Business news from Ukraine

REVENUE FROM TOBACCO EXCISE DUTIES GROW BY ALMOST ONE FOURTH IN 2015, TO UAH 22.2 BLN

KYIV. Feb 11 (Interfax-Ukraine) – Revenue of the national budget from the excise duties on tobacco grew by almost one fourth in 2015, to UAH 22.2 billion, the Ukrainian Center for Tobacco Control reported on Tuesday.

The increase in revenue by over UAH 4 billion was recorded without a rise in sales of cigarettes that did not change compared to the previous year – 73 billion cigarettes. Budget revenue grew, as in July and September 2015 the excise duties were increased. In addition, in January 2015, the tax on unfiltered cigarettes was increased to the level of filtered cigarettes. Finally, the average price of a package of unfiltered cigarettes grew from UAH 6 to UAH 11, and their sales fell from 12.7 billion in 2014 to 5.8 billion in 2015. Imports of cigarettes fell last year from 6.5 billion to 4 billion.

Cigarette production in 2015 grew by 8%, to 93 billion from 86 billion. This is linked to a rise of exports to 23 billion from 18 billion and a decline in imports.

The center said that in the fourth quarter of 2015 sales of cigarettes grew to 22 billion, while in the previous three quarters it was 17 billion on average. Growth in sales was artificial provoked by price wars of tobacco corporations starting from October 2015. They aimed at not allowing growth of the excise duties in 2015.

“Despite price wars budget revenue in the fourth quarter grew to UAH 6.6 billion, while in the previous quarters they were UAH 5.2 billion,” Head of the tobacco control department of the Ukrainian Institute for Strategic Studies of the Health Ministry of Ukraine Kostiantyn Krasovsky said.

Tobacco corporations artificially increased cigarettes sales in the fourth quarter of 2015, waiting for a large rise in the excise duties from January 2016. Thus, the excise duty was paid at the rates of 2015, and cigarettes were left at warehouses and were sent to the retail chains in 2016. A temporary fall in sales of cigarettes in the first months of 2016 could be seen. If sales of cigarettes in 2016 falls to 66 billion (10% down on 2015), thanks to a rise in the excise duties budget revenue this year would be at less than UAH 28 billion.

AGRICULTURE MINISTRY PREDICTS RISE IN GRAIN EXPORTS IN 2015/16 AGRI-YEAR TO 37 MLN TONNES

KYIV. Feb 11 (Interfax-Ukraine) – The Agricultural Policy and Food Ministry of Ukraine predicts that grain exports in 2015/16 agricultural year (July-June) will expand to 37 million tonnes.

“With the revision of figures we do not see 36 million tonnes, but 37 million tonnes [for exports],” Agricultural Policy and Food Minister of Ukraine Oleksiy Pavlenko said in Kyiv on Wednesday.

He said that it is planned to export 15 million tonnes of grain in the next five months, while since the beginning of the agricultural year 22 million tonnes of grain has been exported.

Earlier it was reported, referring to the Ukrainian Grain Association (UGA) that since early 2015/16 agri-year as of February 3, 2016, Ukraine exported 23.85 million tonnes of grain, including 11.066 million tonnes of wheat, 3.94 million tonnes of barley and 8.691 million tonnes of corn. UGA President Volodymyr Klymenko said that in general exports of grain and flour reached 24.092 million tonnes.

TURBOATOM’S PORTFOLIO OF ORDERS FOR 2016 INCLUDES ONLY EXPORT CONTRACTS – CEO

KYIV. Feb 11 (Interfax-Ukraine) – PJSC Turboatom, the largest Ukrainian producer of turbine equipment, 75% of whose shares belong to the state, currently has a portfolio of orders for the current year, however it is formed at the expense of export orders, while there are no orders from Ukrainian companies, Plant CEO Viktor Subotin has said.

“Against the backdrop of the overall difficult situation in Ukraine, energy machinery manufacturers, of course, have fewer orders this year than two or three years ago. But our main problem is that, for example, in total sales in 2015 only 26% were deliveries in Ukraine. And if last year there was one order – the delivery of a condenser to Yuzhnoukrainsk nuclear power plant, then this year there are no domestic orders at all. Ihor Bilous [the head of the State Property Fund] meant this,” Subotin said, commenting on Bilous’ statement about absence of orders at Turboatom in an interview with the Ukrainska Pravda edition.

Subotin noted that he appealed to the SPF head with the request to assist in obtaining orders from Ukrainian companies.

INFRASTRUCTURE MINISTRY TO CREATE UKRAINIAN ROADS GEOINFORMATION SYSTEM THANKS TO EU FINANCIAL AID

KYIV. Feb 11 (Interfax-Ukraine) – The Infrastructure Ministry of Ukraine will create a Ukrainian roads geoinformation system thanks to funds received as part of the technical assistance from the European Union (EU), the director of the road market and transportation strategic development of the ministry, Roman Khmil wrote on his Facebook page.

“We’ve received financing for the creation of the Ukrainian roads geoinformation system. We want to create an integrated system that would be useful both for road workers, sector managers and the public,” he said.

Khmil said that earlier similar projects were created by volunteers, although they had restricted opportunities.

“The next step is designing of technical specifications that would describe the requirements to the system. Then we put it for the open and transparent tender,” Khmil wrote.

The ministry’s press service told Interfax-Ukraine that the EU technical assistance for the projects in the transport area will reach UAH 294 million, and some of the funds will be sent to the creation of the geoinformation system.

POLSA PRESIDENT: POLAND INVESTED IN JOINT PROMOTION OF UKRAINIAN ROCKET SOLUTIONS TO EU MARKET

KYIV. Feb 11 (Interfax-Ukraine) – Ukraine has state-of-the-art rocket technologies, and Poland shows a serious interest to cooperation in their joint gradual promotion to the EU market, President of the Polish Space Agency (POLSA) Marek Banaszkiewicz has told Interfax-Ukraine.

“I think that there is a very large potential for promotion of rocket technologies that are well developed in Ukraine to the EU space market. This would be not an easy task: as you know, there is a mature market in Europe with companies that define the competitive positioning on the market,” he said after a first meeting of the ad hoc working group for space of the Ukrainian-Polish interagency commission for economic cooperation held in Kyiv and Dnipropetrovsk on February 8-10.

Banaszkiewicz said that today Ukraine “has access to the market that operates and develops on the verge of competition and cooperation and could take part in the competitive fight on it.”

“I think that first there is sense to develop cooperation in the area that are open for partnership,” he said, adding that one of the projects where Ukrainian rocket technologies could be of great demand is the Ariane 6 new-generation launcher program being implemented in the EU.

Among promising areas for bilateral partnership is the creation of new rockets, Banaszkiewicz said. One of the projects could be the project on the creation of a new European light launcher proposed for joint realization by the Polish Aviation Institute and Pivdenne Design Bureau (Dnipropetrovsk).

“No European country has offered the similar product to the market,” he added.

He said that one should not forget about possibilities of developing cooperation in the satellite area and creation of the Earth remote sensing systems.

“We should think of additional options for cooperation as part of the operation of our working group at the intergovernmental commission and move step by step,” he said.

Banaszkiewicz said that at present, the Polish government shows the interest to the development of space solutions, and first solutions in the interests of the security and defense sector as part of the future development of Polish industry.

Assessing the investment attractiveness of Pivdenne Design Bureau and Pivdenmash state enterprise that are being prepared for reformation, he expressed confidence that the two enterprises are interesting for investors.

The POLSA head said that these enterprises have a large number of skilled specialists.

“This is an excellent base for competitive fight with Arianespace,” he said.

UKRAINIAN MARKET REMAINS IMPORTANT FOR INDIAN PHARMACEUTICAL MANUFACTURERS

KYIV. Feb 10 (Interfax-Ukraine) – The Ukrainian pharmaceutical market remains important and promising for Indian pharmaceutical companies, Head of the Indian delegation of the Ukrainian-Indian working group for healthcare and pharmaceutical market and Deputy Minister of Chemicals and Fertilizers of India Sudhansh Pant.

“Ukraine is a very important market for Indian pharmaceutical companies. It was and remains important and promising, despite the fact that in recent years the decline in goods turnover in the U.S. dollars was seen. Nevertheless, we’re working on returning the indicators of the goods turnover to the level we saw several years ago and increased them,” he told Interfax-Ukraine, commenting on the results of the second meeting of the Ukrainian-Indian working group held in January 2016 in Kyiv.

Pant said that the change of currency exchange rates resulted in growth of goods turnover between India and Ukraine in the hryvnia equivalent.

“We should say that goods turnover in hryvnias have an upward trend,” he said.

Pant also said that the meeting of the Ukrainian-Indian working group in January 2016 was the second meeting and the first meeting was held in 2013 in India.

“In general, there is a good opportunity to discuss all urgent issued appeared during cooperation at these meetings. During discussion one can see progress in achieving the goals set, clear up the positions of the sides to support development,” he said.

He also pointed at possibilities of implementing projects to localize production of medicines at facilities of Ukrainian pharmaceutical manufacturers and organize production by Indian pharmaceutical companies in Ukraine.

“Taking into account the potential of the Ukrainian pharmaceutical market, expectations from localization of production facilities are very positive. We will welcome projects on entering the Ukrainian market by Indian pharmaceutical companies to organize medicine production. I hope that we will see in the near future in what form it will happen and what contribution of Ukraine will be. In general, we see an upward trend both for the Ukrainian market and investment of Indian companies,” Pant said.

He also mentioned the fruitful work of the Indian Pharmaceutical Manufacturers’ Association in Ukraine (IPMA).

“At a meeting with representatives of the companies that are part of the IPMA the head of the IPMA association raised several problems that representative of Indian companies have to face in Ukraine, in particular, exports of medicines from India to Ukraine. We’ve discussed the issues and formed the position of India at the meeting of the working group. Some of the issuers were announced by India,” he said.

Pant said that India received a positive reaction from Ukraine.

He said that in general India positively assesses the negotiations.