Ukraine open for business - Business news

Business news from the Ukrainian League of Industrialists and Entrepreneurs

INFRASTRUCTURE MINISTRY INITIATES LAUNCH OF TRAINS TO SOME EUROPEAN COUNTRIES

KYIV. April 27 (Interfax-Ukraine) – Ukraine’s Infrastructure Ministry has said that some railway routes for communications with European countries should be launched, Infrastructure Minister Volodymyr Omelyan said at a government meeting on Wednesday.
“The ministry believes that new railway routes to European countries – Poland, Slovakia, Hungary, Germany and Romania should be launched to continue expanding communications with Europe,” he said.
Earlier Ukrzaliznytsia launched the Intercity+ train on the Kyiv- Przemysl (Poland) route. Soon a new two-wagon rail bus Pesa with 182 seats for passengers would start running on the Kovel-Yahodyn-Chelm (Poland) route.

UBC GROUP WILL LAUNCH FIRST STAGE OF REFRIGERATOR PLANT IN VINNYTSIA IN AUTUMN 2017

KYIV. April 27 (Interfax-Ukraine) – UBC Group (Kharkiv), a commercial and industrial holding working in the field of refrigeration appliances, will launch the first stage of a refrigerator plant in Vinnytsia in autumn 2017.
“We now have a problem with production capacities. We need new production capacities to increase the market share in Western Europe and America. And we are building a plant in Vinnytsia for this purpose. We bought 11 hectares of land there and rented the same area,” UBC Group President Ihor Humenny told Interfax-Ukraine.
He said at present UBC Group has completed the zero cycle and in May-June will assemble industrial buildings. The facilities are manufactured in Sweden and are assembled on the site as Lego bricks.
“Now plant parts are being delivered to Ukraine. Its assembly will take two months, it will be ready in June. The first phase of the plant will be commissioned this autumn. It is planned that 400 people will work there in autumn, then the plant will expand, and over a year we will bring the number of employees to 1,000,” the expert said.
UBC Group has three factories in Ukraine and offices in 26 countries.
UBC Group also owns a network of Stargorod brewery restaurants in the CIS and Baltic countries.

PERSHA PRYVATNA BROVARNIA EARLY JUNE TO START MAKING CZECH BEER KRUŠOVICE UNDER HEINEKEN’S LICENSE

KYIV. April 27 (Interfax-Ukraine) – Persha Pryvatna Brovarnia, a large brewery in Ukraine, has received a license form Heineken Concern to produce Czech beer Krušovice and will start its production early June.
“This year we received a license from Heineken Concern to produce Krušovice and in a month will start producing this famous Czech beer,” the co-owner of Persha Pryvatna Brovarnia Andriy Matsola said in an interview with Interfax-Ukraine.
He said that usually it takes three or five years to receive the beer production license from Heineken. Persha Pryvatna Brovarnia started negotiations with Heineken in 2012 and at the end of 2015 and early 2016 the brewery launched Heinekel beer production in Ukraine under the license.
“The vice president of Heineken personally flied [to Ukraine] to inspect. The whole structure was inspected: from the head office, retail staff, atmosphere and policy of the company to tests of production facilities. In 2015, Persha Pryvatna Brovarnia was the fourth company in the world that received this license from Heineken, not being in ownership of the concern,” Matsola said.
He said that Heineken does not plant to enter the Ukrainian market.
Persha Pryvatna Brovarnia intends to launch production of hard lemonade at a plant in Radomyshl and enter the cider segment.
“Last year we bought equipment from Germany’s KHS. Now we will bottle our products in 0.44 liter and 0.5 liter cans. The canned beer market in Ukraine is only 6% of the total volume. We assess our market share at 10%, as we are working in the upper mainstream and premium class. We wanted to install a can line a long time ago, but earlier this project was loss-making. Now it is time to realize it,” he said.
Persha Pryvatna Brovarnia was created in 2004. It manages two breweries with a total capacity of 2.4 million hectoliters of beer per year in Lviv and Radomyshl (Zhytomyr region).

ARRICANO DEVELOPER SEES $23.5 MLN OF NET PROFIT IN 2016

KYIV. April 27 (Interfax-Ukraine) – Arricano Real Estate Plc (Cyprus), a managing company and developer of some shopping malls in Ukraine, saw $23.493 million in net profit in 2016 compared to $20.379 million of net loss in 2015.
According to an annual report of the company posted on the London Stock Exchange (LSE) on Wednesday, This turnaround was due to the $11.5 million increase in the property valuation, in addition to the $11 million reduction in operating expenses and the $18.4 million fall in finance costs all contributing towards this improved figure.
Arricano said that in 2016 recurring revenues increased by 13.3%, to $23.1 million (2015: $20.4 million).
Total comprehensive profit for the year was $21.13 million compared to $58.604 million of total comprehensive loss in 2015.
According to the report, the portfolio of assets was externally and independently valued as at December 31, 2016 by Expandia LLC, part of the CBRE Affiliate Network.
The portfolio was valued at $175.663 million (December 31, 2015: $160.31 million), the increase in the value of the portfolio was primarily driven by the increase in rental income and the improved stability of the hryvnia.
Total assets, as at December 31, 2016, amounted to $187.1 million (2015: $173.2 million). This represents an increase of 8% from the previous year.
Net Asset Value as at December 31, 2016 was $24.2 million (2015: $3.1 million), resulting in an Adjusted Net Asset Value per share of $0.23 (2015: $0.03).
Cash balances as at December 31, 2016 including cash equivalents and current deposits amounted to $4.953 million (2015: $3.349 million).
According to the report, total non-current liabilities in 2016 fell by 6.4%, to $52.281 million, while total current liabilities shrank by 3.2%, to $110.647 million.
Arricano said that bank debt at the year-end was $50.1 million, a decline of 16.6% year-over-year. Weighted average number of shares was 103.271 million, and the number of employees at the year-end was 112 people.
By late 2016, Arricano had 27 subsidiaries, including 14 in Ukraine, 10 in Cyprus, one each in Russia, Estonia and Isle of Man.

AGRICOM GROUP STARTS PRODUCING CEREALS UNDER DOBRODIYA BRAND, FLAKES UNDER SUPER HERCULES BRAND

KYIV. April 27 (Interfax-Ukraine) – Agricom Group has started production of cereals under the Dobrodiya trademark and the new product line under the Super Hercules trademark consisting of five products, Director of the marketing department Halyna Horban has told Interfax-Ukraine.
“Flakes is the most nutritious, tasty and cheap breakfast. In 2017, we plan that the flake market would start growing and reach the pre-crisis level. We have started actively studying demand of our consumers in this segment,” she said.
Horban said that the company designed the Super Hercules flake product line.
She said that by the end of the year Super Hercules could occupy 3% of the flake market in Ukraine.
Agricom Group seeks to supply Super Hercules not only to the domestic market, but to Europe. The company is holding talks with partners.
The cost of new flakes at Ukrainian stores will be around UAH 30 per a 600 gram package.
“In 2017 we launched 10 cereals under the Dobrodiya brand under contracts, as demand of distribution channels was seen. The quality department permanently monitors all stages of cereal production at our partners,” Horban said.
She said that the products are made at the partner plant in Kyiv region, but this autumn the company plans to launch own flake plant in Chernihiv region.
Аgricom Group produces and distributes food made of grain at own production base. It unites agricultural, processing and trade enterprises.

MOBILE OPERATORS CLAIM THEIR NETWORKS READY FOR 4G

KYIV. April 27 (Interfax-Ukraine) – Kyivstar mobile operator has prepared 70% of its network for the introduction of 4G (LTE) communications and plans to reach 100% by the end of the second quarter of 2017.
“Traffic consumption has jumped. We have expanded the network capacity by 250%. We improve the technical specifications of the network. We have prepared 70% of the network for 1,800 MHz range and by the end of the second quarter 2017 we will prepare 100% of the network,” Kyivstar President Petro Chernyshov said at a press conference in Kyiv on Tuesday.
He said that in 2015-2016 Kyivstar invested UAH 9.4 billion in infrastructure, including the cost of the 3G license.
PR Director of Vodafone-Ukraine Viktoria Ruban said that 89% of the operator’s network is ready for the introduction of 4G.
“Investment in the network in 2015-2016 totaled UAH 10 billion, including the cost of the 3G license,” she said.
The press service of lifecell did not specify the percentage for the readiness of its network, adding that all equipment installed by the operator for introducing 3G is ready for the launch of LTE.
“Total investment of lifecell in 2015-2016 was UAH 8.5 billion,” the press service said.