Business news from Ukraine

NOVA POSHTA OPENS FIRST PHASE OF PARCEL SORTING CENTER

Nova Poshta, a leader in express delivery in Ukraine, has opened a first phase of the new parcel sorting center – Kyiv Innovative Terminal (KIT) in Zhuliany district of Kyiv City.
Co-founder of Nova Poshta Volodymyr Popereshniuk said on Friday, March 2, that the terminal can service over 350,000 parcels a day.
The first phase of the center can process only parcels and small parcels (envelops).
The center services the right bank area of Kyiv City and Kyiv region.
Vanderlande supplied sorting equipment. The capacity of the equipment is 8,500 bar-codes per hour (over 200,000 bar-codes a day).
Five faces of parcels are scanned with the speed of 2.3 parcels per second.
Popereshniuk said that in the future it is required to scan all six faces of the parcels for cutting the scanning time.
Another co-founder of Nova Poshta Viacheslav Klymov said that investment in construction of the first phase of the KIT terminal amounted to EUR 15 million. The half of the money is own funds from reinvested profit and the rest are borrowed funds.
“Ukrainian banks helped us a lot. This is a first large loan, as we have been developing for 17 years using own funds,” he said.
Popereshniuk said that the first phase is 80% of the readiness of the entire center, and it is likely that $5-10 million will be required to finish the project.
The KIT terminal was built in 2015-2017. Art Bud Service LLC acted as general contractor. The total area for construction is 23,900 square meters. The area of the first phase is 14,800 square meters.
The center processes over 400 trucks a day. A total of 750 employees will work there in four shifts.

STATE-OWNED ENTERPRISE PIVDENNE DESIGN BUREAU SEES 40% RISE IN VOLUME OF COMPLETED WORK IN 2017

State-owned enterprise (SOE) Pivdenne (Yuzhnoye) Design Bureau (Dnipro) increased the volume of completed work by 43.3% in 2017, reaching UAH 2.417 billion.
According to a report posted on the bureau’s website, sales grew by 21.8% in 2017, to UAH 1.096 billion.
The share of export of total sales was 82%. Exports grew by 19.6% in 2017, to UAH 1.612 billion.
The enterprise said that last year the financing of the bureau under contracts signed grew by 4.9%, to UAH 1.933 billion, and the financing under contracts signed with foreign companies rose by 5.3%, to UAH 1.663 billion.
In 2017, the volume of works ordered by the bureau from component industries under cooperation inside Ukraine totaled UAH 939.8 million, which is 13.6% less than in 2016.
Pivdenne Design Bureau is a leading enterprise of the Ukrainian aerospace industry with advanced space technologies. A major part of its products and services is supplied abroad, including the EU countries and the United States.

SPACECOM FROM ISRAEL IN TALKS WITH UKRAINE’S SPACE AGENCY ON CREATING UKRAINIAN SATELLITE SYSTEM

Israel’s Spacecom, a leading world operator of AMOS communications satellite made by Israel Aerospace Industries (IAI), has held talks in Kyiv with the head of the State Space Agency of Ukraine (SSAU) on creating a Ukrainian national satellite communications system (UNSCS). According to an announcement on SSAU’s website, the talks on the status of the UNSCS project were held between SSAU head Pavlo Dehtiarenko and CEO of Spacecom CEO David Pollack in Kyiv at the end of February.
“Israeli representatives expressed interest in a successful launch into orbit of the [Ukrainian] Lybid satellite and activating it with the aim of using it jointly,” the press service said.
During the meeting the positive experience of cooperation between Spacecom and the state-owned Ukrkosmos enterprise was noted, namely the rent of the AMOS 7 satellite under the Strana TV project, the press release said.
As earlier reported, the creation of UNSCS in cooperation with Canada and Russia foresaw the creation and launch of the Lybid satellite, which would operate at a geostationary orbit beaming in three directions: European-Ukrainian, Western-African and Indian, capable of transmitting up to 900 television stations.
The satellite was created under a contract signed by SSAU and Canada’s MacDonald, Dettwiler and Associates (MDA) in December 2009. A loan worth $254.6 million was raised from Export Development Canada (EDC) against government guarantees to build the satellite on the Express 1000NT platform, developed by Russia’s Information Satellite Systems – Reshetnev Company. Since summer 2014, the satellite has been in safe custody at the Russian developer, as was instructed by the Canadian general contractor.
The implementation of the project was under a threat of a failure due to the annexation of Crimea and the loss of land infrastructure involved in the project by Ukraine. Taking additional financial liabilities, Ukraine has overcome force majeure: in 2014-2015 a new spacecraft control center was built on Ukraine’s mainland.
Ukraine’s government in October 2017 supported SSAU’s proposal for additional financing of the project in the amount of $17 million, taking into account increased costs. SSAU in November announced plans to use the satellite in the second half of 2018. The satellite will be launched from the Baikonur Cosmodrome using a Zenith-3SLBF carrier rocket. The project was jeopardized by the bankruptcy in 2017 of Diamantbank (Kyiv), one of the clients and creditors of Ukrkosmos, which ordered the satellite.

VOLUME OF INDUSTRIAL PRODUCTS SOLD IN UKRAINE 28.1% UP IN JANUARY 2018

The volume of sold industrial products (goods, services) in January 2018 stood at UAH 204.197 billion, which is 28.1% more than in January 2017, in particular the volume sold abroad was worth UAH 59.119 billion (an increase of 48.1%), the State Statistics Service has reported. According to the agency, in January 2018 compared to January 2017 the index of turnover of sold production in mining and quarrying grew by 7.7%, in processing industry by 33.8%.
In the total volume of sales, the largest share accounted for the supply of electricity, gas, steam and air conditioning (25.7%), metallurgical production (18.9%), production of food, beverages and tobacco goods (17.7%), and mining and quarrying (14.2%).
As reported, in 2017 industrial products (goods, services) worth UAH 2.153 trillion were sold, which is 21.9% more than in 2016.

ADOPTION OF LAW ON CURRENCY WILL FACILITATE INFLOW OF INVESTMENT TO UKRAINE

The adoption of the draft law on currency developed by the National Bank of Ukraine (NBU) will facilitate the inflow of foreign direct investment (FDI) into the country, Oleh Churiy, the deputy head of the central bank, has said.
“We believe that the adoption of this law will certainly promote such an inflow, since we will first of all bring our legislation in correspondence with European standards, it will fully comply with these principles and this will indicate that we are finally moving towards free capital movement, removing many restrictions that are currently ineffective and inhibit the inflow of foreign investments. I think this will be a very positive factor in terms of inflow of not only foreign investments but also from the point of view of even domestic investments,” he said at a press conference in Kyiv.
Churiy also said that the entry into force of the law on currency would not affect the situation in the market.
“Regarding its influence on the balance of payments: we have our simultaneous process – it is currency liberalization. Of course, this should not affect the market situation, since when we lift restrictions, we will also be guided by our plan for currency liberalization. At the same time, if the law is passed, we will be able to immediately remove the norms that affect the business climate. That is, after the adoption of this law, I think the situation will improve much in terms of effectiveness of currency legislation on the one hand and, on the other hand, there will not be any negative impact on the market situation,” he said.

UKRAINE’S AEROSPACE SECTOR HAS 26% RISE IN PRODUCTION

Enterprises of the aerospace sector in Ukraine increased production by 26.3% in 2017, to UAH 4.6 billion.
Sales last year grew by 24% and export – by 8.1%, according to a report of the head of the State Space Agency of Ukraine (SSAU) for 2017 posted on the agency’s website.
According to the report, in 2017, the sector enterprises produced and sold products for over UAH 4.6 billion. Total volume of gross products was over UAH 5.4 billion.
SSAU currently manages 26 enterprises and organizations of the aerospace industry.
The national budget for 2017 announced UAH 2.91 billion of financing the aerospace industry, or 14.2% less than in 2016. In the total amount of financing, 61.5% of the funds from the national budget’s general fund are envisaged for paying on debt obligations on previously attracted loans for the implementation of international industry projects.