Ukraine may benefit from the restructuring of supply chains that will follow the crisis, said regional economist at the European Bank for Reconstruction and Development (EBRD) and former head of the Central Bank of Macedonia Dimitar Bogov.
“Ukraine, with its geographical proximity to Western Europe and the size that can have economies of scale, has every opportunity to capitalize on such a post-crisis development. This crisis will also provide additional impetus to the information and communication technology, e-commerce and delivery services industries while challenging the business models of retail, real estate services and the sharing economy,” Bogov in an interview with Interfax-Ukraine.
In his opinion, this is one of the economic opportunities that will arise in response to the Covid-19 crisis in the long run.
“The crisis can lead to a more thorough study of supply chains with an emphasis on sustainability and diversification. In many sectors, one economy, often China, is now the dominant global supplier,” he said.
In some of these sectors, the economies of the EBRD regions already have comparative advantages and large export volumes, which could lead to further expansion of their exports, he added.
The metallurgical enterprises of Ukraine in 2020, according to the updated forecast, will reduce steel production by 4.1%, to 20 million tonnes compared to actual production in 2019 in the amount of 20.848 million tonnes, and by 7% compared to the original forecast, when steelmaking in the country was predicted this year in the amount of 21.5 million tonnes.
According to the updated balance sheet for the formation and consumption of scrap metal in Ukraine for 2020, published by the Ukrainian Association of Secondary Metals (UAVtormet), 2.7 million tonnes of scrap metal will be required to produce 20 million tonnes of steel at Ukrainian metal enterprises (a decrease of 10.3% compared to 2019, when 3.011 million tonnes of imported scrap metal was delivered).
In addition, it is forecasted that export of scrap metal from Ukraine this year will amount to 50,000 tonnes, while in 2019 it amounted to 40,900 tonnes (an increase of 22.2%). At the same time, scrap import in 2020 will also amount to 50,000 tonnes.
At the same time, according to the balance sheet, scrap metal procurement in 2020 should decrease by 18.2% compared to 2019, to 2.750 million tonnes.
It is also stated that in January-April 2020, Ukraine reduced steel production by 9.5% compared to the same period last year, to 6.731 million tonnes. During this period, 901,100 tonnes of scrap metal was delivered to the country’s metal enterprises (a decrease of 8.7% compared to the four months of 2019). Exports of scrap metal from Ukraine in the four months decreased by 59.1%, to 11,600 tonnes, imports by 74.6%, to 5,700 tonnes. Scrap metal procurement for this period fell by 10.2%, to 958,300 tonnes.
Gallusman, one of Ovostar Union companies, plans to begin the construction of an egg production complex in Latvia in partnership with the energy company ADVEN in 2021, the project is currently at the stage of assessing potential environmental impacts. According to Ovostar, it is expected that the new production complex will export up to 90% of its products. Another Latvian subsidiary of Ovostar, Ovostar Europe, which since 2015 has been cooperating with the group’s trading partners in the EU countries, will be engaged in export sales. The goal of Ovostar is to enter new markets in Europe and the Middle East.
“Today, the project is at the stage of assessing the potential impact of the new production on the environment. The examination should be completed before the end of this year, and the start of construction work is scheduled for 2021,” the company noted.
It is projected to bring about EUR 100 million investment and 200 new jobs to the Latvian economy.
Ovostar reported that Gallusman and ADVEN had already signed a letter of intent. The partnership of the companies is aimed at finding the best energy and infrastructure solutions for the egg production complex to achieve non-waste production.
“Upon completion of the project, Gallusman will become a leader in the poultry industry and animal feed trade in Latvia, as well as the largest producer of eggs and egg products in Northern Europe,” Ovostar said.
Gallusman is part of the Ovostar Union group. Ovostar Union, one of the leading Ukrainian agricultural holdings, is one of the largest egg producers in Europe. The business model of the company is built on the principle of a full production cycle.
BUILD, EGG, LATVIA, OVOSTAR, PRODUCTION
The reserves of natural gas in underground gas storage facilities (UGS) of Ukraine as of May 10, 2020 amounted to 17.032 billion cubic meters (bcm), according to recent data from JSC Ukrtransgaz.
According to the calculations of the Interfax-Ukraine agency, this volume exceeds the inventory indicator for the same date in 2015-2019 by 1.7-2 times (by 7-8.5 billion cubic meters).
According to Ukrtransgaz, as of May 1, 2020 non-residents stored 1.173 billion cubic meters of gas in the “customs warehouse” mode in the underground gas storage facilities, while residents some 1.197 billion cubic meters.
In particular, today companies from Austria, Germany, Poland, Slovakia, the United States, France, Switzerland and Estonia use the services of UGS facilities in Ukraine.
At the same time, over the four months of this year, the share of foreign traders is a quarter of the total volume of gas pumped into the storage facilities (551 million cubic meters out of 2.318 billion cubic meters).
Ukraine counts on $10 billion of financial support from various financial institutions in 2020, said Prime Minister of Ukraine Denys Shmyhal. “All these funds … Their volume this year exceeds $10 billion of financial support from various financial institutions, international financial organizations – the IMF, European bodies, the EU and partner countries,” he said during an hour of questions to the government in parliament on Wednesday.
At the same time, Shmyhal noted that most often the allocation of finance depends on the agreement of Ukraine with the International Monetary Fund.
“Therefore, it is very important that we move forward and receive these funds, so that next year we will have a 7% increase without rolling into the abyss and being not able to get out of it for another ten years,” added Shmyhal.
Citibank’s (Kyiv) net profit for January-March 2020 amounted to UAH 411.59 million, which is UAH 1.9 million or 0.5% more than for the same period in 2019 (UAH 409.66 million), according to the quarterly statements of the bank. According to the report on the bank’s website, its net interest income for the first quarter amounted to UAH 501.8 million, which is 5.1% more than for the first quarter of last year.
The bank’s assets for the reporting period increased by 0.9%, to UAH 31.68 billion, in particular NBU deposit certificates by 13.2%, to UAH 14.5 billion, and loans to customers decreased by 23.5%, to UAH 4.2 billion.
Liabilities rose by UAH 26.8 million or by 0.1%, to UAH 28.18 billion, in particular customer deposits by UAH 45.4 million or by 0.16%, to UAH 27.7 billion.
Net worth increased by UAH 248.9 million, or 1.14%, to UAH 3.5 billion. Charter capital remained at the level of UAH 200 million.
Citibank, founded in 1998, is a subsidiary of the American Citibank NA.
According to the National Bank of Ukraine, by January 1, 2020 Citibank ranked 13th among 75 banks operating in the country in terms of total assets (UAH 31.457 billion).
