closed in Q4, almost two thirds ended with positive results for complainants.

Household gas prices will not increase through the end of this heating season, usually mid-April, Prime Minister Groysman said Friday at a community meeting in Bohuslav, 140 km south of Kyiv. In 2017, Ukrainian households cut gas consumption by 6%. Timothy Ash writes: “Ok, so backtracking by Groysman, opening the way for gas price hikes before the start of the next heating season in October. What we are seeing is lots of efforts by the Poroshenko administration to give the IMF sweeteners - NBU governor, Nasirov firing, privatization bill, plus also suggestion of gas price hikes. Albeit the key still is the anti-corruption court.”

After losing a Bangladeshi helicopter maintenance contract, Russian defense industry firms are sending potential customers threatening letters maintaining that only Russian companies “have the right to repair or modernize Soviet equipment,” Sergii Siliusarenko, CEO of Ukrinmash, a state-owned defense investment and export company, said Friday. Rejecting such ‘blackmail,’ Siliusarenko told Ukroboronprom: “Repair of aviation equipment — both helicopters and aircraft — constitutes significant income for Ukraine.” Ukroboronprom said that the helicopter repair facility contract “strengthened [Ukraine’s] positions and expanded possibilities for repairing military equipment of Soviet production on the markets of third countries.”

A 16 MW solar power plant has been commissioned in Vesele, Zaporizhia, about 50 km north of the Black Sea coast. The owner, Solar Park Pidhorodnye, previously built two small solar plants with a total installed capacity of 1.6 MW in nearby Dnipropetrovsk.

Poland is by far the country of choice for Ukrainian labor migrants, new statistics show. Of all residence permits received by Ukrainians in 2016, 87% were issued by Poland, according to Eurostat. And, of all the work permits issued by Poland during the first half of 2017, 95% were issued to Ukrainians, according to Poland’s Ministry of Family, Labor and Social Policy. The National Bank of Ukraine predicts that labor migration will continue this year.

Starting April 19, Wizz Air’s London Luton – Kyiv Zhuliany flight will become daily. Also in the spring, flights from Zhuliany to Wizz Air’s Budapest hub will increase from three times a day to nearly four times a day. Wizz Air also is moving up the start of its Lviv-London flights to May. These moves come as Infrastructure Minister Volodymyr Omelyan tells UBJ that he is “99% certain” that Wizz Air’s discount rival, Ryanair, will start flying to Ukraine in the first half of this year.Ukraine International Airlines is to increase its seat capacity by 16% this year according anna.aero’s analysis of schedules published by Ukraine’s national flag carrier. Despite the loss of Russia flights in 2015, UIA more than tripled its seats since 2012, to 7.9 million in 2017. Last year, UIA’s fastest growing market was Germany, with seats out of Boryspil to four Germany cities up by 47%.

Domestic air traffic increased last year by 17.6% to 930,900 passengers, according to the State Aviation Service. With five airlines serving nine cities, Ukraine has a low level of domestic air traffic given its large size, comparable to France. This year, the Infrastructure Ministry is taking steps to promote new domestic flights and cheaper tickets.

This year, 17 cruise ship calls are scheduled for Odesa, a marginal improvement over last year’s level of 13 port calls and 3,155 cruise tourists, Odesa seaport's press service tells UNIAN. In 2013, cruise ship visits peaked at 106. After Russia’s 2014 annexation of Crimea, sanctions barred cruise ships from visiting Sevastopol and Yalta. Terrorist violence against tourists in Turkey also made Black Sea Turkish ports unappealing to some Western cruise passengers.
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Old 6th February 2018, 16:45
Gotno Gizmo Gotno Gizmo is offline
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Ukraine Business Journal

Ukraine’s food exports to the EU grew by 37% last year, more than twice as fast as the 16.3% global growth of Ukraine’s food exports, Olga Trofimtseva, Deputy Minister of Agrarian Policy and Food for European Integration, tells the UBJ. Food sales to the EU amounted to $5.8 billion last year. In addition to big ticket staples -- cereals - $ 1.7 billion, cooking oil - $ 1.4 billion – processed exports experienced high growth. Poultry doubled to $134 million. Confectionery products almost doubled to $38 million. Flour products rose by one third to $96 million. Juices rose by one third to $71 million. And honey rose by one quarter to $99 million.

Ukraine should expect a record apple harvest of over half a million tons, Andrew Yarmak, economist for the UN’s Food and Agriculture Organization, posts on Facebook. With the 2018-2019 apple harvest expected to grow by 11%, Ukraine will have 130,000 tons available for export. With Russia’s market largely closed, major markets for Ukraine’s apples will be the Middle East and Southeast Asia.

Ukraine produced 1 million tons of eggs last year, placing it on the list of the world’s top 10 egg producers. Ukraine ranks 10th, after Turkey and Indonesia.

About 2,000 households switched to solar power last year, taking advantage of a high ‘green’ tariff for sale of electricity to the grid. In a tariff guaranteed through 2030, household solar electricity sells for 18 euro cents the kWh. In the last three years, households have invested $65 million in solar systems, according to the State Agency for Energy Efficiency and Energy Saving.

Interest rates may rise again this year if inflation does not come down, say members of the National Bank of Ukraine Monetary Policy Committee. Newly released minutes of the last meeting of the 6-member Committee read: “The majority of the MPC members concurred that the key policy rate might be raised in the near future if there are no strong indications of lowering inflationary pressure." At that meeting, on Jan. 24, the Committee raised Ukraine’s prime rate to 16%.

An anti-corruption court bill should go before the Rada this week, Andriy Parubiy, parliament speaker, tells reporters. By the end of February, the Rada should vote on Yakiv Smoliy as central bank governor. Timothy Ash writes: “This is the bill which is non IMF compliant. As per the strategy with regards to pension reform, Poroshenko’s strategy seems to be to ram home his versions of various bills, which don’t address IMF concerns, and then hope the IMF caves in.”

IMF spokesman in Washington William Murray says the bank stands by its position that the draft law on an anti-corruption court be brought “fully in line with Ukraine's commitments under the IMF program and the recommendations of the Venice Commission.” Murray also said an IMF team visit to Ukraine has not been scheduled. Concorde Capital’s Alexander Paraschiy writes: “All that's left for the financial community is to hope that increased pressure on Ukraine’s President from abroad, as well as the clear risk of Ukraine being denied borrowing from all IFIs, will force the President and parliament to approve the necessary legislation on the anti-corruption court in the soonest time frame.”

If Kyiv can get back on track with the IMF, the exchange rate will end the year at 29.5 hryvnia to the dollar, Tomasz Fiala, CEO of Dragon Capital, predicts. With today’s rate of 27.7 hryvnia to the dollar, that would mean a 6% devaluation. Fiala said: "Without the IMF money, it can, of course, be worse, much worse."

Foreigners without residence permits can now register as individual entrepreneurs, a major tax advantage, Olesksiy Honcharuk, head of the Better Regulation Delivery Office, writes on Facebook. UNIAN reports that almost 1.8 million individual entrepreneurs – many of them IT workers -- are registered in Ukraine. Referring to Ukraine’s growing IT sector, Honcharuk writes: “The fewer barriers, the more investment."

In a promising economic sign for 2018, cargo handled in January by Ukraine’s 13 sea ports was up 11% over the same month last year, according to the Seaports Administration. Last year, cargo handled by the ports increased by only 1%. This January, exports were down 1%, but imports jumped by 70%. Overall, the ports handled 913 ships in January, 47% more than in January 2016.

Betting on growth of consumer spending, Ukraine’s Foxtrot home appliance chain plans to open 10 new stores and to invest $5 million to renovate its 40 flagship stores, the company reports. With 158 stores in 90 cities across Ukraine, Foxtrot has 7 million Ukrainians – about one quarter of the adult population – enrolled in its ‘Fox Club’ loyalty program.

About 425,400 cars with foreign license plates circulate in Ukraine, the State Fiscal Service reports. This represents about 5% of all cars in the country. It is three times the 138,944 new and used cars sold in the country last year. Almost one quarter of the foreign registered cars are from Poland. Most of the cars have violated their temporary stays as owners duck import taxes and paperwork.

Bavaria, the heart of Germany’s car making industry, will open a political representational office in Kyiv this year, a German diplomat says. Two weeks ago, Stepan Kubiv, Ukraine’s minister of Economic Trade and Development, led a business delegation to Bavaria’s capital, Munich.

The European Aviation Safety Agency is to review and, ideally, certify Uzhgorod International Airport, under a $75,000 contract with the Infrastructure Ministry. Unique among Ukraine’s 17 commercial airports, Uzhgorod uses Slovakian airspace for takeoffs and landings. Therefore, it needs EU certification. The airport’s sole runway, 2km of asphalt, stops 90 meters short of the international border. In July 2016, Uzhgorod, the nation’s westernmost airport, lost its sole scheduled flight, to Kyiv. Instead of a 1h15 min air hop to Kyiv, residents now choose between a 10h30 car drive or a 12h30 train ride to the capital. Lviv airport is a four drive north. Košice Airport, in Slovakia, is 100 km to the west.
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Old 8th February 2018, 12:32
Gotno Gizmo Gotno Gizmo is offline
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Ukraine Business Journal

Due to irregular rains, Ukraine’s key sunflower seed crop fell by 10.7% in 2017, while the planted area only fell by only 0.7%, reports the State Statistics Service. Even worse, soybean production fell by 9%, while the planted acreage increased by 6.3%. In contrast, production of rapeseed almost doubled while the planted area increased by 6.3%. Used for canola cooking oil, rapeseed is the most drought resistant of the three oilseeds.

Ukraine ranks 39th of 15 countries in a 2017 budget transparency index. Compared to 2016, Ukraine rose 18 positions in the Open Budget Index compiled by the International Budget Partnership. In the Index, Ukraine is tied with Spain, and eight positions higher than Hungary. Oksana Markarova, First Deputy Finance Minister, told reporters that one positive factor is the new E-Data budget portal. Open around the clock, it gets 20,000 visitors a day.

Two years after a legal deadline, 16,743 Ukrainian companies have not made public the identities of their ultimate owners, according to OpenDataBot, a monitoring service of registration data. In the aftermath of the 2014 Revolution of Dignity, the Rada passed a law setting a 2015 deadline obliging Ukrainian companies to submit information to the state registrar about their ultimate beneficiary owners.

Google’s Ukraine affiliate increased its revenue by 75% in 2017, entering the list of the nation’s top 100 taxpayers, Google LLC Director General Dmytro Sholomko, reports to Interfax. Contributing to this growth, Ukraine’s mobile Internet has exceeded traditional computer internet, he said. Participating in a European Business Association macroeconomic forecast, he said Ukraine’s IT advancement is reflected in decisions by PayPal, Samsung and Waze to open development centers here.

Power distributor Ukrenergo, a leading target for cyber attacks, will invest up to $20 million in a new cyber defense system, its chief executive said Tuesday. Vsevolod Kovalchuk told reporters that Ukrenergo and international consultants identified about 20 threats. These would be neutralized by new software and a new system to be in place by 2020. In the last two years, cyber attackers, believed to be Russian, cut the power on two occasions – once in western Ukraine and once in Kyiv. Reuters quotes Kovalchuk saying: “We have developed a new concept of cyber security whose key goal is to make it physically impossible for external threats to affect the Ukrainian energy system.”

“Ukraine’s investment shortage puts rebound at risk,” warns an article in the Financial Times from Dnipropetrovsk region. High domestic interest rates and skittish foreign investors are blamed for last year’s low GDP growth rate of 2%. Ivan Miklos, an advisor to President Poroshenko and a former Slovak finance minister, says direct investment is only 15% of GDP, far below the 25% needed to get Ukraine growing at 6-7% a year.

Inflation will taper off to single digits by the middle of 2019, Yakiv Smoliy, acting governor of the National Bank of Ukraine, predicted Tuesday in a meeting with Rada MPs, Ukrinform reports. Last year, inflation was 13.7%. After raising Ukraine’s prime interest rate two weeks ago, Smoliy lost popularity in parliament. He now is meeting with parliamentary factions to win support in a confirmation vote, expected for the end of this month.

Ukrainian science researchers punched above their weight, winning 5.5% percent of EU grant money spread among 42 countries -- 28 EU member nations and 14 associated nations. Competing for Horizon 2020 grants, 83 Ukrainian organizations -- universities, research institutions and private sector entities -- won EUR 17.2 million, or about EUR 207,600 apiece. In this highly competitive contest, 16% of Ukraine’s 505 applicants won grants.

London-based Opal Transfer is launching a new money transfer service between Poland and Ukraine. Using the fintech company’s app, users can do same day transfers for $1.50. Poland’s National Bank estimates that in 2016 Ukrainians transferred home 5 billion Polish Zloty, or $1.5 billion.

To modernize rail infrastructure, Ukraine will invest $650 million this year, the largest amount in a decade, Infrastructure Minister Volodymyr Omelyan told reporters Tuesday. Of interest to business, the state railroad will buy 30 General Electric locomotives, produce 3,600 freight cars and renovate 10,000 more. For passengers, the state railroad will buy 30 new passenger railcars and modernize 226 more. About half of the money will go to completing the Beskidy tunnel through the Carpathians and to electrifying sections of track, largely feeder lines to Black Sea ports.

Ukravtodor is starting a 5-year road building and renovation program to connect all 24 regional capitals with ‘high quality’ roads, Oleksandr Kharchenko, acting deputy head of the state highway authority, told reporters Tuesday. Ukravtodor plans to spend $643 million to repair and rebuild about 4,500 km of roads this year, more than double the 2,100 km fixed last year. Under a new decentralization system, Ukravtodor is responsible for 50,000 km of roads, and local authorities are responsible another 120,000 km. Local authorities are to receive 35% of revenues going to the Road Fund.

Speeding people and vehicles across southern Ukraine’s busiest border crossings with Moldova is the goal of a new, two-year program. Funded by the EU, the project will pay for truck scales, vehicle inspection equipment, computer systems and furniture for the posts which will have both countries’ border controls under one roof. Implemented by the UN’s International Organization for Migration, the new facilities will control two border crossing points: Kuchurhan-Pervomaisc, 75 km northwest of Odesa; and Reni-Giurgiulesti, two border towns on the east bank of the Danube. EU Ambassador Hugues Mingarelli said Tuesday: "The flow through these two border crossing points reaches over 3 million persons and 800,000 vehicles per year...We are working for simpler and faster border crossing for travelers and goods."

Foreign visitors to Kyiv increased by 25% last year, to 1.6 million, according to Andrei Strannikov, head of the city council budget commission. He based this number on the tourist tax, which amounted to almost $1 million last year. After last May’s Eurovision boost, hotel keepers now look forward to 120,000 foreign visitors for the UEFA Champions League, the football final scheduled for the weekend of May 26 in Kyiv.
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Old 9th February 2018, 13:29
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Naftogaz plans to resume purchases of Russian gas next month, according to Andriy Kobolyev, CEO of Ukraine’s state energy company. Ukraine stopped buying gas from Gazprom in Nov. 2015. Six weeks ago, a Stockholm arbitration contract ruled that Naftogaz had to fulfill a purchase contract, but at current European market prices.

China Railway International Group officials have discussed subway and bridge projects in Kyiv with Dmytro Davtyan, deputy head of Kyiv City Administration. The City’s press office said Wednesday the Chinese “are ready to invest large funds in the projects.” Davtyan said: “Most technologies used by Chinese companies are high-tech and use advanced solutions.’

IT service exports increased by 7.6% last year, to $2.5 billion, according to the National Bank of Ukraine. Offering a different numbers, IT Ukraine Association, an industry group, reports on its website, that Ukraine’s exports of IT services grew by 20% in 2017, hitting $3.6 billion.

Ukraine’s Export Credit Agency has been approved by the Cabinet of Ministers with a preliminary budget of $7 million. Natalia Mykolska predicts the agency will open by the end of the year. In 2016, the Ministry of Economic Development and Trade estimated that 16.5% of Ukraine’s exports would be eligible for support.

To reverse the decline in the nation’s dairy herd, Kyiv is offering in $90 million in low interest loans this year for construction of dairy farms and a $50 a head bonus for each milk cow kept by a household for one year. As the rural population ages, elderly villagers are butchering their cows rather than milking them. Prime Minister Groysman vowed Wednesday: “Throughout this year, mass construction of farms, dairy-commodity complexes will begin. We will increase the number of livestock and the volume of products produced.”

Kyiv is expanding a program to subsidize purchases of locally made farm machinery. With $35 million set aside for the program, the government will rebate 25% of the purchase cost this year, up from 20% last year. The localization level of the equipment must be at least 35%. The Ministry of Agrarian Policy and Food estimates this will boost local equipment sales by 20%.

President Poroshenko has dismissed Boris Lozhkin as chairman of the National Investment Council and has appointed Dmytro Shymkiv as acting secretary. Shymkiv continues as Deputy Chief of Staff of Presidential Administration. The Council Board includes top executives of Turkcell, Marubeni, Sumitomo and General Electric.

The Rada has approved a bill creating a central registry of all borrowers with debts over $13,500. The central bank will maintain the registry and release information on debtors on the request of banks. Concorde Capital’s Alexander Paraschiy writes: “This is an encouraging development for Ukraine and its banking system…a centralized transparent database on the quality of borrowers will reduce the risks and costs of banks related to issuing loans to new clients...all in all, it should contribute to increased lending activity in Ukraine and better economic growth in the mid-term.”

The European Bank for Reconstruction and Development is providing $50 million in guarantees to UkrSibbank for corporate client lending, UkrSibbank reports on its website. The EBRD program is largely aimed at agricultural clients. BNP Paribas S.A, of France. Owns 60% of the bank's charter capital. The EBRD holds 40%.

The EBRD will share risk on loans made by Raiffeisen Bank Aval to SMEs totaling €20 million through 2020. The EBRD will cover up to 65% of risks for individual clients. Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval, said: “Last year, we issued loans to more than 1,100 companies, including 300 new clients. The program is an opportunity to double our support for Ukrainian companies in their business development.” Raiffeisen Bank International, of Austria, owns 68.28% of Raiffeisen Aval. The EBRD owns 30%.

The European Investment Bank has issued EUR9 million in guarantees to Ukrgasbank to support lending to small and medium-sized enterprises. The money will guarantee up to 70% of a loan. With this multiplier effect, the total volume of the loan project is estimated at EUR77 million. The Finance Ministry owns 95% of the Ukrgasbank, the fourth largest bank by assets of the nation’s 88 banks.

An IMF team will arrive in Kiev on Monday to spend the week consulting with Ukrainian authorities, according to Goesta Ljungman, IMF Resident Representative here. Almost three years ago, the IMF approved for Ukraine a four-year Extended Fund Facility worth $17.5 billion. Since then Ukraine has received almost half -- $8.4 billion.

AutoHUB, the new one stop service for importing cars at Odesa seaport, is processing cars at almost four times the rate before the service started, last September. In January, 1,800 cars were processed by AutoHUB, which groups in one building seven government and private agencies, including customs and border guards. Before the center opened, imported cars were processed at the rate of 485 per month.

Antonov sold $218 million worth of planes, parts and service last year, 1.6 times more than in 2016. Last year, Ukraine’s aircraft manufacturer recorded about $6.7 million in profit. With 10,000 employees, Antonov pays an average monthly wage of $317, the Kyiv-based company reports.

Through June, Lviv Airport is increasing by two thirds the number of foreign cities with direct scheduled service, the airport’s website reports. In addition to three Italian cities added in December, the airport is adding Barcelona, Batumi, Brno, Dortmund, Gdansk, Katowice, London Luton, and Olsztyn Poland. With these 10 new cities, Lviv will have scheduled flights to 25 foreign destinations, almost all in Europe. Starting March 1, Turkish Airlines will increase its Lviv-Istanbul flight to daily.

Ukrainians have won visa free entry to yet another nation – Antigua and Barbuda in the eastern Caribbean. With direct flights from London, Milan, New York and Miami this island nation of 100,000 inhabitants is diversifying from its historic dependence on American tourists. As signed by the ambassadors of the two nations last week in Washington, the visa free regime allows Ukrainians to stay in Antigua and Barbuda for 90 days in any 180-day period.
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Old 10th February 2018, 16:47
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The number of Kyivstar subscribers using mobile roaming in the EU increased by 25% last year, over 2016. Kyivstar, the nation’s largest largest mobile operator with 26.4 million subscribers, said the most popular countries were: Poland, Romania, Turkey, Hungary, Germany, the Czech Republic, Egypt, Russia, Moldova and Belarus. Last year, Kyivstar reduced the cost of roaming mobile services in 34 countries. At home, Kyivstar saw an explosion in use of mobile Internet, up almost four times in 2017, compared to 2016.

ICU's investment group has increased its assets in management to more than $500 million, ICU managing partner Makar Paseniuk tells Interfax. Over the last five years, the average annual growth of assets under management has been 25%. He said: “The growth is due to the positive investment result, the launch of new products, and M & A transactions.” A major manager of private pension funds, Paseniuk said he looks forward to more business through pension reform and to the creation of a commodity exchange in Ukraine. He said: “Ukraine with its potential is now one of the best countries for investment."

In its first two years of investigations, the National Anti-Corruption Bureau of Ukraine has returned to the state almost $10 million and prevented the theft of about $75 million, NABU reports. Repayments were the result of court orders and voluntary decisions.

Japan’s Toshiba Corp. plans to bid to supply turbine generators for use in Energoatom nuclear power plants, Asahi Shimbun newspaper reports. Ukraine’s state-run nuclear power company is building two new nuclear reactors and plans to replace some generators at its 15 working reactors. Toshiba’s nuclear power plant design business collapsed after the 2011 tsunami damaged a nuclear power plant in Fukushima (not designed by Toshiba). In recent months, Toshiba began looking overseas to sell nuclear power equipment.

Poltava Petroleum Company, a British-Ukrainian joint venture, will restart its drilling program in coming days, pushing several wells down to 3,000 meters, reports Viktor Gladun, acting CEO of JKX and Director of Poltava. The company’s drilling budget for 2018 is about $10 million. In a press release, Gladun praised the Rada’s decision in December to cut rental fees in half for new gas wells. He said: "The new fiscal system of Ukraine for gas-extraction business is one of the most favorable in Europe.”

Bankrupcty for Zaporizhia Automobile Plant, or ZAZ, is a matter of days, reports UkrAVTO, the owner since 2002. Once Ukraine’s largest car manufacturer, ZAZ sales last year dwindled to 1,673, or 2% of the new cars sold in Ukraine last year. Only a decade earlier, in 2008, ZAZ produced 258,000 cars, or 41 percent of the cars sold in Ukraine that year. A post-Independence joint venture with Daewoo Motors failed when the South Korean car maker folded in 2001. Since then, ZAZ has had on and off assembly partnerships with Chevrolet and China’s Chery Automobile.

Usage of “counterfeit cement” has dropped in Ukraine, the International Cement Review reports citing Ukrcement, the cement producers association. Defined as “non-factory cement and cement of unknown origin,” counterfeit cement fell from 21.5% in 2014 to 8% in 2017.

Austria and Ukraine will hold a trade and investment forum in Kyiv in mid-March, during a visit to Ukraine of Austria’s President Alexander van der Bellen. On Thursday, at a press conference in Vienna with van der Bellen, President Poroshenko invited Austrian energy companies to participate in a tender to manage Ukraine’s massive gas transportation system. Although Vienna is only a two-hour flight from Kyiv, this was the first time that Poroshenko visited Austria during his nearly four-year presidency. He said bilateral trade increased by 17% during 2017. Austria last year expanded its honorary consulate in Lviv, a former Habsburg empire city still known to German speakers as Lemberg.

The U.S. House of Representatives passed the "Ukraine Cyber Security Cooperation Act" by 404 votes, a large margin. The bill aims to promote bilateral cooperation “in the area of cyber security at the time of the continuing efforts to counter Russian hybrid aggression," the US embassy in Ukraine posted on Facebook. The bill is designed to help Ukraine secure government computer networks from cyber intrusions, to cut Ukrainian reliance on Russian information and communications technology, and to facilitate cyber security information sharing. Before becoming a law, the bill needs to pass the Senate and then to be signed by President Trump.

Addressing a key concern of the IT industry, a high level Intellectual Property Council will develop legal protection of intellectual property in Ukraine. The Council will be led by Stepan Kubiv, First Deputy Prime Minister and Minister of Economic Development and Trade.

To promote biotechnology in Ukraine, the US-Ukraine Foundation is offering $25,000 in prizes to 40 Ukrainian biotech students, researchers and entrepreneurs. Winners will be encouraged to travel to the US to engage with the American biotech community through educational exchanges, conferences and trade shows. The top four winners will receive $2,500. The next four will be invited to participate in a biotech forum in the US, with travel paid by the Foundation. The Foundation’s Biotechnology Initiative was launched last fall thanks to a gift from Irene Hoffman, a Ukrainian-American biotechnology entrepreneur in North Carolina.

“A top Arab carrier” – presumably Qatar Airways – may start flying this year to Lviv and Kharkiv, Infrastructure Minister Volodymyr Omelyan told reporters Thursday. Recently back from meetings with Qatar Airways executives in Doha, Omelyan said: “If this air carrier starts transportation from Lviv to Asia and from Kharkiv to Asia, then we will see many Poles who will come to Lviv, because it is nearby and it is cheap to get to Asia, and we will see Belarusians who will fly to Kharkiv.”

On Sat. Feb. 17, a major event of hotel industry, the International Hospitality Conference, is to draw 300 participants to the Interontinental Kyiv Hotel. Industry experts will present market statistics and analysis, data on income levels of Ukrainian and European hotels, forecasts for the industry, and information on new services. There will be speakers from Britain, France, Germany, Poland, Spain, Switzerland and Ukraine. The conference is organized by Hoteliero Hoteliers and Restaurateurs Club.
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Old 12th February 2018, 17:41
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Chinese companies made the lowest price bids in six of seven tenders to drill 42 exploratory wells for the state gas production company, Ukrgazvydobuvannya, or UGV. Xinjiang Beiken Energy Engineering will drill 30 wells and Zhongman Petroleum and Natural Gas Group will drill six wells. In the ProZorro tenders, the Chinese underbid asking prices by 21-26%. Last fall, Xinjiang won another tender to drill 24 more wells for the gas company. After increasing drilling by 21% last year, UGV plans to double drilling this year. Ukraine’s largest gas producer, UGV has set a goal of increasing gas production by one third, hitting 20.1 billion cubic meters in 2020.

Chinese buyers are canceling corn purchases from the U.S. and switching to Ukraine as Beijing tightens controls on processing genetically modified strains, Reuters reports from Beijing. Chinese grain mills are having a harder time getting permits to process GMO corn, forcing traders to turn to non-GMO shipments from Ukraine. “It is hard for U.S. corn to come in now due to the GMO issue. Getting the GMO processing permit is very difficult,” one corn trader in eastern China told Reuters. “I had only ordered 7,000 tons of U.S. corn, but had to cancel the order, and turned to Ukraine.” Of China’s 2.83 million tons of corn imports last year, U.S. supplied about one quarter and Ukraine supplied about two thirds.

Ukraine’s grain crop was down 7.3% last year, to 61.3 million tons, according to the State Statistics Agency. Wheat held steady at 26.1 million tons. But, due to irregular rains, corn was down 14.1%, to 24.1 million tons, and barley was down 12.3%, to 8.3 million tons.

Apple exports to the EU grew nine times over the last July to January season, APK-Inform reports citing Customs Statistics. Compensating for a poor harvest in Europe, Ukrainian apple exports hit 9,200 tons. Over all, Ukraine’s apple exports increased 2.3 times. The largest buyer in Belarus, taking 11,400 tons. Much of this produce is shipped on to Russia, which restricts direct import of fruit and vegetables from Ukraine.

In a good economic indicator for 2018, cargo handled by Chornomorsk port was up 47.5% in January compared to January 2016. Exports were up 29%, to 1.4 million tons. Imports almost tripled, to 397,000 tons. Last year, cargo was up by 11.6% at this port near Odesa which handles bulk and container cargo.

Imports of used cars tripled last year, to 72,900, just below the level of new car imports, 80,500, the State Fiscal Service reports. New car imports were up 28%. Used car imports jumped largely because import duties were cut in August 2016. Last year, about $2,800 was paid on each imported car, 28% less than the 2016 average.

Eurocar, Ukraine’s lone functioning car plant, increased car production in January by 60% to 479 cars, compared to one year earlier, Ukravtoprom trade association reports. Located in Zakarpattia, on the border with Slovakia and Hungary, Eurocar produces a full line of Skoda cars.

A $30 million, 36 MW solar power plant will be built with EBRD and World Bank loans at Ternovytsa, midway between Lviv city and the Polish border. The European Bank for Development and Reconstruction and the World Bank’s Clean Technology Fund will loan the money to Zinoviy Kozitsky, a local energy entrepreneur, to build the plant on a brownfield site, an abandoned chemical plant. Later, the plant's capacity is to double to 72 MW. Earlier, the EBRD financed construction of two Kozitsky wind power stations near the Lviv region town of Stary Sambir.

Belgium’s Upgrade Energy will build a 25-30 MW solar power plant in Zhytomyr region, the region’s press service reports. Land leases have been signed in the Irshansk area, about 160 km west of Kyiv. Design work has been started by Irshankaya SES, a company with investment by Estonia Energy Invest.

A large Austria-Ukraine business forum will be held in Kyiv in mid-March, Kostiantyn Yeliseyev, deputy head of the Presidential Administration, told Inter TV channel Friday night. At that time, Austria’s President Alexander van der Bellen is to visit to Ukraine accompanied by company executives. Noting that Austria is major investor in Ukraine, Yeliseyev said: “The Austrian president will come with a powerful business delegation, and of course, our two presidents will open this business forum.”

Ukrainians rank second in a list of “50 influential people of the Polish economy” made by a Polish newspaper. Gazeta Prawna hails Ukrainians as the “collective hero of the Polish economy,” placing them in importance between Poland’s Prime Minister and President. Noting Poland’s shrinking workforce and expanding economy, the “immigrants from the East soften and hinder demographic changes.” The newspaper says that in 2017, Polish employers filed statements of intent to hire 1.7 million Ukrainians, one third more than in 2016. Gazeta writes of Ukrainians: “It is for them the fastest and most popular form of employment. It allows you to work legally for half a year within 12 months.”

Foreign banks lead the list of most profitable banks compiled by the National Bank of Ukraine. As measured in hryvnia, the most profitable banks were: Raiffeisen Bank Aval (UAH 4.47 billion); UkrSibbank (UAH 1.47 billion); Credit Agricole Bank (UAH 1.1 billion); Citibank (UAH 1 billion); Ukreximbank (UAH 929 billion); OTP Bank (UAH 918 million); FUIB (UAH 786 million); Alfa Bank (UAH 655 million); Ukrgasbank (UAH 624 million), and Sberbank (UAH 559 million).

The biggest money losing banks were: PrivatBank (-UAH 22.97 billion); Prominvestbank (-UAH 7.67 billion); VTB Bank (-UAH 4.1 billion); Ukrsotsbank (-UAH 3.1 billion); Forward Bank (-UAH 639 million); BTA Bank (-UAH 563 million); Bank Credit Dnipro (-UAH 446 million); Bank Clearing House (-UAH 347 million); Pravex Bank (-UAH 110 million); and Misto Bank (-UAH 84 million).

Inflation was 1.5% in January, compared to 1% in December, the State Statistics Service reports. Inflation in 2017 was 13.7%. At the end of January, 12-month inflation was 14.1%. In January, food and juice prices increased by 2%.

To attract Ryanair, but placate Ukraine International Airlines, Kyiv’s Boryspil Airport has adopted a policy of discounting airport passenger fees and landing charges for new passengers and new flights. Discounts are to start at 80% and then be phased out over the next five years, or the airport reaching an annual passenger flow of 20 million, whichever comes first. Last year, the airport handled 10.6 million passengers. With this discount policy effective Feb. 1, Infrastructure Minister Volodymyr Omelyan believes the stage is set for the arrival this year of Ryanair.
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China-Ukraine trade should jump 30% to $10 billion this year, Stepan Kubiv, Economic Development and Trade Minister, wrote on Facebook after a meeting with Chinese officials on Friday to discuss the Ukraine-China Action Plan. Fresh from the meeting, he hailed the “the $7 billion China is ready to invest in Ukrainian projects, including infrastructure, such as ports, the bridge [over the Dnipro] in Kremenchuk, the Odesa-Mykolaiv [cement] road, the large beltway around Kyiv, on concessionary financial terms, and another Metro line.”

Chinese visitors to Ukraine increased by 51.4 percent last year, to 31,114, Ukraine’s State Statistics Service report. Starting in June 2016, Chinese visitors get 15-day visas on arrival at Kyiv Boryspil or Odesa airports. Overall, 14.2 million foreigners visited Ukraine last year.

January's 14.1% year over year consumer inflation provokes comment. Dragon Capital’s Olena Bilan writes: “Inflationary pressure is likely to remain significant this year because the economic policy will remain socially-oriented before the elections in 2019… We expect price growth will reach 9.5% y / y at the end of 2018 and 6.5% at the end of 2019…we believe that the central bank will adhere to tight monetary policy this year..the National Bank is likely to again raise the discount rate on March 1 (after three consecutive increases in October, December and January) to 350 basis points overall to 16.0% per annum.”

Concorde Capital’s Evgeniya Akhtyrko writes: “A massive injection of budget funds into the economy at the end of 2017 boosted consumer demand throughout the holiday season in January…Higher global prices for oil, coupled with depreciation of the national currency, drove Ukraine’s gasoline prices higher, pushing public transportation providers to raise their prices even more. We expect consumer inflation to slow from current highs only in 2H18.”

For the first time in a decade, Fitch rated Odesa as a bond issuer, giving the city a B- rating with a stable outlook. Since October, Fitch has given the same rating to Kharkiv, Kyiv and Lviv.

The IMF’s mission chief for Ukraine, Ron van Rooden, met with Prime Minister Groysman in Kyiv on Monday. Van Rooden, who has held the post since 2015, is leading a weeklong technical mission here to assess Ukraine’s compliance with the three-year-old $17.5 billion loan program that is to expire one year from now. Finance Minister Oleksandr Danylyuk has said the visiting IMF experts would give Ukrainian authorities recommendations on the Anti-Corruption Court.

Prosecutor General Yuriy Lutsenko has taken steps to start the dismissal process for Finance Minister Danylyuk. The moves come after the Finance Minister publicly called on Lutsenko to resign. Concorde Capital’s Zenon Zawada writes: “Danylyuk has had a feud with President Poroshenko and Lutsenko ever since becoming Finance Minister in April 2016, which has recently intensified. Danylyuk’s advantage in this conflict is that he has strong relations with IMF officials, having earned their trust.”

Ukrposhta, the national postal operator, sold its first bonds Monday, worth a total of 150 million hryvnias, or $5.4 million, UNIAN reports, citing the public joint stock company’s press service. According to Oleksandr Chernyavsky, first deputy General Director for Financial Issues, money raised will be used for buying new trucks and computers, upgrading equipment, and improving energy efficiency.

Interpipe boosted sales volumes by 35% in 2017, to 767,000 tons, the metallurgical mill company reports in a press release. Pipe sales increased 31%, propelled by sales to the US, which jumped 109% to 90,000 tons. Concorde Capital’s Dmytro Khoroshun writes: “The worldwide revival of oil and gas drilling activity, which was the reason for the increase in Interpipe’s pipe products sales in 2017, is likely to continue supporting this segment in 2018…the 20/20 strategy (to produce 20 bln cubic meters by 2020) by UkrGasVydobuvannya, Ukraine’s state-owned largest natural gas producer, has become the major growth driver for pipe product sales in Ukraine.”

This year, 49 new Ukrainian movies will be released, Philip Illienko chair of the State Film Agency, tells Channel 5 TV. “The most ambitious premiere of the coming months will be the emotional film The Stolen Princess. It is the second full-length 3D animated feature film in Ukraine's history, and it is likely to be a box office success.” The current hit is “Cyborgs,” the story of Ukrainian soldiers who fought to defend Donetsk Airport. Since release in December, it has earned $800,000 at the Ukrainian box office, about half of its $1.5 million budget. Half of the budget was a state grant, which does not have to be repaid. Release in Russia is not possible.

Reflecting the high caliber of visitors to the first Ukraine House at the World Economic Forum in Davos last month, new companies are asking about serving as corporate sponsors, Lenna Koszarny, Horizon Capital CEO and Ukraine House Davos Organizing Committee member, tells UBJ. About 5,000 people visited during the five-day meeting at Davos, sometimes called “a billionaires club.” Rather than Ukrainians talking to Ukrainians, Koszarny says seats were taken by “global investors, leaders and top officials from Europe and the U.S., as well as from Middle East, India and Asia.”

Ukraine International Airlines, the nation’s largest carrier, has expanded its fleet by leasing its 34th Boeing 737. UIA has an all-Boeing fleet, with the exception of five Brazilian-made Embraer regional jets.

Italy's Ernest Airlines intends to launch this spring three new flights to Italy from Kyiv and Lviv, according to Ukraine's Center for Transport Strategies. Ernest would fly from Kyiv Zhulyany to Bologna and from Lviv to Rome and Milan–Malpensa. The flight to Malpensa would supplement Ernest’s existing flight from Lviv to Milan-Bergamo, according to a company announcement at the BIT Milano 2018 International Tourism Exchange.

LOT Polish Airlines wants to launch Warsaw flights to three Ukrainian cities with no flights to Poland: Dnipro, Ivano-Frankivsk, and Vinnytsia. Also, UNIAN reports, Poland’s LOT wants to carry out Kyiv-Lviv-Warsaw and Odesa-Lviv-Warsaw flights. EU member states permit ‘cabotage,’ or allowing an airline from Country A to carry passengers between two cities in Country B. Ukrainian law is believed to allow a foreign carrier to pick up or drop off international passengers along a domestic route, but not to carry them between two Ukrainian cities.LOT Polish Airlines wants to launch Warsaw flights to three Ukrainian cities with no flights to Poland: Dnipro, Ivano-Frankivsk, and Vinnytsia. Also, UNIAN reports, Poland’s LOT wants to carry out Kyiv-Lviv-Warsaw and Odesa-Lviv-Warsaw flights. EU member states permit ‘cabotage,’ or allowing an airline from Country A to carry passengers between two cities in Country B. Ukrainian law is believed to allow a foreign carrier to pick up or drop off international passengers along a domestic route, but not to carry them between two Ukrainian cities.
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