Ukraine open for business - Business news

Business news from the Ukrainian League of Industrialists and Entrepreneurs

UKRAINE’S SECOND KROMBERG&SCHUBERT PLANT TO BE LAUNCHED IN ZHYTOMYR REGION IN 2016

KYIV. Oct 22 (Interfax-Ukraine) – The German company Kromberg & Schubert, which owns Kromberg & Schubert Ukraine LLC (Volyn region), plans in early 2016 to begin production of cable systems for Porsche, BMW, Audi, Mercedes cars at the second production site in Zhytomyr region.

According to a report on the website of Zhytomyr Regional State Administration, with reference to its head Serhiy Mashkovsky, investment in setting up a new company will amount to about EUR30 million.

To assist investors in solving problems with the supervisory authorities and establishing cooperation between the government and businesses, a memorandum of cooperation with Kromberg & Schubert Ukraine was signed at a meeting of the council for attracting investment at Zhytomyr Regional State Administration.

“Our plan is the second enterprise in Zhytomyr, which will employ about 3,000 people. New projects in Zhytomyr are components for new car brands that will enter the market in 2017: Audi Q2 and BMW,” Technical Director of Kromberg & Schubert Ukraine Slawomir Kaczmarek said.

Kromberg & Schubert Ukraine was established in 2005. According to Volyn Regional State Administration, this is the first plant of the German company in the CIS, in which it invested EUR11.5 million.

The plant produces onboard cable systems for passenger cars. The plant’s capacity is about 1,000 sets of electric cables per day, the main consumers of its products are Daimler AG, BMW, Volkswagen.

 

CONSTRUCTION OF HIGH-QUALITY ROADS IN UKRAINE WITH INVOLVEMENT OF FOREIGN FUNDS ESSENTIAL FOR COUNTRY – POROSHENKO

IVANO-FRANKIVSK. Oct 22 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko has said that construction of new high-quality roads in Ukraine with the involvement of funds of foreign partners is essential for the country.

“We’ve forgotten how to build roads, asphalt plants stopped and do not operate, there is no asphalt, stones. They forgot how to hold tenders, as they worked only if it was possible to steal money. We should see new contractors who can show both good quality and terms and the competitive price,” the president said during his visit of the section of the Mukacheve-Lviv (H-09) highway in Ivano-Frankivsk on Wednesday.

He said that Ivano-Frankivsk region should become the proving ground of how to build roads in Ukraine.

“Later, you know that now roads are being built in Zakarpattia and in Lviv region, we would speak about Central Ukraine and we will restore infrastructure of Donbas and build roads there, including using the funds of foreign partners,” the president said.

FIRST PRODUCTION LINE TO RECYCLE MERCURY-CONTAINING LIGHT BULBS IN UKRAINE LAUNCHED IN LVIV

KYIV. Oct 22 (Interfax-Ukraine) – A first production line to recycle mercury-containing light bulbs in Ukraine was launched in Lviv at the city’s combined heat and power plant on October 20, 2015, the press service of Lviv City Council has reported.

According to the report, the launch of the production line is foreseen in the project on the creation of the municipal electric and electronic equipment waste disposal system in Lviv which is being realized with the financial support of the EU.

It is planned to provide EUR 1.3 million of financing for the project, and the mercury-containing light bulb recycling line cost EUR 700,000.

Sweden’s MRT System International AB supplied the equipment for the production line.

“Only two persons will work at the line, as it is fully automated, and two persons have been already trained,” Project Coordinator Oksana Viytyk said.

According to the report, the capacity of the production line is 500 tube mercury-containing light bulbs or 800 compact fluorescent light bulbs (CFLs) per hour, which would allow providing the services to the whole western Ukraine. Almost all elements received after bulb recycling can be used as recycled materials.

Waste bulbs will be collected from households using two mobile pick-up centers which have already been bought.

INVESTMENT IN ELITE PROPERTY IN KYIV ON FIRST REALTY GROUP DEALS 81% UP IN SEPT

KYIV. Oct 21 (Interfax-Ukraine) – Investment in luxury real estate in Kyiv on the transactions of Blagovist and Park Lane real estate agencies, part of First Realty Group (all based in Kyiv), in September 2015 increased by 81% compared to August 2015, to $6.88 million, which accounts for 23% of total investment in real estate in the past month.

Park Lane said, with reference to its analytical center, that this data includes the calculation of the cost of a transaction in the national currency at the average exchange rate to the U.S. dollar on the day of the transaction.

“After August holidays activity in the real estate market in Kyiv in September invigorated significantly. This allows us to talk about the successful start of a new business season, as well as positively estimate the prospects of the expensive real estate market,” Park Lane CEO Viktoria Barabash said.

She also added that there are prerequisites for the tendency to increase the activity of buyers in October and November to continue in the real estate market in Kyiv, but the pace of growth may slow down.

According to the agency, the share of transactions in elite real estate in the capital, including facilities with a cost from $250,000, in the total volume of First Realty Group operations in September 2015 grew to 7% against 4% in August 2015.

 

WOG INCREASES LIQUEFIED GAS SALES BY 50% IN H1, 2015

KYIV. Oct 21 (Interfax-Ukraine) – The WOG network of fuel filling stations in January-June 2015 increased retail sales of liquefied gas by 50.3% (by 7,400 tonnes), to 22,100 tonnes, Company CEO Serhiy Koretsky has said at the LPG Ukraine 2015 forum organized by A-95 Consulting Group (Kyiv).

He said the company now holds 6.8% of the market, whereas a year earlier its share was 5.2%.

“Our strategy is to increase the market share to 22.5%, while the sales volume to 360,000 tonnes by 2020,” the WOG head said.

According to Koretsky, total retail sales of liquefied natural gas in Ukraine for the six months of 2015 rose by 5.2% (11,200 tonnes), to 225,800 tonnes. Liquefied natural gas was mainly sold in the networks of Privat Group (Ukrnafta, ANP, Avias, etc.) with 58,200 tonnes (a 29% rise), BRSM ranked second with 32,900 tonnes (a 9% fall), while WOG ranked third.

MHP INCREASES POULTRY SALES BY 4% IN Q3 2015

KYIV. Oct 21 (Interfax-Ukraine) – Myronivsky Hliboproduct (MHP) sold 150,260 tonnes of poultry to third parties in July-September 2015, which is 4% up year-over-year, the company said in a report on the website of the London Stock Exchange (LSE).

As a result of the increased production volumes at Vinnytsia poultry farm (100% utilization since the beginning of 2015), poultry production volumes in Q3 2015 increased by 6% to 142,295 tonnes and in 9M 2015 production increased by 4% to 420,720 tonnes.

Poultry sales in 9M 2015 grew by 3%, to 407,680 tonnes.

Due to significant depreciation of the local currency, domestic demand for chicken meat has increased,  which also occurred as a result of consumers’ trade down from more expensive meats (pork and beef) to more affordable ones. MHP’s domestic sales volumes in Q3 and 9M 2015 increased by around 15% and 4% year-on-year respectively.

During the third quarter of 2015 chicken meat exports were 22% lower than in Q3 2014 and constituted 34,585 tonnes mainly due to decreased exports to the CIS region in Q3 2015 compared to the same period last year. During the first nine months of 2015, poultry export sales remained relatively stable at 100,600 tonnes compared to 102,145 tonnes.

MHP continues to follow its strategy of diversified export markets and is seeking new business opportunities in Asia, the Middle East and Africa by building-up export volumes of chicken meat.

The average chicken price in Q3 2015 remained stable compared to Q2 2015 but at the same time increased by 25% year-on-year to UAH 27.62 per kg (excluding VAT) predominantly due to the Ukrainian hryvnia depreciation.

Through the nine months of 2015 the average chicken prices increased by 45% to UAH 26.92 per kg (excluding VAT) compared to the nine months of 2014.

During the third quarter of 2015, sausage and cooked meat production volumes increased by 2% to 8,960 tonnes. During the first nine months of 2015, production volumes decreased by 13% to 20,950 tonnes.

At the same time the average sausage and cooked meat prices during the third quarter of 2015 increased by 35% to UAH 43.71 per kg (excluding VAT) and through the first nine months of 2015 increased by 61% to UAH 42.92 per kg (excluding VAT).

In Q3 2015, MHP sold 71,900 tonnes of sunflower oil, which was 4% lower than in Q3 2014. In 9M 2015, 217,710 tonnes of sunflower oil, which was 26% higher than in 9M 2014, were sold at an average price of $786 per tonne.

MHP is the largest poultry producer in Ukraine and is also engaged in the production of grains, sunflower oil, and meat.