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  • Ukraine Business News
    Goldman Sachs and Dragon Capital have bought Horizon Park, one of Kyivs largest office centers and home to Ciklum and the American Chamber of Commerce in Ukraine. With a total leasable area of 68,800 square meters, the two towers had been owned by Ukrsotsbank, until the bank was bought by Alfa Group in 2016. No purchase price was made public. The purchase was announced by the Antimonopoly Committee of Ukraine.
    For Dragon, it marks the latest in a series of purchases of high profile commercial real estate across Ukraine in the last year: Sky Park office building in Vinnytsia, Eco Park office building in Zaporizhia, West Gate Logistic warehouse in Kyiv, Victoria Gardens shopping center in Lviv, and Prime and Eurasia business Centers in Kyiv.
    Across Ukraine, investors are starting to buy state properties at auction, unlocking dormant values. Since sales started last summer, 150 successful auctions have taken place, earning the state $6 million. Currently, the ProZorro.Sale online auction system lists 738 auctions to held by the end of this year, selling off 1,071 small state properties for a total listed price of $30 million.
    The starting auction price for the states 78% of shares in Centrenergo will be $212 million, the Cabinet of Ministers decided on Wednesday. Concentrated in central and eastern Ukraine, Centrenergo saw its electricity production drop by 36% due to the cut off anthracite coal from the Russia-controlled section of the Donbas. With alternative coal sources in place, the company is seeing electricity production bounce back this year.
    Ukroboronprom, the state-owned defense industry conglomerate has prepared a list of 10 companies to transfer to the State Property Fund for sale by auction this fall. Although Ukroboroprom does not name this first group of non core assets for sale, the total payroll is reported to be 300 workers.
    Radio Relay offers an example of the poor shape of some properties the state wants to sell.Founded in 1920 in Kharkiv, then the capital of Soviet Ukraine, the company now has 1,300 employees. In the first half of this year, the plant sold $500,000 worth of products. The buyer must maintain the companys main activities for five years, maintain the entire payroll for six months and must repay all unpaid wages. The auction will be held Oct. 19. The starting price is $2.6 million.
    Since 2015, $1 billion has been invested in renewable energy projects, creating 1,000 MW of electricity generating capacity, reports Serhiy Savchuk, head of the State Energy Efficiency Agency of Ukraine. This year, 429 MW of capacity is under construction. Of the total, 83% will be solar, and 13% will be wind.
    Simplifying permitting for wind power and other renewable energy projects is the goal of legislation signed into law Monday by President Poroshenko. The presidential website reports: The implementation of the document will help to eliminate administrative barriers and increase the transparency of legislation.
    Houses without gas meters will fae higher gas rates than the rest of the population, under a proposal by the Ministry of Energy and Coal. The measure is part of a wider gas conservation effort that includes low interest loans for insulating Soviet-era houses and apartment buildings. Household gas rates are about one half of industrial rates. Even at the low rates, about half the population receives subsidies to pay their gas bills. Surveys show that households with subsidies use more gas than households that pay market rates.
    The EU has extended for five years anti-dumping duties on imports of seamless metal pipes from Ukraine and Russia. Duties range from 12.3% -25.7% for Ukrainian pipes to 24.1% to 38.8% for Russian ones.
    With Ukrzaliznytsia facing complaints of shortages of freight trains, Ukraine demands return of 30,000 rail cars stranded since 2014 in the Russian-occupied corner of Ukraine. I want to remind you of the terrible fact that the Russian aggression led to the theft of more than 30,000 cars from Ukrzaliznytsia that remained in the occupied territory, Parliamentarian Irina Gerashchenko said Wednesday in the Rada. Prospects of return do not look good. UNIAN reports Geraschenko added: There are now there are announcements on Russian and separatist websites with proposals: Buy cars stolen in Ukraine.
    ArcelorMittal Kryvyi Rih, the nations largest steelmaker, has acquired 500 more freight wagons, allowing it to cover up to 15% of its needs for rail wagons. Built nearby by Dniprovahonmash, the wagons are used under a leasing arrangement.
    Nova Poshta predicts it will increase deliveries this year by 17%, to 170 million, Oleksandr Bulba, director of the privately owned delivery company, tells Interfax-Ukraine. With e-commerce fueling its growth, Nova Poshta is adding 600 new delivery points, a 25% expansion. Through June, the company delivered 78 million items, 21% more than in the first half of 2017.
    By April, remote control speed cameras are to be in use in Ukraine, according to a Cabinet of Ministers decision on Wednesday. Remote cameras are part of larger campaign to reduce traffic accidents.
    Swedish investment firm Vostok New Ventures has invested $4 million in Busfor, the online bus ticketing platform with Ukrainian roots that now operates across Eastern Europe. Launched in Ukraine in 2010 as Gillbus, the company now is based in Poland. It operates in Ukraine, Belarus, Georgia, Russia, Poland, and several other EU nations. Although the regional bus business amounts to $9 billion a year, on line ticket sales account for less than 5%. Busfor believes online sales will grow to 30% by 2022. It aims to control one third of this volume.
    Kharkiv airport registered a 19% jump in passengers through August, to 639,400, placing it within striking distance of the 1 million mark by years end. Bolstering traffic, Wizz Air starts flights this month to two new Polish cities Gdansk and Wroclaw. Wizz Air also starts direct flights from Kharkiv to London Luton on Oct. 30 and to Vienna on Nov. 25.
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    Mining World Ukraine, a show of mining equipment and technology, will take place next week at Kyiv Expo Plaza, in Nyvky, western Kyiv. From Oct. 10-12, the show will highlight geotechnologies, mining machinery and transportation equipment. The show takes place as the government seeks to accelerate exploration and production of the nations subsoil wealth. So far this year, the State Geological Service, has granted 306 mining permits, halfway towards an expanded 2018 goal of 650, Marina Vasyukova, head of Geonadras head of permits, tells Ukrinform.
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    UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
    Read More News on www.ubn.news

    Comment


    • Ukraine Business News
      Gazprom plans to start sending gas to Germany via Nord Stream 2 on Jan.1, 2020,Alexey Miller, managing director of the Russian state company Gazprom head Alexei Miller said Thursday at the St. Petersburg International Gas Forum. He said: "Today, construction is underway on Nord Stream 2We can start gas supplies via Nord Stream 2 from Jan. 1, 2020." Over the last year, he said, Nord Stream 1 ran at 107% rated capacity, sending 59 billion cubic meters to Europe, instead of the design capacity of 55 bcm. With Russias southern TurkStream nearing completion across the Black Sea, he predicted that Russian pipeline gas will be cheaper than seaborne LNG for years to come.
      Nord Stream 2 AG has announced a tender for 70 km of pipes to bypass Denmark in case Germanys northern neighbor does not grant permission for the Nord Stream-2 gas pipeline to pass through its territorial waters. With or without Denmark, Nord Stream backers at the St. Petersburg Forum were publicly determined to build the Baltic Sea pipeline over the next 15 months. Rainer Seele, CEO of Austrias OMV, told reporters his energy company has allocated 500 million to finance construction of the gas pipeline.
      Russias Energy Minister poured cold water on Ukrainian hopes for major gas transit volumes after next year, saying that setting tariffs is too complicated to allow for any promises. He told Interfax in Moscow: In any case, tariffs for the transportation of gas via the Ukrainian GTS should be competitive in comparison to other gas supply options. Otherwise such transit will be uneconomical for us. The minister, Alexander Novak, added: There is also another problem: the Ukrainian GTS is in a very run-down condition, its modernization requires large investment.
      Next year, Ukraine is to increase electricity exports by 5% to 6.4 billion kWh, forecasts the Energy and Coal Ministry. Exports to Poland would go up 6% and to Moldova by almost 14%. Last year, Ukraine increased energy exports by 29%, earning $236 million.
      World Bank predicts Ukraines economy will grow by 3.3% this year, and possibly by 4% next year, according to Faruk Khan, the Banks lead economist for Ukraine, Belarus and Moldova. Without an IMF accord this fall, growth could tumble to 2% next year, he told reporters on Thursday.
      Investments into Ukrainian agriculture increased by 40% yoy, for the marketing year that ended June 30, according to the annual directory, Agribusiness of Ukraine 2017-2018, prepared by Top Lead marketing agency. Companies invest in fixed assets, buying tractors, combines, and seeders. Business is developing. The next step is the processing -- the transition from the raw materials market to the creation of added value and access to foreign markets, said Stanislav Shum, Top Lead CEO and an author of the report.
      Work has started on a $12 million grain elevator complex in Makharyntsi, 100 km north of Vinnytsia city. Built for VIH-AGRO-EXPORT LLC, the elevator will have a 65,000-ton storage capacity and the ability to load railroad cars at 300 tons an hour. The company will build a rail spur to the nearby main line, which runs south to Odesa port. The regional government stated: The north of Vinnitsa region long needed a powerful elevator, where you can store grain. This will be a huge help to the farmers of Kozyatynskyi district.
      An $8 million grain elevator complex will open this fall in Volodymyr-Volynsky, a Volyn region town,15 km east of the Polish border and 50 km southwest of the Kovel rail hub. Capable of cleaning, drying, storing and shipping a variety of grains and oilseeds, the Piatydni LLC complex will be capable of loading 25 rail wagon a day and will employ 80 people.
      Nibulon LLC, which exports 4.5 million tons of food a year, is studying concession offerings at Kherson port, Interfax-Ukraine reports. With a fleet of 67 vessels, largely river barges and tug boats, Nibulon has a string of 11 river ports on the Southern Bug and on the Dnipro. At Mykolaiv, where the Southern Bug meets the Black Sea, Nibulon has a terminal with a capacity of transshipping 5 million tons a year. Kherson is located at the mouth of the Dnipro. The Infrastructure Ministry plans to offer private companies concessions in the form of long term leases to build new cargo handling equipment and to develop infrastructure.
      The government has approved a draft law to cut red tape blocking the opening of new wineries and beekeeping operations. After Ukrainian winemakers lost control of Soviet-era wineries in Crimea, they confronted an obstacle course of 100 permits to legally open a new winery in modern Ukraine. "Simplification of the procedure for obtaining a license will ensure the development of small businesses in the horticulture, beekeeping and viticulture industries, will reduce the monopolization of the wine market, the Cabinet of Ministers press service said after Wednesdays approval.
      Chinas Zhongman Petroleum and Natural Gas Group Corp. has won a ProZorro tender to sell a new mobile drilling rig to Ukrgazvydobuvannia for $12.5 million. For delivery by June 1, the rig will be used to overhaul wells down to 6,000 meters and to drill new wells down to 2,800 meters. One year ago, the state oil and gas producer signed a $110 million contract with Germanys Bentec GmbH Drilling & Oilfield Systems to supply five drilling rigs. The first rig is to arrive this month.
      China is one of "the most powerful and the most promising" potential investors into Ukraine,Andriy Demchuk, director of the investment department of the Economic Development and Trade Ministry, told a Xinhua correspondent at a China-Ukraine business forum in Kyiv on Wednesday. He added: "There are several major industries of particular interest -- infrastructure projects, green energy projects, and the digital development of Ukraine. On Oct. 14-15, a major China-Ukraine business conference organized by Switzerlands Horasis think tank will take place in Kyiv.
      DTEK, the nations largest privately held electricity company, plans to gradually shift its car fleet to electric, Igor Kovalev, DTEKs director of infrastructure development, said Thursday at the Petroleum X conference in Kyiv. He said that a test with seven electric cars saved 85% of fuel costs through August, compared to gasoline or diesel equivalents. This is interesting and profitable -- we will continue to transfer our fleet to electric cars, he said. In June, DTEK invested $500,000 to open 10 electric charging stations in Kyiv, operating under the Strum brand.

      UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
      For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
      Read More News on www.ubn.news

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      • Ukraine Business News
        China Machinery Engineering Corporation and DTEK, Ukraine's largest private energy company, broke ground Thursday on a 200 MW, $265 million solar farm near Nikopol,Dnipropetrovsk region. Speaking to Xinhua at the 400-hectare site, Maksym Timchenko, chairman of the DTEK, said: "This would be the largest solar power station not only in Ukraine, but also at the European scale." When completed, six months from now, the Nikopol plant would be Europes second largest, after Frances Cestas 300 MW solar station. Financed by DTEK and by China Machinery, the plant will use equipment from three Chinese companies -- Seraphim Solar System and Trina Solar will provide 750,000 solar panels, and Shenzhen Kstar Science and Technology will supply 80 inverter stations.
        A German-Ukrainian joint venture is producing solar power from Chernobyl for the first timesince the last Soviet-designed nuclear reactor closed there in 2000. The solar array produces only 1 MW of electricity, but plans call for expanding to 100 MW. "It's not just another solar power plant," Evhen Variagin, CEO of Solar Chernobyl LLC, told reporters Friday. "It's really hard to underestimate the symbolism of this particular project." Solar Chernobyl is a joint venture of Kyiv-based Rodina Energy Group and Hamburg-based Enerparc AG. For now, 3,800 panels produce electricity for 2,000 houses and apartment in northern Kyiv region.
        Canadas DAI Inc. plans to build a 150 MW, US$180 million solar farm in Rubizhne, 15 km north of Severodonetsk, administrative center of government-controlled Luhansk region. Hennadiy Ivanenko, first deputy head of administration, said after a site visit by DAI experts: The solar power plant will be able to provide 150 MW, which are critical for the energy security of our region. Canadian Commercial Corporation, Canadas trade support corporation, backs what would be the first Ukraine project for DAI, an Ottawa-based renewable energy company.
        Romania and Ukraine want to build a 1-kilometer, $280 million bridge over the Danube, a structure that would cut two hours off the drive from Odesa to Turkey. The bridge from Orlivka, Ukraine to Isaccea, Romania would be part of the European E87 highway, a road that largely parallels the Black Sea coast. On Friday, President Poroshenko and Bulgarian Prime Minister Boyko Borisov inspected repairs on the Odesa-Reni stretch of this road. With upgrades on this 320 km highway nearly complete, the freight traffic on it has increased significantly, and the [Orlivka] bridge will increase it tenfold, Oleg Varivoda, Odesa region director of highways, told reporters.
        To further integrate northern Moldova with central Ukraines Vinnytsia region, Moldova seeks to allow cars to cross at the Unguri-Bronnytsia checkpoint and to replace a ferry with a bridge across the Dnister river at Cosauti-Yampil, Tudor Ulianovschi, Moldova's Foreign Affairs and European Integration minister, tells reporters in Kyiv. The projects have the support of Prime Minister Groysman, former mayor of Vinnytsia city, his political base. In Chisinau on Friday, Groysman told reporters that in the first half of 2018, bilateral trade was up 40% yoy, topping $500 million. Pavel Filip, Moldovas Prime Minister visits Kyiv in November.
        To boost Ukraines electricity exports to Slovakia, the power transmission companies of both countries have agreed to build a new 400 kV power line, replacing a line erected in 1963. The cross-border, overhead line will connect existing 400 kV substations in Mukachevo, Zakarpattia, and Velke Kapusany, Slovakia, Ukrenergo says of the link with Slovakias SEPS.
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        As Nord Stream-2 work accelerates, a second, pipe laying ship, the Audacia, has joined the Castoro Dieci in laying pipe in a first 38 km north from Germanys Baltic coast. Nord Stream AG 2, the project operator, reports that work in German waters will be completed by the end of this year. Gazprom says it plans to ship gas through the new pipeline on Jan. 1, 2020.
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        ChemChinas Syngenta, one of the worlds largest producers of seeds and seed protection agents, has opened a Digital Innovation Lab in Kyiv, its sixth laboratory worldwide. The other laboratories are in Britain, China, India, Singapore, and the US. The Ukraine laboratory will offer a full cycle of developing solutions from research and modeling of test samples of digital products to creating working versions ready for launch with real users, Benjamin Ninio, Syngentas digital technologies head, said Friday at the laboratory opening in Kyivs Unit.city techno park.
        Ukraines role in feeding Asia is underscored by the nations food export statistics through August. Of the $11.5 billion in exports, 44% went to Asia. Globally, India was the top buyer of Ukrainian food -- $1.3 billion. China was in second place, with $700 million, according to the Agricultural Policy and Food Ministry.
        Cows could soon be placed on Ukraines Red List of endangered species warns Galina Kovtok, CEO for UkrLandFarming. From 27 million cows in Ukraine in 1980, there are now 2 million, according to the State Statistics Service. The problem, Kovok, says is the long payback period, at least two years, until slaughter for beef. Costs of animal husbandry are up 17% so far this year, reports the Statistics Service. With the national herd shrinking, domestic beef prices are up 30% this year, according to ProConsulting.
        Agro managers demand subsidies higher the current $100 a head per year, but the core problem may be that Ukraine is a nation of farmers, not ranchers. ProConsulting sees markets for competent managers: "On the foreign market, in particular, in the countries of the Middle East and North Africa, Ukrainian producers have several advantages: feed for cattle in Ukraine is relatively cheap, and delivering finished products is closer than from the main exporting countries - Brazil, India, Australia.
        Spains Glovo moped delivery service has chosen Ukraine to be its fifth European market. On Thursday, the company launched service in Kyiv, guaranteeing delivery of food, groceries, and pharmaceuticals within one hour. Couriers, known as Glovers respond to messages through the Glovo app, charging a minimum of 30 UAH per delivery.
        McDonald's has opened its first gas station restaurant in Ukraine, at the KLO station on the ring road, in Kyivs western suburb of Sofiivska Borshchahivka. With 175 seats, the McDonalds will have a summer terrace of 170 additional seats. It will be largely powered by 100 rooftop solar panels, says Grzegorz Chmielarski. managing director of McDonald's Ukraine. McDonalds Ukraine employs 7,500 people and serves about 350,000 meals a day.
        Cigarette sales are down 11-12% through June, year over year, Interfax-Ukraine reports, citing Paul Holloway, general manager of Japan Tobacco International Ukraine. Starting Jan. 1, a 20% tax hike is expected to further depress sales. With many cigarette brands selling for only $1 a pack, Ukraine is the top source of smuggled cigarettes into the EU, according to a KPMG survey. Last year, 4.8 billion cigarettes were smuggled from Ukraine into the EU, accounting for almost 11% of the total volume.


        UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
        For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
        Read More News on www.ubn.news

        Comment


        • Ukraine Business News
          The EBRD, the largest international financial investor in Ukraine, is shifting gears from post-2014 crisis response to targeting five areas for investment through 2023. Since 1993, the Bank has invested EUR 12.1 billion in 400 Ukraine projects, a track record that motivates foreign investors to watch its evolving priorities. As approved by the Banks London-based board, the new priorities for Ukraine are: 1) energy efficiency, renewables and market reform 2) privatization and better governance in the state sector 3) strengthening banking and capital markets 4) facilitating foreign investment and trade 5) modernizing infrastructure and ties to the EU.
          Through September, Ukraines mining and metals companies increased the dollar value of their exports by one quarter to $7.7 billion. This follows a 20% dollar value jump in 2017 over 2016. Currently, metals account for 22% of Ukraines exports. After agriculture, metals are expected to tie labor remittances for second place this year in generating foreign exchange.
          Good roads and foreign investors are the top benefits that Ukrainians hope to see from integration with the EU, according to Alyona Getmanchuk founding director of the New Europe Center think tank. Getmanchuk commissioned GfK Ukraine to poll Ukrainians about attitudes toward the EU. After witnessing the radical upgrade in roads in Poland, Ukrainians traditionally associate good transport infrastructure precisely with the EU, she writes.
          To take grain trucks, concrete is being used this fall to build two north-south roads leading to ports. Concrete is more expensive than asphalt, but lasts longer. Concrete is being used to rebuild National 31, which runs 170 km from Reshetylivka to the river port at Dnipro. The road will be one of the most modern in Ukraine, Prime Minister Groysman writes on Facebook of the project which receives $71 million this year. On Monday, a Turkish company, Onur Construction International, won a ProZorro tender for one section. On the west bank of the Dnipro, Ukravtodor is using a concrete coating on a key farm export road, National 14, which runs 180 km from Kropyvnytskyi to Mykolaiv, the Black Sea port. A Chinese company, Sinohydro Corporation, also is using concrete to build the Zhytomyr detour, a heavily trafficked section of the E-40 Kyiv-Lviv highway.
          Italian company Lotti is studying the feasibility of building an Odesa Northern Bypass, Ukravtodor reports. The road would take trucks from the port around the city. The new Northern Bypass road of Odesa will completely free the city from transit trucks," says Slavomir Novak, the head of Ukravtodor, the state highways agency. Eligible for international financing, the road would be a key link on the planned Baltic-to-Black Sea GO Highway, which is to link Gdansk and Odesa.
          This year, used car imports are displacing new car imports as the top category for first time car registrations in Ukraine. Through September, used car imports are up by 87%, to 72,000. They now account for 60% of first time registrations, reports Ukravtoprom, the vehicle industry association. In September, 10,200 used cars were registered nearly double the number of September, 2017.
          Ukraine's shadow economy continues to gradually decline, hitting 32% of GDP, down from 43% in 2014, reports Stepan Kubiv, Minister of Economic Development and Trade. The Finance Ministry says the lions share of the informal economy is driven by a desire to avoid paying taxes. According to the State Statistics Service, 31% of Ukrainian workers or 8 million out of 26 million paid, partially or fully, in cash.
          Farmland certified as organic has expanded by 10% yoy, to 420,000 hectares, or about 1% of Ukraines total farmland. Organic foods are increasingly popular in the EU, where spending averags EUR 60 per resident. With an eye to this fast growing market, President Poroshenko recently signed legislation establishing strict rules for organic certification and penalties for violators. Last year, Ukraines organic food exports to the EU increased by 10%, hitting 330,000 tons, for a value of EUR 100 million.
          The restructuring of failed agro-holding Mriya does not inspire Alexander Paraschiy, head analyst for Concorde Capital, writes in a new report. Due to massive fraud, creditors and Eurobond holders ended up this year with only 3.3-4.1% of their original investment, he writes. After the creditor takeover of 2014, the companys land bank was whittled in half, from 320,000 hectares to 162,000 hectares. Mriya insiders say local judges and police in Ternopil region repeatedly sided with the original owners, the Guta family. This history handicaps efforts by Ternopil officials to attract new foreign investment.
          Signs of growth: 15 new companies joined the European Business Association in September, boosting overall membership to 979. They include: Ukrlandfarming, UNIT.City, Biopharma and ADD, or Apteka Dobroho Dnia, the pharmacy chain. Also joining are: Aakon Grain Ukraine, which leases farm machinery; Brovary Aluminum Plant; Art Nation, a marketing company; Audit Consult Group; Business Interiors; Edwin Steel Corporation; and Goodgrainoil. Also joining are: Perenio, of Czech Republic; Rent-a-car Ukraine, representative of Europcar; and Skyrora UA, a subsidiary of British-based Skyrora Limited.
          Quiet confidence in Ukraine: Raiffeisen Bank Aval, the subsidiary of the Austrian bank, is quietly extending dollar and euro loans below 6% interest rates to select large Ukrainian companies.
          PrivatBank is holding a competition to select Ukrainian and international companies to market its share of Bukovel ski resort and the Radisson Blu Resort Bukovel hotel. The bank, nationalized in 2016, has set a minimum price $37 million for its share of the hotel. It has set a $78 million price for its share of the ski resort, Ukraines largest.
          With the number of Ukrainians vacationing in Turkey topping 1.5 million this year, direct scheduled flights are to start next year from Ukraine to four new Turkish cities: Bursa, 150 km south of Istanbul; and Izmir, on the Aegean, and Bodrum and Dalaman, on the Mediterranean. With 180 direct flights a week, Ukrainian tourism to grow by 20-30% this year. Andriy Sibigha, Ukraines ambassador to Turkey, tells Ukrinform. Flying north, about 250,000 Turks are to visit Ukraine this year.
          Ukraine is considering starting a biometric visa system for Russian visitors, Pavlo Klimkin, Ukraines foreign minister, said on UA:Kharkiv TV. A proposal in August to end direct Ukrzaliznytsia passenger trains to Russia was dropped for fear of political costs in an election year. Kharkiv, Ukraines second most populous city, has suffered economically from restrictions on trade with Russia, 40 km to the north.
          Ukrainians accounted for up to 40% of foreign tourists visiting Georgia through September,Ramaz Eloshvili, a Georgian diplomat based in Kyiv, tells UNIAN. Last week, Georgian and Ukrainian leaders officialized no passport 90-day tourism between the two countries. On Friday, MyWay joined Georgian and UIA in offering direct flights between Kyiv Boryspil and Tbilisi. Yanair flies the route from Kyiv Sikorsky (Zhuliany).
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          After handling 10,000 passengers a day in September, Kyiv Sikorsky airport reports that its passenger flow for the first nine months of the year is up 57% over the same period last year. Of the nearly 2.2 million passengers, 97% flew on international flights, the airport reports.


          UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
          For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
          Read More News on www.ubn.news

          Comment


          • Ukraine Business News
            Money sent home by Ukrainians working abroad totaled $5.5 billion during the first half of this year, up 31% year over year. For the 12 months ending in June, Ukrainians sent home $11 billion, the National Bank of Ukraine calculates. This is 10% of Ukraines $112 billion GDP.
            Ukrainian workers are spreading out from Poland. Remittances from Poland were stable during the second quarter, compared to the first quarter, at $890 million. But inflows from other EU countries, such as Czech, accelerated. Poland accounted for 32% of second quarter remittances. Other EU countries accounted for 30%, including 7.4% from Czech. Russia accounted for 12%, with the US close behind.
            Dragon Capital analyzes: Strong inflows of remittances from temporary labor migrants continue to support Ukraines current account balance, foreign exchange market and household consumption, while forcing domestic companies to improve working conditions. At the same time, growing domestic wages and, respectively, labor costs together with a shortage of qualified workers risk limiting growth potential and adding to inflationary pressures.
            Offering an incentive to avoid banks, overseas money transfers over 50,000 UAH or $1,775 may be treated as income by Ukraines social security authorities, causing recipients to lose subsidies for household gas bills, the Social Policy Ministry reports. Separately, Andrei Reva, the minister, tells Novoe Vremya Radio that Ukraine hopes to work out a reciprocal health insurance and pension agreement with Poland by the end of this year. The Kyiv government has worked out such deals with 21 countries, but not with Poland, home to as many as 2 million Ukrainian workers.
            By the end of this year, Polands oil and gas company, PGNiG, will sign long term contracts with US companies to supply 5.5 billion cubic meters of gas a year for 20 years, Maciej Wozniak, company vice president, tells Polish Radio. Including transportation from Louisiana and regasification in Poland, he said, this gas will be cheaper than Gazprom pipeline gas from Russia. Since March, Ukraine has received 539 million cubic meters of gas from PGNiGs Hermanowice pipeline node, located 3 km west of Polands border with Lviv region.
            Through September, Ukraines coal imports are up 20% yoy, to 15.6 million tons, the Customs Service reports. By value, imports were up 15% to $2.2 billion. The top three exporters were: Russia - 62.7%; US - 30.6%; and Canada - 4%. By comparison, Ukrainian miners produced 25 million tons of coal through September, down 5% yoy. The Energy and Coal Industry Ministry, forecasts that next year, Russia will supply 72% of Ukraines coal imports, and the US 8%.
            Zakarpattia is gaining a 10 MW solar station, located in Tereblya village, near the Romanian border, National Industrial Portal reports. With land rents and fees already paid by the company, FES Tereblya, Ruslan Yanchyy, the village chairman, say he has repaired six kilometers of roads and provided lighting for seven streets. With the $12 million project going up on a 20-hectare site, the village leader sees permanent jobs for local electricians.
            Ukrspirt, the state alcohol company, plans to produce 170,000 tons of ethanol, half for motor fuel and half for export to the EU. Ukraines duty free quota for export to the EU is to grow to 100,000 tons in 2021. The 85,000 tons for fuel about 110 million liters of ethanol would be blended with gasoline on a 35% ethanol basis, Yuriy Lutechko, director of Ukrspirt, tells 112.ua TV. Car engines do not need modificationsto run on such a blend.
            To popularize heating with biomass straw, corn stalks and sunflowers the UNDP will provide technical assistance to 15 such projects around Ukraine. To move beyond wood, experts encourage farming communities to burn crop waste in biofuel boilers. There is no shortage of raw material. Ukraines 413,000 square kilometers of farmland spread over an expanse larger than Germany.
            Ukraine is to export a record amount of canola vegetable oil this year, following a near doubling yoy of exports, to 43,000 tons, in July and August, the start of the marketing year, reports UkrAgroConsult consulting agency. Last year, the EU imported 79% of Ukraines exports of the oil, which is largely used for cooking.
            Dutch development bank FMO and Kyiv-based Diligent Capital Partners are jointly acquiring a 16% equity stake in Allseeds SA, a leading producer and exporter of vegetable oils and meals.Operating out of Ukraines deepest port Yuzhny, Allseeds has its own shipping terminals and operates a multi-seed oilseed processing plant, for sunflower seeds, canola seeds, and soybeans. Dan Pasko, DCP Co-Managing Partner, joins the Allseeds Board stating: "We were truly impressed with Allseeds progress in becoming a regional leader in agribusiness processing and logistics. Vyacheslav Petryshche, Allseeds CEO, looks ahead, saying: We have ambitious growth plans and are open to building partnerships to realize those goals.
            Starting next month, Ukrzaliznytsya will lease 5% of its railway freight wagons through auctions on the ProZorro.Sale electronic system. The goal is to cut corruption and to set a daily benchmark price for state railroads 61,000 cars. Until now, local rail line managers have been known to extort cash premiums for delivery of freight trains to grain silos and metal plants. Yevhen Kravtsov, the railroads acting CEO, called the auctions: a transparent and really effective mechanism for Ukrzaliznytsya to get market value for the use of cars by our customers. A clear position in the price eliminates the possibility for corruption manipulations.
            Concorde Capitals Alexander Paraschiy writes: Success will depend on whether the auction-based prices will indeed reflect the market. In particular, its hard to say whether the auction pricing of only 5% of total railcars will be indicative of the entire market. In any case, such an initiative is a good step towards improving the company's transparency.
            Separately, up to 700,000 pieces of railroad property including 10,000 damaged freight wagons are go to up for auction, starting next year on ProZorro.Sales, according to Economic Development and Trade Ministry. Auction lots would range from scrap metal to railroad buildings to store leases in rail stations. With 23,000 km of track and 1,700 stations and halts, Ukrzaliznytsia provides 82% of freight and about 50% of passenger traffic carried by all transport modes in Ukraine.
            With Kyiv Sikorsky Airport flirting with the 3 million passenger mark this year, the airport plans to invest $22 million to double the capacity of the main passenger terminal, Terminal A. In 2012, when the terminal opened for the Euro 2012 football championship, the airport, then called Zhuliany, handled 862,000 passengers. Built to handle 700 passengers an hour, Terminal A last month handled 10,000 a day.


            UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent andBloomberg Moscow Bureau Chief
            For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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            • Ukraine Business News
              Germanys Metro Cash & Carry, the self-service wholesaler, plans to open 15 to 20 small stores across Ukraine in coming years, their country CEO, Olivier Langlet, tells Interfax-Ukraine. Its better to open more than 20 stores in the regions than one big one, Langlet said, referring to stores in the 1.5-2,000 square meter size that cost EUR 150-300,000 to open. In Ukraine for 15 years, Metro has 27 stores, largely hypermarkets, with the exception of two of the new, smaller stores, in Lutsk and Ternopil.
              Swedens IKEA will partner with one of Kyivs largest shopping center developers for major expansion in the 2020s, Vagif Aliyev, the developer, told reporters Wednesday. One year from now, Aliyevs new Ocean Mall is to open with a 5,000 square meter IKEA, the first Ukraine store of the multinational furniture retailer. This will be followed as many as six IKEAs in the 5,000 and 30,000 square meter formats said Aliyev, adding that he is building a group of 10 shopping and entertainment centers in Kyiv. IKEAs regional representative, Vladislav Lalich, was more cautious, only telling Interfax-Ukraine that the company really plans to stay in Ukraine for a long time, but develop step by step."
              With retail sales strong, Foxtrot, a major electronics and household appliances retailer, is spending $150 million this year to renovate 40 stores and to open 10 new stores, Interfax-Ukraine reports. Targeting big cities and small cities, the chain is opening new stores in Kyiv, Dnipro, Khmelnytskiy, Nova Kakhovka, Kherson region and Varash, Rivne region. Overall, Foxtrot has 161 stores in 90 cities in Ukraine.
              With 50,000 Ukrainians making parts for German cars, Germanys Transport Ministry has given Ukraine an additional 4,000 permits for trucks to travel from Ukraine to Germany. It is estimated that one of every two German cars made today contains parts made in Ukraine.
              The privatization bug has spread to state-owned PrivatBank, which has set a goal of selling more than 900 real estate properties by the end of this year. So far, through the SETAM and PB.LOT.UA electronic sales platforms, the bank has sold apartments, offices, houses, land plots and parking spaces in residential complexes, the bank reports. To drum up buyer interest, the bank beckons: Today, at open auctions, PrivatBank offers real estate in new buildings in Kyiv, Dnipro, Mikolaiv, Yuzhnoukrainsk and Chernivtsi. In addition, office and production facilities, hotels, recreation centers and land plots are for sale.
              The EBRD is planning to loan EUR 51.9 million to state gas producer UkrGazVydobuvannya for well repair equipment and energy efficiency projects. A fully owned subsidiary of Naftogaz, UGV accounts for 75% of gas production in Ukraine. Last year, it raised gas production 5%, an increase it hopes to match this year.
              The IMF predicts the hryvnia exchange rate will devalue gradually, hitting almost 30 to the dollar in 2020. Today, the official rate is 28.08 to the dollar. The IMF forecasts the rate will hit 28.6 to the dollar in 2019, and 29.9 to the dollar in 2020.
              The IMF forecasts that Ukraines national debt will decline steadily over the next five years from 70.5% of GDP today to 56.4% in 2022. The Fund also predicts that Ukraines GDP growth in 2019 will be 2.7%.
              Ivano-Frankivsk, Kyiv and Vinnytsia lead a new ranking of 100 Ukrainian cities evaluated for transparency and friendliness to investors, according to Transparency International Ukraine, which conducted the year long survey. Checked for 17 indicators, for a possible maximum score of 20, the winners are: Ivano-Frankivsk 15; Kiev - 12.7; Vinnytsia -12; Lviv 10.75; and Bila Tserkva - 10.7. Losers include: Stryi -1 point; and Poltava --1.2.
              A cyber attack affected internet services of the State Fiscal Service Monday evening through Tuesday, disrupting programs used by millions of people for procedures such as filing taxes, Reuters reports. The Fiscal Service reported that it has been identified as a denial-of-service attack and an attack protection mechanism has been implemented.
              Turkeys defense company Aselsan has signed a deal with UkrOboronProms Spetseechnoexport to produce Turkish tactical communications devices in Ukraine. Under the $44 million deal, the devices are to be used by Ukraines armed forces.
              Czech defense company Ex”alibur Army Ltd. and UkrOboronProm plan to jointly create and market new models of armored vehicles. The first priority is to modernize the BMP-1 and BMP-2 armored vehicles of Ukraines Army. Later plans include working on 152 mm artillery systems, Pavel Bukin, head of Ukraines defense conglomerate, told Interfax-Ukraine.
              The Thai military is considering making Ukraines BTR-4MB1 the main combat vehicles of the Royal Thai Marine Corps, according to the website of the National Security and Defense Council of Ukraine. Thai Marine Corps Vice Adm. Sangkorn Pongsiri discussed a BTR acquisition program with Defense Council Secretary Alexander Turchinov on Wednesday, on the sidelines of the Arms and Security 2018 conference in Kyiv.
              Through September, there were 2 million crossings of the administrative border between Ukraine and Russia-controlled Crimea this year, reports Ukraines Border Service. Without offering numbers, the Service says that crossings are declining, presumably as Ukrainians alter their vacation patterns. This years statistics show a net exit of 5,000 people from Crimea. Before annexation in 2014, Crimea had a population of 2 million. Due to sanctions, Crimeas lone commercial airport, in Simferopol, only has flights to Russia.
              Mohammed Zahoor, the British-Ukrainian-Pakistani investor, plans to tear down Kyivs 60-year-old Kinopanorama movie theater and build in its place a 3-star hotel, the Kyiv Post reports. Last week, Zahoor closed the 500-seat theater, the first in the USSR to offer panoramic movies. While the theater was starved for investment in recent years, its street, Shota Rustaveli, boomed with a dozen trendy bars and restaurants.
              Zahoor seeks $10 million to complete restoration of his 4-star landmark hotel, the Leipzig, he tells the Post. Zahoor says he has largely resolved legal disputes with the Turkish subcontractor who did the renovation. Although the building carries a sign for Renaissance, a Marriott brand, he says he wants to get out of 30-year operating contract with the American multinational. He threatens to go to court in Britain if Marriott doesnt want to [settle] amicably. Although, there are 1,000 4 and 5-star hotel rooms within a 15-minute walk of the Leipzig, Zahoor believes in high end tourism for Kyiv, saying even the most conservative numbers show that we will pay back the money in six to seven years.


              UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
              For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
              Read More News on www.ubn.news

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              • Ukraine Business News
                Allseeds, the seed crushing giant, plans an ambitious three-year, $200 million investment plan designed to culminate in a listing on overseas stock market by 2022, its CEO, Viacheslav Petryshche, tells Reuters. Our plan is to hold an IPO in the next four years. We are considering Singapore, Hong Kong, Toronto, he says. It would be the first overseas Initial Public Offering for a Ukrainian company since 2012.
                Based in Yuzhne, Ukraines deepest Black Sea port, Allseeds investment plan includes: a $100 million new seed crushing plant to double crushing capacity; a $20 million tripling of dockside storage capacity, to 132,000 tons; a $20 million refining and bottling plant to bottle up to 500 tons of cooking oil per day; and a wheat flour plant capable of milling 500 tons of flour per day. Petryshche tells Reuters Ukraine must add value to its food exports: Process and sell finished products.
                Ukraine needs to graduate from exporting primary commodities to become a major participant in Global Value Chain exports, the World Bank recommends in a new economic report. The bank says Ukraines strategic geographic location at the crossroads of Europe and Asia [and] the largest endowment of fertile agricultural land in Europe give the country a tremendous opportunity for Ukraine to boost exports of higher value-added and diversified products. While Global Value Chain exports account for less than 10% of Ukraines total, other developing countries show the path: Poland 27%; Romania and Turkey 38%; and Vietnam 59%.
                Grain farmers complain that a lack of state railroad locomotives is causing farmers to miss port delivery deadlines. Due to a lack of traction, wagons stand idle at stations and elevators, Ukrainian Agribusiness Club complains, charging that the farm gate to sea port turnaround time for a grain wagon has doubled in two years, to two weeks. As grain production rises, the farm group charges that only 500 of Ukrzaliznytsias 2,500 locomotives work. Last week, the state railways told reporters that its youngest freight locomotive was built in 2000. The average age for its freight locomotives is 40 years old.
                In London, Infrastructure Minister Volodymyr Omelyan tells Reuters the government plans to allow private companies to run freight and long distance passenger trains on the tracks of Ukrzaliznytsia. A pilot plan for freight, with private locomotives and wagons, is planned for next year. On Thursday, the minister wrote on Facebook from London: "We discussed two large projects in the maritime and railway industry with British and American business that will change Ukraine.
                In the first half of this year, the state railroad cut its personnel by 4%, to 266,000, a rail executive said Wednesday on a conference call with railway bondholders, organized by Dragon Capital.
                The European Investment Bank has approved a EUR 50 million loan to help Ukrzaliznytsia and Ukravtodor, the highway agency, eliminate bottlenecks in European transport networks. The goal is to improve East-West road and rail ties with the EU, and to improve road safety. The loan is part of a larger, EUR 110 million project, but the bank did not specify the other sources of finance.
                Post-Brexit, British officials plan to continue on a bilateral basis the free trade privileges Ukraine enjoys with the EU, British officials say in London in the framework of Ukrainian Week. Liam Fox, secretary of state for international trade, made these assurances in a speech at the conference. Separately, Alan Duncan, minister for European and Aerican affairs made similar promises in a meeting with Ivanna Klympush-Tsintsadze, vice prime minister for European integration. Behind the scenes, a bilateral group is elaborating a more liberal trade agreement, building on the facts that Britain is Europes largest food importer and Ukraine is Europes largest food exporter.
                Highlighting the credit thirst of Ukrainian entrepreneurs, the German-Ukrainian Fund has extended EUR 12 million in loans to 112 small and medium businesses. The 15% annual interest rate is attractive in a country where the central banks prime rate is 18%. The National Bank of Ukraine reports Thursday that the annual interest rates for loans to established companies is 19.8%, to individuals - 32.1%..At these levels, most entrepreneurs borrow from friends or family -- or drop their projects. Making the German program more attractive, Kyiv city and Ternopil region pay for half of interest payments on the project loans. Aiming to create more, better paying jobs, Kharkiv, Cherkasy, Volyn and Odesa regions negotiate to join the program for its second year.
                A Bloomberg news feature on Ukraines crypto currency scene -- Bitcoin and Guns, Thats the Only Way to Save This Country reports that daily crypto trades total $1.9 million. Aside from focusing on the Wild East aspect of the sector, the 2,300-word article reports that a crypto currency bill is gradually advancing in the Rada. Sponsored by Oleksii Mushak, of President Poroshenkos party, the bill would impose a flat tax of 5 percent on income from virtual assets, and would limit government oversight to the conversion of digital currencies to fiat currencies.
                A new Ukrainian airline flying international routes is to be set up in Kherson by the end of this year, Infrastructure Minister Volodymyr Omelyan tells Reuters in London in a story headlined: Ukraine seeks to bring in more airlines, sell airport contracts. Serving Kherson and neighboring Mykolaiv, Kherson International Airport also is the closest airport to Crimea, a region only served by flights to Russia. To further boost regional air traffic, Omelyan also told Reuters he hopes to offer at public tender the administration of concessions of 3-5 airports early next year.
                Indian and Chinese tourism to Ukraine could jump in 2019 if talks with Asian airlines bear fruit, Omelyan told Reuters. Currently, the only flights from Ukraine to Asia are carried out by UIA, to China and Thailand. Without naming the Asian carriers, Omelyan predicted they would start flying to Kyiv most likely next year. We are already in discussions with them.
                Next week, Kyiv residents win five new direct air routes to Europe and Israel. On Monday, El Al resumes flights from Boryspil and Tel Aviv. On Wednesday, Brussels Airlines starts direct flights from Boryspil to Brussels. From Sikorsky (Zhuliany), Wizz Air starts direct flights to Vienna on Thursday. On Friday, Ernest Airlines starts flights from Sikorsky to Rome and to Milan Malpensa.


                UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                Read More News on www.ubn.news

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                • Ukraine Business News
                  Within 10 weeks, Naftogaz expects to sign a partnership with a big international oil and gas firm to develop Ukrainian gas fields, Andriy Kobolyev, CEO of the state energy company, tells Reuters in London. I am negotiating with big international oil and gas companies potential partnership agreements to develop gas fields in Ukraine. Without naming the companies, he added: By the end of the year we will sign at least one partnership...and I believe if we have one partner this year, I would expect we could sign partnership agreements with at least two big names next year. Reuters notes that today Ukraine produces abo
                  Ukraines plan to hold electronic auctions in February-March of 30 licenses to explore and produce gas is the focus of a report from London by S&P Global Platts, the energy news service. Reporting from Ukraine Week in London, Platts tells its energy industry audiences that Ukrainian gas industry officials said a transparent licensing round was needed to kick-start exploration in the country whose gas resources are estimated at almost 1.4 trillion cubic meters.
                  Naftogaz CEO Kobolyev told the London conference that a historic block to gas development was the lack of transparency in awarding licenses. Small companies won exploration permits for green fields too large for their capacities, Platts reports. Viktor Gladun, managing director of JKX Oil & Gas' Ukraine subsidiary, said Ukraine could boost domestic production by allowing private companies to take over abandoned wells from state companies for a fee. Alastair McBain, the British president of Arawak Energy, said Ukraine should overhaul its legal framework and develop a new subsoil law.
                  Ukraine still has 15 to 18 banks whose business model we consider unviable, Kateryna Rozhkova, first deputy governor of the National Bank of Ukraine, tells a financial conference in Kyiv. Since 2014, the central bank closed half of Ukraines banks. The remaining number 80 is considered too high for Ukraines $100 billion economy.
                  ArcelorMittal, Ukraines largest foreign investor, received on Friday an offer from the Liberty House Group to purchase most of its European assets. Britains Liberty House wants to buy Arcelors steel operations in the Czech Republic, Italy, Macedonia and Romania. Separately, Arcelor is negotiating the sale its assets in Belgium and Luxembourg. The sales would be part of Arcelors plan to buy Ilva, an Italian company that owns Europes largest steel plant, in Taranto. Arcelors statement on its Europe plans make no mention of its Ukraine holdings.
                  With Poland-Ukraine trade growing, Poland and Ukraine have agreed to a 48% increase in cross border trucking permits for 2019 160,000 for each country. Poland wanted a lower number, but demand in Ukraine is intense. Last April, police arrested an official of Ukrtransbezopasnost, the state safety agency, for selling trucking permits for up to $500 a piece. The official fee for the form is $1.75.
                  As container trains become more popular for moving freight out of the Black Sea ports, the nations largest container terminal, TIS, in Odesa region, increased its cargo handling by 54% through September, year over year, the company reports. Handling 78,200 containers, TIS says growth was boosted this year by two new cranes, the arrival of Maersk container ships, and the launch of weekly container trains to Kyiv, Dnipro, Kharkiv and Ternopil.
                  Next month, Ukrzaliznytsia raises rates by 31-55% in hryvnia for its freight wagons largely grain cars and gondola cars for coal, steel and iron pellets. Also in November, the state railroad starts a pilot program to set benchmark prices by offering 5% of its 61,000 freight wagons for rent on ProZorro.Sale.
                  Nibulon is investing $19 million to build its third Dnipro River terminal in Zaporizhia, a grain rich region. Scheduled for completion in June, construction involves 1.8 km of dredging on the Ploska Osokorivka River and building a 3 km berth, Interfax-Ukraine reports. Nibulon has 11 river terminals on the Dnipro and the Southern Bug, a fleet of 67 barges and tugboats, and a shipbuilding plant and a major grain shipping terminal in the Black Sea port terminal of Mykolayiv.
                  Mykolayiv ports Nika-Tera, is increasing its oilseeds storage capacity to 30,000 tons, the latest of a series of major investments in Ukraines top five Black Sea ports. Nika-Tera, part of Dmytro Firtashs Group DF, reported that its cargo transshipments through September hit 3.7 million tons, up 10% year over year.
                  Antonov is to build two AN-158 regional jets for Fanair, under a memorandum signed Friday with the new Ukrainian airline. Configured to carry 97 passengers, the jets will have ranges of 2,500 km, sufficient for flights to domestic and Black Sea destinations. Priced at $32 million, the jets are to be delivered by the end of 2020.
                  The doubling of air terminal capacity at Kyiv Sikorsky should be completed by May, without interruption in service and in time for next summers travel season. Through September, traffic at Kyivs right bank airport is up by 57%. Denys Kostrzhevsky, chairman of the airports board, predicts 25-30% growth next year. Vasyl Khmelnytsky, partner of Kostrzhevsky in Master-Avia, the airport management company, predicts the $22 million terminal expansion to 1,500 passengers an hour will pay for itself by 2026. Next up, he told reporters, is construction of a budget hotel at the airport, which is 7 km from the city center.
                  Construction will start next spring on Dnipros new airport runway, allowing for completion in the fall, Infrastructure Minister Volodymyr Omelyan promised on a visit to the city Friday. He said $35 million will be allocated to rebuild the cement runway in one construction season, allowing its use in 2020. Referring to President Poroshenko, who is running for reelection next spring, Omelyan said: With the support of the President of Ukraine, we can do it, and Dnipropetrovsk region will finally get a quality airfield. Of Ukraines five largest cities, Dnipro feels like the ugly duckling, with the lowest air traffic and shabbiest air terminal. Kharkiv businessman Alexander Yaroslavsky says he will invest in rebuilding the terminal, but only after the state makes good on its promise to fully rebuild the runway and approach aprons.
                  Sergey Tigipkos TAS group, is buying a half-hectare lot that has long stood empty in the middle of Kyivs Velyka Vasilkivska Street, at Nos 35-37. Surrounded by high end boutiques and restaurants, the lot was originally to be site of a hotel complex. Sergey Popenko, chairman of TAS, told Interfax-Ukraine that the group is weighing options for the site.


                  UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                  For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                  Read More News on www.ubn.news

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                  • Ukraine Business News
                    In the largest China-Ukraine private sector conference in memory, dozens of Chinese private company executives spent
                    Monday and Tuesday meeting with Ukrainian counterparts in Kyiv, learning about Ukraines free trade pact with the EU, and taking steps toward investments. The Horasis China conference brochure listed 99 Chinese executives, but conference organizer Henry Shterenberg says 280 investors participated. With the trade tension with the U.S., it is increasingly critical for Chinese to secure routes to the EU market, Shterenberg said, visibly pleased at the last minute surge in arrivals from China.
                    For many participants, the conference during Ukraines Sunday-Monday holiday was a prelude to a week of business meetings in Kyiv. A sampling of corridor chats with UBN:
                    Peter Pang, a Shanghai-based lawyer, says he is helping three private Chinese companies in different stages of setting up mid-tech production such as parts for TV sets in Ukraine.
                    Harry C. Hui, managing director of Clearvue Partners, a venture capital group based in Shanghai, says he is meeting with Ukrainian IT companies, but is open to other sectors.
                    Anson Chan, chairman Bonds Group of Companies, of Hong Kong, says he is helping to organize Chinas first outward investment conference. He also has meetings with Ukrainian companies.
                    May Liu, chairman of May Group International Ltd., of Beijing, said she is looking for a Ukrainian partner for e-commerce development.
                    Shen Andong, vice president of Beijing Automotive Group, says he has meetings this week about car parts production and electric vehicle assembly and manufacture in Ukraine.
                    ICU, the Kyiv-based investment group, has entered the venture capital business with two investments: Petcube, the online monitoring camera for pet owners; and Hideez, a digital keychain and wallet for crypto currency storage. We invest in companies that have proven the viability of their business ideas, ICU partner Makar Pasenuk tells Interfax-Ukraine. Our investments in one project range from $200,000 to $1 million.
                    Vinnytsia, Ivano-Frankivsk and Zhytomyr are the easiest regions for doing business, according to a nationwide survey of 1,300 business executives conducted by the Union of Ukrainian Entrepreneurs. Major problems include: connection to power grids and registration of land plots under power lines. Of the 24 regions, the three losers are: Chernivtsi, Zaporizhihia, and Luhansk.
                    For the second year in a row, Interpipe Steel is on track to increase steel production. hrough September, Interpipe increased production by 14%, year over year, to 738,000 tons, the company tells Interfax-Ukraine. Last year production was up 38%.
                    Ukraine is closing the gap with Russia in military drone production, Defense One, a Washington-based news site reports. Ukrainian drone manufacturers are displaying their products at more international exhibitions than their Russian counterparts the site says, citing Sam Bendett, a researcher at the CNA Corporation, a federally funded organization. The report highlights a concept drone by Antonov that would have a 22-meter wingspan, fly as high as 12,000 meters, and carry nine air-to-ground missiles with a total weight of 600 kilos. By contrast, Russias drone program suffered a setback last spring with the arrest on fraud charges of the director of Simonov Design Bureau, lead developer of the Altius high-altitude armed drone.
                    Through September, 12.5 billion eggs were produced in Ukraine, a 3% increase year over year, the State Statistics Service reports. Commercial operations increased production by 5%. Kyiv region is the leader in egg production for the first nine months of the current year. During the same period, the number of chickens raised in Ukraine increased by 2%, to 239 million birds.
                    Poultry exports to China should result from an inspection visit this week by Chinas State Service for Food Safety and Consumer Protection. If served small portions, Chinas 1.4 billion people could eat Ukraines poultry flock for lunch.
                    Through September, the number of milk cows decreased by 3.5%, year over year, to 2 million, reports the State Statistics Service. During the same period milk production dropped by 2%. Last year, Ukraine produced 10.3 million tons of milk, making it the worlds ninth largest producer.
                    Of 57 regulations applied to milk production in Ukraine, 16 are irrelevant and 5 are illegal,according to a study by the EU-funded Better Regulation Delivery Office. In addition, the Office reports: Most of 17 regulatory instruments have high corruption risks due to undefined and non-transparent procedures. The Office has posted on line a new, 70-page, Ukrainian language report: Milk Market Regulation.
                    Two food processing companies have signed letters of intent to occupy a 35-hectare industrial park registered last week near Bila Tserkva by Vasyl Khmelnytskys UFuture Investment Group. Nearby, in April, UFuture created a separate industrial park oriented to light industry. Plank Electrotechnics, a manufacturer of electrical systems, is located at this park. Both parks are in Shkarivka, an industrial town on the M-05 highway to Odesa, 400 km to the south. Bila Tservka is on an east-west rail line, midway between Lviv and Dnipro.
                    Ukroboronprom will assist Moldova in modernizing the Antonovs and armored vehicles of its armed forces. Under an agreement signed last week, Ukraines defense conglomerate will sell Moldova arms, ammunition, military equipment and parts.
                    Britains National Cyber Security Centre says experts from Russias foreign military intelligence agency, or GRU, carried out the attacks on Kyivs Metro and Odesas Airport, Infrastructure Minister Volodymyr Omelyan said in a statement in advance of the one year anniversary of the Oct. 24, 2017 attacks. Although both transportation entities have taken cyber security measures, he said: There is no guarantee that attempts to disable critical industry enterprises will not be repeated."
                    Over Ukraines holiday weekend, new Ukrainian language quotas were phased in at the nations TV channels. From 7 a.m. to 10 p.m., 75% of all programming on national and regional stations must be in Ukrainian, UNIAN reports. For local TV companies, the quota is 60%. Soviet-era films should be dubbed into Ukrainian.
                    A new language bill approved in first reading in the Rada stipulates that all media in Ukraine print, online, or television must be in Ukrainian, warns the Kyiv Post. News sites, newspapers and magazines can be published in other languages only if they also produce Ukrainian versions of the same size and content. In an editorial, the Post appeals to the bills sponsors to make an exemption for the English-language media or soften the language demands made of the media in general. Otherwise, the Post warns: We would have to close, or drastically reduce our publication in size. The Ukraine Business News plans to offer the Morning News in Ukrainian and Russian languages next month.


                    UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                    Read More News on www.ubn.news

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                      • Ukraine Business News
                      Matteo Patrone, an Italian with Eastern Europe experience, has been appointed the EBRDs new regional Managing Director, based in Kyiv. Patrone succeeds Francis Malige, who has been promoted to Managing Director, Financial Institutions, at the banks headquarters in London. Patrone has worked for EBRD for the last decade, most recently as director for Serbia 2012-2015, and director for Romania and Bulgaria from 2015 to now. From Kyiv, Patrone will be responsible for the development banks operations in Ukraine, Belarus, Moldova, Armenia, Azerbaijan, and Georgia. The largest international financial investor in Ukraine, the EBRD over the last 25 years has loaned 12 billion euros for 400 projects.
                      The EBRD plans to help finance a EUR 75 million bioenergy program in Ukraine, involving up to 15 projects through 2022, Sergey Maslichenko, the banks associate regional director for energy, said Tuesday in Kyiv at the International Forum on Sustainable Energy. Understanding that solar and wind energy are developing normally, we focused primarily on bioenergy, he was quoted by Interfax-Ukraine. Ukraine, as an agrarian country, has large remnants production, but now they remain in the fields. He said the EBRD plans to attract donor co-financing from the World Banks Clean Technology Fund and from the Washington-based Global Environment Facility.
                      Next Tuesday, the Sweden Ukraine Bioenergy Cooperation Forum will be held in Stockholm, at the World Trade Center. The one-day meeting brings together policy makers, investors, and researchers to enhance cooperation between Sweden and Ukraine in bioenergy. An EU leader in bioenergy, Sweden derives about one third of its energy, 135 terawatt hours, from biofuels.
                      Prime Minister Groysman expects the Rada to adopt the countrys 2019 budget at first reading by Friday. The proposed budget deficit is within the IMF-mandated cap of 2.5% percent. The other hurdle -- raising household gas prices -- will have to be addressed on Thursday, the day the governments freeze expires. If all goes to plan, an IMF agreement would go ahead, setting the stage for the release of a tranche of around $1 billion before years end.
                      Ukrainians receive nine times more money largely wage remittances than they send out of the country, Olena Mahaeva, director of the central banks Payment Infrastructure Division, told reporters Tuesday. The main currencies for money transfers are the US dollar, the euro, the Russian ruble, and the Canadian dollar. She said 35 remittance systems operate in the Ukrainian market. Of these, 29 carry out transfers within Ukraine, and 13 make international transfers.
                      Lithuania and Ukraines central banks have signed an agreement to exchange experiences in FinTech regulation and supervision, and explore joint innovation projects in such technologies as digital and mobile payments, blockchain, distributed ledgers, and big data. Yakiv Smolii, National Bank of Ukraine governor, says: I am confident that the Bank of Lithuania will achieve its strategic goal and become the main FinTech hub in the Nordic and Baltic regionwe will be glad to take on the successful experience of our Lithuanian colleagues. In turn, one of the strategic goals of the National Bank is to achieve greater financial inclusiveness of Ukrainian society.
                      Lakshmi Mittal, CEO of ArcelorMittal, the worlds largest steelmaker, says Ukraines economic situation has stabilized, allowing his Dnipropetrovsk unit to operate successfully and to continue to make investments, Interfax-Ukraine reports from the World Steel Association general assembly in Tokyo. He said: At present, the situation in Ukraine is stable. And our enterprise ArcelorMittal Kryvyi Rih has been operating smoothly.
                      A Silicon Valley unicorn creator, John Sung Kim, gives Ukraines IT sector some tough love advice in a Forbes article titled: Ukraine Is The Best Kept Secret In California's Startup Scene. Below this cheery headline, he warns that growing pools of software engineers working on the EU's legacy enterprise applications is not indicative of Ukraine's potential future as a powerhouse of innovative product development. He elaborates: There's still much conflation between "product developers" and "outsourcer engineers. From every data point we have witnessed, working for an outsourcer and working for a product company are two completely different skill sets.
                      South Korea-born Kim criticizes the low level of business English and Ukraines government,which makes it difficult for foreign investors to set up shop here, provides no tax incentives for outside investors as neighbors like Estonia or Belarus do, and does not support a legal framework for employee stock options.
                      Looking back on his many stays in Kyiv, he writes: At my currentcompany, JetBridge Software, we took a full year of repeated mini-failures before discovering the formula for how to leverage low-cost labor pools here in Ukraine while still maintaining a high-quality work culture. His formula for American managers: Your presence is required, Hire slowly, Be transparent, Test differently, Avoid isolated office space, and Find a local manager with a track record of launching commercially successful products. Kim, who leases office space in Kyivs Unit.City tech park, ends on a positive note, When a company from the U.S. gets the formula for leveraging Ukraine right, it's a significant competitive asset, and one that may not remain a secret for long.
                      Six Ukraine startups have been chosen to represent Ukraine at the Consumer Electronic Show in Las Vegas, on Jan 8-12. They are: FunLight interactive projections for shopping malls; Flasty food 3D printer; Jollylook analogue vintage camera, finds photos; Nuka eternal office (notepad and pencil); RAWR IoT technologies for pets; and Photon_LMS modular portable photo studio. Renting a Ukraine stand and PR and networking mentoring will be paid for by the organizers: Concepter, Western NIS Enterprise Fund, and the Ukrainian Venture Capital and Private Equity Association.
                      Real estate developer Vagif Aliyev expects to sell part of Parus office center by the end of this year to help finance completion next year of his Ocean Mall shopping and entertainment center,Interfax-Ukraine reports. The 34-story office center, Ukraines tallest building until 2012, Parus has a tenant roll that includes Concorde Capital and Viktor Pinchuks EastOne Group. In the summer of 2008, Parus, a Class A office building, had the nations highest annual rental income -- $50 million.
                      A bank auction of Gulliver, the nations tallest office building, did not proceed as scheduled Tuesday because none of the 10 prospective were qualified by SETAM, the 3-year-old electronic auction house operated by the Justice Ministry. Reasons for rejections of the bidder applicants was not specified.
                      Shocked by a 100-fold increase in passenger traffic over the last decade, neighbors of Kyiv Sikorsky, the capitals second busiest airport, are petitioning the City Council to ban night flights.In response, the airport is studying noise patterns, preparing a noise map and drawing up mitigation strategies, Denis Kostrzhevsky, the airport board chairman tells LIGA.net. When the airport was opened, in 1923, the Zhuliany area was pastoral and none of todays complaining neighbors lived there. In modern times, neighbors were lulled by low passenger flows only 30,400 in 2018. For this year, Sikorskys passenger traffic is nudging the 3 million mark.


                      UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                      For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                      Read More News on www.ubn.news

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                      • UKRAINE BUSINESS NEWS
                        Despite two national elections on the horizon, Ukrainian business executives have a positive outlook on business for the next 12 months, according to a new survey of 682 business heads. conducted by the National Bank of Ukraine in the third quarter of 2018. The business expectations index for the next 12 months was 117.2%, the central bank reports reports of the survey, where 100% is neutral. The most optimistic forecasts are in the processing industry. More than 30% of respondents expect production to grow. About 50% are convinced that it will remain at the same level, the bank reported of the survey conducted in 22 regions. It was the 10th quarter in a row registering net positive expectations. Business leaders predict increased sales, increased investment in machinery and inventory, and increased foreign investment in all segments, but agriculture.
                        Polands state oil and gas company, PGNiG, has signed two 20-year contracts to buy a total of 2 million tons of liquefied natural gas from the US. After gasification, this would be 2.7 billion cubic meters, or 13% of Polands forecast consumption next year. The LNG will come from two export terminals in Louisiana owned by Venture Global. Maciej Wozniak, PGNiGs vice-president for trade, said the American prices are cheaper than the prices charged by Gazprom for pipeline gas from Russia. Through connecting pipelines to Lviv region, some of this gas could come to Ukraine.
                        As part of Ukraines plan to become an international gas hub, Ukrtransgaz has announced a tender to modernize the nation's largest underground gas storage facility. Located about 75 km east of Poland, the Bilche-Volitsa caverns can hold 17 billion cubic meters of gas, the equivalent of half of Ukraines annual gas consumption. In the tender, expected to cost $35 million, Ukrtransgaz seeks modern gas turbine engines for the compressor station at the reservoir. Overall, Ukraine can store 31 billion cubic meters.
                        Since 2015, $1 billion has been invested in renewable energy projects in Ukraine, Serhiy Savchuk, State Department of Energy Efficiency, told Kyivs International Sustainable Energy Forum on Tuesday. One fast growing segment often overlooked, he said is rooftop solar. So far, $100 million has been invested in 4,660 of these household and factory projects. He called on the Rada to approve a government bill to replace the green tariff in 2020 with auctions for electricity produced by solar farms larger than 10 MW and by wind farms larger than 20 MW.
                        Investments in solar and wind power this year will pay off with a two thirds jump next year over 2018 levels in electricity generation from renewables, the Energy and Coal Industry Ministry predicts. By sector, renewable productions and year over year growths are: solar up 87% to 1.65 billion kWh; wind up 70% to 1.55 billion kWh; small hydro up 19% to 250 million kWh; and biogas and others up 25% to 300 million kWh.
                        Assets of about 30 bankrupt banks with a face value of $360 million are to be auctioned off by the State Guarantee Fund. Last week, the Fund earned $4 million from the sale of bank assets about two thirds for loan papers and one third for physical assets owned by the banks.
                        Sergiy Tigipko, owner of Kyiv-based TAScombank, plans to acquire another bank. "We've bought and will buy a lot of things -- VS Bank is already on our balance sheet, he told the Ukrainian Banking Forum, referring to the Ukraine unit of Russias Sberbank. We are now ready to purchase another bank and to integrate it into TAScombank if necessary." As reports FinClub, Tigipo earlier acquired Universal Bank from Greek owners and bought the loan portfolios of Platinum Bank, New Bank, and Forum Bank.
                        The freeze on household gas prices has been extended for another nine days, to Oct. 27.Reflecting political sensitivity of the issue, this is the ninth extension in 18 months. A new budget and a formula for raising household gas prices by at least 30% to market levels are the two main obstacles standing between Ukraine and renewal of IMF low interest loans.
                        Ukraines defense industry wants to establish joint production ventures with US companies for military aviation, naval and armored war materiel, Pavel Bukin, the new head of Ukroboronprom, tells Voice of America at the end of a visit to Washington. Bukin said that priorities for Ukroboronprom are an outside audit and restructuring the state-owned defense conglomerate along corporate lines. Ukraine has set a 2020 deadline for shifting defense production to NATO standards. Until now, US defense companies have shied away from joint ventures, partly for fear of getting entangled in corrupt practices.
                        Ukroboronprom has extended until Dec. 11 the deadline for participation in an international tender for a massive outside audit that could be priced at $130 million. On the advice of outside groups, including the Independent Anti-Corruption Committee on Defense, Ukroboronprom rewrote the tender specifications to cast a wider net for applicants.
                        Ukraine should adopt an industrial policy of smart protectionism to accelerate an economic shift from raw materials exporter to exporter of produced goods, argues Viktor Galasyuk, chairman of the Rada committee on Industrial Policy and Entrepreneurship. Why are Ukraines salaries the lowest in Europe? he asked at a Trade Wars forum organized by Ilyashev & Partners law firm. We sell wheat, and buy spaghetti. We sell round wood timber, and buy furniture. We sell steel scrap at $300 a ton, then spend millions to buy tanks. This is outrageous. He said Ukraine can win EU allies by bringing in more EU investment. The latest figure for new foreign investment is $2 billion. At this rate, Ukraine will need 100 years to catch up with Poland.
                        In an upturn for Ukraines shipbuilding industry, Smart Maritime Group is building three tanker ships for VEKA Group of Holland. In Mykolayiv, Smart is building two tankers and at its Kherson shipyard, Smart is building a third tanker.
                        Progress is being made on 300 million euro financing to improve rail access to Mykolayiv, Ukraines second busiest port, after Yuzhne. On Wednesday, President Poroshenko approved Rada ratification of a 150 million euro loan from the European Investment Bank. The EBRD is matching the loan. The money is to go to electrifying and doubling the main 170 km north-south line from Dolynsk to Mykolaiv. The loans also will upgrade a rail line from Kolosivka, 100 km to the northwest of Mykolayiv.

                        UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                        For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                        Read More News on www.ubn.news

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                        • Ukraine Business News
                          Goldman Sachs and Dragon Dragon Capital are buying Aladdin shopping and entertainment center and Platinum B, an adjacent, 6-story business center. Located on the left bank of the Dnipro, both properties are within a five-minute walk of Pozniaky metro station of the Green Line. The business center, with 4,100 square meters of leasable space, and the shopping center, with 10,500 square meters, are the latest in a series of commercial real estate properties that Dragon has acquired this year, several in partnership with Goldman.
                          As part of DTEKs 1 billion euro investment renewable projects through 2019, DTEK Renewables has signed a 150 million euro contract with General Electric Renewable Energy for the supply of 26 wind power turbines. The turbines, each with a capacity of 3.8 MW, are for the doubling of DTEKs Primorska wind farm in Zaporizhia region, on the Sea of Azov. When completed, at the end of next year, Primorska will have 400 MW of capacity. DTEK CEO Maksym Tymchenko says: Our ambitions are to build 1,000 MW of solar and wind power plants by the end of 2019The construction cost of such a capacity exceeds 1 billion euros.
                          With the clock ticking toward a potential cut off of Russian gas to Ukraine in 2020, Ukraines State Geology Service is breaking with past practice and vows to hold monthly auctions of oil and gas permits in 2019, UNIAN reports. This year, the Service will hold an auction next week, on Thursday, and on Dec. 27. Next year, the first electronic auctions of exploration and production permits are to be held Jan. 30 and Feb. 12. Oleg Kirilyuk, acting chairman of the Service, said: "We plan to hold auctions on a monthly basis for which up to 10 lots will be put up. In these lots, there will be both hydrocarbon plots and non-hydrocarbon plots.
                          Systematic development was the mantra used by Prime Minister Groysman to describe his no surprises, methodical approach to growth in a speech to the Kyiv International Economic Forum Thursday. With IT growing at 20% a year, Groysman told foreign investors that Ukraine is shifting from cheap labor to a well paid, educated workforce. He left the meeting to preside over Rada approval on first reading of a 2019 budget. The document calls for 3% growth and 7.4% inflation.
                          Groysman wants the Rada to give final approval to the 2019 state budget by Dec. 1. Alluding to the need for IMF loans, he tells TV Direct: The earlier we will approve the budget, the better we will work, including the maintenance of the foreign debt. Timothy Ash writes from London: In December, the focus will be on the Rada to keep to the government's promise and deliver an IMF compliant final budget reading, which could then see the release of $2 billion in IMF money, and likely something equivalent in terms of other international financial institution credits.
                          The Rada has voted down a bill to allow private trains to haul freight on state-owned tracks.Voting 226-202, the Rada rejected the bill which would have allowed private freight trains next year in a pilot program. Earlier this year, Yevhen Kravtsov, acting CEO of Ukrzaliznytsia, said private freight trains could be possible in coming years. Farmers and steel makers routinely complain of freight bottlenecks and extortion by managers of local rail lines.
                          Concord Consulting will lead an international consortium to prepare for privatization next year of four regional power and heating plants -- Kherson, Dneprovsk, Severodonetsk, and Kryvy Rih. Concord will work with Baker McKenzie, Bureau Marcus, BDO Ukraine, Ernst & Young and Kreston GCG, Vitalii Trubarov, head of the State Property Fund, posts on Facebook. A new, third competition will be held for advisors for Oriana and Ukragroleasing. The Property Fund will prepare Sumykhimprom for privatization as no company has applied for the job.
                          Hackers have infected three energy and transport companies in Ukraine and Poland with sophisticated new malware and may be planning destructive cyber attacks, a software security firm warns, Reuters reports from Bratislava. Researchers at Slovakia-based ESET said the group responsible for earlier attacks against the Ukrainian energy sector has now developed and used a new malware suite called GreyEnergy. This was the reconnaissance and espionage phase, potentially leading up to cyber sabotage, ESET researcher Robert Lipovsky tells Reuters. This shows that this very dangerous and persistent threat actor is still active. Reuters was unable to identify the companies. Ukraines Cyber Police confirmed attacks on two Ukrainian companies. Cyber sleuths link the new malware to Russias GRU, the spy agency seen as behind the devastating NotPetya cyber worm which caused billions of dollars of damage worldwide in 2017.
                          Ship building and repair, a mainstay of Ukraines economy since the days of Catherine the Great, are on the upswing. Smart Maritime Group, which unites the shipyards of Kherson and Mykolayiv, nearly doubled its ship repair volume last year, to 78 vessels, compared to 46 in 2016. There is a gradual resumption of ties with our traditional European counterparties, Vasily Fedin, Smarts general director, tells UNIAN. Noting that Smart is building two chemical tanker hulls for Hollands VEKA, he added. We hope this contract will renew the interest of European customers in our capabilities.
                          Wednesdays arrival of Brussels Airlines marks the 10th new airline to start service to Boryspil airport this year, Infrastructure Minister Volodymyr Omelyan told the Kyiv International Economic Forum. Addressing foreign investors, he said private capital in the form of concessions and public private partnerships is to provide almost half of $60 billion the government plans to spend on infrastructure by 2030. He cited areas open to foreign companies: construction of 10 autobahns, installation of 100 truck weighing stations, a Tesla Motors factory, replacement of the entire fleet of railway cars and locomotives, and upgrading of the Black Sea and Dnipro River ports.
                          For Kyiv residents looking for an Italian weekend, discount carrier Ernest Airline starts direct flights today from Sikorsky (Zhuliany) to MilanMalpensa and to Rome.
                          Four million Ukrainians more than 10% of the adult population -- have signed up with BlaBlaCar, Nicolas Brusson, a founder of the online marketplace for carpooling, told the Kyiv International Economic Forum. We have seen phenomenal growth here, he said. Ukraine is the fastest growth country of the 22 countries where we work.


                          UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                          Read More News on www.ubn.news
                          Ukraine Media Group LLC 2018

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                          • UKRAINE BUSINESS NEWS
                            Ukraine secured a new $3.9 billion, 14-month stand-by aid agreement with the International Monetary Fund on Friday. The IMF announced the deal hours after Prime Minister Groysman announced that household gas prices would go up by 23.5% on Nov. 1. Alluding to Presidential and Parliamentary elections scheduled for next year, the IMF said the deal will provide an anchor for the authorities economic policies during 2019.
                            The IMF deal will unlock about $2 billion pre-approved EU and World Bank aid. In addition to giving Ukraine low interest loans, the deal will also allow Ukraine to borrow money at cheaper rates. Ukraines Eurobonds rose following announcement of the gas price hike.
                            Disbursement of IMF money is contingent on final Rada approval of the national budget for 2019. Opposition Rada members blasted the gas price hike. Olena Babak, of the opposition Samopomich party, told 112 news: This is a crime against Ukraine. Yulia Tymoshenko, who leads polls for the March 30 presidential election, call the winter gas hike genocide against the Ukrainian people. After Tymoshenko called an emergency Rada session to debate the hike, Andriy Parubiy, chairman of the Rada, said he backs the hike, calling it unavoidable. He added: I am convinced that the subsidy system developed by the government will provide real economic protection to every Ukrainian family that needs help.
                            Kyiv plans to return to the municipal Eurobond market next year, Mayor Vitali Klitschko told the American Chamber of Commerce on Friday. During his four-year tenure as Mayor, Klitschko says he cut the citys $1 billion debt in half and doubled the citys budget, to $1 billion. Two bond ratings agencies, S & P and Fitch, give the capital B-Stable ratings. In 2018, he said he increased the city budget by 30%, partly by pulling money out of the shadows. To illustrate his anti-corruption, transparency fight, he cited a coffee cart outside Arsenalna metro station which, due to an open bidding process, now pays $32,150 in annual rent.
                            Horizon Capital Group plans to invest up to $200 million in Ukraine by 2023, Denys Tafintsev, a member of Horizons investment committee, told the Kyiv International Economic Forum. Ukraine has a relatively stable macroeconomic situation and poorly priced assets: six years ago they were three times more expensive, he said. Horizon's industry priorities are: IT, processing, export sectors, and light industry.
                            Norways Scatec Solar has won two new Ukraine projects two solar farms with a total cost of EUR137 million and a total capacity of 121 MW. Without identifying locations or local partners, the Oslo Stock Exchange notice was headlined: Scatec Solar increases backlog in Ukraine. Including these two new projects, Scatec has contracted this year to build 251 MW of solar plants in Ukraine.
                            In the first two months of small privatizations, over 200 lots of state and communal property have been auctioned on ProZorro.Sales, earning the state $10 million. About more 1,000 lots are up for sale by the end of this year, says Maxim Nefyodov, first deputy minister of economic development and trade. As mayors and ministers seek to unlock value from dormant state properties, the mini privatizations are expected to continue for years to come.
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                            [TD="align: left"]The State Statistics Service estimates Ukraines current population is 42.2 million people, excluding the Russia-controlled areas. It is unclear if the estimate includes the 4 million Ukrainians working outside the country. Since the start of this year, deaths exceeded births in Ukraine by 100 deaths for 58 births. This contributed to a net loss of 152,400 people. At the last census, in 2001, Ukraine had 48.5 million people. The next census is scheduled for 2020.

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                            • 22/10/18 continued...
                              The State Statistics Service estimates Ukraines current population is 42.2 million people, excluding the Russia-controlled areas. It is unclear if the estimate includes the 4 million Ukrainians working outside the country. Since the start of this year, deaths exceeded births in Ukraine by 100 deaths for 58 births. This contributed to a net loss of 152,400 people. At the last census, in 2001, Ukraine had 48.5 million people. The next census is scheduled for 2020.
                              There were 97,000 job vacancies in Ukraine officially offered by employers at the end of September, one third more than the 73,400 offered one year ago, reports State Statistics Service. According to the service, there is now one job opening for every three unemployed persons in Ukraine.
                              The Czech Republic plans to double its legal annual intake of Ukrainians to 40,000 workers next year, reports Hospodsk Noviny, a Prague center-right newspaper. Faced with a growing labor shortage, Czech started Regime Ukraine in 2016 to bring in workers. Over the last two years, the program cut visa processing times in half, to two months, and brought in 24,000 workers, Radio Prague reports. In the last year, the number of Czech companies participating in the program doubled. The Czech Chamber of Commerce, which represents 15,000 companies, warns the nations labor shortfall next year could be 500,000.
                              Ukrainian trucking permits to Poland are to drop by 20% next year, to 160,000, reports the Logistics Committee of European Business Association. An equal number is given to Polish truckers. But Polish trucking companies do not use most of them, due to long waits at the border and higher wages for Polish truck drivers. With EU trade growing and rail freight slow and expensive, Ukraine-based manufacturers predict a serious trade bottleneck in 2019. Poland is the port of entry for more truck traffic to the EU.
                              At the start of 2019, issuance and registration of international trucking permits will be conducted through an online platform, Infrastructure Minister Vladimir Omelyan told the Rada on Friday. As part of the E-Government program, payment for licenses and payment of fines also will go online.
                              About 3,500 kilometers of roads have been repaired so far this year, Prime Minister Groysman tweets. Last year, the figure was 2,100 km. In 2016, it was 900 km.
                              Construction of parking garages will become profitable for investors in Kyiv next year, Mayor Klitschko predicts. In two months, the city will have legal powers to levy parking fines from drivers who park on sidewalks. Now parking garages are empty, because people know they can park wherever they want, the Mayor told 200 members of the American Chamber. He called for building garages under European Square, at the north end of Kreschatyk, and under Poshtova Square, in Podil.
                              Swedens H&M has opened its second Ukraine store this year, in Kyivs Sky Mall. Two months ago, the nations first H&M opened in Kyivs Lavina Mall. According to 112.ua, during the first half of 2018, 11 new international brands entered Ukraine, including Under Armor, Inditex - Zara Home, Koton and DeFacto. Retailers returning to the market include: Lee Cooper, Hugo Boss, Baldessarini, Liu Jo, Penny Black, All Saints, and Scotch & Soda.
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                              UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                              For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
                              Read More News on www.ubn.news

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                              • UKRAINE BUSINESS NEWS
                                With initials barely dry on Fridays IMF staff level agreement, Ukraine meets investors today and tomorrow in London and New York to place up $2 billion in 10-year bonds. BNP Paribas, Citi, Goldman Sachs and JP Morgan are organizing the roadshow. Depending on investor response, Ukraine also may sell five-year bonds. S&P and Fitch rate Ukraine as B- with a stable outlook. In the last such sale, one year ago, Ukraine placed 15-year Eurobonds for $ 3 billion with a yield of 7.375%.
                                Among the best developments for Ukraine this year is how Concorde Capitals Alexander Paraschiy greets the Friday accord. It would succeed in reducing Ukraines sovereign risk for the next 1.5 yearsWe expect Ukraines MinFin will place international Eurobonds in the coming weeks, which will allow it to fully finance the 2019 budget deficit, as well as boost Ukraines gross international reserves back to the safe level of over three months of future imports.
                                G-7 country ambassadors in Kyiv hailed Fridays agreement as a key step towards ensuring the future economic stability of Ukraine and continuing economic growth." Approval of the 14-month, $3.9 billion IMF standby program contributes to Ukraines macro-financial stability and sends a positive signal to foreign investors, say five bankers polled by Interfax-Ukraine.
                                January is the estimated time of arrival of the IMF tranche probably $1 billion coupled with about $2 billion in EU and World Bank. Dragon Capital forecasts: Ukraine would need to tap the Eurobond market again by May 2019 to raise around $3 billion.
                                Naftogaz is planning its own international road show to raise up to $1 billion in Eurobonds,Andriy Kobolyev, CEO of the state energy company, told reporters Monday. We will go after the Ministry of Finance, he said. Last summer, Naftogaz signed a 2-year contract with the London law firm Freshfields Bruckhaus Deringer to support the placement of Eurobonds.
                                Battling to defuse political opposition to raising household gas prices at the start of winter,President Poroshenko promised Monday that his government will expand the subsidy programso not a single person, not a single poor person, not a single unprotected family feels the increase in tariffs in their own budgets." The government said it negotiated the IMF down from a 60% hike to full parity with gas market prices to the 23.5% hike that starts Nov. 1. Almost half of Ukraines population receive gas price subsidies because they live in poorly insulated housing built in the Soviet era when piped gas was virtually free.
                                S & P Global Ratings predicts exchange rate stability and declining inflation over the next three years. S&P predicts these year end hryvnia/dollar rates: 2018 -- 29.50; 2019 30.30; 2020 31.20; 2021 31.10. Consumer inflation estimates are: this year 10.3%; 2019 7.5%; 2020 and 2021 -- 7%.
                                Ukraines largest city attracts 200,000 new residents a year, Kyivs Mayor Vitali Klitschko says.In Kyiv, there is no unemployment, we lack labor, he said. The salaries are the highest in the nation, he said, citing an average of $464 per month. The capital also is an education magnet half of children in city schools come from surrounding Kyiv region.
                                Ukrainians are importing more cars and tractors, but paying less for them. Through August, the number of imported cars was up by 35% yoy, to 127,611. But, reflecting a surge in imported used cars, the average unit cost was down 23%, to $10,626. Most car imports come from the EU. Similarly, tractor imports are up 17% yoy, to 70,211, the State Statistics Service reports. The average dollar cost is down 23%. Of tractor imports, 78% come from China.
                                By March, Kharkiv airport doubles its EU destinations. Wizz Air starts service this Sunday to Gdansk and Wroclaw, on Tuesday to London-Luton and on Nov. 25 to Vienna. On March 21, Ernest Airlines starts flights to Rome and Milan. So far this year, Kharkiv airport passenger traffic is up 20%.
                                In a largely symbolic sign of a return of normalcy to Ukraines east, Washington is allowing U.S. and codeshare partners to fly to Kharkiv, Dnipro and Zaporizhia. The decision by the Federal Aviation Administration is largely academic because US carriers never have had scheduled service to those cities. Turkish Airlines, a Star Alliance member, already flies from Istanbul to Kharkiv and Zaporizhia.
                                Announcing a Kyiv-Genoa flight for March, Italys Ernest Airlines emerges as Ukraines discount airline to Italy only one year after starting flights here. With Genoa, Ernest will fly from Kyiv Sikorsky Airport (Zhuliany) to six Italian cities: Bergamo, Bologna, Genoa, Milan-Malpensa, Naples and Rome-Fiumincino. From Lviv, Ernest flies to Bergamo, Milan, Naples, Rome and Venice. In March, Ernest starts flights from Kharkiv to Rome and Milan.
                                Starting next week, Ukrainians will enjoy 90 visa-free visits to Qatar. The mutual agreement starts Nov. 2. Qatar Airlines has direct flights between Boryspil and Doha.
                                Kyiv Mayor Klitschko says that a central Kyiv bicycle path network will be implanted next year on these streets: Kreschatyk, Bohdana Khmelnitsokoho, Ivana Franka and Pushkinska. Briefing the American Chamber of Commerce, he also said a plant will open in the city to assemble 500 trams. He promised to expand LED street lighting to cover all city streets. With the construction season ending, Kltischko says he has renovated 300 km of roads this year.
                                Next year, construction will start on the first of five major highway interchanges around Kyiv,Infrastructure Minister Volodymyr Omelyan tells reporters. The interchanges will be located to speed traffic west to Zhytomyr and south to Odesa.


                                UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief
                                For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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