Business news from Ukraine


KYIV. May 31 (Interfax-Ukraine) – Ukrainian Prime Minister Volodymyr Groysman after visiting Mariupol Illich Steel Works (Donetsk region), part of Metinvest Group, and talking to management has ordered that ministries and agencies discuss the problems the mining and metal companies and hold a special meeting.

Metinvest said in a press release that the Prime Minister attended the sinter plant reconstruction site – the largest environmental project in the history of independent Ukraine (at the end of five years of the project the total investment will comprise $220 million).

In the course of the meeting the group’s and enterprise management drew attention of the prime minister to the infrastructure problems encountered by the iron and steel works in Mariupol: Mariupol Illich Steel Works and Azovstal. The discussion touched upon the possibility to increase the throughput capacity of Polohy–Kamysh-Zoria–Volnovakha railway section, which would facilitate an increase the volumes of raw materials supply to Mariupol and finished goods shipments from Mariupol significantly.

The steel makers also mentioned the need to deepen the waters of Mariupol seaport to open the possibility to receive large vessels.

During his visit to Mariupol Illich Steel Works, Groysman instructed the Economic Development and Trade Ministry to arrange an ad hoc meeting involving the executives of the Infrastructure Ministry and Ukrzaliznytsia, as well as other ministries and departments in order to discuss the state policy in the field of support to the mining and metals sector.

Groysman noted that there was also the issue of rising railway tariffs by Ukrzaliznytsia.

“I want us to sit at a round table and clearly discuss the problems to be resolved in order to expand the product range and export capabilities, rather than the decline production. Exports for us are of utmost importance,” he said.

He said that the development of domestic infrastructure projects could stimulate related industries, including metallurgy. In this regard, he noted the importance of Metinvest Group’s investments in modernization of the production facilities, adding that the metallurgy was an industry, the development of which was absolutely necessary. Groysman also promised to render assistance by the government in terms of strengthening competitive ability of the Ukrainian companies with export potential.

“The modernization program at the enterprise gives us confidence that the environmental situation in Mariupol will start improving already in 2017. Within five years, the emissions to the atmosphere will meet EU standards. This development should be welcomed. I would like Ukraine to switch from raw materials-based economy to high added-value economy. During our visit to Mariupol, we saw, where the national produced (wealth) is being created. We will do everything possible to stimulate business, so it attracts investments for the construction of new capacities and national wealth,” Groysman said.

Chief Executive Officer of Metinvest Group Yuriy Ryzhenkov said that despite challenges the group continues investing in development of its production facilities.

“During 10 years, the company has invested $5.5 billion in production. We intend to continue the modernization emphasizing environmental safety. The support from the government is crucial. Without the government’s assistance in the area of fair pricing policies for state monopolies and resolving infrastructure problems, steel producers will have extremely hard time competing in international markets and developing their production facilities,” he said.

Metinvest Group is a vertically integrated group of steel and mining companies that manages every link of the value chain, from mining and processing iron ore and coal to making and selling semi-finished and finished steel products. It comprises steel and mining production facilities located in Ukraine, Europe and the US, as well as a sales network covering all key global markets.


KYIV. May 31 (Interfax-Ukraine) – Horizon Capital intends to launch private equity fund Emerging Europe Growth Fund III, L.P. with a capital of $150 million, according to a newsletter from the fund.

According to the document, the fund will focus on small but fast-growing export-oriented companies in Ukraine and Moldova. The fund will invest primarily through the purchase of minority stakes in such companies. At the same time, if necessary, provision of start-up capital, a full redemption of companies or participation in privatization is possible.

One of the investors in the fund may become Overseas Private Investment Corporation (OPIC, the United States). The OPIC board of directors will consider the issue of providing the fund with $37.5 million for ten years on June 9, 2016.

Horizon Capital was established in 2006. It manages private equity funds Western NIS Enterprise Fund (WNISEF, established in 1994 with a capital of $150 million), Emerging Europe Growth Fund, L.P. (EEGF, established in 2006 with a capital of $132 million) and EEGF II (EEGF, established in 2008 with $370 million capital).

The money of these funds is invested in projects in Ukraine, Moldova, and Belarus.


KYIV. May 31 (Interfax-Ukraine) – China Nuclear Energy Industry Corporation and Ukrainian concern Nuclear Fuel are discussing $600 million investment in uranium mining in Kirovohrad region, Head of Sumy Regional State Administration Mykola Klochko has said following his visit to China.

“Nuclear Fuel cooperates with China Nuclear Energy Industry Corporation in attracting investment in the amount of about $600 million for joint uranium production in Kirovohrad region,” the press service of Sumy Regional State Administration said.

As reported, in July 2015 Nuclear Fuel and China Nuclear Energy Industry Corporation (CNEIC) signed a memorandum on cooperation in the field of a nuclear fuel cycle.


KYIV. May 31 (Interfax-Ukraine) – Ukraine seeks to hold negotiations on cooperation with U.S. Boeing Corporation under the Sea Launch program in the course of the first launch of the Antares launch vehicle after its modernization scheduled for July from the Wallops Flight Facility (Virginia, the United States), Head of the State Space Agency of Ukraine (SSAU) Liubomyr Sabadosh has said.

Commenting on the results of his working visit to the United States on May 23-27, he said at a press conference in Kyiv that he failed to meet with Boeing representatives, but he received a signal that the negotiations on Sea Launch would be organized in July.

Sabadosh said that Boeing has not yet formed the final position for the project.

“I know that the interest of investors to continue the project exists. Negotiations are underway,” he said, adding that representatives of investors visited Ukraine and Pivdenmash (Dnipropetrovsk) to discuss the possibility of making Zenit launch vehicle under the Sea Launch project in Ukraine.

The U.S. District Court for the Central District of California in September 2015 satisfied a claim filed by Boeing against RSC Energia of Russia and Pivdenne Design Bureau, saying the partners breached their contract obligations by not reimbursing Boeing for Sea Launch expenses.

The shareholders of the Sea Launch consortium, which was created in 1995 to carry out commercial satellite launch from the sea launch site in the Pacific Ocean, were Boeing with 40%, RSC Energia with 25%, Ukrainian-based Pivdenne Design Bureau and state-run enterprise Pivdenmash with a combined share of 15% and the Anglo-Norwegian Engineering and Construction Кvaerner Group with 20%.

After reorganization in 2010, a total of 95% of shares are now owned by Energia Overseas Limited (EOL), a ‘granddaughter’ of RSC Energia, while a 3% stake belongs to U.S. Boeing, 2% to Norwegian Aker Solutions. The headquarters of Sea Launch AG are in Nyon (Switzerland).


KYIV. May 31 (Interfax-Ukraine) – Ukraine and the United States continue negotiations on cooperation in the missile engine building sphere. Ukraine still pins hopes to join the project on the creation and production of a new liquid missile engine for the United States to replace Russia’s RD-180 engine, Head of the State Space Agency of Ukraine (SSAU) Liubomyr Sabadosh has said.

He said at a press conference on Monday in Kyiv that the prospects of expansion of technological and industrial cooperation in the aerospace area, in particular, cooperation in the missile engine building sphere, were discussed during the negotiations with U.S. partners during the working visit of Sabadosh to the United States on May 23 through May 27.

“Our U.S. partners understand that this task is complicated, but we can cope with it,” he said.

He said that the talks would continue at the level of sector specialists. The design terms, tests, conditions of cooperation and expenses are to be discussed.

“We are confident that jointly with U.S. partners we would be able to realize the project more quickly. I think it would be cheaper,” he said, adding that the next round of the negotiations is scheduled for November.


He said that the possibility of lobbying for Ukraine’s interests in the implementation of the project to create an alternative liquid missile engine to Russia’s RD-180 for the U.S. Air Force was discussed with Senate committee office on Armed Services, chaired by U.S. Senator John McCain.

Ukraine hopes to given preference in participating in the project, Sabadosh said.


KYIV. May 30 (Interfax-Ukraine) – The opening of Reforms Office in Kyiv is scheduled for early summer 2016, Director of Kyiv Investment Agency Oleh Mistiuk has told Interfax-Ukraine.

“I hope that in May an order of the mayor to create the Reforms Office, the strategic reforms board and the advisory reforms board in Kyiv would be signed,” he said.

Mistiuk said that the Reforms Office will not be part of Kyiv City Administration’s structure. It will be directly coordinated by the city mayor.

The organization structure of the Reforms Office would consist of strategic and advisory reforms boards. The creation of the office is intended to increase Kyiv city’s investment attractiveness, improve its borrowing capacity and boost efficiency of the city council via introduction of legislative and organization changes.

Mistiuk said that the strategic board’s members would be Kyiv Mayor Vitali Klitschko, Secretary of Kyiv City Council Volodymyr Prokopiev, First Deputy Mayor Hennadiy Plis and Deputy Mayor Oleksiy Reznikov. The board would also include at least four representatives of the most famous nongovernmental organizations that forward reforms in Ukraine and at least four representatives of donor and international financial institutions (IFIs).

The advisory board would have people of Michael Bloomberg caliber as members, as well as foreign and Ukrainian experts and businessmen.