Business news from Ukraine

UKRPOSHTA SEEKS TO HOLD TENDER TO EQUIP TRUCK FLEET WITH GPS SYSTEM

KYIV. Jan 5 (Interfax-Ukraine) – Ukrainian state-run postal enterprise Ukrposhta intends to hold a meeting on January 17 with participation of Ukrainian and international companies providing vehicle monitoring system installation services to discuss the details of the future tender to buy the service.

“Our company has one of the largest truck fleet in the country – 3,600 vehicles. It is planned to install the full-featured vehicle monitoring system on the trucks [on the basis of existing GPS devices],” Ukrposhta said on its Facebook page.

Ukrposhta seeks to monitor the routes of trucks, achieve money saving and provide for reliability of transportation and improvement of services.

The company intends to discuss technical requirements drawn up by its specialists, the optimal commercial model, factors that could influence the price, the conditions and requirements of the tender to be held in the ProZorro e-procurement system.

CANADA’S FAIRFAX BUYS ALMOST 10% OF SHARES IN ASTARTA FOR $35.6 MLN

KYIV. Jan 5 (Interfax-Ukraine) – Fairfax Financial Holdings Limited on January 4, 2017 finalized a deal to acquire 9.99% shares in Astarta agro-industrial holding.

The holding reported on the website of the Warsaw Stock Exchange (WSE) Fairfax bought 2.498 million shares in Astarta Holding N.V. (Amsterdam, the Netherlands) at PLN 60 per share. Thus, the shares were bought for PLN 149.85 million (around $35.65 at the exchange rate of the National Bank of Poland).

As reported, on August 24, 2016, Fairfax signed the agreement with the companies of the founders of Astarta Viktor Ivanchyk – Albacon Ventures Ltd. – and Valeriy Korotkov – Aluxes Holding Ltd. Albacon held 37.8% (9.45 million shares) and Aluxes– 25.99% (6.497 million shares) in Astarta.

Fairfax shall acquire 450,000 of shares from Albacon and 2.048 million shares from Aluxes.

Fairfax shall also have the right to acquire from Aluxes an additional 4.449 million shares in Astarta.

Fairfax shall have the right to acquire from Aluxes an additional 2.498 million shares in the company, representing approximately 9.99% of the voting rights in the company which can only be exercised 61 days after the sale of shares (First Tranche Call Option).

Fairfax shall have also the right to acquire from Aluxes a further 1.952 million shares in the company, representing approximately 7.8% of the voting rights in the company, which can only be exercised after the 61st day after acquisition of shares.

Aluxes also has the right to put the above shares to Fairfax should Fairfax not exercise its rights above.

In addition, Albacon has granted a tag along right to Fairfax in case Albacon sells a certain percentage of its shares in the company to a third party.

Furthermore Fairfax has been granted the right to nominate the chairman of the board. In addition, Astarta has agreed that the company shall agree some issues concerning shares with Fairfax.

Astarta is a vertically integrated agro-industrial holding, uniting six regional divisions in Poltava, Vinnytsia, Khmelnytsky, Ternopil, Zhytomyr, and Kharkiv regions. They include nine sugar factories, agricultural farms with a land bank of about 250,000 hectares and dairy farms. The holding also has a plant for processing soybeans in Poltava region (Globyno processing plant).

UKRAINE EXPORTS $4.5 MLN WORTH OF CHRISTMAS DECORATION

KYIV. Jan 4 (Interfax-Ukraine) – Ukraine in January through October 2016 exported $4.5 million worth of Christmas decoration to 25 countries, Deputy Minister of Economic Development and Trade, Ukraine’s Trade Representative Natalia Mykolska has said.

She wrote on her Facebook page on December 31 that 90.6% of exported Christmas decoration was made of glass.

“The main market is the EU countries. A total of 62.3% of total decoration was exported to this market in January through October 2016. Total supplies to the EU countries grew by 31.7% (from $2.1 million in January-October 2015 to $2.8 million). Among top three largest markets were three EU countries (the Netherlands, Germany and Poland),” she wrote.

She also said that 31.1% of total exports and 49.9% of exports to the EU countries is the market of the Netherlands (growth by 37.5%).

Exports to Canada soared by 13.9 times, to Belarus – by 5.1 times, Italy – 3.1 times, Moldova – by 2.9 times, the United States – by 2.7 times, Switzerland – by 2.6 times and Poland by 2.3 times, she said.

Mykolska said that this year new markets appeared – Turkey, Maldives, the Czech Republic, Spain, Ireland, Azerbaijan and Iceland.

The Russian market fell by 54.4% this year, being only $632,300 ($3.5 billion in January-October 2014).

ARCELORMITTAL KRYVYI RIH BOOSTS STEEL SMELTING BY OVER 15% IN 2016

KYIV. Jan 4 (Interfax-Ukraine) – ArcelorMittal Kryvyi Rih boosted steel smelting by over 15% in 2016, to 7 million tonnes, the company said in a press release on Tuesday.

The enterprise met the 2016 target and broke a record of the past years smelting 7 million tonnes – earlier the company smelted this volume in 2008.

The target of 7 million was an ambitious goal. The enterprise met it thanks to effective operation of all divisions of ArcelorMittal Kryvyi Rih.

In 2017 the enterprise will continue implementing large-scale investment projects that would help to reduce production cost, increase effectiveness of production and improve the environment situation in Kryvy Rih and the region, the company said.

GOVERNMENT FACILITATES EXPORTS OF SCRAP METAL

KYIV. Jan 4 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers has facilitated exports of scrap ferrous and nonferrous metals, revoking the registration of foreign economic contracts related to transactions with scrap metal.

The amendments were made to some government resolutions in resolution No. 1035 dated December 28, 2016. The resolution also annuls some previous government resolutions.

“The government has relaxed the procedure for exporting scrap metals. The decision would help to liberalize foreign economic activities and liquidate barriers in foreign trade. The institute of registration of scrap metal exports contracts was annulled as such not having economic effect. The resolution revokes the obligatory red tape procedure for this registration. It permits free exports of scrap metal, improves business climate in the country and significantly reduces corruption risks in the sector,” the government said in an explanatory note to the document.

The authors of the resolution expect that scrap metal exports would grow and currency income would increase. The balance between scrap metal producers, exporters and consumers will be established. Foreign economic traders would have to show less permits for customs clearance of exported goods.

GOVERNMENT SEEKS TO DISCUSS CREATION OF AGENCY FOR EUROPEAN INTEGRATION BEFORE JULY 2017

KYIV. Jan 4 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers seeks to discuss the creation of the Agency for European Integration in the second quarter of 2017.

According to the draft action plan for medium-term outlook until 2020 the agency could be created as a central executive power authority with a special status.

It is planned that the agency would help to apply a centralized approach to the implementation of tasks in the European integration area and to observe Ukraine’s legal liabilities in the area.

It is planned to approve the communications strategy in the sphere of European integration for 2017-2020 in Q2 2017.