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  • Gotno Gizmo
    started a topic Extracts from Ukraine Business Journal

    Extracts from Ukraine Business Journal

    The European Commission is holding back on transferring to Ukraine a third and final tranche of EUR600 million in aid. Stumbling blocks were non-action on four points: lifting the ban on roundwood exports, launching an automatic check on electronic asset declarations, the law on the NBU credit registry, and checking information on beneficial owners of companies. Under the program approved in 2015, Ukraine received EUR1.2 billion out of EUR1.8 billion in the package. EU said it is open to talking about a new program. President Poroshenko told a business group Friday that reform will be becoming increasingly difficult as the 2019 elections approach.

    EBRD board has approved a loans of EUR160 million to Kharkiv for the extension of it third subway line toward the airport. Paired with co-financing from the European Investment Bank, the investment will extend the ‘green’ line 3.5 km, build depots and two metro stations - Derzhavinskaya and Odesskaya, and buy 85 subway cars. The project aims to increase the annual passenger flow by 25 million people, or 68,000 a day.

    State Department spokesperson Heather Nauert says the United States worries that that the construction of Nord Stream 2 and Turkish Stream gas pipelines will undermine Ukraine as a state transiting gas to Europe. Nauert said: “It would advance Russia's goal of undermining Ukraine – that's a particular concern of ours – by ending Ukraine's role as a transit country for Russian gas exports to get to Europe."

    Ukrainians are more optimistic about their nation’s economy, according to the latest public opinion poll conducted by International Republican Institute. In a September - October poll, 42% of the 4,500 respondents predicted the economy would improve or stay the same over the next year, compared to 41% who said it would worsen. One year ago, 32% of respondents to the same poll predicted economic improvements, compared to 54% who predicted a worsening.

    Ukraine’s foreign trade deficit grew by 15%, to $5 billion, for the first 10 months of the year, according to National Bank of Ukraine.

    Ukraine’s milk production continues its decline, on track to hit 10 million tons this year, or 3% below last year, Olha Trofimtseva, the Agriculture Ministry’s deputy minister for European Integration, told the All-Ukrainian Dairy Business Conference. Behind falling milk and butter production, the number of cows in Ukraine gradually shrinks. Currently, about one quarter of all cows are owned by dairies and three quarters by households.

    Ukraine has the second cheapest Internet access in the world, according to a new British survey of 196 countries. Ukraine’s $5.47 average monthly broadband package was narrowly beaten by Iran with a prices of $5.37. Internet was twice as expensive in neighboring Russia and Moldova. According to British consulting firm BDRC Continental and internet provider Cable.co.uk. the price in the US is $66.17; in Canada $54; in Germany $34.2; and in Poland $19.22.

    As 2018 shapes up as a road building year, Prime Minister announced the reconstruction of two highways: the 530 km road from Kyiv southwest to Chernivtsi, near the Romanian border; and the 190 km Kharkiv-Sumy highway, which runs parallel to the eastern border with Russia.

    On Saturday, Ukrainian Railways started selling tickets online for international trains to six nearby EU nations: Austria, Czech, Hungary, Poland, Romania and Slovakia. Fares vary according to the Euro exchange rate of the day of purchase.

    Lviv airport handled its 1 millionth passenger of the year on Friday, reportedly the first time since Independence in 1991 that the airport has handled such a volume. Through October, passenger traffic grew by 46.8%, hitting 918,400 passengers. The number of flights increased by 36.7%, to 10,088. Boosting traffic even more, Ernest Airlines starts next Saturday direct flights from Lviv to Naples and Venice.

    Faced with complaints about labor migration out of Ukraine, President Poroshenko responded: “Please: pay more to your workers!” At a meeting sponsored by the European Business Association and the American Chamber of Commerce in Ukraine, Anna Derevyanko, executive director of the EBA, said Friday that, due to steady outflow of workers, the real population of Ukraine in the area controlled by Kyiv is 35 million, not the 42 million figure often used. Vyacheslav Klimov, a co-owner of Novaya Poshta, the “lines of people” waiting to work at his delivery company have disappeared. Poroshenko responded, telling employers to adapt with the times: “These are the positive consequences of reforms, of the opening of borders, and of the European choice.”

    President Poroshenko proposed Monday to raised the minimum wage to UAH 4,100 UAH, or about $150 a month, on Jan. 1. This would be a 28% raise in one year, about double the rate of inflation.

    Locally generated tax revenues of city budgets have more than doubled in the last four years, hitting $6.3 billion today, President Petro Poroshenko told a conference of municipalities on Monday. As a result of Ukraine’s fiscal decentralization, the locally generated portion of city budgets has grown from 30% a decade ago to about 50% today, he said.

    Ukrainians will be offered referendums on joining NATO and the European Union in the "near future," President Petro Poroshenko said Friday. About 43 percent of Ukrainians support joining the Western military alliance and 56 percent of Ukrainians support joining the EU, according to a public opinion poll conducted in November.

    Ukraine's steel production through November fell 13% year-on-year to 19.4 million tons, according to Ukrmetallurgprom, Ukraine’s steel producers' union. Last year, steel production rose 5.5%, to 24.2 million tons. This year, steel output is likely to total 21.1 million tons.

    A Turkish solar developer is to build a 15 MW solar power plant in Ochakiv, Mykolaiv region. A solar park will be built on a 23-hectare site and several public buildings, such as schools, will be outfitted solar roof panels. The development is to be carried out next year by Eko Yenilenebilir Enerjiler A.S. (EkoRE)

    Next spring, construction starts on the Radisson Blu in Odesa, renovating the historic Seamen's Palace on Primorsky Boulevard, overlooking Potemkin Steps. The project, undertaken by Double W developer of Odesa, has attracted EUR40 million in international financing. Part of this money, from the Danish Investment Fund, and the Nordic Environmental Fund (NEFCO) will go for design work and equipment to help the four star hotel meet international LEED green certification.

    Minister of Infrastructure Volodymyr Omelyan predicts that in 2018 competition among low cost carriers will drive the average price of tickets for flights between Ukraine and European destinations to the EUR 30 to 50 range. At present, Wizz Air is expanding in Ukraine. Talks are to resume next year with Ryanair.

    As part of its Polish expansion, Ukraine International Airlines starts flights Dec. 26. from Kyiv Boryspil to Krakow, Poland’s second largest city. The route is to become daily in mid-January. UIA will use its Embraer 145 regional jets for the 1h45 minute flights. UIA recently won permission to fly next year to three other Polish regional airports: Gdansk, Poznan, Wroclaw.

    UIA has placed on sale tickets for its new flight from Boryspil to Toronto, which starts June 6. Round trip tickets, all taxes included, start at $659 for the flight, which is 10h25 minute from Ukraine to Canada.

  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    Volodymyr Zelenskiy, the anti-corruption campaigner, won the presidency by the largest margin in Ukraines history, 73% to 25%, according to a consortium of exit polls released Sunday night. Zelenskiy swept the nation, with vote margins ranging from 57% in the West to 88% in the East, according to responses tabulated from 13,686 voters leaving 300 polling stations.

    Zelenskiy presented his team of experts Thursday night on Right to Power on 1+1, the TV channel owned by his biggest backer, Igor Kolomoisky. Mirroring membership of the Cabinet of Ministers, the main experts are:

    Ruslan Stefanchuk, intellectual property lawyer, responsible for reforming legal institutions and developing legislation.

    Ivan Bakanov, CEO of Zelenskiys entertainment company Kvartal 95 and legal founder of Zelenskiys party, Servant of the People, responsible for relations with the Rada.

    Dmytro Razumkov, political consultant and managing director of Politconsulting Group, responsible for domestic policy.

    Oleksandr Danylyuk, former Finance Minister, presented as an expert in foreign relations, economics, and finance.Ruslan Ryaboshapka, former member of the National Agency for Corruption Prevention, responsible for anti-corruption policy.

    Andriy Gerus, director of the Association of Consumers of Energy and Utilities, a NGO that defends utilities consumers, responsible for energy, utilities, and anti-monopoly policy.

    Danylo Hetmantsev, president of the Association of Tax Advisors, in charge of economics, finances, and taxation
    Viktoria Strakhov, former member of the National Reform Council and corporate secretary at PrivatBank after it was nationalized, responsible for banking.

    Ivan Aparshyn, defense and security expert. Promised on TV to make defense procurement transparent

    Concorde Capitals Zenon Zawada writes: This team includes many people with impressive theoretical expertise, but few people with practical experience. Their success will depend on Zelenskiys ability to support them in their attempts at reforms, especially when their proposals are inevitably resisted.

    Viktor Medvedchuk, a Ukrainian who often serves as emissary for Russian President Putin, tells Reuters that Ukraines new president could regain control over the separatist east by years end, get cheap gas and investments from Russia -- if he does a deal with Moscow. Medvedchuk, who has known Putin for 19 years, says billions of dollars would flow from Russia in the form of investments and purchases of Ukrainian goods. Asserting Ukraine is losing $20 billion a year in exports to Russia, he said in an interview last week in Kyiv: Were not saying that we have to kiss or hug each other again. Were talking about restoring pragmatic economic relations.

    Russias new permit system for exports of coal, coke, gasoline and diesel threatens monthly supplies to Ukraine worth $360 million. According to Alfa Bank and the State Statistics Service, Ukraine imports $152 million worth of coal, or 60% of needs; $151 million of diesel, or 41%; $21 million of gasoline, or 23%; $21 million of LPG, or 38%; $16 million of coke, or 74%. Alexiy Blinov, chief economist for Alfa Bank, writes: This is a threat for Ukraines power sector, car fuel market, and the steel sector.

    Two of DTEKs eight power generating plants run on anthracite coal which no longer is produced in government-controlled areas of Ukraine. DTEK has planned to entirely fuel these two plans with 2.2 million tons of coal imported from Russia, some from its own mines. Concorde Capitals Alexander Paraschiy writes: If DTEK wont be able to supply coal to Luhanska from Russian territory (either from DTEK-related mines, or from other Russian suppliers), the plant will have to either switch to burning natural gas (which is too expensive) or halt its operations altogether...All in all, we continue to consider DTEKUA Eurobonds as the most exposed to political risks of 2019.

    Metinvest, Ukraines largest steelmaker, may face a shortage of coking coal. Concorde Capital calculates that Metinvests mines can only cover 57% of the 9.1 million tons of coking coal the company needs. On Thursday, Metinvest told Interfax-Ukraine that it has a long-term supply strategy that guarantees sufficient coal. However, Anatoliy Starovoyt, general director of Ukrkoks, the national association of coking coal consumers, worries that Ukraines seaports cannot handle an onvernight doubling of coking coal imports. Last year, Ukraine met almost half of its needs for 13.3 million tons of coking coal by import coal from Russia, by rail.

    Russias outright import and export bans will cover $250 million worth of goods a year, estimates Russian Prime Minister Dmitry Medvedev. But, Ukraine analysts say these items are replaceable, analysts say. Last year, Ukraine imported most of its oil from Azerbaijan and only 20% of its bitumen used for paving roads -- from Russia. Interpipe only exported only 61,600 tons of pipe, 9% of its total exports, to Russia.

    Foreign investment in Ukraines hryvnia treasury bonds rose by 20% last week, hitting a total dollar equivalent of $1.1 billion. Attracted by high interest rates and not put off by the presidential election, foreign investment in the bonds has increased almost 5-fold this year, to UAH 31 billion. Last year, foreign investment in the bonds increased by 22%.

    With Chinese equipment, DTEK inaugurated Europes second largest solar power station on Friday in Nikopol, Dnipropetrovsk region. Costing $243 million, the 200 MW capacity plant is second only in Europe to Frances 300 MW plant in Cestas, Gironde region. China Machinery Engineering Corporation built the 400-hectare plant, using 160 PV inverters manufactured by Chinas Shenzhen Kstar Science and Technology and 750,000 solar panels made by Chinas Seraphim Solar System and Trina Solar. CMEC President Han Xiaojun told Xinhua news agency: The Nikopol plant is based on advanced solar modules and inverters made in China, as well as on advanced power plant control systems.

    After opening a 10.5 MW plant last year in Nikopol, Canadian renewable energy company TIU has its second Ukraine plant, in Mykolaiv region, on Thursday. With an investment of about 11 million, the plant was built in Kalynivka, 150 km northwest of Mykolaiv city.

    Delay of delivery of three Boeing 737 MAX passenger jets is prompting UIA to cancel its Kyiv-Vinnytsia flight and to cut frequencies on its flights from Kyiv Boryspil to Amman, Ankara, Athens, Baku, Geneva, Istanbul, Ivano-Frankivsk, Kherson, Minsk, Riga, Yerevan and Zaporizhia. Compounding UIAs difficulties, the airline lost $100 million last year.

    With Kolomoisky owning a major share of UIA, the election of his protg, Zelenskiy, could result in government favors extended to the national flag carrier, analysts tell The Kyiv Post. While a frontal confrontation with discount airlines would be highly unpopular, a Kolomoisky-influenced government could cut aviation fuel taxes for Ukraine-based airlines and cut navigation fees, charges that the UIA already is fighting in court.

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    In a warning shot to Ukraines voters and to Ukraines next president, Russia is banning exports to Ukraine of oil, coal, gasoline and diesel, effective June 1, two days before inauguration day. As announced Thursday by Russias Prime Minister Dmitry Medvedev, the government retains the discretion to allow exports of coal, diesel and gasoline by individual permit.

    Ukraine relied on Russia for 70% of its coal imports last year, paying $1.7 billion last year for 15 million tons. Supplies to Ukraine increased by 29% last year, reports Russias Energy Ministry. For diesel and propane, Ukraine paid Russia $2 billion last year, reports CTS-Consulting. During the first quarter of this year, Ukraine imported 88% of its oil products from Russia and Belarus, paying $873.5 million.

    "Ukraine will be able to quickly replace the shortage of petroleum products, which will arise in connection with the Russian ban on their import into the country, predicts Sergey Kuyun, director of CTS-Consulting. Diesel fuel will rise in price by 1-1.5 UAH / liter, liquefied gas - by 2 UAH / liter." He said alternate supplies could come from Belarus, Kazakhstan, the EU and increased production from Ukraines Ukrtatnafta refinery. It is not known if Russia will pressure Belarus to stop transshipping Russian oil to Ukraine.

    Ukraines central bank will appeal a surprise court decision ruling that the 2016 nationalization of Ukraines largest bank, PrivateBank, was illegal. Last September, the same Kyiv District Administrative Court recognized that the National Bank of Ukraines decision to declare PrivatBank insolvent was legitimate, reports the Kyiv Post. As part of the nationalization, the government injected $6 billion in PrivatBank, averting a banking crisis. In 2018, Kroll Inc., the New Yorkbased corporate investigations firm, completed a forensic audit that concluded that a large-scale and coordinated fraud scheme had stolen $5.5 billion.

    I won - I won the lawsuit, Ihor Kolomoisky, the main shareholder of PrivatBank, told Reuters on learning of the court decision. In a separate court case, at Kyivs Commercial Court, Kolomoisky is suing for $2 billion in reparations and return of his 41.6% shareholding. In about 100 lawsuits, Kolomoisky is fighting government efforts to seize his properties to cover part of the $6 billion cash injection. Also on Thursday, Kolomoisky said that after Sundays vote he will return to Ukraine from self-exile in Israel. In that vote, his protg, Volodmyr Zelenskiy is expected to win easily.

    Markets and international observers reacted negatively to the court ruling. Ukraines dollar-denominated bonds fell Thursday, according to Refinitiv. The US Embassy in Kyiv immediately posted a statement: In 2016 Ukraines international partners supported the decision of the government and the National Bank of Ukraine (NBU) to nationalize PrivatBank...It is important that the authorities continue their efforts to recover losses from former owners and related parties of failed banks. Ukraines international partners will be closely monitoring developments in this area.

    From London, Timothy Ash writes: The IMF et al will simply not tolerate any scenario where PrivatBank ends up back in the hands of former owners, unless they stump up the $5bn+ which the state used to recapitalize the bank. I cannot see any future IMF lending to Ukraine if the court does eventually rule for the bank to be handed back to former owners... I cannot see Privatbank returned to former owners - the IMF programme/anchor is just too important still for the macro economy, and its hard to see Privatbank being sustainable without state support.

    PrivatBank is expected to be a hot topic in tonights presidential debate, the only face to face encounter of the runoff campaign. In advance, President Poroshenko stressed his opponents ties to Kolomoisky, posting on Facebook: This adventure threatens the loss of money to tens of millions of customers, and the country as a whole - a default and a new economic crisis. In response, Zelenskiys campaign blamed the ruling on Poroshenkos failed judicial reform, posting on Facebook: Instead of defending the interests of the state, the NBU loses the court to PrivatBank.

    On Thursday, the last day for publishing polls, Zelenskiy gets 73% of support among decided voters, compared to 27% for Poroshenko. Almost half of the 3,000 voters polled by Rating Sociological Group predicted that the country will improve after the election. About half of respondents said they would give the new president one year to get results.

    Comedian as President Raises Serious Questions for Ukraine headlines a Bloomberg report. Actual policies were all but absent during his campaign...what he would do as president remains hazy, write two Kyiv-based reporters. Conversations with advisers helping Zelenskiy suggest he isnt simply keeping his cards close to his chest rather, hes yet to determine exactly what he wants to do if he wins.

    American Bunge Ltd and Spains Dacsa are investing $14 million to build Ukraines largest corn processing complex in Vinnytsia region. When completed next year, the plant is to export 80% of production, Dmitry Gorshunov, director of Bunge Ukraine tells Inventure news site. Last summer, Bunge inaugurated a $180 million farm products exporting terminal at Mykolaiv port. The new plant, located in Demkivtske village, is to use Italian equipment to process corn, breaking it down into oil, starch, protein and fiber.

    With freight trains backing up at the Belarus-Poland border, China plans to start in June a second container route through Ukraine to Europe, CTS reports, citing Rakhmetolla Kudaibergenov, secretary general of the Trans-Caspian International Transport Route. Trains coming from the former Soviet Union must stop at the western borders of Belarus or Ukraine to switch to European gauge tracks. Last week, a weekly China-to-Hungary freight train started service, also passing through Ukraine. The Trans-Caspian official said: The initiative to create a new logistics product belongs to the Chinese side due to the shortage of cargo transportation capacities to Europe through Belarus.

    Sinosure, Chinas official export credit agency, will provide up to $500 million worth of insurance cover for credits for Chinese projects in Ukraine. Under a deal signed Thursday with Ukreximbank, the insurance cover is to go to projects in construction, agriculture, energy, transportation, oil and gas. Two weeks ago, Sinosure announced that it will extend $1 billion of insurance cover to Naftogaz to allow state energy company to get low-cost credit to buy high tech Chinese equipment.

    From the Editor. I will be in Bangkok this week, reporting on Ukraine's business events from a dispassionate distance. Its not the holiday you might think, Ill be attending to necessary but frustrating visa matters. Back in Kyiv on Monday April 29. As always, if you have any comments or story tips, reach out to me at: editor@ubn.news.

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    Zelenskiy could be a good news story, writes Tim Ash, who has been following Ukrainian politics since Independence. Noting that the frontrunner in all polls prior to Sundays election is pro-Western, pro-business and pro-market, Ash writes: Reformers, and the West, need to work with Zelenskiy to ensure the post Euromaidan wins are preserved and further reforms pushed forward.

    Tempering his optimism, Ash cautions that Zelenskiys financial backer, Ihor Kolomoisky is the biggest concern for investors and I think Western diplomats in regard to Zelenskiy. Ash, a senior sovereign analyst for Blue Bay Asset Management in London, writes: It is difficult to imagine the current IMF standby agreement sustaining if a Zelenskiy administration backtracks on existing commitments to reform of the National Bank of Ukraine and the broader banking sector. This will be a deal breaker for the IMF et al, and I think for foreign private sector creditors.

    Oleh Dubyna, a senior energy official under successive governments in the 2000s, has emerged as a key economic advisor to Zelenskiy, reports RFE/RL. Last week, Signal Group, a Washington lobbying firm, started setting up meetings for Dubyna in Washington with Trump Administration officials, congressional aides, reporters and think tank leaders. Dubyna, now 60, was, successively, Energy Minister in the Yuschenko government, advisor to President Kuchma, then chairman of Naftogaz under Prime Minister Tymoshenko.

    With Sundays vote looming, Zelenskiy assiduously ducks the press, delegating to advisors the task of explaining future policies, 21 Ukrainian news outlets complain in an open letter. "Our readers, viewers and listeners are asking questions we cannot answer since we have not once talked with you directly," the letter says. "Our professional duty as journalists is to bring important information to the public in a timely and comprehensive manner. Since you ignore our interview requests, we cannot fulfill this function." The media groups demand a press conference. A campaign spokesman says that, with the debate on Friday, there is no time.

    Zelenskiys team is sending crossed signals on the future of the National Bank of Ukraine. Dmytro Razumkov, a campaign spokesman, called last week for an audit of the central bank, a move that could start a process for pushing out central bank governor Yakiv Smolii. But on Monday, Oleksandr Danylyuk, Ukraines former finance minister, said there is no need for an audit of the bank. He said on ICTVs Svoboda Slova show: We understand the (NBU) is an independent institution, and that its a big achievement that the National Bank became independent.

    Serhiy Fursa, an investment banker at Dragon Capital, warns against tinkering with the bank, writing in Novoye Vremya news site: The NBU is the loudest example of the success of reforms in Ukraine, and the independence of the regulator is a clear signal of the opportunity to invest.

    Tomorrow nights presidential debate should draw 60,000 people to Kyivs Olimpiyskiy Stadium, about 85% of capacity, predicts the Interior Ministry. The Zelenskiy campaign reports that within 30 minutes of posting a ticket booking link, 12,000 free tickets were reserved. Dmytro Razumkov, says the two campaigns are to split the cost of the stadium rental, about $250,000.

    More than half -- 51.3% -- of respondents to a nationwide poll say Fridays debate is not important for them to select a candidate, reports the Kyiv International Institute of Sociology. Asked about top priorities for the next president, 39% said lower household gas price; 35% said removing political immunity from MPs, judges and the president; 32% said investigating big corruption schemes; and 23% said negotiating a real ceasefire for the Donbas.

    The index of business expectations by Ukrainian enterprises' top executives grew to 119.7% in the first quarter, from 117.3% in the fourth quarter, reports UNIAN. About half of business executives polled predicted that the hryvnia would not fall below 29 to the dollar, a 7% devaluation from todays rate. Separately, the average value of the consumer sentiment index in Q1 exceeded the average value for all of 2018, according to a study by Info Sapiens. In general, the index of economic expectations in March rose by 1.4 points - to 68.1 according to the results of a poll of 1,000 people.

    Grain exports are up 21% compared to this time last year, reports the State Service for Food Safety and Consumer Protection. Since the start of the marketing year, in July, Ukraine has exported 40 million tons. Of last falls 70 million ton harvest, Ukraine may export as much as 50 million tons.

    The outcome of trade disputes between China and the US and Canada will determine Ukrainian export flows in coming years, Argus Media reports from Kyivs Black Sea Grain conference. US-China trade talks are expected to end this month. No deal would big opportunities for Ukraines exports of corn, barley and canola. There is a big opportunity for Ukraine to export to China, Renault Quach, director of Chinese trading firm Donlink Grain and Oil.

    The name of Ukraines busiest port has been officially switched from Yuzhny (Russian) to Pivdennyi (Ukrainian). Both words mean Southern. Founded 40 years ago on a shore of the Ajalyk estuary, 40 km north of Odesa, Pivdennyi handled 43 million tons of cargo last year. It is also Ukraines deepest port, with average depths of 15 meters.

    Since 2016, 6,800 km of roads or 15% of the national road network -- have been been repaired or rebuilt, Prime Minister told the Cabinet of Ministers on Wednesday. Starting this month, $1.25 billion is being spent this year on rebuilding state roads. Support this historically high level, the new Road Fund supplies 60% of the state road building budget. Starting last year, regional governments are responsible for maintaining the nations 120,000 km village-to-village and village-to-district center roads.

    Two Canadian companies -- International Road Dynamics Inc. and Quarterhill Inc. have won a $6.4 million contract to supply 12 electronic complexes capable of weighing trucks as they travel down highways. In an effort to get overloaded trucks off the roads, the World Bank is largely paying for the Weight in Motion systems. The systems weigh and ticket drivers, minimizing the human interface. Reflecting the amount of money traditionally made by extorting drivers, a group of police officers attacked a rival police group early Wednesday morning at an Odesa highway weigh station. Five cars were damaged and three men went to the hospital.

    UIA has switched to three new fare categories: Economy Light, Economy Standard and Economy Premium. Fares differ according to baggage amounts and the ability to switch travel dates. Designed to maximize revenue per seat, the rules follow similar rate structures adopted since 2015 by other legacy flag carriers -- Lufthansa, Air France, KLM, Alitalia, British Airway, and LOT. Last year, UIA lost 100 million USD.

    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    Comedian Volodymyr Zelenskiy is increasing his lead over President Poroshenko, according to the latest nationwide poll, conducted through Sunday by the Kyiv International Institute of Sociology. In a poll of 2,004 people, 72% of respondents who plan to vote and who have made up their minds will vote for Zelenskiy. Poroshenko was favored by 25%. Zelenskiy is the favorite in all regions. Poroshenkos support trails off, going West to East. In the West, he is favored by 46%. In East, it is 12%, and in the Donbas 5%. The candidates are to hold one debate, Friday night. The vote is Sunday.

    Zelenskiys close ties to oligarch Igor Kolomoisky are increasingly clear, Reuters reports in a story headlined: Mutual friends and borrowed cars: how Ukraine's would-be leader is linked to tycoon. The two men have business partners in common, Zelenskiy uses security staff also seen in the past accompanying Kolomoisky, a former Kolomoisky adviser is on Zelenskiys campaign team and at least two vehicles used by Zelenskiy and his entourage are owned by people or entities linked to Kolomoisky, Reuters reports from Kyiv. The report notes that Zelenskiys recent stardom has been made by Kolomoiskys 1+1 TV channel.

    Volodymyr Fesenko, director of Kyivs Penta think-tank, describes the potential payoff: If Zelenskiy becomes president, taking into account that he basically doesnt have any people, or has very few, Kolomoisky can suggest different people to him (for government office) through whom he will then exert his influence on power.

    Concorde Capital details Zelenskiys 13 flights in the last three years to Geneva and Tel Aviv, ostensibly to see Kolomoisky. Several flights were on private jets belonging to Kolomoiskys business partners. There can be no doubt about Zelenskiys close ties to Kolomoisky, writes Concorde analyst Zenon Zawada. Ukrainian political tradition has been that the oligarchs sponsoring political campaigns get special treatment, and even preferences, as a reward for their support.

    The ratio of unemployed people to vacancies, has fallen from 5 people per job opening in January, to 3 people per vacancy in March, reports the State Statistics Service. Overall, the official unemployment rate fell to 8.8% at the end of 2018, from 9.9% one year earlier. Faced with labor migration, Oleg Bakhmatyuk, owner of Ukrlandfarming, a major agro holding, tells UNIAN that in the last two years, he has nearly doubled the average farmworker salary, to $407 a month. Skilled mechanics earn over $1,000 a month.

    A Dutch-Ukrainian poultry farm on the border with Poland is investing 38 million to double its production, says Alina Sych, general director of the company, Volodymyr-Volyn Poultry Factory. A new plant will be capable of processing 13,500 broilers an hour, she tells Interfax-Ukraine. The farm accounts for 6% of national production.

    Ukraines poultry exports were up 39%, to 103,600 tons, in the first quarter of this year, compared to the same period last year, reports the State Fiscal Service. In dollar terms, exports were up 31%, to $147 million. As of April 1, there were 205 million chickens in Ukraine, reports the State Statistics Service. While cows, sheep and goats were down slightly year-over-year, chickens bucked the trend, increasing by 3.7%. Poultry in industrial farms were up 6%. Reflecting the industrys dominance, in March poultry accounted for 69% of total meat production in Ukraine.

    Racing the grain harvest, Nibulon is tripling its construction workforce to 1,500 to complete a new $19 million Dnipro river transshipment terminal by July. With the 300,000 ton a year terminal in Ternivka, Nibulon will have three Dnipro river ports in Zaporizhia region. The need for farmers to use heavy trucks will disappear, Nibulon CEO Oleksiy Vadaturskyy predicted on a visit to Ternivka, saying river ports cut out the expense of long drives to Black Sea ports. This certainly will save each farm from $3 to $5 a ton...it is a colossal amount of money that farmers will be able to invest in development of their farms.

    Ukraine, the world's largest exporter of sunflower oil, is exporting 7% more oil than during the last marketing season. Two thirds of the way through the September to August marketing season, Ukraine has exported 3.3 million tons of the cooking oil, according to APK-Inform. The largest buyers are India, the EU and China.

    With food exports leading the way, Ukraines largest trade exports last year were: India $1.6 billion; Egypt $1.4 billion; Netherlands $827 million; Spain $741 million; and Moldova $671 million. Source: State Statistics Service.

    The International Court of Arbitration has ruled that Russia must pay Ukrnafta $48 million for gas stations and buildings stolen five years ago with the annexation of Crimea. Last October, Switzerlands Supreme Court ruled that the Arbitration Court has jurisdiction. The compensation to the state oil and gas company covers the value of stolen property, interest since April 2014 and arbitration costs. It is unclear if Russia will pay. Ukrenergo, the state electricity company, also plans to sue Russia to stealing its assets in Crimea.

    In ranking of 1,028 big city startup ecosystems around the world, Kyiv jumped 29 places last year, to come in 34th. Among European cities, Kyiv came in 6th. For the other cities of Ukraines big five, the rankings by StartupBlink are: Odesa 235; Lviv 299; Kharkiv 435; and Dnipro 561. The report says: Kiev, Ukraine Startup Map has 321 startups, and the most popular startups...are Grammarly, Hotelscan and Template Monster.

    As part of the new foreign exchange liberalization, PrivatBank terminals now allow users to deposit hryvnia or use their bank card to replenish their dollar or euro foreign currency account. Under the Feb. 7 foreign exchange law, individuals can buy online every day up to 150,000 hyrvnia, currently $5,555.

    No change at the coffee shop? The volume of hryvnia banknotes and coins in circulation is almost $1 billion less than at the start of the year, reports the National Bank of Ukraine. Currently, UAH 375.4 billion -- $13.9 billion -- in cash circulates in Ukraine, or 6.2% less than on Jan 1. The government encourages the use of credit cards and bank cards to collect more sales taxes.

    Meal delivery is the fastest growing sector for Kyiv restaurants, says Michael Don, a 23-year veteran of the capitals restaurant scene. Delivery is growing by 30% a year, traffic is heavy, and people dont want to drive, says Don who maintains 90 small cars to make deliveries for his 74 restaurants. In addition to handling orders by Internet, Dons USG Holding is investing in brick and mortar this year, opening two new Sushi-Yas and two more Il Molino. Currently, USG has 42 Sushiyas and and 18 Il Molinos. He also mulls opening a small chain of Lebanese restaurants, depending on how quiet the election is.

    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS


    The EU Council approved a European gas directive Monday that is expected to delay commissioning of the Nord Stream 2 gas line and potentially leave it half empty. Extending EU rules to non-EU pipelines, the directive will force Gazprom to unbundle or hand over operation of the line to a company independent of Russias state gas producer. Potentially, more serious, half of the pipe has to reserved for third companies. Given Gazproms gas export monopoly, this could leave half of the pipe empty until Russias creates a separate gas exporter. Ukraines Mission to the EU issued a statement welcoming the new rules.

    Complaining of a deliberate attempt to delay the project's completion," Nord Stream 2 AG filed an application Monday for a third alternative route around Denmark's Baltic Sea island of Bornholm. Russia, Finland, Sweden and Germany have issued permits for the 1,220 km pipeline which is almost half built. Responding to Russias impatience, Denmark Energy Agency says environmental impact statements take time. The new route goes through waters that once were contested by Poland and Denmark. Although a settlement was reached, Poland has not yet ratified it.

    In the latest move to bring non-Russian gas to Poland and, potentially Ukraine, the European Commission signed on Monday a 215 million grant to start building a pipeline to bring Norwegian North Sea gas to Denmark and a Polish Baltic sea port. Designed for completion by 2022, the line would supply 10 billion cubic meters of gas to Poland. By comparison, the Russia-German Nord Stream 2 pipeline is scheduled to open next year with an annual capacity of 55 bcm. Last year, Russia supplied almost half of gas consumed in the EU, followed by followed by Norway -34%- and Algeria and Libya, each 8.6%.

    The EU grants pays for 60% of the 275 km underwater line connecting Denmarks Faxe with Polands Niechorze-Pogorzelica. Attending the signing ceremony in Brussels was Polish Prime Minister Mateusz Morawiecki and Maro efovi, commission vice-president for the Energy Union. Next month, after Ukraines presidential election, efovi, a Slovak, plans to restart EU-Ukraine-Gazprom talks on renewing Russias gas transit pact with Ukraine. In June, Poland is to receive its first liquefied natural gas supplies from the United States, under a deal signed by Polands state energy firm PGNiG with Houston-based Cheniere Energy.

    Last Friday, a senior EU energy official told a conference in Brussels that the EU plans to drag out the Nord Stream 2 permitting process until Gazprom negotiates a new 10-year gas transit deal with Ukraine. There will be some years of delay and that is our trump card with Russia, predicted the official, Klaus-Dieter Borchardt.

    Shrugging off the election season fireworks, S & P Global Ratings confirmed Ukraines sovereign credit rating at the level of B-/ B, with outlook of stable. The international ratings agency says the stable outlook reflects expectations that Ukraine will comply with the IMF agreement, maintaining macroeconomic stability during the presidential and parliamentary elections. S & P expects Ukraine to retain access to domestic and international capital markets, allowing it to repay debts in 2019. Last month, Fitch confirmed its rating of Ukraine foreign currency bonds at B- with a stable outlook.

    Dragon Capital writes: Uncertainty stemming from the presidential and parliamentary elections, compounded by high public sector external debt repayments, is likely to keep Ukraines credit ratings from being upgraded this year.

    Ukraine hopes to raise new sovereign debt backed by a World Bank guarantee again this year though the size has not been decided, Finance Minister Oksana Markarova tells Reuters on Monday. Last month, Ukraine borrowed 529 million under World Bank guarantees. We are working on the maximum possible amount, but it is too early to say specific figures, Markarova said. Next month and in November, Ukraine also expects to receive two IMF loan tranches worth a combined $2.5 billion.

    If a Kyiv court decides to reverse the 2016 nationalization of PrivatBank, it will cause a deep crisis in relations with the IMF, President Poroshenko warned Monday in a meeting with members of the American, European, and Ukrainian chambers of commerce. Saying he was shocked by Igor Kolomoiskys demand for $2 billion in compensation, Poroshenko said the nationalization saved the deposits of 22 million Ukrainians. He charged that Kolomoiskys strategy is to push for a court decision before Sundays election to say that this happened without their participation.

    Separately, Valeria Gontareva, who nationalized the bank as Governor of the National Bank of Ukraine, dismissed Kolomoiskys demand for $2 billion as complete nonsense. The bank did not have that capital -- there was a hole of 5.5 billion dollars, which the state closed," she told Novoe Vremya Biznes. In a warning to the court, she added: This is the biggest fraud in the history of the financial world, so the whole world is watching this case.

    At the meeting with business leaders, Poroshenko drew applause when he said he signed the Bankruptcy Code. As adopted by the Rada last fall, the new Code makes it easier for individuals to go into bankruptcy and for bankrupt properties to be sold at electronic auctions by ProZorro.Sale.

    With opinion polls strongly favoring Kolomoiskys protg, Volodymyr Zelensky, the mood was somber among the standing room only crowd of several hundred business business leaders at Kyivs InterContinental Hotel. Anna Derevyanko, executive director of the European Business Association, praised the president as a fighter and gave him an embrace. Lenna Koszarny, chair of the American Chamber, said: People are worried. Business is worried. Recalling a meeting last month with chamber representatives where Zelensky showed up in a black T-shirt and gave vague answers, she said: Nobody knows a thing we are all trying to find out what will happen, how it will happen...When I hear the hrvynia exchange rate, not at 30, but 40, 50 -- I feel terrible.

    Prime Minister Groysman, who is expected to remain in his post for another six months -- until the Oct. 27 parliamentary elections promised to push the Rada to pass more legislation in upcoming sessions. Noting that the Rada has adopted only one third of the Poroshenko Administrations top 35 laws, he said: Everyone says we have to move much faster than we do now.

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    The EU Council approved a European gas directive Monday that is expected to delay commissioning of the Nord Stream 2 gas line and potentially leave it half empty. Extending EU rules to non-EU pipelines, the directive will force Gazprom to unbundle or hand over operation of the line to a company independent of Russias state gas producer. Potentially, more serious, half of the pipe has to reserved for third companies. Given Gazproms gas export monopoly, this could leave half of the pipe empty until Russias creates a separate gas exporter. Ukraines Mission to the EU issued a statement welcoming the new rules.

    Complaining of a deliberate attempt to delay the project's completion," Nord Stream 2 AG filed an application Monday for a third alternative route around Denmark's Baltic Sea island of Bornholm. Russia, Finland, Sweden and Germany have issued permits for the 1,220 km pipeline which is almost half built. Responding to Russias impatience, Denmark Energy Agency says environmental impact statements take time. The new route goes through waters that once were contested by Poland and Denmark. Although a settlement was reached, Poland has not yet ratified it.

    In the latest move to bring non-Russian gas to Poland and, potentially Ukraine, the European Commission signed on Monday a 215 million grant to start building a pipeline to bring Norwegian North Sea gas to Denmark and a Polish Baltic sea port. Designed for completion by 2022, the line would supply 10 billion cubic meters of gas to Poland. By comparison, the Russia-German Nord Stream 2 pipeline is scheduled to open next year with an annual capacity of 55 bcm. Last year, Russia supplied almost half of gas consumed in the EU, followed by followed by Norway -34%- and Algeria and Libya, each 8.6%.

    The EU grants pays for 60% of the 275 km underwater line connecting Denmarks Faxe with Polands Niechorze-Pogorzelica. Attending the signing ceremony in Brussels was Polish Prime Minister Mateusz Morawiecki and Maro efovi, commission vice-president for the Energy Union. Next month, after Ukraines presidential election, efovi, a Slovak, plans to restart EU-Ukraine-Gazprom talks on renewing Russias gas transit pact with Ukraine. In June, Poland is to receive its first liquefied natural gas supplies from the United States, under a deal signed by Polands state energy firm PGNiG with Houston-based Cheniere Energy.

    Last Friday, a senior EU energy official told a conference in Brussels that the EU plans to drag out the Nord Stream 2 permitting process until Gazprom negotiates a new 10-year gas transit deal with Ukraine. There will be some years of delay and that is our trump card with Russia, predicted the official, Klaus-Dieter Borchardt.

    Shrugging off the election season fireworks, S & P Global Ratings confirmed Ukraines sovereign credit rating at the level of B-/ B, with outlook of stable. The international ratings agency says the stable outlook reflects expectations that Ukraine will comply with the IMF agreement, maintaining macroeconomic stability during the presidential and parliamentary elections. S & P expects Ukraine to retain access to domestic and international capital markets, allowing it to repay debts in 2019. Last month, Fitch confirmed its rating of Ukraine foreign currency bonds at B- with a stable outlook.

    Dragon Capital writes: Uncertainty stemming from the presidential and parliamentary elections, compounded by high public sector external debt repayments, is likely to keep Ukraines credit ratings from being upgraded this year.

    Ukraine hopes to raise new sovereign debt backed by a World Bank guarantee again this year though the size has not been decided, Finance Minister Oksana Markarova tells Reuters on Monday. Last month, Ukraine borrowed 529 million under World Bank guarantees. We are working on the maximum possible amount, but it is too early to say specific figures, Markarova said. Next month and in November, Ukraine also expects to receive two IMF loan tranches worth a combined $2.5 billion.

    If a Kyiv court decides to reverse the 2016 nationalization of PrivatBank, it will cause a deep crisis in relations with the IMF, President Poroshenko warned Monday in a meeting with members of the American, European, and Ukrainian chambers of commerce. Saying he was shocked by Igor Kolomoiskys demand for $2 billion in compensation, Poroshenko said the nationalization saved the deposits of 22 million Ukrainians. He charged that Kolomoiskys strategy is to push for a court decision before Sundays election to say that this happened without their participation.

    Separately, Valeria Gontareva, who nationalized the bank as Governor of the National Bank of Ukraine, dismissed Kolomoiskys demand for $2 billion as complete nonsense. The bank did not have that capital -- there was a hole of 5.5 billion dollars, which the state closed," she told Novoe Vremya Biznes. In a warning to the court, she added: This is the biggest fraud in the history of the financial world, so the whole world is watching this case.

    At the meeting with business leaders, Poroshenko drew applause when he said he signed the Bankruptcy Code. As adopted by the Rada last fall, the new Code makes it easier for individuals to go into bankruptcy and for bankrupt properties to be sold at electronic auctions by ProZorro.Sale.

    With opinion polls strongly favoring Kolomoiskys protg, Volodymyr Zelensky, the mood was somber among the standing room only crowd of several hundred business business leaders at Kyivs InterContinental Hotel. Anna Derevyanko, executive director of the European Business Association, praised the president as a fighter and gave him an embrace. Lenna Koszarny, chair of the American Chamber, said: People are worried. Business is worried. Recalling a meeting last month with chamber representatives where Zelensky showed up in a black T-shirt and gave vague answers, she said: Nobody knows a thing we are all trying to find out what will happen, how it will happen...When I hear the hrvynia exchange rate, not at 30, but 40, 50 -- I feel terrible.

    Prime Minister Groysman, who is expected to remain in his post for another six months -- until the Oct. 27 parliamentary elections promised to push the Rada to pass more legislation in upcoming sessions. Noting that the Rada has adopted only one third of the Poroshenko Administrations top 35 laws, he said: Everyone says we have to move much faster than we do now.

    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news

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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS
    The EU plans delay permitting Nord Stream 2 to force Russia to negotiate a gas transit deal this year with Ukraine, a senior EU official tells an energy conference in Brussels. Delays by Denmark and new EU pipeline rules will not allow Gazprom to meet its Dec. 31 target to commission the 1,225 km Russia-Germany gas line.
    This is something that will bring the Russian side to the table, Klaus-Dieter Borchardt, a senior energy official at the European Commission, told the conference Reuters reports. There will be some years of delay and that is our trump card with Russia. Borchardt, a German, also predicted that Germany pipeline connectors to the Czech Republic and Central Europe will not be in place by 2020.
    At the urging of Houstons Frontera Resources, Ukraine is offering an oil and gas tender for its first offshore block: a 9,772 square kilometer section of the continental Black Sea, near Romania. Called the Dolphin section, the block is to developed under a 50-year production sharing agreement that requires a minimum investment during the first five year to drill at least five exploratory wells. Frontera already produces oil and gas in the Black Sea, off the coast of Georgia. Romania, drilling in the Danube delta region of the Black Sea, is on track for a gas boom in the 2020s.
    Ukraine increased electricity export revenue by 22% in January-March q-o-q, to $98.4 million,the State Fiscal Service reports. Hungary purchased 60%, or $58 million. Poland bought $22 million and Moldova about $14 million. Last year, Ukraine increased electricity exports by 19% to almost 1 gigawatt. In monetary terms, exports jumped by 41%, to $332 million.
    Ukraines harvest of rapeseed, used for canola cooking oil, is to jump by 23% this year, predicts AgroConsult. This increase would put Ukraine in fifth place world wide after Canada, the EU, China, and India. Exports of seed would increase by 17%, to 2.9 million tons. With new investment in crushing plants, processing into cooking oil is to jump by 50% this year, to 500,000 tons, predicts Yulia Garkavenko, the consulting groups oil market expert.
    Led by grain exports, cargo handling at Ukraines ports rose 12.4% q-o-q, to 37 million tons, reports the Sea Ports Administration. Grain exports were up by 33%, ore shipments were up by 30%, and container cargo was up by 14%. Fewer ships carry more cargo. The number of ship calls was down by 15.
    Yuzhne confirmed its leadership as Ukraines busiest port, handling 11.6 million tons, up by 19%. Mykolaiv came in second, with 8.2 million, up 26%. Chornomorsk dethroned Odesa for third place, handling 6.4 million tons, up 23%. The Pearl of the Black Sea came in fourth, with 6.2 million tons, up 5%. Kherson enjoyed a 40% jump, handling almost 1 million tons. The two Azov ports saw declines: Mariupol down 5%, to 1.3 million tons, and Berdyansk, down 27%, to 261,000 tons.
    Skadovsk, Ukraines loneliest port on the Black Sea, is up for rent, announces the Sea Ports Administration. Handling only 2,000 tons of cargo in the first quarter half last years level Kherson regions Skadovsk has the lowest volumes of Ukraines eight Black Sea ports. With five berths up for rent, port officials are billing the port as an alternative to the closed ports of nearby Crimea and as the terminus for a summer sightseeing boats, from Mykolaiv to Kinburn peninsula, to the remote beaches of southern Kherson.
    With milder weather in March, shippers jumped at the chance to abandon trucks and trains for river barges. River cargo on the Dnipro jumped 8-fold q-o-q, to 724,000 tons. Of the cargo, 54% was grain, reports the Sea Ports Administration. With freight cargo rates going up this month, more cargo is expected to move to the river.
    Ship passenger traffic was up by one third during the first quarter, with 11,373 people traveling by boat to and from Odesa and Chornomorsk. The lions share 76% -- traveled on UkrFerrys Black Sea routes from Chornomorsk to Poti and Batumi in Georgia and to Haydarpasa and Samsun in Turkey.
    The Ukrainian Danube Shipping Company launches its shipping season this week. While some routes will go the full Alps to the Black Sea route, most cruises will be of a 1,000 km section of the Danube, between Passau, Bavarias City of Three Rivers, and Budapest, the Queen of the Danube. Based in Izmail, the company has four river cruisers: Dnipro, Moldova, Ukraine and Volga.
    The European Investment Bank is to help pay for a feasibility study to build a 270 km highway from Lviv to Mukachevo and Uzhgorod, says Ukravtodor, the state highway agency. The goal is to cut the drive time to Mukachevo in half -- to 90 minutes. The rebuilt highway would connect Lviv, Western Ukraines road hub, with the new highways approaching Ukraine from Slovakia and Hungary.
    On the election front, Aivaras Abromavicius, an advisor to Volodomyr Zelenskiy, tells Reuters that Zelenskiy would preserve the central banks independence and keep its governor, Yakiv Smoliy, in place if he wins the run-off next Sunday. Abromavicius, a former economy minister, also says Zelenskiy would lobby the Rada to lift the ban on a private market farmland. Experts also tell Reuters that Zelenskiy as president would maintain the program with the IMF. Zelenskiy as comedian playing the role of a fictional Ukrainian president gets drunk at a dinner and tosses the head of the IMF into a swimming pool.
    President Poroshenko, fighting damaging corruption allegations, announced Thursday the launch of Ukraines Anti-Corruption Court, staffed with 38 new judges. Setting up the court is a key benchmark for continued cooperation with the IMF.
    The Kyiv Post notes that Zelenskiy backer Ihor Kolomoisky is a beneficiary owner of UIA. Last year, UIA, the national flag airline, lost $100 million due to competition from new low cost airlines flying to Ukraine. The Post quotes two experts saying that if Kolomoisky is allowed to stack the Infrastructure Ministry and State Aviation Administration with UIA loyalists, Ryanair, Wizz Air and other discount airlines could be pushed out of Ukraine. Andriy Guck, a partner at Kyivs Ante law firm and an airline expert, warns that if the government bureaucracy is turned on discount airlines, they will be ready to very quickly close up shop and leave.
    Through March, Wizz Air carried 450,000 passengers, 80% more than during the first quarter of 2018, reports the Budapest-based discount airline. With a new hub in Kyiv Sikorsky, Wizz Air starts service in May to Athens and Thessaloniki, in June to Lublin, Poland, and in July to Leipzig. With this expansion, Wizz Air will fly from Kyiv to 30 EU cities.
    Passenger traffic at Ukraines airports grew by 22% q-o-q, to 4.4 million people, reports the State Aviation Administration. Of this flow, 91% flew internationally. Lviv and Kyiv Sikorsky airports grew the astest. Ukraines top six airports are: Kyiv Boryspil 2.7 million passengers +15%; Kyiv Sikorsky 638,000 passengers +44%; Lviv 370,000 passengers +53.5%; Kharkiv 221,000 passengers +29%; Zaporizhia 97,000 passengers +17%; and Dnipro 62,000 passengers +12%.
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS
    Three new polls indicate Volodymyr Zelenskiy will beat President Poroshenko by a 2:1 margin in the April 21 runoff. The tally was 71% for Zelenskiy and 29% among decided voters interviewed by Ratings Sociology Group. Of the 3,000 voters interviewed face to face, 61% of respondents predicted Zelenskiy will be Ukraines next president. Two thirds of Zelenskiy voters described their vote as a protest vote. Similar 2:1 margins were reported by Razumkov Center and Kyiv International Institute of Sociology.
    In the Rating poll, 83% of respondents said the country needs radical changes and 52% predicted the country will improve as a result of the elections. Zelenskiy led in all age groups and across the nation, but for the West where he was tied with Poroshenko. Concorde Capitals Zenon Zawada writes: Zelenskiys victory is inevitable, barring any force majeure events....We recommend our clients to assume a Zelenskiy victory as the base-case scenario in the Apr. 21 runoff vote which the bond market has already done.
    Foreign investment in Ukraines UAH treasury bonds has quadrupled since the start of this year, hitting almost $1 billion, according to the National Bank of Ukraine. The increase to 25.8 billion hryvnia is attributed to: high interest rates, lack of concern about the presidential election, and the expectation that the opening in coming weeks of the Clearstream clearinghouse link will increase demand and lower spreads for Ukraine bonds.
    A 5% tax amnesty starting next year, a tax on capital withdrawals, international exchange of tax information, creation of a Financial Investigations Service, and creation of a legal mediation alternative to litigation are among the measures the Zelenskiy team would submit to the Rada,according to a report in liga.net. These economic steps were sources to Ruslan Stefanchuk, the campaign ideologue, and Danylo Hetmantsev, the campaigns expert on economic and financial issues. The report also said former foreign minister Oleksander Danylyuk would be named Foreign Minister. Concorde Capitals Zenon Zawada writes: This list of promises goes a long way to remove doubts in the minds of voters about Zelenskiys commitment to Ukraines Western integration.
    Speaking for candidate Zelenskiy at a large agricultural convention, Danylyuk said the Zelenskiy team favors creating a transparent land market. In a poll of representatives of nearly 500 farming companies at the Ukrainian Land Forum, about half said they favored restricting farm land purchases to Ukrainian citizens. As to size, 52% said company farms should be limited to 5,000 hectares and 22% favored a limit of 22%.
    Setting an example for Ukraine, Moldovas Aragvi Holding International Ltd., has successfully launched Moldovas first ever international bonds a $300 million, five year Eurobond issue. Fully subscribed last week the bond, with a 12% coupon, had this buyer profile: EU 33%; Switzerland 29%; Britain 19% and US 18%. Aragvis Trans-Oil Group specializes in growing and crushing sunflower seeds and exporting oil through Moldovas Danube river port of Giurgiulesti and Ukraines adjacent port of Reni. The bonds are listed on the Irish Stock Exchange.
    Trade with the EU is up, and trade with Russia and the CIS is down, according to first quarter statistics release by the State Fiscal Service. Ukraines trade with the EU grew 6% q-o-q, to $11.2 billion. Exports were up 3%. to $5.2 billion. Imports were up 9%, to $5.9 billion. During the same January-March period, trade between Ukraine and the CIS, including Russia, was down by 5%, to $4.3 billion. Exports fell by 6%, to $1.5 billion. Imports fell by 4%, to $2.8 billion.
    Ukrtelecom JSC, the nations land line telephone compay, starts in May $10 million, two year project to lay 3,500 km of fiber optic lines to bring high speed internet to 300 small towns and villages, the company reported Tuesday. Ukrtelecom, owned Rinat Akhmetov, will work with Slovenian telecommunications company Iskratel. Half of the budget is funded by SID Banka, Slovenias development bank.
    The Infrastructure Ministry is negotiating with a Chinese company to make electric buses in Ukraine, allowing easy access to the booming EU market. Together with the Chinese business, we are trying to set up production of electric buses in Ukraine -- the demand for electric buses in Europe is crazy, Minister Volodomyr Omelyan told a Kyiv briefing, according to the Center for Transportation Strategies. Shortly after he spoke, Paris transport operator RATP announced three French companies - Heuliez Bus, Bollore and Alstom won a 400 million tender to supply 800 electric buses by 2022. By the 2024 Summer Olympics, Paris Mayor Anne Hidalgo wants all of the citys 4,700 buses to run on electricity or biofuels.
    After a three-month winter closure, the Dnipro is open for shipping with the locks open all the to Kyiv. At the start of the river shipping season, Yuriy Lavrenuk, deputy infrastructure minister, believes Dnipro cargo will grow, building on last years 22% rebound, to 10 million tons. "River transport is becoming more and more relevant and relevant, he told a recent transportation meeting in Kyiv. We see new carriers emerging on the river transportation market. Our goal is to reduce the load on Ukrainian roads by redirecting part of the cargo to the river. Cargo by Ukraines ports on the Danube was 6 million tons, and on the the Southern Bug River, 600,000 tons.
    Increasing rail freight cargo rates and a highway crackdown on overweight trucks will push more cargo to river barges, predicts Dmytro Kozachenko, executive director of the Ukraine Rivers Association. He tells Interfax-Ukraine: We are still far away from the figures before the 1990s, when 60 million tons of cargo were transported on Ukrainian rivers. However, we can talk about some recovery of the market. According to the State Statistics service, the river cargo breakdown last year was: construction materials -- 39.5%; ore -- 14%; and grain -- 11%.
    Two weeks after authorizing an open skies aviation agreement with Qatar, Ukraines government proposes to Qatar Airways to start a local carrier. We are ready to support the creation of Qatar Airways Ukraine, Infrastructure Minister Volodymyr Omelyan tells U Vidpustku travel site. "This is a serious offer. We see that we are chronically short of airplanes on the domestic market of Ukraine. Separately, Qatar Airways seeks to fly to Amsterdam via Lviv. Omelyan said that Wizz Air has applied to reopen Wizz Air Ukraine, closed in 2015.
    Starting Sunday, Ukrainians can visit Thailand for 30 days without visas. UIA flies from Kyiv Boryspil to Bangkok Suvarnabhumi five days a week.
    A Hilton hotel is to be built in Lviv, Mayor Andriy Sadoviy said at a City Council meeting. The hotel, with 157 rooms and apartments, is to be built on a site in Bohdan Khmelnytsky Park, the citys best known park. They want to build a hotel, it seems, Hilton, the mayor said. Half of the building should be a classic hotel, half of the building an apartment hotel. This should be a building of high architectural level a work of art.
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  • Gotno Gizmo
    replied
    UKRAINE BUSINESS NEWS

    The World Bank reports that Ukrainians sent home last year $14.4 billion in wages, almost one third more than the $10.9 billion figure reported by the National Bank of Ukraine. Ukraine is now the largest recipient of wage remittances in Europe and Central Asia, says the World Bank. For comparison, $14.4 billion is 11% of the nations GDP and 10 times the $1.4 billion disbursed by the IMF to Ukraine last year.

    Labor is now Ukraines second largest export, after food. Wage remittances now are more than the total exports of metals and IT services combined. With more than a $1 billion a month coming into Ukraine, economists say wage remittances boost retail sales and residential construction and help explain why the hyrvnia / dollar exchange is basically unchanged for three years.

    Almost two years after the start of the 90-day visa-free regime with the EU, part time work in the EU is increasingly common. Of the 7-9 million Ukrainians who work abroad, only one third do so full time, estimates Andriy Reva, Minister of Social Policy. Polands Foreign Minister Jacek Czaputowicz estimates about 2 million Ukrainians work or study in Poland -- about 5% of the people living there. In turn, about 2 million Poles work further West in Europe, largely in Germany and Britain.

    Polands average wage is $1,050, about three times higher than in Ukraine. In a recent Channel 24 report, economist Alexander Savchenko said a fast way to increase monthly salaries by one third would be to slash payroll taxes.

    On average, Ukrainian companies raised wages last year by 15-20%, Yuriy Perch, Ukraine director for the ANKOR job agency, tells 112.ua for a detailed story about labor migration. To hold on to employees, Metinvest and OKKO raised salaries by 30% last year. since 2015, the average farm salary has tripled, says Leonid Kozachenko, president of the Agrarian Confederation. With farms in neighboring countries recruiting Ukrainian tractor drivers and combine operators, labor shortage suddenly displaced corruption and raiding for second place on the Confederation members worry list, after shortage of credit.

    Ukrainian builders, welders, plumbers, and truck drivers are most sought after abroad, according to Vasyl Voskoboynik, who runs a Ukrainian employment agency association. An experienced tiler who earns $7-10 per square meter in Ukraine, can earn $30 per square meter in Belgium. On his return home after 90 days, he has little incentive to do the same work here for one quarter the wage, Perch of ANKOR, tells 112.ua.

    In Ukraine, 42 domestic and international payment systems were in use at the end of last year, reports the National Bank of Ukraine. These included credit card companies and international transfer systems. On Wednesday, PrivatBank announced that it has set up an international transfer system with Israel, through STB Union. PrivatBank, Ukraines largest bank, said: Now you can send a transfer from Israel for a few clicks through the mobile STB Union application at the best exchange rate.

    The Finance Ministry sold the equivalent of $304 million bonds Tuesday, fulfilling 99% of all bids without changing yields from the 18-19% range. ICU writes: Demand for local-currency bills remains high, allowing the MoF to borrow more funds than needed for debt repayments. Foreign investors purchased more than UAH 8 billion during recent weeks.

    Horizon Capital has acquired a minority stake in Dobrobut, the Kyiv-based private healthcare provider. Financial terms werent announced for the investment which is from Horizon new $200 million Emerging Europe Growth Fund III. Dobrobut CEO Oleg Kalashnikov said the company plans to shortly open a 10,000 square meter facility in Kyiv that will offer surgery and heart and cancer care.

    Dentons law firm moved last week from Volodymyrska, Kyivs law firm avenue, to the new Astarta Organic Business Center on Podols Naberezhno-Khreshchatytska Street. Billed as Kyivs first "green" business center in Ukraine, the Astarta building has its own park with fountains and lines of trees. Oleg Batyuk, managing partner of Dentons Ukraine, which has 30 fee earner lawyers, said: For over 25 years, we have been devoted to the Ukrainian market and we will continue to invest in growing our capabilities.

    Businessman Vadim Grigoryev has made his second big Kyiv office center purchase in a year, buying a 28,200 square meter building in western Kyiv currently occupied by Innovecs, the Israeli software outsourcing company. Hryhoryev bought the center for $13 million at a ProZorro.sale auction of assets owned by the now defunct Ukraine subsidiary of Russias VTB bank. Last year, he bought the 17,100 square meter Renaissance Business Centre for $25 million, Kyivs largest office purchase of the year. With IT companies grabbing space, office vacancies in Kyiv have fallen to 3%.

    Starting July 1, 5% of all new parking spaces in public garages and apartment blocks will have to be equipped with chargers for electric cars. By 2030, 100% of parking spaces in garages are to have chargers. In the span of the next 5-10 years, the global community will entirely switch to electric cars, predicts Lev Partskhaladze, deputy minister of Regional Development, Construction and Housing. This will not happen at once. We need to begin preparing now.

    Election Update:

    Tomorrow afternoon in Paris, Volodymyr Zelenskiy and President Poroshenko will meet with French President Emmanuel Macron separately. A French Presidential source tells Reuters: "These contacts will allow us to calmly prepare the next steps in the development of Franco-Ukrainian ties and joint work for security on the European continent. Earlier in the day, Poroshenko will meet with German Chancellor Angela Merkel in Berlin. Then, Poroshenko flies back to Kyiv, where he promises to stand in Olimpiyskiy Stadium Sunday at 14:14 to debate his opponent. Zelenskiy has only said he will debate at the stadium on Friday evening April 19.

    Ihor Kolomoisky wants PrivatBank back. On Tuesday, the day after Ekonomichna Pravda quoted Kolomoisky saying he wants $2 billion in compensation for the nationalization of PrivatBank, the Ukrainian oligarch amended his lawsuit in Kyivs Economic Court to say he wants full return of his 41.5% share of the bank. In response, President Poroshenko told NV Radio: The reboot of the first level courts was delayed. And today they are de facto not reformed. Unfortunately, anything can happen there. Poroshenko estimated state losses in PrivatBank to be as high as $6.7 billion. Kolomoisky backs Zelenskiy in the April 21 runoff presidential vote.

    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news

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  • Gotno Gizmo
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    UKRAINE BUSINESS NEWS
    Ihor Kolomoisky, former owner of PrivatBank and backer of presidential candidate Volodymyr Zelenskiy, has demanded $2 billion in PrivatBank capital be returned to him. The nations largest bank, PrivatBank, was nationalized in December 2016. One year later, Kroll Inc., the New York investigation company reported of large scale and coordinated fraud over at least a ten-year period ending Dec. 2016, which resulted in the Bank suffering a loss of at least $5.5 billion.
    They want to keep PrivatBank? Kolomoisky asked Economichna Pravda magazine in an interview. Let them. I dont need PrivatBank. But there was $2 billion in capital there. Let them return it to me and there will be no problems. Speaking from self-exile in Israel, Kolomoisky said the IMF instigated the bank seizure, adding: They said that they would not give Ukraine money until the bank was taken. Only under a new president, Kolomoisky said, would he get a fair court and fair legal assessment" of Privatbank nationalization.
    In the largest bank rescue in Ukraines history, the government contributed $5.5 billion to its equity and and bailed in $1.1 billion of the banks liabilities, including $550 million in Eurobonds. Concorde Capitals Alexander Paraschiy writes: We do not believe in the prospect for any sizable compensation to Kolomoisky from the state for Privatbank's alleged expropriation, even under a Zelenskiy presidency. At the same time, we do see a solid chance for Kolomoisky, who is among the holders of Privatbank Eurobonds, to secure recovery of the bonds that were bailed in.
    With ties between Zelenskiy and Kolomoisky clear, the US Embassy in Kyiv tweeted before the first round vote: The US Embassy closely monitors the development of events around PrivatBank. Its nationalization was an important stage in economic reform and the fight against corruption.
    This week, President Poroshenko flies to Germany and France for photo ops with Chancellor Merkel and President Macron. Zelenskiy also will meet with Macron. Then, Poroshenko says he will be at the Olimpiyskiy Stadium Sunday evening to debate Zelenskiy. Zeleneskiy says he will only go to the Stadium on Friday evening April 19, 36 hours before the second round vote.
    The Kyiv Post, historically critical of the Poroshenko administration, is increasingly skeptical of the comedian candidate. The more scrutiny that is applied to presidential candidate Volodymyr Zelenskiy, the worse he is holding up, writes Chief Editor Brian Bonner, citing Zelenskiys links to Kolomoisky and to Russia. On national security issues alone, Poroshenko is the safest choice.
    While he surrounds himself with a group of reformers ex-Finance Minister Oleksandr Danylyuk, ex-Economy Minister Aivaras Abromavicius and lawmaker Sergii Leshchenko how much influence they have over the candidate is questionable, the editorial continues. Their presence looks more and more like window-dressing.
    Anders Aslund in an Atlantic Council essay writes that financial markets are happy, pacified by the freest and fairest election in Ukraines history. He elaborates: The hryvnia strengthened by 3% in relation to the US dollar in the week after the first round of the presidential election. The yield on sovereign Eurobonds has fallen to 7-8%, while it was 9-10% a couple of months ago. The financial market is thin, but it is intelligent and well informed. Why shouldnt the market respond positively?
    Investments by foreigners in Ukrainian domestic treasury bills hit a new record last week,increasing by UAH 2.5 billion, to nearly UAH 23bn, or $852 million. ICU writes: For three weeks in a row, domestic bills have been favored by foreign investors. It is very likely that demand from this category of investors will continue to be high during the following weeks.
    A new China-Hungary container train, rolling 1,200 km through Ukraine, starts weekly service on Friday. Last week, a 41-container test train carrying consumer goods from Shanxi, China, completed the 12-day trip to Eperjeske, Hungary, arriving on Sunday. The train enters Ukraine at Zernove, Sumy, and then runs in a southwest diagonal to Batevo, Zakarpattia. Promoters of the service -- Rail Cargo Logistics of Russia and KTZ Express of Kazakhstan -- say the train opens a southern corridor" from China to Hungary, Austria, Romania, Italy and Balkans.
    Planners are drawing up blueprints for a 600 million industrial park and logistics hub to turn Kovel into a gateway for Chinese goods to the EU. Trains from China to the EU face two railroad gauge breaks. The first is at Dostyk, Kazakhstan, where the wide Soviet gauge starts. The second is at Polands eastern border, where the narrow European gauge starts. Currently, the main gauge transfer point Brest, Belarus / Maaszewicze, Poland is overloaded, says Yevhen Kravtsov, CEO of Ukrazalinytsia.
    With five rail lines radiating out of Kovel, Western Ukraines rail hub, Ukrzaliznytsia is electrifying the 85 km stretch southwest to Izov on the Polish border and planning to use EU loans to rebuild the 65 km of European gauge section that runs due east to Chelm, Poland. The rail route from Dostyk, on the Chinese-Kazakh border, to Kovel is only 4% longer 206 km than the rail route to Brest. By shipping products by rail, some Chinese factories can cut shipping times to the EU in half, compared to sending by sea.
    "The [Kovel] region has a unique opportunity to turn into a transport and logistics hub and become the western gateway of Ukraine to Europe," Oleksandr Savchenko, Ukraines chairman of regional administration, recently told a meeting in Kovel of the Volyn Regional Development Council, according to Zal¦znichne postachannya magazine. He estimated construction of an international "dry" cargo port with a track side industrial park would create 3,500 jobs.
    One year after restoring its Zurich-Kyiv route, Swiss International Air Lines increases its frequency this week by 50%, to six times a week. In July, the flight will increase to daily, says Rene Koinzack, country manager for Lufthansa Group, the parent company for Swiss. The flight had been dropped Oct. 1, 2014, due to the hostilities between Ukraine and Russia.
    Ukraine new discount airline SkyUp starts flying to France in the first half of June, company CEO Eugene Haynatsky tells U Vidpustku travel site. SkyUp will fly three times a week from Kyiv Borispol to Paris Orly and two times a week from Kharkiv to Orly. It will also fly twice a week to Nice, competing with a UIA flight on that route. In a reciprocal deal, discount French carrier Aigle Azur, starts flying between Kyiv Boryspil and Orly on April 18.
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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  • Gotno Gizmo
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    UKRAINE BUSINESS NEWS

    Metinvest, Ukraines largest steelmaker, plans $1 billion capital investments this year, a 20% increase over last year, the company tells analysts. Metinvest CEO Yuriy Ryzhenkov, says more than 60% of CapEx will be for maintenance and 35% will be for strategic development projects. Concorde Capitals Dmytro Khoroshun reviews the companys spending on debt, dividends and CAPEX and writes: We think that it is realistic for Metinvest to cover this deficit with investment-related debt facilities and with withdrawals from its $1.9 billion in working capital.

    Metinvest made $1.2 billion in net profits last year almost double the 2017 level, the company reports. Underpinned by favorable steel and iron ore prices and ongoing economic growth in Ukraine...revenues soared by 33% year-on-year, Metinvest CEO Yuriy Ryzhenkov, writes of the 2018 company results. In 2018, Metinvest delivered some of its best results in the last four years. After the report, Ryzhenkov told S&P Global Platts in London that Metinvests crude steel output should rise by about 1 million tons this year, to 8.5 million tons.

    Nearly $900 million of investments in Metinvests two Mariupol steel mills last year helped push Ukraines steel production up 4.5% during the first quarter, to 5.5 million tons. Last month, Metinvest launched a new continuous casting machine with annual capacity of 2.5 million tons at its Illyich Steel MMKI mill. Next month, Metinvests other big project goes on-stream: a modernized blast furnace at Azovstal will increase the plants annual hot metal capacity by up to 1.6 million tons. Dragon Capital writes: Domestic steel production keeps recovering gradually, driven by a pipeline of CAPEX projects that are likely to continue powering the steel sector through 2020.

    Exports of steel products through Mariupol were down 30%, to 455,000 tons, in January and February, compared to the same period last year. By contrast, at Mykolaiv, the Black Sea alternative for Mariupols steel mills, steel exports were up 20%, to 615,000 tons. Last year, Mariupol was the nations top steel exporting port, shipping out 4.1 million tons of steel. But last May, Russian border controls ships started harassing shippers in the Azov, causing some companies to stop serving Ukraines largest port on the Azov. At Kherson, a smaller Black Sea port closer to the Azov, cargo handling during the first two months of this year was up 27.5% y-o-y. From Mariupol, Kherson is 420 km, or seven hours by truck.

    The EU and the European Investment Bank are preparing new concessional loans to finance the rebuilding roads and railroad tracks from Mariupol northwest to Zaporizhia and west to Mykolaiv, reports the EU Delegation to Ukraine. The move comes after a high level EU delegation visited Ukraines Sea of Azov ports and reported on Feb. 18 to a EU Foreign Affairs Councils discussion dedicated to Ukraine. Soon, the EU will open in Mariupol an office dedicated to promoting decentralization and curbing corruption.

    In the latest investment in Mariupol port, a successful auction was held last week for dredging 2 million cubic meters of sediment from the approach channel and port. Five previous auctions failed due to a lack of bidders. Companies feared their dredges and barges could be bottled up in the Azov due to Russian control of the Kerch Strait. Azimut, a Ukrainian company, won the ProZorro auction with a bid of $13.3 million. Now, the Sea Ports Administration plans to issue a tender for dredging Berdyansk port.

    The World Trade Organization, or WTO, has upheld Russias national security justification for banning transit of Ukrainian exports through Russia to Central Asia and Mongolia. Russia imposed restrictions on truck and train cargo in 2016. Since then, Ukraines trade plummeted with the Russian-speaking world. Concorde Capitals Alexander Paraschiy writes of the ruling: It will hardly have any economic implications for Ukraine. Even if the WTO experts had decided that Russia did something wrong by limiting Ukrainian transit, the Russian side would hardly have changed its behavior in the short term.

    The EU will finance almost two thirds a 208 million project designed to expand Polands sole LNG terminal by 50%, reports Polish Radio. Located in winoujcie, a Baltic port on the German border, the project is due for completion in 2021. Separately, Polands government announced last month that they will build a second, floating LNG landing terminal at Gdansk. In the 2020s, Poland is to become Central Europes hub for LNG from the United States.

    By 2023, a pipeline is to bring Norwegian gas through Denmark to Poland. With American LNG and Norwegian pipeline gas, Poland plans to stop buying gas from Russia in 2023. Currently, Russia supplies two third of Polands gas needs. Alluding to Ukraine and other countries dependent on Russian gas, Peter Naimsky, Minister for Strategic Energy Infrastructure, told Polands Senate: We want to give our neighbors access to gas through the Polish gas transmission system.

    Created by a Ukrainian, Nigerias largest online marketplace for classifieds, has acquired its main competitor on the African market, OLX and its businesses in Kenya, Ghana, Uganda and Tanzania. Founded in Lagos in 2014 by Kyiv native Anton Wolyansky, Jiji lists 1.1 million items and has six million active users. With these acquisitions, Jijis population base expands by 50%, to 300 million. In face of Jijis growth, South Africa-based OLX pulled out of Nigeria last year.

    Inc.com, the New York-based business news site, ranks Kyivs UICE Group at the top of its list of the Top 10 Fastest-Growing Private Companies in Europe. The Ukrainian Interbank Currency Exchange became an authorized exchange platform in the early 2000s. Led by Oleksandr Ginzburg, the exchange trades stocks, derivatives, oil, gas, and coal. The site reports: Inc. 5000 Europe rank No. 1: Three-year growth 24,845% 2017 revenue 79.3 million.

    Setting an ambitious goal for air travel, the government wants to nearly quadruple air passengers in the 2020s, to 80 million in 2030. Building on a 25% jump last year, to 20.5 million air travelers, the Infrastructure Ministry sets this 2030 target in its new Aviation Transport Strategy. By comparison, Poland with roughly the same size population of Ukraine, but half the territory, carried only 38 million air passengers in 2017.

    Kyiv Boryspil passenger traffic was up 15% during the first quarter, to 2.6 million people, compared to Jan-March of last year. Ukraine International Airlines, the airports main tenant, carried 8% more passengers in the first quarter, about 1.5 million. With the fast growth of discount airlines, UIA lost $100 million last year.

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  • Gotno Gizmo
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    UKRAINE BUSINESS NEWS
    Anatoliy Grytsenko, the former defense minister and winner of 7% in the first round presidential vote, endorses frontrunner Volodymyr Zelenskiy conditional on Zelenskiy announcing his nominees for five key government offices. Grytsenko writes on Facebook after meeting the comic actor on Saturday: Is he ready for the presidency? No, he is not, but he is aware of the responsibility that comes with it and is ready to make efforts and intends to rely on professionals. The posts filled by the President are: central bank chairman, foreign minister, defense minister, prosecutor general, and head of the Security Service of Ukraine, or SBU.
    After passing drug and alcohol tests on Friday, President Poroshenko and Zelenskiy are to face each other in a single debate, in the Olimpiyskiy Stadium, tentatively on Friday night April 19, just 36 hours before polling stations open. Timothy Ash writes: Poroshenko will have to pull out an absolute knockout blow in the weeks to come - maybe the chance is at the Olympic stadium.
    Zelenskiy unveiled a corruption fighting program Sunday: removing parliamentary immunity from prosecution; using international competitions to staff independent anti-corruption agencies; promote e-government; offer rewards to citizens who denounce acts of corruption; ask Western countries to prosecute Ukrainian officials involved in corruption; and decriminalize economic activity to the maximum and punish officials who make artificial claims to business. Many of these changes would need Rada approval. Ukrainians elect a new parliament on Oct. 27.
    Foreign companies and investment funds now can open accounts in Ukrainian banks, without setting up representative offices, the National Bank of Ukraine reports on its website. Part of a wider currency liberalization started in February, foreign companies have greater freedom in using their Ukraine bank accounts.
    Foreign companies are invited to bid in a project to build a half kilometer long cable way in Lviv,taking sightseers from Na Valakh park to Vysoky Zamok, or High Castle Park. Mayor Andriy Sadovy says the project is being coordinated with UNESCO and is expected to cost around $12 million. A ProZorro tender will be issued.
    This spring, the April winds blowing across Ukraine are spinning wind turbines. Currently $1.3 billion worth of onshore wind projects are underway across Ukraine. By comparison, $100 billion was spent worldwide last year on onshore wind, Bloomberg reports. Worldwide, wind energy was the second fastest growing renewable energy source in 2018, adding 49 GW. In first place was solar, adding 94GW, the International Renewable Energy Agency announced last week.
    Here are Ukraines major projects:
    With German turbines and Chinese construction, work starts this spring on a 380 million Franco-Norwegian project to build 250 MW of wind capacity on the north shore of Lake Syvash, facing Crimea. Norways NBT AS has partnered with Total-Eren S.A. to build the wind farm on a 1,308 hectare site in southern Kherson, expanding on an existing 3 MW project. Beijing-based PowerChina is performing engineering, procurement and construction. By the end of this year, Rostock-based Nordex SE is to supply 34 turbines, for first 133 MW.
    NBT has signed an agreement with Unit Venture Investment Fund develop a 1 billion 742 MW wind power plant along the northern shore of the Azov, in Yakymivka district, Zaporizhia. With the working name of Zophia, this would be the largest onshore wind power plant in Europe. Currently, the largest is a 600 mw plant, Fntnele & Cogealac, in Romania. The second largest is Whitelee, a 539 MW plant in Scotland.
    By June, DTEK plans to complete construction of the first 100 MW phase of Prymorsk, or Seaside, on the north shore of the Azov, in Zaporizhia region. As of Friday, 18 of the 26 planned GE turbines were generating electricity, with a capacity of 69 MW. A second 100 MW phase of the plant is under construction. Separately, DTEK is building Oryol, a 135 million, 100 MW plant, powered by Vestas turbines from Denmark. The three projects add up to a 400 million investment in 300 MW of wind power on a 50 km stretch of Azov coast, west of Berdyansk.
    Belgium-based GreenWorx Holding N.V. broke ground two weeks ago on a 188 million, 110 MW wind power plant on the north shore of Khersons windswept Gulf of Dnipro. Located in Oleksandrivka, Bilozerka district, the project is to use 25 Nordex turbines of 4.4 MW each. According to Eco Town news site, GreenWorx CEO Tom Hanson said at the groundbreaking that construction will create 300 jobs and the plant will create 40 fulltime jobs.
    Germanys eab New Energy Group has opened an office in Lviv and is helping Ferozit Wind Energy build a total of 85MW of wind power capacity at three sites in Lviv region, in Pustomyty and Radekhiv districts. A leader in wind energy, Germany drew 34.4% of its electricity in March from wind power plants.
    The Ukraine partner of Germans Fuhrlnder AG is starting to make 4.5-4.8 MW wind turbines at its Kramatorsk plant, double the size of the first turbines made by Fuhrlaender Windtechnology LLC when it started production in 2012. With 15-20 of these turbines to be built this year, a special crane will be imported to erect them, Andriy Sergienko, a director of Wind Parks of Ukraine, tells ExPro Consulting site. While electronics are imported, largely from Siemens, about 70% percent of the turbine/tower package is produced in Ukraine, he says.
    About 15 km south of the Belarus border, 189 MW of wind power capacity is to be built in three stages at Pokaliv, Zhytomyr by Wind Solar Energy, of Cyprus. Called Lisova, or forest, the plants first stage is to be 111 MW, reports Interfax-Ukraine.
    About 15 km east of the Polish border, a 100 MW wind power plant is being planned for the Volyn region village of Myshiv. The plan is to raise 35 turbine towers on a 150 hectare site. As a first step, the developer, Wind Power GSI Volyn, is erecting this spring a 120-meter high wind gauge, according to bug.org.ua news site.
    Near the Danube, a five turbine, 19.5 MW wind power station is planned for Kiliya, Odessa region, Pavel Boichenko, head of the unified territorial community, tells Oblesvesti.com.
    Building on the Dniester estuary, Turkeys Gri Construction plans to inaugurate this month Ovid 1, a 34.4 MW wind farm powered by GE turbines. Gri is obtaining permits for a second phase of 50.4 MW, also on land 40 km south of Odesa.
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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  • Gotno Gizmo
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    UKRAINE BUSINESS NEWS
    Starting tonight, customs and passport controls for Kyiv-Warsaw trains will be conducted on the train, at Kyivs Central Station. Eliminating the border stop at Yagodyn Station, Volyn, is the latest step to streamline travel between Ukraine and Poland. Passengers are asked to board the 19:13 train by 18:45 to have their passports and bags checked on board.
    Poland and Ukraine plan to launch a Lviv-Lublin train this summer. Initially, passengers will ride in a Ukrzaliznytsia train to the Lviv border town of Rava-Ruska, and then change to a European gauge Polish train. For most of the 20th century, trains plied the 225 km route, connecting Lviv, the largest city of Western Ukraine, with Lublin, the second largest city of Lesser Poland.
    On June 30, Wizz Air starts a twice a week, Kyiv Sikorsky-Lublin flight. Today, Wizz Air starts a Kyiv-Krakw flight. With these two new routes, Wizz Air will fly from Kyiv to seven Polish cities.
    Ukrzaliznytsya is launching a weekly, 1,400 km, east-west container train from Dniproetrovsk to Sawkw, Poland. The freight train takes advantage of Polands longest broad gauge track, a 1970s-era line that reaches 400 km into southern Poland to Sawkw, 50 km west of Krakw. In Nizhnedneprovsk, the train will collect containers from Ukraines eastern industrial cities of Zaporizhia, Mariupol and Nikopol. The train will cut travel time in half, to 40 hours, says Yevhen Kravtsov, chairman of Ukraines state railroad. The line is the railroads 19th container train, a fast growing service.
    Dedicated container trains cut train travel times by 70%, Igor Tkachuk, Odesa port chief, tells the Center for Transportation Strategies. From Odesa, port of entry of two thirds of containers handled by Ukraines Black Sea ports, container trains now fan out to Dnipro, Ivano Frankivsk, Kharkiv and Kyiv.
    Ukraine ports eye larger share of Asia cargo headlines The Journal of Commerce, the New York-based shipping and logistics news site. Focusing on competition between Ukraines Black Sea ports and Russias port of Novorossiysk, reporter Eugene Gerden writes that since 2017 Ukraine has cuts its container clearing times and fees to half those of Russia. Topping Novorossiysk for the first time, Ukraines container traffic jumped by 19% last year, to 846,485 TEU. Novorossiysks container traffic increased by 2.5%, to 754,890 TEU.
    Starting April 16, Euro Marine Logistics NV plans to start a twice a month roll on roll off cargo service between Piraeus, Greece and Chornomorsk. Served by an EML vessel, the City of Amsterdam, the route is designed to facilitate the export of new and used cars from the EU to Ukraine. The ship will follow a triangular route around the Black Sea: Piraeus-Chornomorsk-Novorossisk. Based in Belgium, EML is jointly owned by Norways Hegh Autoliners and Japans Mitsui O.S.K. Lines.
    Cross-Danube ferry service is to start this summer, linking Isaccea, Romania and Orlivka, Ukraine. It will create Odesa regions first border checkpoint with the EU. The 500-meter ferry crossing will replace a 100 km road detour through Moldovas southern tip. On both banks, the roll on roll off facilities are built to handle 250 cars and 1,000 trucks a day. After 20 years of government discussions, a private Ukrainian company built Ukraines ferry terminal and customs control buildings. On the Romanian bank, Navrom SA Galati built the terminal at a cost of 12 million, reports Romania Libera. To promote trade, local residents are to be allowed to cross without passports and circulate freely within 30 km of the ferry docks.
    Reni, Ukraines northernmost port on the Danube, is planning to build an LNG terminal and floating berth for bunkering, or fueling, river ships, reports the local branch of the Sea Ports Authority. To cut emissions by river boats, the EU encourages natural gas powered vessels. Reni is five kilometers south of the Moldovan border, and about 150 kilometers upriver from the Black Sea. By 2025, ExxonMobil and other multinationals plan to double Romanias annual gas production -- to 20 billion cubic meters -- by developing gas fields on the continental shelf of the Black Sea. Ukraines Sea Ports Authority is looking for investors to build the LNG terminal by 2025.
    Ukraines Danube River cruise season opened this week with the docking of the Victoria on Monday in Ust-Dinaisk, Vylkove, a Danube delta city of canals sometimes called Ukraines Venice. The local port authority reports: There are 140 tourists on board who arrived in the Ukrainian Venice from Austria. This season, 40 Danube cruise ships are expected to call at Ust-Dunaisk, an increase over 2018. Last year, cruise ship visitors hit 5,338, an 18% rise over 2017.
    Floating through the Chornobyl exclusion zone on the Pripyat river would be the lure of a Mazyr, Belarus-Kyiv boat trip now being negotiated by Belarusian Shipping Company OJSC and Ukraines River Ports Administration. Fleet, terms and mechanisms for selling tickets are now being discussed, Alexei Gerashchenko, the Infrastructure Ministrys top official for river transport, tells the Center for Strategic Technologies. About one third of the 250 km, 10-hour cruise would pass through Chornobyl, now a wilderness considered safe for short term visits.
    After dropping to zero last year, two European cruise ships return to Odesa this summer. On May 10, the Maltese-flag Aegean Odyssey is to call at Odesa, bringing 380 passengers. This fall, on Oct. 30, the Bahamian-flag Amera is to call with 800 passengers. In 2013, the modern peak, 106 cruise ships called at Odesa. Russias attacks on Ukraine killed the business, followed by sanctions rendering off limits the two cruise ports of call in Crimea Yalta and Sevastopol.
    A turnaround is coming with nine cruise ships booked for 2020, Igor Tkachuk, Odesa port director, tells the Center for Transportation Strategies. His boss, Infrastructure Minister Volodymyr Omelyan tells Black Sea News: I recently returned from negotiations with large Arab companies [in the UAE]. They are interested in investing in Ukraine. They see the seaport in Odessa not just as a port, but as a convenient place for a marina, where it will be possible to create a wonderful public space, and all the amenities for cruise liners.
    Viking River Cruises returns to the Dnipro on May 27 with 11 cruises between Odesa and Kyivthrough Sept. 24. With prices for the 11-day cruises ranging from $3,700 to $10,000, most of the staterooms priced under $5,000 are sold out through June. Based in Basel, Viking beckons: Cruise the Dnieper River to the Black Sea, an ancient and splendid trade route lined with rich cultural treasures, onion-domed churches and rural folkways that recall the days of Vikings, Tatars and Cossacks. Visit Kievs Cave Monasteries. Marvel at the riding skill of Cossack horsemen. And trace the footsteps of history at Odessas Potemkin Steps.
    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news
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  • Gotno Gizmo
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    UKRAINE BUSINESS

    Zelenskiy advisor Oleksandr Danylyuk calls for abolishing the State Prosecutors Office and completely destroying and rebuilding key judicial institutions. The prosecution service is a failure, courts are a failure, the SBU is a failure, and the State Fiscal Service is a complete flop! Danylyuk, a former finance minister, said Tuesday at the Bendukidze Free Market Center, his think tank in Kyiv. Therefore, there is the only approach, which we will have to apply, this is a long-standing approach of the revolution: destroy it completely and then rebuild it anew. Danylyuk is expected to be one of the top five advisors that Zelenskiy promise name in coming days.

    Zelenskiy or Poroshenko, the next President is not expected to tinker with the hard won independence of the National Bank of Ukraine, Dmytro Sologub, a deputy governor, predicts in an interview with CNBC, the US-based financial news network. He said: We in the central bank are confident that whoever is the president and whatever the outcome of the political cycles this year, the central bank will be able to fulfil its mandate of price and financial stability.

    Boosting foreign direct investment from the current level of 2% of GDP should be a core task for Ukraines next president, Andy Hunder, president of the American Chamber of Commerce in Ukraine, writes on the Atlantic Council Ukraine blog site. Whoever wins, either Poroshenko or newcomer Volodymyr Zelenskiy, he will need to focus on attracting FDI, Hunder writes. Since both candidates are successful businessmen, the next president should watch closely that investors are welcomed and treated well. At a meeting with business leaders two weeks ago, he says: Zelenskiy focused on assuring us that his views and intentions are aligned with the business communitys priorities, specifically on rule of law, macroeconomic growth, and fighting corruption.

    In a reversal, Ukraines mobile phone operators now earn more money from Internet than from voice. Last year, the nations cell phone companies earned 46% of their revenue from Internet --$600 million. Voice accounted for 42% or $550 million. By contrast, in 2016, operators earned three times as much from voice as from Internet, according to the National Commission for the State Regulation of Communications and Informatisation.

    The government is banning business jet flights between Ukraine and Russia. Commercial flights were banned in Nov. 2015. On Wednesday, Cabinet of Ministers extended the ban to private planes in response to a March 22 flight to Moscow by two pro-Russian politicians Yury Boiko and Viktor Medvedchuk. The expanded ban does not apply to flights by such international organizations as the Red Cross, the United Nations and the Organization for Security and Cooperation in Europe, or OSCE. Prime Minister Groysman vowed the bank would only be lifted when Russia ceases to be an aggressor country and turns into a civilized state.

    In response, Rosaviatsiya, Russias federal air transport agency, told Interfax: We propose to conduct negotiations and resume air traffic on a regular and charter basis between Russia and Ukraine in full...We are confident that such a decision is in the interests of our peoples and air passengers." Traffic on sanctions-busting flights through Minsk are increasing. On Monday, Motor Sich resumed daily flights between Minsk and Zaporizhia, the busiest airport in Ukraines heavily Russian speaking southeast. Belavia now has direct flights from Minsk to Ukraines seven busiest airports: Dnipro, Kharkiv, Lviv, Odesa, Zaporizhia and Kyivs two airports.

    Today in Washington, NATO foreign ministers debate naval measures designed to assure that there is a safe passage for Ukrainian vessels through the Kerch Strait, US ambassador to NATO Kay Bailey Hutchison tells reporters. The US proposes increasing surveillance of Russias military and rotating more NATO ships through the Black Sea. This month, US, Canadian, Dutch, French and Spanish warships are in the Black Sea. Under the 1936 Montreux Convention, non-Black Sea warships are allowed in the Black Sea for visits up to 21 days. Russia and Ukraine regard the Kerch Strait and the Sea of Azov as internal waters. Entry by a third country warship would require consent of both nations.

    Ending Russian harassment of freighters going to Mariupol would boost cargo volumes by 15%, or 800,000 tons, Oleksander Oleniky, the port director, tells the Center for Transportation Strategies. Last May, Russia opened a highway bridge without a drawbridge. The Kerch Strait bridge is too low for one third of the freighters that historically serviced Mariupol port, the director says. One year later, the bridge pylons may be creating new currents and uncharted sandbars. Although regulations require passage of the Kerch Strait with a local pilot onboard, a 17,500-ton bulk carrier, the Maryland, ran aground in the Strait on March 14. Initially, it resisted the efforts of four tug boats to free it.

    Since 2014, Ukraines berry exports have increased five-fold, to 23,500 tons, Olga Trofimtseva, acting agriculture minister, said Wednesday at an industry conference in Kyiv organized by Berries of Ukraine. She said: Ukrainian fresh berries are exported to Belarus, Poland, Moldova, the United Kingdom and the Netherlands. The largest consumers of frozen berries have become EU countries. Ukraines top harvests are: strawberries 62,300 tons; raspberries 35, 600 tons; and currants 29,600 tons.

    Almost $1 billion was invested last year in food processing in Ukraine, Prime Minister Groysman said at a recent agricultural fair, Agroport West Lviv. Noting that this accounted for about 28% of the $3.3 billion invested in farming last year, he said: Our task is to change this structure...We must increase the in-depth processing of Ukrainian products.

    Consolidating its role as Western Ukraines air hub, Lviv airport saw its passenger flow jump by 53.5% during the first quarter of this year compared to last year. Growing faster than last years rate of 48%, Lviv could handle 2.5 million passengers this year, more than triples the citys population. Boosting to 38 the number of cities with direct, scheduled flights to Lviv, the city added in the last month: Wizz Air to Copenhagen; Motor Sich to Uzhgorod; and airBaltic to Riga.

    To help Western Ukraine residents use the airport, Lviv started on Monday an hourly bus to the airport from Lvivs Main Railroad Station, the second busiest rail station in Ukraine, after Kyiv Central Station. To cash in on the tourist flow, the city also started on Monday a tourist tax, with rates up to 0.5% of hotel bills.

    For comments and story tips, Brooke is reachable at: jbrooke@ubn.news

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