Ukraine open for business - Business news

Business news from the Ukrainian League of Industrialists and Entrepreneurs

AGRARIAN UNIONS SUPPORT LAUNCH OF LAND MARKET FROM 2024

KYIV. April 29 (Interfax-Ukraine) – Agrarian associations support lifting restrictions on land purchase and sale from 2024, deputy chairman of the Ukrainian Agrarian Council Mykhailo Sokolov said at the Agri Invest Forum 2017.
“The land market should not be launched immediately, there should be an opportunity for both agrarians and the state to prepare for this. The transition period should be five years, the market should be launched from 2024,” he said.
According to the expert, this opinion is shared by the Ukrainian Agrarian Council, the Association of Milk Producers, the Pig Breeders of Ukraine association, the Ukrainian Agrarian Confederation, the Ukrainian Agribusiness Club, the Association of Farmers and Private Landowners of Ukraine and others that unite more than 90% of agricultural producers in Ukraine.
“Before the market launch, data in the state land cadaster and the register of rights to immovable property must be fully included and corrected, a program of preferential lending to farms of up to 100 hectares should be launched, and land to former and incumbent employees of state agricultural enterprises, who did not participate in land sharing, should be allocated,” Sokolov said.

ED&F MAN LAUNCHES FIRST STAGE OF IRRIGATION COMPLEX WORTH $5 MLN IN KHERSON REGION

KYIV. April 29 (Interfax-Ukraine) – ED&F Man, one of the world’s largest sugar trading companies, has invested $5 million in the launch of the first stage of an irrigation complex with an area of 1,000 hectares in Bilozerka district of Kherson region.
“The first line of the complex, in which the British company has already invested $5 million, will allow growing sugar beets on 1,000 hectares in a zone of risky farming,” a press release from the company reads.
The company intends by 2020 to restore the irrigation system on a total area of 20,000 hectares in Kherson and Mykolaiv regions, investment will exceed $60 million.
“We focus on a full cycle of production: from seeds to finished products, sugar. Both the company and the Ukrainian economy are interested in a high added value. Through cooperation with local and central authorities that create conditions necessary for us, ED&F Man has more comfortable conditions for work, so we can plan the following investment projects,” Managing Director for Commodities at ED&F Man Jan Kees van der Wild said.
According to Kherson region governor Andriy Hordeyev, the national budget foresees UAH 30 million for improving irrigation in 2017, of which UAH 26 million will be allocated to Kherson region.
During the period of work in Ukraine, ED&F Man has invested more than $150 million in development.
ED&F Man was founded in London in 1783. It is the largest supplier of food, sugar, spices, animal feed, tropical oils, rubber, biofuel and coffee through a network of offices and agencies in more than 50 countries.

AZERBAIJAN CASPIAN SHIPPING COULD ACQUIRE OR LEASE UKRZALIZNYTSIA’S FERRIES

KYIV. April 27 (Interfax-Ukraine) – Azerbaijan Caspian Shipping has said that the company could buy or lease railway ferries Heroi Shypky and Heroi Plevny operated by Liski of public joint-stock company Ukrzaliznytsia.
According to a press release of state-run enterprise Chornomorsk maritime merchandise port (Odesa region), the issue was discussed during a trip of a delegation from Azerbaijan to the port and a meeting of Port Director Serhiy Kryzhanivsky with Board Chairman of Azerbaijan Caspian Shipping Rauf Valiyev.
Valiyev said that the government of his country set a task to establish cooperation with Ukraine in relation to the quick implementation of the Trans-Caspian International Transport Route. Today Azerbaijan Caspian Shipping is a link in the Europe-Caucasus-Asia transport corridor.
Representatives of Azerbaijan Caspian Shipping plans will visit the Chornomorsk port in summer 2017.

MOTOR SICH SEES NET PROFIT RISE BY 4.8 TIMES IN Q1, 2017 – IFRS REPORT

KYIV. April 29 (Interfax-Ukraine) – The consolidated net profit of PJSC Motor Sich in the first quarter of 2017 according to international financial reporting standards (IFRS) amounted to UAH 1.457 billion, which is 4.8 times more than for the same period in 2016 (UAH 304.67 million), according to the company’s quarterly report.
According to its data, net sales income in January-March this year increased by 63.4%, to UAH 3.431 billion.
Motor Sich specified its gross profit in the first quarter of this year increased by 46.3%, to UAH 1.978 billion, and operating profit was up by 2.9 times, to UAH 1.525 billion.
PJSC Motor Sich is one of the world’s largest manufacturers of engines for aircraft, as well as industrial gas turbine units. It delivers products to more than 100 countries.

FUTURE OF UKRAINE’S ENERGY SECTOR IS IN WIND FARMS, SOLAR POWER PLANTS, CCGT PLANTS, ENERGY STORAGE UNITS – BUSINESSMAN GRIGORISHIN

KYIV. April 29 (Interfax-Ukraine) – The key innovative ideas for the Ukrainian energy sector are construction of solar power plants and wind farms with synchronous boosting of maneuvering power capacities in the form of combined cycle gas turbine (CCGT) plants and energy storage units, businessman Konstantin Grigorishin, who owns a number of regional power supply companies and power engineering enterprises, has said.
“In next 20 or 30 years we should build… from 7 to 10 gigawatts of CCGT plants. We should synchronously build wind farms – from 1 to 2 gigawatts a year, as well as solar [power plants] – also 15-20 gigawatts. At the same time today we should test energy storage units launching local production,” the businessman said in an interview with the Energoreforma (Energy Reform) resource of Interfax-Ukraine.
He said that the current structure of the Ukrainian balance of energy is out of date.
“It [the balance of energy] consists of hydrocarbons (oil and gas), coal, nuclear fuel, hydroelectric power and some solar and wind units. If today the share of “green” energy in the country’ balance is no more than 1-2%, in developed countries it is larger, and in the prospect of 20 or 30 years it is at least 50%,” he said.
He said that today in over 50 countries solar and wind power is the cheapest, being 3 or 4 cents per kilowatt hour (kWh) in the United States and around 4 cents per kWh in England.
“The “green” energy technologies are changing so quickly that the cost of the installation of new facilities will be reduced and their efficiency would grow. Finally this would result in the large cheapening of electricity,” the businessman said.
He said that construction of “green” energy facilities in Ukraine would be profit-making at the price of around 5 cents per kWh, while the current price of over 10 cents is too high.
“Even if we finally annul the Rotterdam+ formula, with the current capital rate the cost of coal-burning energy would exceed 10 cents, taking into account operation costs and cost-effectiveness of business,” he said.
Grigorishin said that even with the reduction of the capital cost from 10% to 5% the investment element will be at least 3-4 cents plus the cost of emissions and the cost of coal, operation costs.
“It is unlikely that the price of electricity generated from coal burning will be less than 8-10 cents. Today the world is using only old units that have been built letting them generating electricity if they exist,” he said.
He said that for nuclear energy, the completion of two reactors designed in Russia could be discussed. It could cost $2,000-3,000 per kWh, but due to the politics this option is not good.
He said that pumped storage units lost their effectiveness.
He said that the problem could be solved via the introduction of CCGT plants.

UIA POSTS SOME UAH 400 MLN OF NET PROFIT UNDER IFRS IN 2016

KYIV. April 29 (Interfax-Ukraine) – Ukrainian International Airlines (UIA, Kyiv) saw UAH 387.885 million of net profit under international financial reporting standards (IFRS) compared to net loss of UAH 504.923 million a year ago.
According to an annual report of the company, net revenue last year grew by 36%, to UAH 17.829 billion.
As reported, in 2015, UIA saw a 68.8% fall in net loss, and net revenue grew by 91%, to UAH 13.133 billion.
UIA is the largest Ukrainian airline. It is based in Boryspil International Airport.
One of the ultimate beneficiaries is businessman Ihor Kolomoisky.
Its fleet includes 39 planes, including 35 medium haul planes and four long haul planes.