Business news from Ukraine

CATTLE AND PIGS NUMBERS IN UKRAINE DOWN, POULTRY UP

Cattle numbers in Ukraine (excluding the temporarily occupied territory of Crimea and part of Donbas) as of February 1, 2019 amounted to 3.392 million animals, which is 3.4% less than on the same date of 2018.
According to the State Statistics Service, the number of cows during this period decreased by 3.6% and amounted to 1.928 million.
The number of pigs fell by 1%, to 5.912 million, sheep and goats by 3%, to 1.265 million.
Poultry numbers in the country compared with February 1, 2018 increased by 3.8%, amounting to 207.614 million birds.

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SALES OF TELECOM SERVICES IN UKRAINE 10% UP IN 2018

The volume of sales of services by telecommunications and postal communications enterprises in Ukraine in 2018 amounted to UAH 72.565 billion, which in absolute prices is higher than the level of 2017 by 10%, according to the State Statistics Service of Ukraine.
According to its data, the volume of services provided to the population amounted to UAH 42.9 billion, or 59.1% of the total volume of services sold, which is 12.9% up from last year.
At the same time, in comparable prices compared to 2017 the volume of services sold as a whole decreased by 0.4% and in terms of providing services to the population grew by 0.6%.
In particular, in absolute prices in 2018 the volume of sales of postal and courier services grew by 9.75%, to UAH 6.1 billion, of which services rendered to the population amounted to UAH 1.7 million, which is 27.5% up from last year.
The volume of sales of mobile communications services in 2018 grew by 9.4%, to UAH 38.5 billion, of which services provided to the public amounted to UAH 26.6 billion (13.49% up from 2017).
The volume of sales of Internet services in 2018 also rose by 13.5% and amounted to UAH 12.3 billion, of which the population was provided with services worth UAH 8.8 billion (18.9% up from 2017).

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ZAPORIZHIA AUTOMOBILE PLANT STARTS PRODUCING PILOT BATCH OF SOUTH KOREAN TRACTORS

Zaporizhia Automobile Plant (ZAZ), part of the UkrAVTO Corporation, has started producing a pilot batch of LS Mtron tractors to study the process of production and demand, Spokesman of the Corporation Dmytro Skliarenko has said. “The creation of a joint venture with the manufacturer is not being discussed yet,” he told Interfax-Ukraine.
The corporation does not disclose other details of the project. As reported, in autumn 2017, the UkrAVTO Corporation, the leading player on the Ukrainian automobile market, was studying consumer demand on tractors of South Korea’s LS, which has not yet been presented in Ukraine. UkrAVTO presented these tractors at the AGROEXPO 2017 exhibition held in Kropyvnytsky.
The company said that this step looks completely logical and justified, since the agricultural sector begins to show upward pace and has a great potential and prospects for larger development.
Later the distribution agreement with LS company was signed. LS is the exclusive supplier of tractors under the governmental agriculture development program in South Korea.
According to experts, according to their characteristics, LS are direct competitors of the most popular MTZ Belarus tractors in Ukraine.
UkrAVTO intends to stake in Ukraine on two models of LS tractors: V-series with a capacity of 70-80 hp and H-series with a capacity of 110-140 hp. The LS tractors’ price starts from $38,000, and the price of the most powerful is $70,000.
At the same time, ZAZ, at present, amid the crisis in the automotive industry in Ukraine, has stopped the production of passenger cars.
UkrAVTO was registered in 1992. It holds a controlling stake in CJSC ZAZ and Poland’s FSO. The corporation includes over 400 car servicing enterprises in all Ukrainian cities, distribution and dealer companies of the leading car brands and the filling station network.

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SMART ENERGY MULLING PARTICIPATION IN OIL AND GAS ELECTRONIC AUCTIONS

The Smart Energy Group is mulling a possibility of participating in the first electronic oil and gas auction scheduled for March 6, 2019, Smart Energy CEO Sergei Glazunov said at a press conference in Kyiv. “We looked at 10 licenses that are exhibited on March 6. There are several interesting facilities there, and we are now deciding whether to participate in them. We hope that the auctions will be held as expected – transparently and in an understandable way,” Glazunov said.
As reported, on October 24, 2018, a temporary procedure for implementing a pilot project for the introduction of electronic trading in the sale of licenses for the use of subsoil came into force. In accordance with it, the licenses are sold exclusively through electronic bidding.
On December 6, 2018 the State Service for Geology and Mineral Resources put up the first 10 sites for electronic oil and gas auctions. At the second round at the end of January seven more sites were exposed.
The first auction will take place on March 6, 2019.

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ONE OF THE LARGEST UKRAINIAN AGRICULTURAL GROUPS KERNEL ACQUIRES RAILCAR BUSINESS FOR $64 MLN

One of the largest Ukrainian agricultural groups Kernel has acquired 100% of shares in Rail Transit Kargo Ukraine (RTK-Ukraine) for $64 million, the company has reported on the Warsaw Stock Exchange (WSE).
According to the report, RTK-Ukraine is the owner of 2,949 grain railcars accounting for nearly 15% of the market and making it the second largest grain hopper wagon fleet operator in the country after the state monopoly Ukrzaliznytsia.
“The acquisition shall not only contribute an estimated incremental EBITDA of up to $20 million annually and protect the company against ever rising logistic costs, but it shall also procure the smooth and efficient flow of grains from inland silos to the ports as company’s export volumes increase following the commissioning of TransGrainTerminal in the port of Chornomorsk,” the company said.
Adjusted for working capital and net debt, the company paid $49 million in cash at completion while the remaining balance shall be released upon the achievement of certain conditions.

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SMART ENERGY GROUP PLANS TO INVEST UAH 1 BLN IN NATURAL GAS PRODUCTION

Smart Energy Group plans to invest about UAH 1 billion in increasing natural gas production in 2019, director general of the group of companies Serhiy Hlazunov has said at a press conference in Kyiv.
“Investments are foreseen for drilling new wells – we have plans to drill four new wells this year. We also plan to overhaul both our wells and those of Ukrgazvydobuvannia located in our fields,” he said.
According to him, the company as a whole expects to overhaul five wells this year. Of the four wells planned for drilling, one could be put into operation before the end of 2019.
Commenting on gas production plans, he added that the company expects a 10% growth (about 30 million cubic meters), to 325.2 million cubic meters.
In 2018, the group of companies increased natural gas production by 31% compared with 2017, to 296.7 million cubic meters, gas condensate output by 40%, to 25,700 tonnes, that of liquefied gas by 49%, to 6,900 tonnes.

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