Business news from Ukraine

AURUM GROUP PLANS TO INVEST IN WAGON BUILDING AND AGRICULTURE

The Aurum Group, a multi-profile industrial and investment group, plans to invest in development of some sectors to increase its competitiveness, in particular, some UAH 100 million in development of wagon building and some UAH 50 million in agricultural business, the group has said in a press release. “According to the long-term development strategy of Aurum Group, this year we plan to invest about UAH 100 million in the development of the private rolling stock of the country in order to minimize the existing acute shortage of gondola cars and grain carriers,” the group’s founder Alona Lebedieva said in a press release.
According to her, the funds will be used to build new railway freight cars on the basis of the Diesel Plant LLC, which is part of the group, which will later be transferred to the management of the leasing company of the group – Trans Energy LLC.
According to the press release, UAH 30 million has already been allocated for technical re-equipment of the foundry, thanks to which an automatic molding line has been bought and ready for installation. It uses the method of cold-hardening mixtures produced by Omega Foundry Machinery (Great Britain).
“The modernization of the foundry production of the group will allow, with a reduction in the cost of production, to make high-precision castings with high efficiency. The line will also meet the needs of the Diesel Plant in the production of medium-carload molding, for example, parts like the front and rear stop. Later the plant plans to mold more railway products,” Lebedieva said.
She also announced the intention to more actively develop a new agricultural division for the group this year, where it is planned to invest about UAH 50 million. In particular, it is planned to build the entire production chain – from planting, storing and processing agricultural products.
Lebedieva said that if before 2018 Aurum Group planted only grain and a number of niche crops (flax, mustard, millet), then taking into account the market situation and, according to the group’s development strategy, this year efforts will focus on the creation of a product with high added value.
In addition, according to the founder of the group, transactions to invest in domestic IT projects, details of which have not yet been disclosed, are at the stage of completion. “Ukrainian IT specialists are in great need of additional financing, and we plan to invest in several projects like this in 2018. I would be happy if our participation will contribute to the fact that these talented guys will remain in the country,” the founder of Aurum Group said.

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MARKET PRICE OF UKRAINIAN BARLEY BREAKS RECORD

As of 4 April, the cost of Ukrainian barley on the terms of FOB deepwater ports of Ukraine increased to $208-218 per MT that is 27% higher than the price level for the same period last year, the Ukrainian Agribusiness Club association (UCAB) has reported. The association said on its website that such a price for domestic grain crop is a record since the end of 2014.
“The key factor in the steady increase in barley prices over the past few months was the unstable demand from Saudi Arabia, which is the key importer of this grain in the world. In 2017, Ukraine shipped 2.07 million tonnes of barley to this country, which accounted for 57% of total exports,” analyst of agricultural markets of the UCAB Ilha Kharabara said.
This year, demand from Saudi Arabia is not sustainable – tenders for the purchase are infrequent, but volumes are quite significant. At the last tender, the Saudi Grains Organization (SAGO) announced the purchase of 1 million tonnes of barley, at the previous one was purchased 0.96 million tonnes.
The tense world balance at the beginning of the marketing year supported the price increase for barley – world production fell to 142.4 million tonnes in 2017/2018, which is 3.5 million tonnes less than last year.

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APARTMENT SALES IN KYIV (40,000 APARTMENTS) EXCEED VOLUME OF COMMISSIONED BUILDINGS BY 21% IN 2017

The number of apartments sold in Kyiv in 2017 reached some 40,000, while the number of commission housing last year was 33,000 apartments, Director for LUN.UA real estate portal development Andriy Mima said at a press conference. “After holding a closed access poll among developers, when the respondents roughly announced how many facilities they sold, we estimated that about 40,000 apartments in Kyiv were sold in 2017. Some 33,000 apartments were put into operation, and 40,000 were sold. This means that there is no crisis of oversupply,” Mima said.
At the same time, according to the expert, the pace of construction in Kyiv city and region remains high.
“In Kyiv city in 2017 there were about 100 names of residential complexes, and in Kyiv region – about 150. That is, several residential complexes can be launched a month or even a week,” Mima said. According to the estimates of Marketing Analyst of City One Development Olena Shyrina, the number of investment transactions in the structure of housing sales is about 40%. “We have about 40% of deals going for the purpose of investing funds,” Shyrina said.

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COMPANIES FROM ROMANIA AND BELARUS TO CONDUCT HYDRAULIC FRACTURING AT 80 WELLS IN UKRAINE

Romania’s Tacrom and Belorusneft will conduct hydraulic fracturing at 80 wells of public joint-stock company Ukrgazvydobuvannia for UAH 486.5 million, according to the ProZorro e-procurement system. Tacrom, in particular, won a lot during a tender and conduct hydraulic fracturing at 50 wells of Ukrgazvydobuvannia for UAH 303.8 million. Belorusneft wins another lot and will conduct hydraulic fracturing at 30 well for UAH 182.725 million.
Tacrom and Belorusneft were the only rivals during the tender.
Ukrgazvydobuvannia, which is wholly owned by NSJC Naftogaz Ukrainy, is a large gas processing company, which accounts for about 75% of total gas output in the country. It operates Shebelynka gas refinery.

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UKRAINE AND MOLDOVA AGREE TO SYNCHRONIZE ENERGY SYSTEMS WITH EUROPEAN ENTSO-E

The governments of Ukraine and Moldova have signed a memorandum on the synchronization of the work of the energy systems of the two countries with the ENTSO-E energy system of Europe. According to the press service of the Cabinet of Ministers of Ukraine, the relevant agreements were reached during the meeting of Prime Ministers of Ukraine and Moldova, Volodymyr Groysman and Pavel Filip.
“The parties noted that the energy and economic component of cooperation has a significant growth potential,” the message reads.
During the talks the parties discussed a wide range of road map of cooperation and agreed on the participation of Ukrainian PM Volodymyr Groysman at the GUAM summit in Chisinau in June this year, the press service of the Cabinet said.

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NUMBER OF ELECTRIC CARS IMPORTED TO UKRAINE IN 2018 TRIPLES

The number of electric cars imported to Ukraine in the first quarter of 2018 tripled year-over-year, to 1,744 vehicles, according to a posting on the website of the State Fiscal Service. The authority said that in January 2018, some 784 passenger cars and other vehicles with electric engines were imported compared with 132 in January 2017, in February 2018, some 413 vehicles were imported (181) and in March – 537 (237).
As reported, in 2017, some 2,700 electric cars were imported to Ukraine.
In 2018, electric vehicles and other vehicles equipped exclusively with an electric motor are exempted from taxation by excise duty and value added tax (VAT) when they are transported to the customs territory of Ukraine.

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