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  #43 (permalink)  
Old 14th February 2018, 17:39
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Ryanair, Europe’s largest airline, will fly to Ukraine this fall, Infrastructure Minister Volodymyr Omelyan told Hromadske TV. The schedule of flights, to Lviv and Kyiv Boryspil, will be announced in coming weeks. The low cost airline will be arriving one year late. Flights were to start last October, but a deal fell through after a dispute with Boryspil about airport fees.

Kyiv’s Boryspil International Airport was Europe’s third fastest growing airport for its size last year, the Airports Council International Europe reports. With 22.1% percent growth, to 10.5 million passengers, Boryspil was bested only by Keflav*k, Iceland, up 28.3%; and Naples, up 26.6%. With its growth, Boryspil outgrew its category, the 5 to 10 million passenger group. Among Europe’s non-EU countries, the airports of Ukraine, Moldova, Georgia and Iceland showed the region’s highest growth, an average increase of 20%.

Boryspil, Ukraine's largest airport, saw record $152 million revenue last year, the Kyiv-based Center for Transport Strategies reports. After recording 10.5 million passengers, Boryspil’s management starts a 6-year, $224 million modernization program designed to double traffic by 2023, to 20 million. Boryspil accounts for 60% of Ukraine’s air traffic and offers direct flights to about 100 cities.

Kharkiv is tripling cities served with regularly schedule flights, from five today to 16 this summer, Vladimir Vasilchenko, the airport general director, told journalists Tuesday. Sky Up, Ukraine’s new discount carrier, will start flights in June from Kharkiv to Barcelona, ​​Larnaca, Tivat, Burgas and Rimini. Domestically, Sky Up will fly from Kharkiv to Lviv and Odesa. Wizz Air will start flights to Katowice and to Dortmund. Georgian Airlines will start flights to Tblisi and UIA to Bergamo. In addition, the airport is negotiating flights to Dubai with Fly Dubai and to Vienna with Austrian Airlines. With the new flights, the airport is expected this year to top one million passengers. Julia Svetlichna, governor of Kharkiv region, said: "Kharkiv airport is the largest in the east of the country. It serves the inhabitants of Kharkiv, Donetsk, Lugansk, Zaporozhye, Sumy, and Poltava regions.”

YanAir airline will start regular flights from Odesa to Krakow on May 22. The 90- minute, 900 km flight to Poland’s second largest city, comes after Polish LOT Air recently started Odesa-Warsaw flights. This spring YanAir starts flights from Odesa to Batumi, Tblisi, and Tel Aviv. The slowest growing of Ukraine’s eight biggest airports, Odesa saw its traffic rise 18.3% last year to 1.2 million. This year, it will probably be overtaken this year by Lviv.

For 2018, ICU investment bank forecasts 3% GDP growth and a year end dollar exchange rate of 28.5 hryvnia. The trade deficit will grow, boosted as steel and iron ore prices decline 8-16% in 2018. High oil and gas prices also will hurt. But, IC writes: “Ukraine has already started increasing its energy independence and there is growing export potential this year.”

Ukraine’s cash-based ‘shadow’ economy fell to 33% of GDP in the first nine months of last year, down three percentage points from the same period in 2016. By sector, the Ministry of Economic Development and Trade observed the following drops: real estate transactions – to 38% from 46%; wholesale and retail trade -- to 22% from 27%; financial and insurance activities -- to 49% from 53%; and construction -- to 28% from 34%.

Shadow employment’ in Ukraine fell by 8% to 3.7 million workers last year, Andriy Reva, Minister of Social Policy, told reporters Tuesday.

The World Bank’s International Finance Corporation is to provide Astarta agro-holding with a long-term loan of $30 million. If approved by the IFC board, this would be the the fourth IFC loan to Astarta since 2012. Spread over Poltava, Vinnytsia, Khmelnitsky, Ternopil, Zhytomyr, Chernigov, Cherkasy and Kharkov regions, Astarta has sugar factories, dairy farms and a land bank of 250,000 hectares.

Agroliga, a major Kharkiv-based agro-holding, reported to the Warsaw Stock Exchange that its net profit increased 11.4% in 2017, to EUR 4.2 million. This spring, the company plans to launch a new EUR 9 million vegetable oil refinery in Nova Vodolaha. With a base capacity of processing 100,000 tons of raw materials, it can be expanded for a small additional investment to 280,000 tons.

The number of cows in Ukraine on Feb. 1 was down 4.5% yoy, to 3.5 million, the State Statistics Service reports. Similarly, the number of pigs decreased by 8.2% to 6 million, and the number of sheep and goats by 5%, to 1.3 million.

Mariupol, Ukraine’s major port on the Sea of Azov, increased cargo handling in January by 32% yoy, according to the Sea Ports Authority. Open year around, Mariupol is a full service port with 4.2 km of berths and capacity to handle ships up to 240 meters long and with drafts up to eight meters. Ukraine fears that Russia’s construction of a bridge over the Kerch Strait could strangle the port.

The CEO Ukroboronprom, Ukraine’s state-controlled defense conglomerate, has announced his retirement. Roman Romanov, the CEO, said in a statement posted on the company website that since war with Russia began in summer 2014 “more than 16,000 pieces of weapons and military equipment have been handed over to the Armed Forces of Ukraine, National Guard and other security forces.”

DTEK, Ukraine's largest privately held energy holding, cut production of anthracite coal by 52% percent last year, to about 10 million tons. This was due to the loss in March of control over anthracite mines in separatist areas of Donetsk and Lugansk regions. Overall, DTEK’s coal production dropped by 11.3% to 27.7 million tons. The company cut coal exports by 44% and sharply increased imports – from Poland, South Africa and the US.

Vodaphone, Ukraine’s second largest mobile operator, has lost access to subscribers in the separatist-controlled half of Donetsk region. Alexander Zakharchenko, the rebel leader, said that a one-month long break in a Vodaphone cable justifies the separatists breaking with Vodaphone. He asked the estimated 1 million residents of the separatist area to open accounts with a new local operator, Phoenix.
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Old 15th February 2018, 18:46
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Ukraine Business Journal

The net inflow of foreign direct investment to Ukraine was $2.3 billion last year, Prime Minister Groysman told government officials Wednesday. He added: "Last year we attracted 2.3 billion dollars in direct investment. This is a good figure, but not sufficient."

General Electric Transportation and Ukrzaliznytsia, the state railroad, are to sign next week a cooperation agreement for building GE locomotives in Ukraine. With production expected to be at the Kriukiv Railway Car Manufacturing Plant in Kremenchuk, the rate of localization is to rise from 10% at the start to 40% several years from now. Ukrzaliznytsia’s sole locomotive plant is in a part of Luhansk now controlled by separatists. According to some reports, the main machinery has been shipped to Russia.

A Chinese state company will loan $500 million to finance a Ukrainian state mortgage project here for residential housing. Ukraine’s Cabinet of Ministers approved on Wednesday the loan from China National Complete Engineering Corporation, or CCEC. Homebuyers will get 15-year mortgages at 4.5% interest a year. At present, most houses and apartments are sold for cash. Lev Partskhaladze, deputy minister of regional development, construction and housing, hailed the loan, writing on Facebook: “Under simplified leasing conditions, more citizens will be able to purchase their own housing.”

Ukraine’s corn exports to China are expected to rise by 25% this year, to 2 million tons, UkrAgroConsult forecasts. In the last week, three Panamax ship cargoes were sold to China, with ADM, Ameropa and Nibulon said to be among the sellers.

Lviv Tobacco Factory, Ukraine’s only cigarette producer, is preparing to undergo an international standard audit with an eye to an IPO in 2019. The company has about 9% share of a market that is gradually shrinking, more recently because of a new 29% tax on cigarettes. Dengi.ua reports that the owners “are negotiating with a Chinese tobacco company about possible investment in production.”

Polish retail operator LPP Group plans to expand its Ukraine retail space by 24% this year, adding 10 new stores. Selling the brands Reserved, Cropp, House, Mohito, and Sinsay, LPP currently has in Ukraine 88 stores and 49,000 square meters. Claudia Skorlutovskaya, LPP spokeswoman, told Interfax-Ukraine: "The Ukrainian market is characterized by significant sales potential.”

The average monthly salary in Ukraine will exceed UAH 10,000, or $357, this year, Prime Minister Groysman predicted Wednesday. Adjusted for inflation, real wages grew 19% in 2017 and 9% in 2016, he said. He added: “Prices are rising. So our task is to make people's income grow faster than prices rise.

GDP growth in the last quarter of 2017 was 1.8%, the State Statistics Service reports. With this figure, Ukraine’s economic growth slowed every quarter of last year: Q4 2016 was 4.5%, Q1 was 2.5%, Q2 was 2.3%, and Q3 was 2.1%. The National Bank of Ukraine forecasts a reversal this year, with the GDP growing at 3.4%.

Business sentiment indicators point to economic recovery, reports the State Statistics Service. Using a standard methodology promoted by the IMF, Ukraine’s economic sentiment indicator in Q1 is 110.1%. That is 30% higher than the level of 84.5% recorded one year ago.

Ukraine recorded a $2.6 billion trade deficit last year, a reversal from a $540 million trade surplus in 2016, the State Statistics Service reports. Exports increased by 16% to $52.3 billion. Imports increased by 23% to $55 billion. In trade with the EU, exports grew 27%, to $20 billion. Imports grew 19% to $23.3 billion. In trade with CIS countries, exports increased by 9% to $10.7 billion. Imports – propelled by coal purchases from Russian -- jumped by 31% to $12.1 billion.

About 14,000 Ukrainian companies exported their goods to EU market last year, Mykola Tochytsky, Ukraine’s representative to the EU tells Ukrinform. Noting that 734 new Ukrainian companies started selling their product to the EU last year, he said: “The share of the EU in the structure of Ukraine's foreign trade now is almost 43%. In 2013, this figure was slightly more than 20%."

In this decade, Ukraine has switched from tomato paste importer to tomato paste exporter, reports the website Tomato News. François-Xavier Branthôme, roving tomato correspondent, reports that Ukraine’s tomato production this year is to hit 730,000 tons, about three times the level of 2010. Growth came from increasing tomato fields by 25% and by doubling yields to 90 tons per hectare. Most growth comes from Inagro’s Agrofusion, which last year produced 83% of the nation’s tomato paste. After Russia, Ukraine’s main market, abruptly closed its doors in 2014, Ukraine turned West, quickly becoming a regional tomato power. Today, Ukraine is the largest exporter of tomato paste to Poland.

Ukraine’s two Danube River ports, Izmail and Reni, are to be dredged this summer, reports Ukraine’s Seaports Administration. With an estimated cost of $1.3 million cost, foreign and national dredging companies are invited to participate by March 12 in a ProZorro electronic tender. Increasingly appreciated as Ukraine’s waterway to the heart of Europe, the western Odesa region ports report handling combined cargo of 316,500 tons in January, up five times yoy. Chinese companies are interested in Ukrainian Danube Shipping Company, which could be privatized this year.

Ukraine’s state railroad plans to launch this summer “Five Capitals” – a north-south train that will travel Kiev-Minsk-Vilnius-Riga-Tallinn and back, Yevgeny Kravtsov, chairman of Ukrzaliznytsia, tells UNIAN. A one-way ticket will be about $50 – half the price of air tickets to the Baltics. Along with Ukrzaliznytsia’s other international trains this year, the Five Capitals will offer a new feature – duty free shopping.

Expanding its Ukraine flight network to six cities, Polish LOT airlines will launch service between Warsaw and Zaporizhia on July 2. Flying six days a week, LOT will use Embraer regional jets for the two hour flights. With scheduled flights to Minsk, Tel Aviv, Kyiv’s two airports and Istanbul’s two airports, Zaporizhia International Airport saw its passenger traffic increase last year by 26.5%, to 348,438 -- 10 times the volume of 2010.

Odesa gets its first flights to Germany this summer when UIA starts service in June to Frankfurt Hahn and in July to Berlin Schoenefeld. The flights will be twice a week on a Boeing 737-800, the main aircraft of Ukraine International Airlines.
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Old 16th February 2018, 17:56
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Ukraine Business Journal

OPIC has signed a deal to insure $250 million in fixed-rate bond securities issued in US capital markets for a major Ukraine project.Because of this insurance, Moodys rates the bonds Aa2, well above the government of Ukraine's Caa2 rating. The money raised will go to building a Central Spent Fuel Storage Facility at the Chernobyl site. This storage facility will ultimately save Ukraine “hundreds of millions of dollars” now spent on storage in Russia, says Energoatom, Ukraine’s nuclear power plant operator. Following Overseas Private Investment Corporation guidelines, the project will generate $225 million of procurement of US-made goods and services. Holtec International of New Jersey, will supply storage casks, other equipment and training to the project over five years.

Horizon Capital, the Kyiv-based private equity firm, has guided one of its investments,Purcari Wineries PLC of Moldova, through an IPO on the Bucharest Stock Exchange. Investors oversubscribed the offering more than four times over. Horizon reports: “As a result of this successful public launch, Horizon Capital, on behalf of its fund EEGF II, has sold a 40.9% stake in Purcari, realizing a 3.2 times gross cash-on-cash return on the sale of these shares.” Horizon retains 22.7% stake in the winery, which has operations in Moldova and Romania.

French company Suez Environnement is to prepare financial models for projects to turn Ukrainian garbage into energy, Sergei Savchuk, chairman of the State Energy Efficieny agency said after meeting a company delegation in Kyiv. Suez has built large waste processing plants in Belgrade, Serbia and in Poznan, Poland. In Ukraine, biogas stations can sell electricity at an advantageous "green" tariff, currently 12.4 euro cents / kWh.

French company Global EcoPower SA is to build a 20MW solar power station in Khoroshiv, Zhytomyr region, according to Philippe Perret, a company director, and Igor Gundich, head of regional administration. Since December, Zhytomyr has announced three solar power investments, totaling 65MW and $60 million.

Russia was behind the cyber attack on Ukraine’s banks, government and power grid last summer, Britain’s Foreign Office says. Cyber experts at the National Cyber Security Centre say the GRU Russian military intelligence agency was responsible for the NotPetya attack in June 2017. The Foreign Office said the attack masqueraded as criminal ransomware, but in fact was a deliberate attack on Ukraine.

Colt Canada, the main supplier of small arms to Canadian Forces, is chasing a deal that could see Ukraine order up to 100,000 rifles, The Ottawa Citizen reports. In December, Canada’s government changed Canada’s arms export rules to allow the sale of automatic weapons and other small arms to Ukraine. In January, representatives of Colt traveled from their Kitchener, Ontario headquarters to Kyiv to discuss a sale. Ukraine is upgrading its weapons to NATO standard. In September, Defense Minister StepanPoltorak talked with Canadian Defense Minister HarjitSajjan about Canada building an ammunition plant in Ukraine.

As consumer spending picks up, the warehouse market tightens around Kyiv, responsible for about one third of spending in Ukraine. A survey by Pickard Real Estate & Asset Services reports: “ The warehouse market around Kyiv has only less than 2% vacancy level currently, and even this space is under serious negotiations….With brownfield land sites still at historic lows and sites available and construction costs still low, now should be the time to invest in warehousing. Rents levels are sure to increase as will yields.”

PrivatBankplans to increase lending to small businesses this year by two thirds over last year, to $178 million, the bank says in a press release. With more and more Ukrainians opening small businesses, the bank, Ukraine’s largest, says that it added 76,000 new small business clients last year.

The number of registered unemployed people dropped by 50,000 in January, to 378,900, according to the State Statistics Service. Officially, the unemployment rate is 1.4% and there are 1 million job vacancies. With signs in the Kyiv metro offering Ecolines bus tickets to Poland for $15, many unemployed people now travel to the EU for temporary jobs.

Azerbaijan’s SOCAR Energy Ukraine plans to launch five new facilities in Ukraine this year, the company tell Azernews. After doubling LPG sales last year, the company wants to install LPG dispensers at its 59 gas stations. The state company, a major provider of oil to Ukraine, wants to get in on Ukraine’s aviation boom by selling aviation fuel. A SOCAR official said: “We see great prospects for development in Ukraine.”

When roadwork season starts next month, the Infrastructure Ministry intends to start repairing 4,000 km of roads this year, according to Infrastructure Minister VolodymyrOmelyan. Including international aid, this year’s road repair budget is a record $2 billion.
Trains to Russia were the most profitable lines for Ukraine’s state railroad last year. Kyiv-Moscow, with 11 cars and 77% occupancy, earned Ukrzaliznytsya the most - $5.7 million. Odesa-Moscow, with 10 cars and 89% occupancy, came in second, earning $3.6 million profit. In fifth place was Kyiv-St. Petersburg, with 11 cars, 65% occupancy and $740,000 profit. Also profitable were: Khmelnytsky-Moscow, Lviv-Moscow, Kovel-Moscow, and Kharkiv-Moscow. Ukraine and Russia cut off air service in October 2015. Since then, nationalist politicians have called for ending train service. But Ukraine’s railroad lost $130 million last year on passengers a loss that was compensated by freight.

Ryanair board member JuliuszKomorek confirmed Thursday that the discount airline will fly toUkraine this fall. "This is a real date. I hope this would happen," he told Poland's Fly4free publication. Komorek, a Pole, said the flights would not be the same as announced last year, adding: "There will be some changes in this timetable. But the flights from Ukraine to Poland will be definitely launched." Separately, Minister of Infrastructure Vladimir Omelyan at a press conference in Kiev that there would not be a reduction in the number of Ryanair flights to Ukraine.
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Old Yesterday, 14:20
Gotno Gizmo Gotno Gizmo is offline
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Ukraine Business Journal

Ukraine is drawing nearer to visa-free regime with South Korea, Interior Minister ArsenAvakov posts on his Facebook page from Seoul. He wrote: "Do we need the visa-free regime with the 11th world economy? The question is rhetorical! I am very glad that we have managed to come close to an agreement on this issue." A visa-free regime might prompt Ukraine International Airlines to start service from Kyiv Boryspil to Seoul Incheon.

Exports to Europe grew by 21%, outstripping Ukraine’s global export increase of 16%, Prime Minister Groysman reports. In a sharp turn around from earlier dependence on Russia, EU countries bought 40.5% of Ukraine’s exports last year, or $20 billion.

A new shopping center is to be built in Lviv, on a one hectare site next door to Aquapark Plyazh, 5 km southwest of Market Square, Zaxid.net news site reports. On the west side of Princess Olga Street, a busy divided boulevard, the location is near several other shopping complexes. Consumption is driven by the city’s booming tourism and tech industry, both dollar-denominated.

The White House squarely blames Russia for last summer’s “Not Petya” cyber attack on businesses. The short statement reads: “In June 2017, the Russian military launched the most destructive and costly cyber-attack in history. The attack, dubbed “NotPetya,” quickly spread worldwide, causing billions of dollars in damage across Europe, Asia, and the Americas. It was part of the Kremlin’s ongoing effort to destabilize Ukraine and demonstrates ever more clearly Russia’s involvement in the ongoing conflict. This was also a reckless and indiscriminate cyber-attack that will be met with international consequences.”

Ukraine’s Cabinet of Ministers proposes extending sanctions against Russia to ban the use of Russian software “especially in information and telecommunication systems of objects of critical infrastructure of the economy, national security and defense of Ukraine,” Interfax reports.

Russia’s VTB bank will close almost all its Ukraine offices by this summer, Andrei Kostin, president of the bank, told RIA Novosti Friday on the sidelines of the Russian Investment Forum in Moscow. He said: “We will have only one or two offices in Kyiv. We are now very rigidly closing the branches across the country and paying off all the depositors.” Set up in 1990 as Russia’s Foreign Trade Bank, VTB has the Russian government as its majority shareholder. Until now, its bank office network largely has been in Eastern Ukraine: Cherkassy, Dnipro, Kharkiv, Kerson, Kriviy Rih, Mariupol and Poltava. Last March, the Poroshenko government imposed restrictions on the five Russian-owned banks here.

Blocked from buying coal and coke from Ukraine’s separatist controlled corner, ArcelorMittal is buying these raw materials for steel production from Russia, Girish Sardana, the company’s chief procurement officer, tells Metalurg news site. Despite delays with Ukrainian Railways supplying locomotives and wagons, the Kryvyi Rih mills were able to work at full capacity last year, hitting a record level of steel production -- 7 million tons.

Germany and Poland diverged sharply Friday on Russia’s Nord Stream 2 pipeline, a pipe to deliver Russian gas directly to the EU without going through Ukraine. German energy groups Uniper and Wintershall, Austria’s OMV, Anglo-Dutch group Shell and France’s Engie are investing in the 1,225 km pipeline.

German Chancellor Angela Merkel said at a Berlin press conference: “We think this is an economic project. We are also for energy diversification. We also want Ukraine to continue to have transit gas traffic, but we believe Nord Stream poses no danger to diversification.”

Polish Prime Minister Mateusz Morawiecki told reporters later: “Once Nord Stream 2 is built, Putin can do with Ukraine whatever he wants…And then we potentially have his army on the eastern border of the EU.”

“More than a dozen world-famous companies have declared their desire” to participate in the modernization and management of Ukraine’s massive, East-West gas transmission system, or GTS, President Poroshenko told reporters Saturday at the Munich Security Conference.
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