Business news from Ukraine

Business news from Ukraine

UKRAINE RATIFIES OPEN SKIES AGREEMENT WITH EUROPEAN UNION

On February 17, 2022, the Verkhovna Rada of Ukraine adopted a law on ratification of the agreement between Ukraine and the European Union on the Common Aviation Area.
Some 311 deputies voted for the ratification of the agreement on Thursday.
The purpose of the agreement is the gradual creation of a Common Aviation Area between Ukraine and the EU and its Member States, based, in particular, on identical rules in the field of flight safety, aviation security, air traffic management, environmental protection, consumer protection, computer reservation systems, as well as on identical rules regarding social aspects.
To this end, the agreement establishes mandatory rules, technical requirements, administrative procedures, basic operational standards and implementation standards applied between the parties.
Common Aviation Area operates on the basis of free access to the air transportation market and on equal terms of competition.
Ukraine is taking the necessary measures to incorporate into the legal system of Ukraine and implement the requirements and standards of the acts of the European Union.
The parties cooperate, among other things, in order to achieve convergence of certification systems in the areas of primary certification and maintaining airworthiness.
Upon request, the Parties shall provide each other with all necessary assistance to prevent acts of illegal seizure of civil aircraft and other illegal acts directed against the safety of such aircraft, their passengers and crew, airports and air navigation facilities, as well as any other threat to the safety of civil aviation.
The Parties recognize the importance of environmental protection in the development and implementation of aviation policy.
As reported, on October 12, 2021, Ukraine and the European Union signed the Common Aviation Area Agreement. On June 28, 2021, the EU Council approved the signing of the Common Aviation Area Agreement with Ukraine, as well as with three other countries – Armenia, Tunisia and Qatar.
The process of harmonization of the Ukrainian aviation space with the EU was started in 1999. On December 12, 2006, the EU Council authorized the European Commission to start relevant negotiations with Ukraine. In October 2013, the text of the Agreement was agreed upon by the parties, but due to foreign policy conditions, its signing was postponed indefinitely.

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NOVA POSHTA INVESTS UAH 5 BLN IN DEVELOPMENT

Nova Poshta Group plans to invest UAH 5 billion in development in 2022, of which UAH 1.2 billion into an innovative terminal in Odesa.
As Nova Poshta said in a report on Wednesday, the terminal in Odesa will become the company’s second largest sorting facility after its opening.
Construction work at the Odesa terminal began in June last year. The terminal will consist of two buildings – postal and freight, their total area – more than 26,000 square meters.
Active construction is currently underway: a building frame is being assembled at the cargo terminal.
“In 2022, we plan to invest unprecedented UAH 5 billion in the Nova Poshta development: in terminal infrastructure; a network of branches and post offices; in innovation. This is one and a half times more than last year. We believe in our country, we believe in its people, so we continue to develop our business and work with inspiration,” co-owner of Nova Poshta Volodymyr Popereshniuk is quoted in the report.
In March, the installation of automated equipment will begin at the terminal. These will be two main automated Vanderlande lines for sorting parcels from 2 kg to 30 kg and three lines for sorting small parcels manufactured by the Ukrainian company Konsort.
In addition, telescopic conveyors will be installed at the terminal, which drive directly into the car body and help automate the process of loading. A total of 48 such “telescopes” are planned to be installed at the terminal.
It is planned to use 50 robotic carts at the cargo part of the terminal: robots manufactured by Ukrainian SBR for moving cargo.
The terminal will begin operation, tentatively, already in November of this year. It will be able to process up to 40,000 parcels per hour, which is three times more the speed of the current terminal.
The terminal will sort the parcels for Odesa and 65 settlements of Odesa region. It will create more than 700 new jobs.
The company also said that they planned to open an automated terminal in Zaporizhia the following week.
The Nova Poshta group of companies includes, in particular, Nova Poshta, NP Logistic, NovaPay and Nova Poshta Global companies.

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SAMSUNG APPLIES FOR RESIDENCY IN DIIA.CITY

The Ministry of Digital Transformation of Ukraine has received an application from Samsung for residency in Diia.City, Deputy Prime Minister, Minister of Digital Transformation Mykhailo Fedorov said on his Telegram channel on Tuesday.
In addition, according to Fedorov, the Ukrainian IT company MacPaw also applied for residency in Diia.City.
Samsung Electronics is a company that introduces technologies in the world of smartphones, TVs, and home devices. It is a leader in the introduction and commercialization of innovative technologies in the markets of South Korea, the United States and Japan. In Ukraine, the official office was opened in December last year.
MacPaw is a Ukrainian IT company that has been developing software for Apple systems since 2008. It creates applications that make it easy to work on Mac. The most famous products are the CleanMyMac MacBook cleaner, the Gemini photo deletion program, and the alternative appstore Setapp.
Diia.City is a special legal and tax regime for IT, which involves a set of measures to stimulate the development of the high-tech industry.

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GOVT STOPS AIR EXPRESS PROJECT

The Cabinet of Ministers has provided funding for the state-owned enterprise National Project Air Express to stop the implementation of a project of passenger railway communication between Kyiv and Boryspil airport.
The government adopted the relevant resolution at a meeting on Wednesday.
According to an explanatory note to the document, this will minimize Ukraine’s losses associated with the termination of credit and commercial agreements concluded between the SOE National Project Air Express and the China National Complete Engineering Corporation together with the Export-Import Bank of China.
It is expected that as a result of the resumption of negotiations and termination of agreements, about $73.7 million can be returned to the Ukrainian side.
The explanatory note also states that at the moment the SOE National Project Air Express is not solvent, and in order for the enterprise to be able to terminate the contracts under the mentioned project, it is necessary to pay off debts on salaries and payments to the state budget, as well as accumulate funds for participation in litigation.
In particular, the state-owned enterprise National Project Air Express has arrears in wages – UAH 831,000, in payment of personal income tax – UAH 341,000, in military fee – UAH 28,500, and in single social security tax – UAH 222,000.
As reported, in Ukraine for a long time there was an unrealized national project Air Express – railway passenger communication Kyiv-Boryspil International Airport, construction of other infrastructure facilities in Kyiv region. For its implementation in 2011, under state guarantees, a loan agreement was concluded with the Export Import Bank of China in the amount of $372.3 million. CCEC was appointed as a general contractor for the turnkey construction works.
In June 2015, it became known that Ukraine and China were ready to discuss the possibility of redirecting credit funds provided for Air Express to other projects, and in March 2016, the Ministry of Infrastructure received the consent of Chinese partners to reformat the Air Express project.
On November 30, 2018, Ukrzaliznytsia launched an express train to Boryspil airport with a floating schedule of 21 to 30 voyages per day. To this end, about 4 km of non-electrified track was added to the existing railway infrastructure, including a 272 m long railway overpass over the M03 Kyiv-Kharkiv highway. Two passenger platforms were built. For operation on the route Central Kyiv Railway Station-Boryspil Airport, Ukrzaliznytsia repaired five rail buses manufactured by Pesa Bydgoszcz SA previously purchased for operation on other routes.

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METINVEST TO INVEST $1 BLN IN UKRAINE IN 2022

Businessman Rinat Akhmetov in Mariupol, where Metinvest’s metallurgical plants are located, announced his intention to continue investing heavily in the modernization and development of this largest Ukrainian mining and metallurgical holding.
“We continue to build, we continue to invest. This year, Metinvest will invest $1 billion in new production,” he said.
“We will build a new university, we will do everything in our power to ensure that there is a decent job in Mariupol, a decent salary, and most importantly, a happy life for people,” Akhmetov added.
The meeting is also attended by MP Vadim Novinsky, who is a co-owner of Metinvest.
Metinvest CEO Yuriy Ryzhenkov said that a decision, which had been made this year earlier than usual, to increase the holding’s salary by 10% on average from March 1 is made.
Ryzhenkov said that Metinvest has currently planned its investment program at $1.3-1.5 billion per year over the next three or four years, further investments will depend on how the company develops the green metallurgy.
The decarbonization trend is focusing on the steel industry, he said. However, there are already well-studied low-carbon technologies for direct reduced iron (DRI) and electrometallurgy (electric arc furnaces). Metinvest’s efforts in the field of decarbonization are connected not only with the climate, but also with renewal and entry into new markets (in terms of efficiency and product quality).
The updated technology strategy that the company continues to develop suggests different scenarios, but each of them includes a transition to low-carbon operations. The strategic goal is to reduce greenhouse gas emissions by more than 90% by 2050 using a phased approach with key milestones in 2030 and 2040. The final stages of the strategy are expected to include the use of hydrogen.
Metinvest is the largest mining and metallurgical holding in Ukraine. The group’s enterprises are located mainly in the Donetsk, Luhansk, Zaporizhia and Dnipropetrovsk regions.
Metinvest’s main shareholders are the SCM group (71.25%) and Smart Holding (23.75%), which jointly manage the company.

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