Business news from Ukraine

STRATEGIC ADVISORS GROUP HEAD: FDI SHOULD BE ATTRACTED TO UKRAINE

One of the important priorities of reforms in Ukraine should be attraction of foreign direct investment (FDI), as their amount is not enough for provision of potential economic growth of GDP of 6-7% a year, Head of the Group of Strategic Advisors for Support of Reforms in Ukraine Ivan Miklos has said.
“One of the most important priorities should be to bring more FDI… Today, for example, direct investment as their share of gross domestic product in Ukraine is around 15%. To have this growth (6-7% a year), and this is not a theory, this is the experience other countries, the share of investment should be around 25% of GDP,” Miklos said on Channel 5 TV late on Friday, January 19.
He said that in 2017, FDI to Ukraine totaled $2 billion.
“This is too small for the Ukrainian economy… There are three main sources of investment: public finances… loans… and the most important source of investment is FDI. This is linked to the rule of law, privatization,” Miklos said.
He said that in 2017, the economic growth in Ukraine was less than 2.5% of GDP.
“This year we expect 3.5%. This means that there is some growth, but it is not enough: I think that Ukraine has a potential to have economic growth of around 6%, maybe 7%,” he said.

MOST IMPORTANT YEAR FOR UKRAINE’S-EU INTEGRATION IS 2018

Ukrainian Deputy Prime Minister for European and Euro-Atlantic Integration Ivanna Klympush-Tsintsadze has said she believes that the year 2018 is the most important year for European integration of Ukraine.
“I consider this year to be the most important year for Ukraine’s European integration. Tangible victories have already been achieved. It is hardly possible to expect a new step from the EU, like a visa-free regime – it is simply not envisaged by European policy. European integration in 2018 will be ‘quiet,’ barely visible and incomprehensible to the general public, but not less important to the future of the country,” she wrote in an article for Ukraine’s Mirror Weekly published on Saturday, January 20.
Among the tasks of Ukraine for the current year, Klympush-Tsintsadze named the approval of a government-parliamentary roadmap for the implementation of the Association Agreement.
“In addition, this year, the relevant bilateral bodies of association should approve roadmaps on harmonizing legislation in such areas as public procurement, sanitary and phytosanitary measures, financial, postal and courier services, maritime international transportation,” she added.
In addition, she said, in 2018 Ukraine has every chance of actively integrating into the EU’s digital market.
Klympush-Tsintsadze also considers it necessary to adopt a number of legislative acts on inland waterway, rail and road transport and the security of passenger transportation, as well as the transportation of dangerous goods.
“We must carry out domestic legislative work in order to join the EU Convention on a Common Transition Procedure and the Convention on the Simplification of Formalities in Trade in Goods,” the article reads.
Klympush-Tsintsadze said that important tasks for this year also included the launch of an updated system of state food safety control, the adoption of bills on labeling and information for consumers and the establishment of requirements for packaging for food.
Among other things, in her opinion, it is necessary to improve the legislation in the sphere of public health, energy efficiency, and ecology.

CONSTRUCTION OF CYCLONE-4M LAUNCH VEHICLE IN CANADA WILL BEGIN IN MAY

The construction of the Cyclone-4M launch vehicle as part of a commercial project of the space sector companies of Canada, the United States and Ukraine in the Canadian province of Nova Scotia could begin in May, CEO of Canada’s Maritime Launch Services (MLS) Steve Matier has said.
While estimating the progress of the project in an interview with Canada’s SpaceQ, Matier said that in February the company plans to complete the work on exploring the area for the spaceport in the province of Nova Scotia so that the construction of the launch complex could begin in the spring of 2018. Collected data, Matier said, will be transferred to the local Canadian authorities for granting a construction permit.
“If that goes okay and they come out of that 50-day review cycle, I mean, there are three options. Obviously there is a reject, there is an accept, there is an accept with provisos,” he said, adding that in the event of a positive decision, after the procedure for renting a land plot, construction work might begin in May.
“If everything goes okay we can hit a May 1st ground-breaking,” Matier said.
When asked about the progress of cooperation on the project with the Ukrainian side in the development of the Cyclone-4M carrier rocket, he recalled that the Cyclone-4M launch vehicle is being created on the basis of the previous Cyclone-4M project.
“This is a medium class rocket, so we’ve got on the shelf a ready to go design for handling the medium class rocket, and we’ll use a Zenit second stage proven hardy engine that’s flown 60-something times, a hundred percent successful, into the overall structure for the Cyclone-4M,” he said, adding that it is planned to begin the assembly of the Cyclone-4M launch vehicle “after we get through this design, review, and integration process.”
Speaking about the plans for the launch program of the project, Matier said: “At this point, we are looking at the summer of 2020 for a first launch. There is a great deal of work obviously we need to do to get there with a solid 18-months of site construction and another six-months of commissioning.”
“That’s why we are looking at a May 1st and what can follow from that for getting to a July 2020 launch date,” he said, adding that there are some potential customers that are interested in the first launch.
At the same time, Matier noted that the plans of the launch program depended on the Ukrainian partner – the Pivdenne (Yuzhnoye) Design Bureau (Dnipro).
“The potential from just the Yuzhnoye, Yuzhmash direction is they have a production schedule that they have shared with us that can deliver a launch vehicle every 29 days or so. So conceivably we could launch 11 to 12 rockets out of there. From investor perspective, return on investment perspective, we are extremely comfortable with making our, you know, customers and clients happy with eight launches per year,” he said.
“We have certainly seen an interest in the market out there that would be able to fill that manifest,” he added, noting that “there is a potential for other launch vehicles to join into this process, and including sub-orbital sounding rockets.”
Matier also confirmed that there was a preliminary agreement with potential customers for the project to pay about 400 million Canadian dollars for future launch services. He did not voice their names, specifying only that “there are a couple that are very close to crossing the line with respect to Canada, but the other ones are international.”
He said that the company was already completing the so-called “seed funding and bridge funding” stage of project investment.
“So it’s looking extremely positive for us from that financial perspective,” he said.
Explaining the optimism about the good prospects of the project, Matier said: “This project is a one hundred percent commercial project. That’s probably the key piece to it…. The reality is as a commercial project we are under finalizing direct contracts with Yuzhnoye and Yuzhmash as suppliers to us. This is exactly the way it is operating very well for Orbital ATK with the Antares first stage.”
He said that the Cyclone-4M launch vehicle project was considered a priority in bilateral Ukrainian-Canadian cooperation in the space sector as the legal basis for this partnership is fixed in a memorandum signed by the space agencies of the countries in Ottawa at the end of 2017.
“Some of the conversations that we’ve had dealing with some government entities do involve them potentially buying the services and, you know, getting some payload space for themselves and their missions. That is certainly the case,” Matier said.
“We have selected a construction management company for this project, and it’s Lindsay Construction, the largest construction firm in Atlantic Canada,” he said.

FIRST UKRAINIAN AGRICULTURAL COOPERATIVE TO CREATE AGRICULTURAL CLUSTERS

An agricultural cluster in Khmelnytsky region could be created on the basis of 16 enterprises of the First Ukrainian Agricultural Cooperative.
“We have 16 enterprises in Khmelnytsky region. On their basis we will make a cluster that will allow a small farmer with 200-300 hectares to have his elevator, a grain drier and an approaching road for a car. We are now facing the issue of building and investing in elevators, wagons and traction,” Executive Director of the First Ukrainian Agricultural Cooperative Oleksandr Buyukli said in an interview with Interfax-Ukraine.
According to him, only 2% of agricultural products are sold through cooperatives in Ukraine, so there is a great potential for uniting and developing cooperatives.
In December 2017, the First Ukrainian Agricultural Cooperative held a meeting with members of the cooperative, the European Bank for Reconstruction and Development (EBRD) and Rabobank.
“The First Ukrainian Agricultural Cooperative is actively cooperating with the EBRD, as they provide not only important support at the level of specialists, but also technical support for meetings and fundraising. The EBRD and Rabobank see great potential in the development of cooperatives,” the cooperative head said.
He said that the EBRD is preparing a number of projects for the cooperative to process soybeans, wheat and sunflower.
The First Ukrainian Agricultural Cooperative was founded on March 23, 2017. The cooperative includes 61 agricultural enterprises with a land bank of about 180,000 hectares in 10 regions of Ukraine.
For eight months in 2017 PUSK realized about 90 thousand tons of grain and bought about 20 thousand tons of mineral fertilizers.
In January-August 2017, the cooperative sold around 90,000 tonnes of grain and bought around 20,000 tonnes of mineral fertilizers.

MARRIOTT TO OPEN FIRST ALOFT HOTEL IN UKRAINE FOR MAY 1

Marriott International has postponed the opening of its first hotel under the Aloft brand in Ukraine from February 15 to May 1, 2018.
According to the updated information on the company’s official website, the Aloft hotel will be opened on May 1. The hotel is located at 17 Esplanadna Street in Kyiv’s Pechersky district.
As reported, it is part of the U.S. Starwood Hotels & Resorts chain, acquired by Marriott International in 2016.
There are 250 Aloft hotels across the world.
Marriott International, Inc. is a leading global lodging company with more than 6,000 properties in 122 countries and territories, reporting revenues of more than $17 billion in fiscal year 2016. Founded by J. Willard and Alice Marriott and guided by family leadership for nearly 90 years, the company is headquartered outside of Washington, D.C. in Bethesda, Maryland.

FIRST 3D LABORATORY IN UKRAINE OPENS AT KHARKIV POLYTECHNIC INSTITUTE

The first 3D laboratory in Ukraine has opened Kharkiv Polytechnic Institute to train specialists in the field of metrology and technical measurements for machine building and other industries, the institute’s press service has reported.
“Our task, the task of business is to create new jobs and enterprises so that students who graduated from the university could receive decent work in Ukraine. There should be a practical laboratory at every university. Out task for the near future is to find companies that have professional experience in a particular area and that will work with the university and create new laboratories. Students should be able to quickly introduce their theoretical knowledge into practice, even if they are mistaken,” the head of the supervisory board at Kharkiv Polytechnic Institute, Vasyl Khmelnytsky, said.
According to the report, “certification of measuring equipment for Ukrainian enterprises will be conducted at the center, and students and specialists will be able to study the work of equipment for 3D scanning and reverse modeling, as well as new 3D printers.”
According to Rector of Kharkiv Polytechnic Institute Yevhen Sokol, today graduates should be able to effectively use theoretical knowledge that they receive, and this is impossible without modern equipment.
“The state has already provided what it could provide, so today the only opportunity is business that is vitally interested in getting good and modern staff. It can support higher education at the world level. It is the combination of business and education that helps us open such laboratories, which will teach our students with the help of the most advanced equipment,” Sokol said.
The laboratory is equipped with a universal tool for three-dimensional measurements and digitization, a portable coordinate-measuring system for high-precision measurements at extremely long distances, a 3D scanner, and a 3D printer.