Business news from Ukraine

STATE BUDGET 2017 PROVIDES UAH 141.6 MILLION FOR MEDICINE PROCUREMENT FOR HEART INSTITUTE

KYIV. Jan 12 (Interfax-Ukraine) – The state budget for 2017 envisages allocation of UAH 141.6 million for the medicines procurement for the public institution Institute of Heart of the Health Ministry of Ukraine.

According to the Health Ministry, the allocation of additional UAH 40 million of state funds is provided for the purchase of equipment.

At the same time the Health Ministry points out that it did not refuse the mentioned state institution in the development of the program of a mechanical heart installation. Thus, a letter with the request to provide financing while forming the state budget for 2018-2019 for the purchase of five mechanical hearts in the amount of UAH 462.75 million was sent to the Cabinet in accordance with the request of the Heart Institute.”

As reported, two surgeries on installation of mechanical hearts were carried out in the Heart Institute of the Health Ministry in 2016.

In early January 2017 Director General of Heart Center of the Health Ministry Borys Todurov criticized effectiveness of procurement conducted using state budget funds. However, some nongovernmental organizations said that this medical institution bought medicines using budget funds at too high prices.

In addition, Todurov accused the ministry of obstructing to the opening of branches of the Health Ministry’s Heart Institutes in the Donetsk and Luhansk regions.

Meanwhile, according to the website of the Heart Institute, on December 26, 2016 its branch was opened in Severodonetsk (Luhansk region).

The Health Ministry believes that the branch was opened in violation of the statute of the state institution the “Heart Institute of the Ministry of Health.”

POROSHENKO EXPECTS GROWTH OF JAPANESE INVESTMENT IN UKRAINE IN 2017

KYIV. Jan 12 (Interfax-Ukraine) – President of Ukraine Petro Poroshenko is convinced that this year we can expect progress on visa liberalization by Japan for the Ukrainians and the growth of direct Japanese investment in the Ukrainian economy.

As the presidential press service reported on Wednesday, during a meeting with Japanese ambassador to Kyiv Shigeki Sumi, timed to mark the signing of the decree on celebration the Year of Japan in Ukraine by Poroshenko, the president “expressed his belief that this year there will be a progress on visa liberalization to simplify visits to Japan for Ukrainians, as well as activation and increase of direct Japanese investment in the Ukrainian economy.”

Poroshenko gave examples of successful Japanese investment projects in 2016, which are already working in the west of Ukraine and creating thousands of workplaces. “This is a great characteristic of the level of confidence and the level of support that the Japanese business and the Japanese government demonstrate in relation to Ukraine,” the president said.

Ukrainian president extended an invitation to Japanese Prime Minister Shinzo Abe to visit Ukraine this year.

GOVERNMENT APPROVES FINANCIAL PLAN OF UNITED MINING-CHEMICAL COMPANY FOR 2016

KYIV. Jan 12 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers has approved the financial plan for 2016 for public joint-stock company United Mining-Chemical Company managing Vilnohirsk state mining and metallurgical plant (Dnipropetrovsk region) and Irshansk state mining and processing plant (Zhytomyr region).

The plan is approved by government resolution No. 1053-r dated December 28, 2016.

The published documents do not contain financial indicators for 2016.

A well-informed source told Interfax-Ukraine that net revenue for 2016 was projected at UAH 2.248 billion, spending at UAH 1.781 billion, net profit – UAH 483.66 million and payments of all taxes and duties to the national budget – UAH 577.125 million.

United Mining and Chemical Company started operating in August 2014 when the Ukrainian government decided to transfer Vilnohirsk state mining and metallurgical plant and Irshansk state mining and processing plant to its management.

FINANCIAL POLICE ESTABLISHMENT IS ONE OF FINANCE MINISTRY’S PRIORITIES – FINANCE MINISTER

KYIV. Jan 12 (Interfax-Ukraine) – In the coming days the Ministry of Finance will submit the draft law on the establishment of the Financial Police for consideration of the Cabinet of Ministers of Ukraine, “for which business is waiting for and the IMF memorandum refers to,” Finance Minister of Ukraine Oleksandr Danyliuk said.

“At the end of 2016, due to a technical error, the Verkhovna Rada actually announced the tax police outside the law starting from January 1, 2017 […] Is it worth to fix the mistake again legalizing repressive tax police? It is obvious that it is not. It is necessary to move only forward,” Danyliuk wrote on his Facebook page.

According to the minister, the development and approval of the draft law were completed in September 2016.

The document provides for a number of basic principles on which it is planned to create the Financial Police: replacement of a power approach to an analytical approach; reduction of personnel up to 2, 500 people (with 15,000 now); non-interference in the work of honest business; staff renewal through a transparent competition and an independent selection committee, representatives of the security staff – no more than 25%; salaries, which will reduce the risk of corruption and provide an opportunity to attract the best staff.

“We plan to submit a draft law to the government at the next meeting and send the bill to the parliament after its approval. It is desirable the deputies will avoid “clerical errors,” Danyliuk said.

UKRAINIAN AIRLINES SEE 31% RISE IN PASSENGER TRANSPORTATION IN 2016

KYIV. Jan 11 (Interfax-Ukraine) – Ukrainian airlines saw a 31% rise in passenger transportation in 2016 year-over-year, to 8.274 million people, according to data from the State Aviation Service of Ukraine.

Passenger numbers used international routes grew by 31.6%, to 7.472 million people.

Passenger flow via Ukrainian airports rose by 20.9%, reaching 12.929 million.

Passenger flow on international flights grew by 19.9%, to 11.294 million people.

NEW TRUCKS SALES IN UKRAINE 47% UP IN 2016

KYIV. Jan 11 (Interfax-Ukraine) – Sales of new trucks in Ukraine in 2016 with a fully loaded weight of over 3.5 tonnes grew by 46.6%, to 2,085 units, AUTO-Consulting has reported.

The number of deals to sell trucks grew for almost all active market players and some of them managed to boost sales by dozens of times.

The leader of the Ukrainian truck market was Russia’s GAZ in 2016, boosting sales by 2.3-fold, to 349 trucks, and its market share grew from 10.7% to 16.7%. In 2015 GAZ was second in sales.

MAN was second for the first time with 15.4% of the Ukrainian market (6.8% in 2015 and fifth on the market), boosting sales by 3.3 times, to 321 trucks.

Last year leader – Belarus’ MAZ – is not third with a 19.4% fall in sales, to 312 trucks, while its market share deceased to almost 15% compared to 27.2% in 2015.

AUTO-Consulting said that it is hard to switch to Euro-5 emission standard that took effect in Ukraine early 2016 for MAZ. MAZ trucks meeting Euro-5 emission standard were started only in H2 2016 and this affected the sales figures.

Scania trucks are fourth (third in 2015) with a 19.3% rise in sales, to 179 units.

The experts said that Volvo, Mercedes-Benz, DAF, Renault boosted their sales. Only KAMAZ (eighth) posted an 18.6% fall in sales. Dealers of Ford Trucks successfully attracted MAZ consumers.

“Turkey’s Ford showed the highest growth on the market and boosted sales by over 16 times, to 104 trucks,” the analysts said.

Chinese truck sales were also stirred up. Foton was tenth (14th in 2015) leaving KrAZ behind (sixth in 2015).

The experts said that 57 KrAZ trucks were sold in Ukraine in 2016 or 32% less than a year ago.