Business news from Ukraine

Business news from Ukraine

JAPAN TO PROVIDE UKRAINE WITH $3.6 MLN TO SUPPORT EASTERN REGIONS

Japan is to provide Ukraine with $3.6 million for humanitarian needs to support vulnerable parts of the population and restore eastern regions of the country, Japanese Ambassador to Ukraine Shigeki Sumi has said.
“Japan will provide nearly $4 million in 2018,” Sumi said on Monday during a press conference.
He said the money would be spent on radio equipment for the Interior Ministry, the rebuilding of housing, purchase of medical equipment and training for persons from eastern regions of the country.
The ambassador said most of the money would not be spent on humanitarian assistance, but would be used for the rebuilding.
The assistance will be used to finance seven projects implemented by the United Nations in Ukraine, including the International Organization for Migration, the UN Development Program, the office of the United Nations High Commissioner for Refugees, UNICEF, the UN Office for Project Services, and the World Health Organization.
Neal Walker, the UN Resident Coordinator and Humanitarian Coordinator said the help would be provided in the following areas: employment, environmental protection, potential development, and the safety of citizens.
Walker said most of the assistance would be sent to eastern Ukraine.
According to Ukraine’s Regional Development, Construction and Housing Minister Hennadiy Zubko, Japan currently helps Ukraine with the implementation of a large-scale project for the renovation of Kyiv’s Bortnychi sewage treatment plant. What is more, a mission of Japan International Cooperation Agency (JICA) is scheduled to visit Ukraine on February 21 to conduct talks on waste disposal projects in Kyiv, Dnipro and Kharkiv.

UN FOOD AND AGRI ORGANIZATION DISTRIBUTES 50 DRIP IRRIGATION SYSTEMS TO SMALL FARMERS IN UKRAINE

The UN Food and Agriculture Organization (FAO) distributed 50 drip irrigation kits to small farmers in conflict-affected Donetsk and Luhansk regions on February 16. 2018. According to a press release of FAO, the kits were distributed in the villages of Bolotene and Orlovske in Luhansk and Donetsk regions respectively. The two villages are located within eight kilometers of the contact line and both are short of water for irrigation.
Each beneficiary farmer will receive a full irrigation kit – designed for kitchen garden or orchard irrigation – complete with high-capacity water tank, drip lines, drip tapes, filters, hose and tubing, sprinklers, sprayers, and valves. Each kit is custom-made and can be utilized for a variety of crops. Water flow can be precisely controlled and deposited at the base of the plant, maximizing the water’s effects and minimizing waste.
Coordinator of FAO’s emergency response programme in Ukraine Farrukh Toirov said that drip irrigation is not just an additional means of increasing efficiency, but one of the most important components of modernizing agricultural practices. FAO experience shows that this technology can more than double the incomes during the first year of proper use, he said.
“There are about 2.8 million hectares of farming land in the Lugansk and Donetsk regions, but the irrigation infrastructure is old and often not operational,” he said.
FAO’s emergency programme in eastern Ukraine is financed by the governments of Canada and France, as well as by FAO’s own resources.

OVER A DOZEN WORLD-FAMOUS COMPANIES HAVE DESIRE TO PARTICIPATE IN UKRAINE’S GTS MANAGEMENT

Ukrainian President Petro Poroshenko has said that at the moment more than a dozen world-famous companies had expressed their desire to participate in the management of the Ukrainian gas transportation system (GTS). “Over a dozen world-famous companies have already expressed desire to participate in this process,” he told reporters in Munich.
In addition, the president noted the government has already made appropriate decisions.
“And when we define the range of companies that will be able to provide gas transit, ensure an efficient modernization of the gas transportation network and provide the most benefit to the Ukrainian state in the operation of the gas transportation system, the best company will win. I am sure that very much was done in that direction,” Poroshenko said. “A great work was carried out. Naftogaz hired a consultant who is preparing a proposal regarding the transparent management of the gas transportation system of Ukraine in full compliance with international rules,” the head of state said.

MOLDOVA’S PURCARI SEES 35% RISE IN WINE SALES IN UKRAINE

Moldova’s Purcari Wineries Public Company Limited (earlier Bostavan) saw a rise in wine sales in Ukraine in January-September 2017, to RON 3.29 million ($870,000), the company has said in a prospectus for the initial public offering (IPO) posted on its website.
According to the document, sales of more expensive wine under Purcari trademark grew by 54.2%, to RON 1.8 million.
Purcari said that these results became possible thanks to the economic recovery in Ukraine, the growing popularity of wine in the region and the increase in the share of organized retail trade.
The company said that in the reporting period Ukraine accounted for 5% of its sales in bottles and in money terms – 4%, while in 2016 – 4%.
According to the prospectus, in 2014-2016, the average annual reduction of the wine market in Ukraine was 1%, while the markets for strong alcoholic beverages and beer fell by 19.1% and 13.9%, respectively.
Purcari said that the consumption of wine in Ukraine – 4 liters per year – is way below the neighbors: Poland – 6.4 liters, Slovakia – 14.9 liters, Romania – 16.4 liters, the Czech Republic – 20.5 liters, not to mention such countries as Italy – 33 liters and France – 43 liters.
The company, citing Euromonitor data in the prospectus, expects an average annual growth of the wine market in Ukraine in 2016-2020 by 2.9% compared to the growth of the beer market by 1.1%.
Euromonitor estimated the wine market in Ukraine in 2016 a 168 million liters, or EUR600 million with a share of premium and super premium brands of 25%. The leading companies were three companies: Logos (the Inkerman brand) – 13.4%, Bayadera (Koblevo) – 12.1% and Shabo 10.2%.
Experts also said that the share of dry wines in 2016 was 54% in bottles and 40% in money, sparkling wines – 32% and 28%, fortified – 13% and 30% respectively.
Purcari said that the average annual growth of its cash sales in Ukraine in 2014-2016 was 9%, while in bottles, a decline by 11% was recorded. The company mainly relies on third-party distributors to cover the market, but it directly delivers wine to Fozzy Group, one of the largest supermarket chains in the country.
“The Group’s near-term strategy is to focus on building out the Purcari and Bostavan brands in this large, high-potential market and expanding its presence to the sparkling segment, with particular focus on the HoReCa segment, navigating a structurally changing industry following the annexation of Crimea, which accounted for circa a half of Ukraine’s vineyards,” the company said in the prospectus.

UKRAINE INTERNATIONAL AIRLINES GETS FIRST OUT OF FOUR LONG HAUL BOEING-777 PLANES

Ukraine International Airlines (UIA) on February 16, 2018 expanded its fleet with long haul widebody Boeing 777-200ER plane. The press service of the airline reported that the plane is officially registered in Ukraine as UR-GOA. UIA will operate the new plane with 361 seats of business, premium economy and economy classes on long haul flights to New York, Beijing and Bangkok.
“The aircraft is from the world’s largest leasing company, AerCap. It is equipped with a modern personal entertainment system on board made the Panasonic Corporation. In particular, monitors with a wide content menu are installed in the back of each seat: a wide selection of movies, music and computer games. Films made in Ukraine will be presented to passengers of Boeing 777 in order to popularize Ukrainian movie production. The content is available in four languages: Ukrainian, English, Chinese and Russian,” the UIA said.
Boeing 777 seats are equipped with individual sockets and USB-modules for recharging electronic mobile devices, as well as Wi-Fi equipment.
All three class cabins have a modern Sky Interior lighting system manufactured by Bruce Aerospace.
The airline said that this delivery is the first stage of the expansion program for the UIA’s long haul fleet. Three more Boeing-777s will arrive in the first and third quarters of 2018 after major maintenance, which includes testing and verification of all systems, units and assemblies. The contractor of the maintenance and final assembly of interiors is Air France-KLM Engineering & Maintenance.

87% OF WINTER CROPS IN UKRAINE IN GOOD/FAIR CONDITION

Almost 6.3 million hectares (87%) of areas planted with winter grain crops are in good and fair condition, First Deputy Minister of Agrarian Policy and Food of Ukraine Maksym Martyniuk has written on his Facebook page. According to the report, as of middle of February crops on 971,000 hectares (13%) out of 7.3 million hectares areas planted with winter crops and sprouted are in poor and very poor condition.
The deputy minister said that winter rapeseeds sprouts are seen on 99% out 1 million hectares planted with rapeseeds, including crops in good and fair condition on 884,600 hectares (89%) and crops in poor and very poor condition on 110,000 hectares (11%).
“The data is not final. The further condition of the crops will depend on the weather, but we can give a preliminary cautious forecast that the wintering was successful without significant losses,” Martyniuk wrote. He said that, according to preliminary data from the regions, the crop area for the harvest of 2018 is comparable to last year and is expected to be within 27.2 million hectares. Of these, 14.6 million hectares (54%) under grain crops, which corresponds to the standards of the optimal ratio of crops in the crop rotation.