Ukraine open for business - Business news

Business news from the Ukrainian League of Industrialists and Entrepreneurs

UKRAINIAN PRESIDENT AND EUROPEAN COMMISSION HEAD CONFIRM READINESS TO ENACT FREE TRADE AREA FROM JAN 1, 2016

KYIV. Aug 19 (Interfax) – Ukrainian President Petro Poroshenko and European Commission President Jean-Claude Juncker have announced their readiness to begin implementing the Deep and Comprehensive Free Trade Area treaty between Ukraine and the European Union starting from January 1, 2016.

“The parties welcomed the positive dynamics of the process of ratifying the Association Agreement between Ukraine and the European Union and confirmed their readiness to start to implement the Deep and Comprehensive Free Trade Area starting from January 1, 2016,” the Ukrainian presidential press service reported on Tuesday following Poroshenko’s telephone conversation with Juncker.

NCCR APPROVES MEASURES TO INTRODUCE 4G IN UKRAINE, TENDER CAN BE HELD IN H2, 2017

KYIV. Aug 19 (Interfax-Ukraine) – The National Commission for Communications Regulation (NCCR) at a meeting on August 18 approved an action plan for the implementation of the LTE communications standard (4G), according to which a tender for licenses is scheduled for the second half of 2017, an Interfax-Ukraine correspondent has reported.

A commission representative said the plan envisages measures for the release of the first and second “digital dividends,” refarming the frequency spectrum and technology neutrality, as well as holding a relevant tender.

According to commission head Oleksandr Zhyvotovsky, the plan has been agreed with telecommunications operators, professional associations and will be posted on the official website of the commission this week.

Then the plan should be agreed by the relevant executive authorities and approved by a government order.

Under the plan, it is necessary in September-October this year to approve a technical specification for the execution of research work on activities for the implementation of 4G, in the development of which, in addition to the authorities, market participants, who agreed to finance this study, will take part. Then a foreign consulting company, which will conduct the study, should be selected in October-November. A relevant contract should be signed with the company in November.

UKRGAZVYDOBUVANNIA HEAD: INTL INVESTORS SHOULD ENTER UKRAINIAN MARKET NOW

KYIV. Aug 18 (Interfax-Ukraine) – International investors should enter the Ukrainian oil and gas market now as the market will become occupied, Ukrgazvydobuvannia Board Chairman Oleh Prokhorenko has said.

“Everyone understands that the present situation would be resolved, it would stabilize and those who enters as early as possible would win most of all. We would establish relations with those players who will enter [the market] now, and later it would be harder to enter it, as the places will be occupied. We will study now with whom we can work in this direction,” he said in an exclusive interview with Interfax-Ukraine.

Prokhorenko said that each company has its own concept of investment risk, but Ukraine is looking for partners to start working with now.

“The objective situation is the following: large players see Ukraine as a risky place for investment, but there are other companies, which have a more opportunistic approach to this. For example, Frontera worked in Georgia when the country faced Russia’s aggression. They have shown their interest to Ukraine, and they are not embarrassed with Russia’s aggression and they are ready to work in the present situation,” he said.

As reported, national joint-stock company Naftogaz Ukrainy and U.S. Frontera Resources Corporation signed a memorandum of understanding during the Ukrainian-U.S. business forum in Washington on July 13. According to the memo, both sides agreed to cooperate in investing in exploration and development of oil and gas fields in Ukraine and realizing a project on imports of liquefied natural gas (LNG) from the facilities of the American company in Georgia.

KYIV MAYOR PRESENTS KYIV’S INVESTMENT ATTRACTIVENESS TO BEIJING MAYOR

KYIV. Aug 18 (Interfax-Ukraine) – Kyiv Mayor Vitali Klitschko and Beijing Mayor Wang Anshun have discussed the prospects of attracting Chinese investment and modern technologies to Ukraine and Kyiv.

“The deepening of cooperation between the twin-cities and attracting Chinese investment and modern technologies to Kyiv and Ukraine was discussed,” the press service of the Kyiv mayor reported on the results of the meeting between the two mayors in Beijing.

“We’ve started introducing technological management of the capital of Ukraine – the Smart city system. We will spread it to all spheres of the city’s activities. Investments into this is required today – both technologies and funds. Kyiv is now more than ever attractive for investing money in various areas: from business to infrastructure projects. I will personally guarantee transparency and attractiveness of work for each investor,” Klitschko said.

He also said that Kyiv is especially interested in investments into its infrastructure, into projects that require large capital investment, including the completion of the Podilsky Bridge, and construction of subway and transport hubs.

Anshun said that Beijing is interested in cooperation with Kyiv in various areas and it is ready to develop such cooperation.

AGROLIGA SEES 4.3% RISE IN NET PROFIT IN H1 2015

KYIV. Aug 18 (Interfax-Ukraine) – The Agroliga group of companies (Kharkiv region) made a EUR 2.089 million net profit in January-June 2015, which is 4.3 times up year-over-year, the group said in a financial report.

The group said that its revenue soared by 2.5 times, to EUR 12.85 million, gross profit quintupled, to EUR 2.534 million and operational profit grew by 3.4 times, to EUR 2.454 million.

According to the report, the company increased revenue in H1 2015 thanks to an effective operation in sunflower oil exports. The hryvnia devaluation in 2015 was an additional factor of revenue growth, as operation expenses of the group are calculated in the local currency, while sales are calculated in euros.

One of the strategic tasks of the group is the development of oilseed processing. Agroliga plans to expand seed crushing from 55,000 tonnes to 70,000 tonnes in 2015 and to 100,000 tonnes by 2017.

The company also plans to continue expanding its land bank to 12,300 hectares (9,300 hectares as of August 2015) and develop a milk farm. It plans to boost the number of its cows from 1,000 to 1,400 and start producing dairy products. Agroliga also intends to produce powder milk and soft cheese. In August 2015, a retail milk store will be opened.

Agroliga has been working in the Ukrainian agricultural products market since 1992. Its enterprises are engaged in the cultivation of grains, sunflower seeds processing and dairy farming. The group cultivates land in Kharkiv region.

SURPLUS OF UKRAINE’S FOREIGN TRADE IN GOODS IN JUNE 2015 GROWS TO ALMOST $0.4 BLN – STATISTICS

KYIV. Aug 18 (Interfax-Ukraine) – The surplus of Ukraine’s foreign trade in goods in June 2015 demonstrated a positive trend for a fifth month in a row and amounted to $388.6 million against $296.1 million in May 2015 and $229.3 million in April 2015, the State Statistics Service reported on Wednesday.

The surplus of Ukraine’s foreign trade in goods in June 2015 from June 2014 soared by 6.4 times.

Goods exports in June 2015 declined by 29.3%, to $3.13 billion, while imports fell by 37.2%, to $2.74 billion.

The rate of foreign trade decline slowed, particularly in imports: in May 2015 exports of goods from Ukraine decreased by 41.2% year-on-year, while imports by 45.9%, in April by 39.3% and 39.2% respectively.

Exports in June 2015 from May 2017 grew by 7.7%, while imports rose by 5%.

In the first half of 2015, goods exports declined by 35% year-over-year, to $18.53 billion, while imports fell by 38.5%, to $17.28 billion, while the surplus more than tripled to $1.25 billion.

The service said that the share of Russia in the structure of exports fell from 20% in January-June 2014 to 12.5% in January-June 2015, and imports fell from 29.1% to 16.6% respectively.

At the same time, the share of exports to China increased from 5.1% to 7.9%, Turkey from 6.4% to 8%, Egypt from 4.9% to 6%, India from 3.4% to 3.9%, Germany from 2.9% to 3.4%, Italy from 5% to 5.1%, whereas exports to Poland decreased from 5.2% to 5%.

The share of Hungary in the structure of imports grew from 2.1% to 5.4%, Germany from 8.2% to 11.2%. Shipments from China rose from 8.9% to 10.2%, Poland from 5.2% to 6.2%, France from 2.5% to 2.7%, the United States from 3.7% to 4.1%, however Belarusian exports dropped from 6.9% to 6.4%.

The coverage ratio of imports by exports totaled 1.07.

Foreign trade operations were performed with partners from 207 countries.

Exports of goods to the EU amounted to $6.063 million, or 32.7% of total exports, and decreased compared to the first half of 2014 by 35.6%.

The basic goods of Ukrainian exports were metals and articles thereof 27.2%, herbal products amounted to 18.2%, electrical and mechanical machinery 9.9%, fat and oil of animal or vegetable origin and mineral products 8.7%, chemicals 6.5%, and food 6.4%.

Imports of goods from the EU amounted to $7.390 billion, or 42.8% of the total volume, a fall compared to the first half of last year by 25.7%.

Mineral products accounted for 32.1% of total imports, mechanical and electrical machinery 14.8%, chemicals 14.1%, plastics goods 6.9%, non-precious metals 5.3%, food 4.3%, and herbal products 4%.