Business news from Ukraine

FOZZY GROUP INVESTS EUR5.2 MLN IN VEHICLES RENEWAL

Fozzy Group retailer has purchased the first batch of 40 Mercedes-Benz trucks for a total value of EUR5.2 million under a contract with OTP Leasing (both based in Kyiv) to finance the renewal of the truck fleet.
“Today we are upgrading our vehicle fleet with 40 new Mercedes-Benz trucks that will be used to transport products to Silpo, Le Silpo, Fora, Fozzy, Cash & Carry, Thrash! stores throughout Ukraine. The total cost of the trucks was EUR5.2 million,” the Fozzy Group logistics director said.
According to him, the company plans in 2018 to continue updating the fleet and increase warehouse space.
“We have a plan to change the entire vehicle fleet of Fozzy Group, which now consists of 579 trucks. And we plan to update part of the fleet by the end of the year. In addition, we plan to expand warehouse space in the regions by 30,000 square meters,” he added.
According to the director of logistics, the logistics structure of Fozzy Group as of February 2018 includes six warehouses with a total area of about 160,000 square meters in Kyiv, Odesa, Zaporizhia, and Kharkiv. These warehouses cover the retailer’s logistics needs by more than 95%.
The expert also noted the improvement of the situation with warehouse space in Ukraine. According to his forecasts, the quality supply of logistics real estate in the coming years will grow.
According to OTP Leasing, Fozzy Group plans to replace about 150 vehicles in 2018.

UKRAINE EXPORTS 250,000 TONNES OF SUGAR SINCE START OF 2017/2018 MARKETING YEAR

Sugar exports from Ukraine in September-January of the 2017/2018 marketing year (MY) amounted to 250,060 tonnes, the National Association of Sugar Producers Ukrtsukor has reported.
“Over the same period last year some 409,700 tonnes of sugar were exported. As we see, the current figure is almost twice lower. This is due to the unfavorable situation in the world market and a certain surplus due to sugar overproduction in India and Brazil,” reads a press release of the association.
The association noted in order to minimize the risks that occur when three is a surplus, it is necessary to diversify production, both in the key of by-products and through increasing the added value of sugar. For example, it is possible to switch to production of biofuel or granulated beet pulp, sell molasses. Another option is production of sugar in small packages, which is in demand in a number of countries.
“Such a “bioethanol scheme” is not new and works in many countries. Brazil, the world’s leader of the sugar market, is a bright example. When the situation with prices in the sugar market becomes critical – sugar refineries process most of the cane into bioethanol, thus reducing the supply of sugar. This action, in turn, influences prices, forming a greater profitability of sugar production,” head of the association analytical department Ruslana Butylo said.
At the same time, in January 2018 manufacturers exported 76,400 tonnes of sugar, which is 64% more than in the previous month. The main deliveries were made to Turkey (25%), Uzbekistan (23%), and Libya (15%).

UKRAINIAN INSURANCE GROUP GETS PREMIUM COLLECTION BY 10% IN 2017

Ukrainian Insurance Group in 2017 collected insurance premiums worth UAH 817.27 million, which is 9.56% more than a year earlier, according to the website of the insurer.
It is also noted that in January 2018 the company increased premium collection by 20%, to UAH 66.07 million.
As reported, the company in 2017 settled more than 90,100 insurance cases, which amounted to UAH 385.141 million of insurance claim fee payments, which is 19.9% more than the year before.
Ukrainian Insurance Group has been operating in the Ukrainian market of conventional insurance since 2000. Since 2008 it has been a part of Vienna Insurance Group (Austria).

EUROPEAN TRAVEL INSURANCE POSTS 31% RISE IN NUMBER OF INSURED TOURISTS IN 2017

European Travel Insurance (ERV, Kyiv) in 2017 increased the number of insured tourists by 31.27% compared to 2016, to 749,100 tourists traveling abroad and 86,600 tourists traveling in Ukraine.
According to a press release of the insurer, the number of tourists traveling abroad increased by 30.1%, traveling in Ukraine by 42.53%.
The most popular destinations in 2017 were Turkey, Egypt, Bulgaria, Cyprus, Spain, Greece, the United Arab Emirates, and Thailand.
During the year the company registered 10,617 insurance events for the amount of UAH 56.658 million with tourists abroad and 73 insurance events for UAH 143,000 in Ukraine. In total, in 2017 some 116 large insurance cases worth more than EUR2,000 were recorded, and the total amount of payments on them exceeded UAH 18 million.
The number of declared insurance events with tourists in 2017 rose by 31% compared to 2016. The largest number of applications came from Turkey (47% or 4,997 cases), followed by Egypt (21% or 2,252 cases).
European Travel Insurance was founded in 2006. It occupies one of the leading positions in the market of tourist insurance in Ukraine.
The charter capital of the insurer is UAH 9.473 million.

ITALIAN INTESA SANPAOLO CAPITALIZES PRAVEX-BANK FOR UAH 1.109 BLN

The international financial group Intesa Sanpaolo S.p.A. (Turin, Italy) has capitalized Pravex-Bank (Kyiv) for UAH 1.109 billion, according to the bank’s website.
“The only shareholder of Pravex-Bank, Intesa Sanpaolo S.p.A., in accordance with the decision of November 27, 2017 acquired the additionally issued shares of Pravex-Bank for a total of UAH 1.109 billion. Changes in the charter of Pravex-Bank to increase charter capital and other legal procedures will be completed by the end of the second quarter of 2018. Thus, the bank’s capital increased by 25% compared to the beginning of 2017 and as of February 1, 2018 amounted to UAH 5.580 billion,” the report said.
Chairman of the board of Pravex-Bank Taras Kyrychenko said capital increase was not caused by regulatory requirements.
“The increase in capital was not due to regulatory requirements to capital or liquidity, the bank’s capital adequacy and liquidity indicators are several times higher than the economic standards for the banks established by the NBU and European norms,” the banker said.

UKRAINIAN BANKS INTERESTED IN SECURITIES INVESTMENTS OF FOREIGN ISSUERS

The National Depository of Ukraine (NDU) has said that there is a real interest of market players to investment in securities of foreign issuers after the relaxation of admission of these securities to the Ukrainian stock market.
“Decision of the National Commission for Securities and the Stock Market amending the resolution on admission of securities of foreign issuers to Ukraine that took effect on February 6, 2018 has aroused a real interest of professional market players: there are a dozen of interested entities, most of them are banks,” the press service of the NDU told Interfax-Ukraine.
The NDU recalled that this decision significantly relaxes the procedure for admission of foreign securities to the Ukrainian market. In particular, henceforth an application requesting the National Commission for Securities and the Stock Market to admit these securities can be submitted not only by their issuer, but also by the Central Depository under applications of interested investors. In addition, the form of the application has been simplified. Restrictions on the number of securities that can be admitted to the market have been lifted.
According to the resolution, the circulation of these securities does not necessarily have to occur on the exchange.
“This gives more freedom to buyers and sellers who can negotiate purchase and sale. Securities may be donated or handed down,” the NDU said.