Business news from Ukraine


Vienna Insurance Group (VIG) acquires 100% of the Polish insurance company Gothaer Towarzystwo Ubezpieczen (Gothaer TU), according to the website of Ukrainian Insurance Group (Kyiv), which is part of VIG.
The contract of purchase and sale for the acquisition of this subsidiary of the German company Gothaer Finanzholding AG was signed on June 6, 2018. The purchase must be approved by the local authorities.
The Polish insurance subsidiary Gothaer Group is based in Warsaw. It works in the non-life insurance segment, and mainly through intermediaries and agents. Gothaer TU has six branches and an extensive network of agents. In 2017 the company formed a premium volume of about EUR 150 million. Gothaer TU serves more than 632,000 customers and manages about 2 million insurance policies. Currently the company has 530 employees.
Vienna Insurance Group is the leading insurance group in Austria, as well as central and eastern Europe. The group includes 50 companies in 25 countries.


The Bogdan Corporation has hanlded five 12-meter bodies for electric buses to France’s Bluebus environment-friendly transport manufacturer under a contract signed this spring.
The press service of Bogdan Motors reported on Wednesday that the bus bodies were shipped in the approved terms. The customer expressed its interest in further cooperation.
“This contract confirms the competitiveness of the domestic automotive industry in the EU market. Our enterprises are ahead of European products by their cost and, most importantly, they do not concede them in quality. With the government support, Ukrainian plants will be able to strengthen their positions and find new customers in Europe,” the press service reported, citing Director of Automobile Assembly Plant No. 1 of Bogdan Motors (Lutsk) Dmytro Pysany.
The press service said that the plant in Lutsk designs and produces electric transport since 2008, which can become the basis for expanding cooperation between the Ukrainian plant and the French customer. The corporation recalled that this year the Lutsk plant intends to develop and produce at least 15 electric special trucks for EU cities under the contract concluded with Denmark’s BankeElectromotive. In the case of successful pilot operation, mass production of trucks for Western Europe will begin this year.

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The European Bank for Reconstruction and Development (EBRD) could provide a senior secured long-term loan of up to $20 million to finance working capital of Astarta agricultural holding. According to a report on the bank’s website, the decision could be made on June 18.
The project will support the company in development and implementation of cooperation with local universities and schools, contributing to improved access to training and employment opportunities for young people.
In addition, the project is expected to contribute to significant efficiency and productivity gains through introduction of modern IT solutions and farming techniques as well as to support development of stronger backward linkages to local suppliers.
The total cost of the project is $242 million.
As reported, the EBRD in October 2017 provided a $25 million loan for seven years to build and buy sugar and grain storage facilities.
Astarta is a vertically integrated agro-industrial holding operating in Poltava, Vinnytsia, Khmelnytsky, Ternopil, Zhytomyr, Chernihiv, Cherkasy and Kharkiv regions.

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The Cabinet of Ministers of Ukraine has set up the Council for Trade and Sustainable Development, which will be headed by Deputy Economic Development and Trade Minister and Ukraine’s Trade Representative Natalia Mykolska, the Economic Development and Trade Ministry has reported on its website. The government made the decision on Wednesday.
“The Council’s task is to organize the work of the advisory group on trade and sustainable development in accordance with the provisions of the EU-Ukraine Association Agreement on the support of civil society, trade and development,” the report says.
The council will include representatives of government bodies and civil society.

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European Protein Ukraine LLC has built a plant for production of high-protein supplements intended for fattening animals worth about $10 million in the town of Rokytne (Kyiv region). According to the company, the capacity of the new enterprise is 6,000 tonnes of finished products per month. This allows meeting the needs of both the domestic market and the markets of Europe, the Middle East, and Asia. The construction of the plant was started about two years ago. Its official opening is scheduled for June 15, 2018.
The founders of the European Protein Ukraine LLC are Germany’s Agrolife GmbH and Danish-based Fermentationexperts AS, which at the same time owns the technology of production protected by many patents.
The company said now there are two similar plants in the world.
Fermentationexperts AS is a manufacturer of fermented animal feed. The company’s headquarters is in Denmark. Currently it has manufacturing facilities in the United States, Ukraine, and Denmark.
Agrolife GmbH is a supplier of oilseeds, grains and feed additives for livestock in the markets of Germany, the EU, and Ukraine.

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Banks providing housing mortgage loans expect that during the year average monthly mortgage volumes would grow by 10%, according to a poll of the National Bank of Ukraine (NBU) published in the fifth financial stability report. “Banks-respondents expect further growth in volumes of housing mortgage loans. Thirteen banks [out of 24 polled] predicted that in next 12 months average volumes of mortgage loans would grow by over 10%. Five more banks expected growth less than 10%. Six banks projected the unchanged volumes of new loans,” the NBU said in the report.
At the same time, the NBU said that the existing volumes of mortgages cannot affect the residential real estate market. The volume of lending in the first quarter of 2018 increased 3.9-fold and amounted to UAH 565 million. However, issuing less than 3,000 loans a year cannot affect the market: only in Kyiv on the secondary housing market annually more than 30,000 purchase and sale contracts are signed.
According to the poll, in 2017 and in the first quarter of 2018, the purchase of housing in the secondary market was dominated by the number of contracts and the volume of lending. At the same time, the volumes and number of loans issued under the partnership programs of banks with developers are gradually increasing.
According to banks, the main obstacle to the resumption of housing mortgages is the deficit of solvent borrowers with officially confirmed incomes. Thus, in the first quarter of 2018, the average debt service-to-income (DSTI) was 45%, which is 3 percentage points less than a year earlier. At the same time, 18% of the volume of loans granted is accounted for by borrowers who will spend more than 70% of their income on debt servicing. The NBU said that the circle of mortgage creditors remains limited.