Business news from Ukraine

UKRAINE HARVESTS 8.7 MLN TONNES OF GRAIN AS OF JULY 15

KYIV. July 15 (Interfax-Ukraine) – As of July 15 Ukraine had threshed early grain and leguminous crops on 2.8 million hectares (27% of the forecast) and harvested 8.7 million tonnes of grain, the Agricultural Policy and Food Ministry has reported.

According to its data, barley was threshed on 1.2 million hectares, and the harvest reached 3.4 million tonnes with the average yield being 29.4 centners per ha. Wheat harvest totaled 5 million tonnes from 1.5 million ha with the yield being 33.8 centners per ha.

In addition, Ukraine harvested 238,000 tonnes of peas from 114,000 ha, 516,000 tonnes of rapeseed from 240,000 ha.

As reported, with reference to data from the State Statistics Service, the grain harvest last year was 63.8 million tonnes. In 2015, under the ministry’s forecast, it is expected to reach 59-60 million tonnes.

NCER EXPANDS UKRENERGO’S 2015 INVESTMENT PROGRAM BY 45.6%

KYIV. July 15 (Interfax-Ukraine) – Ukraine’s National Commission for Energy, Housing and Utilities Services Regulation (NCER) has expanded the investment program of national energy company Ukrenergo by 45.6% or UAH 2.179 billion, to UAH 6.959 billion (VAT not included).

An Interfax-Ukraine correspondent has reported that the commission made the decision at a meeting on Tuesday.

Commission Head Dmytro Vovk said that the extension of the investment program would entail an increase in the electricity tariff for industrial consumers of within 1%, although in the medium-term outlook the tariff would be decreased thanks to work being completed.

Ukrenergo acting Director General Yuriy Kasich said that the increase of expenses in the 2015 investment program by UAH 2.179 billion is less than 35% of expenses foreseen in the draft development plan of the average annual needs of the company.

He said that the company plans to announce several tenders to buy equipment in the near future.

“Out of 36 electrical devices that are to be installed at facilities of trunk power line network, according to the proposed changes to the investment program, 19 units are new equipment to realize power line development programs [including one unit to be in reserve], eight units is the replacement of damaged equipment and nine units is the replacement of equipment in the unsatisfactory state,” he said.

Kasich said that thanks to the increase of expenses to replace equipment, Ukrenergo will be able to partially catch up with the losses of the previous years.

“The technical state of equipment of truck power lines and interstate power lines today are highly deteriorated. Around 70% of main equipment of power substations has operated for their life cycle of 25 years and requires urgent replacement. The further exploitation of equipment over their life cycle increases maintenance and repair expenses,” he said.

Ukrenergo operates mainland and inter-state power transmission lines, as well as centralized control of the national power grid. The company is state-owned and controlled by the Coal Ministry.

The National Commission for Energy, Housing and Utilities Services Regulation regulates the activity of monopoly entities in the fields of energy, heating supply, central water supply and drainage, oil and gas industries, solid waste treatment, and implements state price and tariff setting policies in these sectors.

TURBOATOM TO MODERNIZE ALL EIGHT TURBINES OF PAKS NPP IN HUNGARY BY 2019

KYIV. July 15 (Interfax-Ukraine) – Public joint-stock company (Kharkiv), Ukraine’s largest producer of turbine equipment, has signed a large contract on modernization of eight turbines of all four reactors of Paks nuclear power plant (NPP) in Hungary, the company said on its website.

Under the contract, the cost of which is not disclosed, Turboatom will implement modernization of eight turbines К-220-44 with the nameplate capacity of 220 MW. As result, the capacity and life-time of the turbines will be increased and the overhaul life will be increased from four up to six years.

Turboatom has been the core supplier of equipment for Paks NPP for over 30 years.

“We have long-time cooperation with Turboatom and we’ve decided to entrust the new modernization of turbines to the Kharkiv enterprise. This is explained by the fact that all manufacturing and design rights belong to Turboatom and under law of our country these conditions allow not carrying out a tender, but work with Kharkiv directly,” the press service said, citing Paks NPP Specialist Dula Pasti.

Chief Designer of Steam Turbines Viktor Shvetsov said that specialists have been working on this pilot project for five years.

One of its main innovations is a seven-stage, instead of existing six-stage, setting of high pressure cylinders, he said.

The equipment will be installed on the existing foundation without the change of the construction structures. Turboatom will also supervise the assembly, carry out the field supervision and participate in guarantee tests before and after reconstruction.

The term of equipment delivery is 2016-2018.

The press service said that as a part of cooperation with Paks, Turboatom signed one more contract to supply twelve rows of turbine blades for reactor two of Paks NPP. Today, four rows are under work.

The term of equipment delivery is March and June 2016.

“These contracts are very important for the enterprise. A large international contract with the long-time partner has been signed, and it opens further prospects on the European energy market,” the press service said, citing Turboatom Director General Viktor Subbotin.

Turboatom is the sole producer of turbine equipment in Ukraine for hydro, heat and nuclear power stations.

Paks NPP is the only operating NPP in Hungary. It generates over 40% of electricity in the country.

UKRAINE, CANADA COMPLETE TALKS ON FREE TRADE ZONE

KYIV. July 15 (Interfax-Ukraine) – A document on the completion of talks to create a free trade zone between Ukraine and Canada was signed during Ukrainian Prime Minister Arseniy Yatseniuk’s working visit to Ottawa, Canada, on Tuesday.

Ukraine’s Trade Representative Natalia Mykolska signed the document on behalf of the Ukrainian government, while Director General for Market Access from the Canada’s Department of Foreign Affairs and International Trade Marvin Hildebrand signed it on behalf of his country, the Cabinet press service reported.

This document opens a new page in the bilateral relations between Ukraine and Canada and it should deepen Ukrainian-Canadian cooperation, boost mutual investment, according to Yatseniuk. “We have a broad agenda, next steps should be done,” he said.

The provisions of the draft agreement on free trade between Ukraine and Canada are aimed, among other things, at deepening trade and economic cooperation, including in trade in industrial and agricultural goods, intellectual property protection, and the regulation of public procurements.

After the agreement comes into effect, Canada will provide Ukrainian exporters free access to 98% of its commodities market. Ukraine will be given a transition period prior to the liberalization of the market by lifting all import duties.

In addition, Yatseniuk said, Canada will provide technical assistance to Ukraine, “to make the Ukrainian industry competitive.”

“This will open an opportunity to enter not only the Canadian market, but also other international markets,” he said.

STATE INVESTMENT IN KHERSON AIRPORT ESTIMATED AT UAH 110 MLN – OFFICIAL

KHERSON. July 14 (Interfax-Ukraine) – Investment in the development of Kherson airport has been estimated at UAH 110 million of state funds.

Deputy Head of Kherson Regional State Administration Vadym Chaban said at a press conference on the opening of Kyiv-Kherson flights by Motor Sich Airline that the funds would be gradually used to reconstruct the apron, runway, taxiways, and other infrastructure.

In the future, it is planned to involve private investors in the development of the airport.

Head of Kherson Airlines Hryhoriy Usyk said the airport is negotiating with other airports, in particular Lviv, Kharkiv, Dnipropetrovsk, as well as Ukrainian airlines on the implementation of domestic flights to Kherson.

He added the airport is in talks on the implementation of international flights to Kherson.

As reported, Kherson airport was opened after reconstruction in April 2013.

The capacity of the airport is 400 passengers per hour.

The airfield has a 2,500 meters long and 42 meters wide artificial runway, main and auxiliary taxiways, a complex of radio facilities, flight facilities that allows the airport to accept the following types of aircraft: Boeing-737, Airbus-319/320/321, Tu-154, Tu-134, Yak-42, An-24/26/12/148, as well as helicopters of all types.

UKRAINIAN SCRAP METAL EXPORTS REACHES PEAK OVER LAST TEN YEARS – UKRPROMZOVNISHEKSPERTYZA

KYIV. July 14 (Interfax-Ukraine) – Exports of scrap ferrous metals in June this year amounted to 230,000 tonnes, which is the highest monthly value for the last ten years, according to a press release issued by state enterprise Ukrpromzovnishekspertyza.

The press release states that the last time a higher export performance per month was recorded in November 2004 (260,000 tonnes), when over the year exports came to 2.5 million tonnes.

“Such a significant rise in scrap metal supply to foreign markets in June this year was due to exporters’ fulfilling contracts, which were signed at the peak of demand in May. Many vendors understood the inevitability of the decline in export prices during Ramadan, when business activity in Turkey traditionally reduces. Therefore most exporters tried to sell available raw materials before the Muslim religious holidays,” Ukrpromzovnishekspertyza Deputy Director Yuriy Dobrovolsky said.

According to him, the exporters’ actions were fully justified, as prices for exported Ukrainian scrap metal, increasing from $210-220 per tonne FOB in April to $250/tonne FOB in May, in early July again fell to $200-210/tonne FOB.

At the same time, the geographical structure of exports remains stable from month to month.

“In June, about 182,000 tonnes, or 80% of scrap metal, was delivered to Turkey. At the same time, exporters shipped 19%, or 45,000 tonnes of raw materials, to Moldova,” the expert said.