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Business news from the Ukrainian League of Industrialists and Entrepreneurs

UKRAINE EXPORTS 69,000 TONNES OF MILK, DAIRY FOODS, 44,000 TONNES OF MEAT IN Q1, 2015 – TRADE MINISTRY

KYIV. April 23 (Interfax-Ukraine) – Ukraine exported 69,000 tonnes of milk and dairy foods in January through March 2015, with an annual export potential projected at 300,000 tonnes, the interagency ad hoc group under the Ukrainian Economic Development and Trade Ministry has said.

In particular, 47,000 tonnes of milk and diary products were supplied to the Crimea free economic zone, while annual supplies are projected at 240,000 tonnes, the group said.

Milk and dairy foods production in Ukraine in the first quarter of 2015 amounted to 2.04 million tonnes with annual production estimated at 11.34 million tonnes. Milk and dairy imports in the first three months stood at 20,000 tonnes, annual imports have been forecasted at 200,000 tonnes.

Meat exports from Ukraine in the three months totaled 44,000 tonnes with the annual forecast being 260,000 tonnes. In particular, Ukraine exported 7,000 tonnes of beef, 6,000 tonnes of pork, and 30,000 tonnes of poultry. Supplies to the Crimea free economic zone in the first quarter of 2015 are estimated at 14,000 tonnes with an annual forecast of 50,000 tonnes.

During the period under review, Ukraine produced 569,000 tonnes of meat, including 59,000 tonnes of beef, 224,000 tonnes of pork, and 284,000 tonnes of poultry. The ministry predicts that in 2015 Ukraine’s meat output will be 2.44 million tonnes, including 410,000 tonnes of beef, 775,000 tonnes of pork, and 1.215 million tonnes of poultry.

From January through March Ukraine imported 31,000 tonnes of meat with an annual forecast of 169,000 tonnes.

UKRAINE SEEKING INTERNATIONAL OPERATOR FOR GAS PROJECT

HOUSTON. April 23 (Interfax-Ukraine) – Ukraine is looking for an international operator for a project to produce gas in the country, Ukrainian Energy and Coal Minister Volodymyr Demchyshyn said at the IHS CERAWeek conference in Houston.

He said the country has 1 trillion cubic meters of undeveloped gas reserves. “This gas could be sold to Europeans,” the minister said.

With the implementation of energy efficiency projects in Russia and Ukraine, Russia will supply more gas to Europe in three to five years, which will have an impact on prices, he said.

“The government of Ukraine has decided to find an international operator in order to leverage this important asset,” Demchyshyn said, adding that an international consortium is an option.

He also said that Ukraine’s gas transport network is currently underutilized, so it would make more sense to involve the existing capacity to ship gas to Europe than to build new pipelines.

“We have 38 individual routes. We’ve already talked about the need to transport gas not only from Russia, but also from the north, from Norway. It’s doable for the Ukrainian system,” Demchyshyn said.

“We can redistribute this gas and ship it on to Romania, Turkey and potentially to Greece,” Demchyshyn said.

He said that Ukraine currently buys more than 50% of gas in Europe, enabling it to lower the price to $240 per 1,000 cubic meters.

ARCELORMITTAL KRYVYI RIH STOPS SUPPLYING PRODUCTS TO RUSSIA, ENTERS NEW MARKETS

KYIV. April 23 (Interfax-Ukraine) – ArcelorMittal Kryvyi Rih (Dnipropetrovsk region) has almost fully stopped shipping metal products to Russia and it is looking for new markets, ArcelorMittal Kryvyi Rih CEO Paramjit Kahlon said at a press conference held at Interfax-Ukraine in Kyiv.

He said that since December 2014, the Russian market has almost closed for the company.

“In Q3 2014 our supplies totaled 55,000-60,000 tonnes a month, then they fell to 35,000-40,000 tonnes and now we almost do not sell [in Russia],” he said.

He said that the key markets for the company are the Middle East and North Africa, including Lebanon, Israel, Syria and others.

“We have to look for new markets for our products to find new consumers and we conduct market studies to find sales markets. In 2014, a first test batch of our roll was sent to Saudi Arabia,” he said.

Kahlon said that the company has to compete with Chinese and Russian producers on foreign markets. Russian enterprise boosted exports sharply after the large devaluation of the Russian ruble.

The cash cost of ArcelorMittal Kryvyi Rih’s products grew due to the worsening or halt of supplies of Ukrainian raw materials from the anti-terrorist operation (ATO) zone and the necessity of replacing it with imported products.

“We’re looking for internal reserves to increase our efficiency, opportunities of cutting the production cost to remain competitive and not to cut production,” Kahlon, adding that in 2014 the company sold 86% of its products on foreign markets and only 14% on the domestic market.

NBU MULLING PAYPAL ADMISSION TO UKRAINE’S MARKET

KYIV. April 23 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) is mulling the possibility of letting PayPal onto the Ukrainian market, the NBU wrote on Facebook.

An ad hoc group, including representatives of the NBU, professional associations, Deloitte and Baker&McKenzie was set up to improve conditions for the operation of international payment systems in Ukraine, the announcement said with reference to NBU Deputy Governor Vladislav Rashkovan.

“The group is now analyzing obstacles that appear in work of international online payment systems and electronic money issuer systems when they provide services to the population in Ukraine (on the example of PayPal). The results of the group’s work will help improve respective legislative acts by the NBU and create conditions for the successful operation of the international payment systems in Ukraine,” the announcement said.

FRANCE TO HELP UKRAINE HANDLE PRIVATIZATION TRANSPARENTLY – POROSHENKO

KYIV. April 23 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko and his French counterpart Francois Hollande have discussed bilateral cooperation in privatizing Ukrainian companies.

During their meeting in Paris on Wednesday, both presidents agreed to facilitate cooperation in privatization, the Ukrainian presidential press service has reported.

“We will use the expertise of the French bureau for the organization of the most transparent privatization in the history of Ukraine,” Poroshenko said.

The parties also discussed the participation of French investors in the privatization of large facilities in Ukraine.

“The presence of powerful French investors in Ukraine will only contribute to the strengthening of our reforms,” Poroshenko said.

France is also willing to share its experience in banking supervision, customs control, administration of public enterprises, as well as privatization, according to the press service.

Hollande in particular expressed his country’s interest in developing closer relations in the agro-industrial sector and in university education. He also announced that a French school would be in Ukraine.

The two presidents emphasized the importance of enhancing bilateral trade and economic relations, particularly in energy, transport, agricultural and food industry, environmental protection and tourism.

“We have signed a joint declaration and outlined a great volume of work that is to be done in various spheres. It is related to the modernization of economy and energy sphere, international financial support and certain projects that will lead to economic growth of Ukraine,” Hollande said.

Poroshenko and Hollande agreed on the training of specialists and the exchange of experience. The deadline for arrangements to enter their first phase of implementation is May 13.

RETAIL ‘PHARMACY BASKET’ SALES ALMOST 23% UP IN HRYVNIAS IN Q1, 2015

KYIV. April 22 (Interfax-Ukraine) – Retail sales of “pharmacy basket” goods in monetary terms grew by 22.7% in the hryvnia equivalent in January-March 2015 year-over-year, to UAH 12.729 billion, and fell in packages by 19%, to 417.7 packages, Apteka publication has reported, quoting data provided by Proxima Research.

The company said that pharmacy sales of drugs totaled UAH 10.878 billion in Q1 2015, which was 22.9% up year-over-year, and a total of 274.9 million packages were sold (17.4% down).

Sales of medical products grew by 25% in monetary terms, to UAH 984 million, while they fell by 22.1% in packages, to 120.6 million.

Cosmetics sales grew by 3.5%, to UAH 451.7 million and fell by 22.1% in packages, to 11.9 million.

The average price of one package of an item of “pharmacy basket” goods in January-March 2015 totaled UAH 30.50, which is 51.5% up year-over-year, and the average price of one package of dietary supplements was UAH 39.90, drugs – UAH 39.60, cosmetics – UAH 38.10 and medical products – UAH 8.10.

The company said that in Q1 2015 the average price of one package of imported drugs was UAH 99.70, and the average price for one package of Ukrainian-made drugs was UAH 20.30.