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Business news from the Ukrainian League of Industrialists and Entrepreneurs

ED&F MAN WILL INVEST OVER $60 MLN IN IRRIGATION SYSTEMS IN KHERSON AND MYKOLAIV REGIONS BY 2020

KYIV. April 27 (Interfax-Ukraine) – The investment of ED&F Man, one of the world’s largest sugar trading companies, in the first stage of an irrigation complex in the village of Kyselivka (Kherson region) amounted to $5 million.
According to a company press release, the first stage of the project is launched for irrigation of 1,000 hectares in Kherson region.
The company plans by 2020 to increase the total area under irrigation to 20,000 hectares in Mykolaiv and Kherson regions and invest more than $60 million.
“New automatic irrigation systems will ensure the proper moistening of fields around Zaselsky sugar plant, solve the problem of growing sugar beets in conditions of arid steppe,” the company said in the press release.
ED&F Man owns Zaselsky sugar factory (Mykolaiv region) with a production capacity of 50,000 tonnes of goods per year.
For the period of its work in Ukraine, ED&F Man has invested more than $150 million in development.

GEORGIAN COMPANY WINS CENTRENERGO’S TENDER TO SUPPLY 700,000 TONNES OF COAL

KYIV. April 27 (Interfax-Ukraine) – Sakhnakhshiri LLC (GIG Group, Tbilisi, Georgia) has won a tender of public joint-stock company Centrenergo to supply 700,000 tonnes of coal, according to the results of an auction held in the ProZorro procurement system.
Sakhnakhshiri offered to supply coal for UAH 1,808,789,000, while the second bidder – I–COAL Sp z o.o. (Poland) – offered UAH 1,808,790,000 (VAT not included).
If the results of the tender are approved, the cost of coal for Centrenergo will be around $97 per tonne with the initially expected around $102 per tonne.
The Georgian company earlier shipped coal to two Armenian and one Bulgarian companies, and inside Georgia – around 300,000 tonnes every year.
Sakhnakhshiri belongs to GIG Holding, part of GIG Group, the founder of which is David Bezhuashvili, brother of former defense minister and former foreign minister of Georgia Gela Bezhuashvili.
Earlier Centrenergo annulled two tenders announced in March and April to supply 700,000 tonnes of coal due to the absence of bids and announced the third tender.
The first tender’s initial price was up to UAH 1.523 billion (around $81-82 per tonne), the second – up to UAH 1.714 billion (around $91-92 per tonne) and the third – up to UAH 1.904 billion (around $101-102 per tonne).
Coal will be shipped to Zmiyivska and Trypilska thermal power plants (TPPs) in May-December 2017 (CIF Black Sea ports, Ukraine). The smallest batch is 70,000 tonnes.

SME REPRESENTATIVES NOTE IMPROVEMENT OF BUSINESS CLIMATE IN UKRAINE IN 2016 – SURVEY

KYIV. April 27 (Interfax-Ukraine) – Representatives of small and medium-sized enterprises (SME) have noted the improvement of the business climate in Ukraine: the corresponding index in 2016 rose to plus 0.06 from plus 0.01 in 2015 (on a scale from minus 1 to plus 1), according to the results of the “Annual assessment of the business climate 2016.”
“The index has improved by 5 percentage points. This not much but nevertheless it is a positive trend,” the coordinator of the analytical component of the USAID LEV program, the executive director of the Institute for Economic Research and Policy Consulting, Oksana Kuziakiv, said at a press conference at Interfax- Ukraine in Kyiv.
According to the results of the survey, low demand became the main obstacle to the development of small and medium-sized enterprises in 2016. It ousted the “unfavorable political situation,” which was the main obstacle in 2015, to the second place.
The optimism of small and medium-sized enterprises regarding the short-term plans has grown, while its growth rate relative to the two-year plans has slightly decreased. This suggests that there is no time for “postponing” the reforms, the expert explained.

ORLAN-TRANS INTENDS TO START WORKING WITH CRYPTOCURRENCIES

KYIV. April 27 (Interfax-Ukraine) – Orlan-Trans Group operating with the A2B Direct online platform for cargo companies plans to start working with cryptocurrencies.
An Interfax-Ukraine correspondent has reported that Director General Volodymyr Baida gave the information at the Logistic Up 2017 forum in Kyiv on Tuesday.
“Strange as it may sound for a Ukrainian carrier, now we see our monetization on starting work with cryptocurrencies. At present we intend to introduce a technology on the basis of blockchain. On May 24 we want to enter the ICO. We look at the work in the future,” he said.
As reported, Ukrainian businessman, a partner of Orlan-Trans and former transport minister of Ukraine Yevhen Chervonenko presented the A2B Direct online platform for haulers late 2016.
A2B Direct online service ensures direct cooperation between haulers and cargo owners at all stages. One can find an optimal hauler online. A2B Direct is able to connect to the driver 24/7. It maintains the entire document cycle, insurance and legal accompanying. The service users will be able to track their cargo online and fully get rid of forwarders’ markups.
Haulers and cargo owners will be able to quickly find deals and plan their loading, reducing no-load trips to minimum.
From October the service operated in the test mode in Ukraine. In 2017 it would be available for CIS states.
Among partners of the project are Kyivstar, WOG, OKKO, Alfa-Bank Ukraine, Bank Vostok and Unison insurance company. The project is launched with support of the Association of International Road Carriers of Ukraine (AsMAP).

AGROGENERATION WANTS TO EXPAND LAND BANK, ATTRACT INVESTMENT IN PROCESSING IN MEDIUM TERM OUTLOOK

KYIV. April 27 (Interfax-Ukraine) – Investment of France’s AgroGeneration Group with assets in Ukraine will be sent to expand its land bank and processing of agricultural products in the medium term outlook.
“We can cultivate 120,000 ha. We are ready to cultivate more. The expansion of the land bank is a top priority,” AgroGeneration President John Shmorhun said at a press conference in Kyiv on Tuesday.
He said that the company is mulling investment in processing of agricultural products in the medium term outlook.
“We want to find a financial and strategic investor, as we know few in this sector, but we are studying the market. This is investment of over $100 million. We need a strategic investor for this,” he said.
He said if the land bank is expanded, the company will be able to more effectively trade with agricultural goods.
“If we have the land bank expanded, it would be more interesting for us trade on the CIF and FOB conditions and we could become a trade company,” he said.
Now AgroGeneration sells 40% of all its products under forward contracts.
AgroGeneration was founded in 2007. It specializes in growing grains and oilseeds. In Ukraine it currently cultivates about 120,000 hectares.

EUROPEAN SYSTEM FOR MONITORING GREENHOUSE GASES EMISSION TO BE INTRODUCED IN UKRAINE – MINISTER

KYIV. April 25 (Interfax-Ukraine) – The Ecology and Natural Resources Ministry of Ukraine with the support of the World Bank is actively working on implementing an efficient monitoring, reporting and verification system for greenhouse gases emissions in Ukraine, Ecology Minister Ostap Semerak has said.
Semerak said this during a working meeting dedicated to Ukraine’s compliance with its international obligations on climate change and the introduction of market mechanisms in line with Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading, the Ecology Ministry’s press service reported on Monday.
The minister noted that to begin with, a quality system of monitoring, reporting and verification of greenhouse gases emission should be created in Ukraine that will allow determining the real volumes of greenhouse gas emissions and should become the foundation for the formation of a national system for trading greenhouse gas emission quotas.
“The national system of trade in greenhouse gas emissions quotas will be an absolutely new instrument for Ukraine to implement the state policy in the field of climate change, therefore, international support and the experience of other countries in implementing the national market for trading in greenhouse gas emission quotas is important for us,”, Semerak explained.
At the same time, he stressed that without a proper monitoring system for greenhouse gases emission in Ukraine, a real national market for trading in quotas is unlikely to be created.
“By the end of 2017 we are planning to submit to the government and parliament the law of Ukraine on the system for monitoring, reporting and verifying greenhouse gases emission,” Semerak said.
He suggested that it would take no more than three years for Ukraine to create and implement a system for monitoring, reporting and verifying greenhouse gas emissions, and then it would be possible to talk about the creation of a national greenhouse gas trading system.
“These measures will enable Ukraine not only to fulfill important international obligations, but also to stimulate the modernization and increase of energy efficiency of industries, attract investment and will allow entering the regional and world markets for trading greenhouse gas emission quotas,” the minister concluded.