Business news from Ukraine

Experience of large Swedish companies like IKEA and H&M in Ukraine would be a guideline for Swedish investors, Swedish Ambassador Martin Hagström has said.
“IKEA’s experience in Ukraine will be also important for future investment of Swedish companies. This will be a guideline for them… They will be attentively monitor experience of H&M, one of the largest retail chains in the world, which also announced its arrival to the Ukrainian market,” Hagström said in an interview with Interfax-Ukraine.
According to him, Swedish consumers are apprehensive about the information that Swedish companies may be involved in corruption, so investors think twice before they master the new market.
“It’s no secret that for IKEA, which is currently planning to enter the Ukrainian market, one of the biggest issues is the situation with corruption. I think that the fact that IKEA decided to come to Ukraine is a sign that the company sees the changes and it is confident that it will be able to work here based on its principles,” Hagström said.
The ambassador also said that corruption is still a big obstacle for investors in Ukraine.
“When I meet with companies that think about coming to the Ukrainian market, their questions mainly concern two things: corruption and the functioning of courts, because if you come to the market, you want to know that your investments will be protected,” the diplomat said.
He said that there are about a hundred Swedish companies operating on the Ukrainian market.
As reported, late 2017, it was announced that IKEA is studying the Ukrainian market and plans to open a first store in Kyiv within two years.
H&M in 2017 signed a contract to open a store with Lavina Mall in Kyiv.

Ukraine boosted gas imports from European countries by 27% or 3 billion cubic meters (bcm) in 2017, to 14.1 bcm, the press service of national joint-stock company Naftogaz Ukrainy has reported.
“The important result of the year was the increase in the volumes and the share of imports by private traders and gas consumers. Last year these companies imported 1.8 times more gas than in 2016: 5.4 bcm against 2.9 bcm. In 2017, 67 companies imported gas to Ukraine (34 companies in 2016),” the company said.
Last year Naftogaz imported 8.7 bcm of gas from the European market, which is 6% or 0.5 bcm more than a year ago. The company purchased gas from 13 European suppliers compared with 15 suppliers in 2016.
“No one of these companies supplies more than 30% of the total volume of imported gas,” the company said.
Naftogaz recalled that in 2017 the company did not buy gas from Russia’s Gazprom.

Suspicions of corruption in the State Migration Service of Ukraine cause concern, as this could affect the security of the European Union, as the State Migration Service issues documents for traveling abroad, Swedish Ambassador to Ukraine Martin Hagstrom has said.
“As you know, there is a visa-free regime between Ukraine and the EU, so suspicions of corruption in such an important state agency as the State Migration Service cause extreme concern. It is clear why: if corruption comes to the bodies issuing documents, this could directly affect the security of the EU countries,” he said in an exclusive interview with Interfax-Ukraine.
Hagstrom recalled that the creation of independent anti-corruption bodies was part of the action plan for visa liberalization.
At the same time, the diplomat noted that it is extremely important to support the independence of anti-corruption bodies and continue to develop these institutions.
“Of course, we see the risks of a rollback. We have no illusions that people involved in corruption are not happy with the change in the system and a decrease in the sense of impunity,” the ambassador said.
In his opinion, work should also be done on the perception of corruption. “According to public opinion polls, many Ukrainians perceive corruption at the everyday level as a matter of course. In this sense serious work is also required,” the ambassador said.
The Swedish diplomat expressed the opinion that the creation of the Anti-Corruption Court would be an important step in the fight against corruption in Ukraine and the strengthening of Ukrainian confidence in state institutions.
“The creation of the Anti-Corruption Court, according to the recommendations of the Venice Commission of the Council of Europe, would be a key step in fighting corruption based on a sense of impunity … One thing strikes me is the very low level of public confidence in many state institutions. I believe the anticorruption court could strengthen this trust, and corrupt officials would be punished,” Hagstrom said.

Dnipro City Council deputies supported at a regular session on January 31 the decision of the competitive commission to select an investor for the construction of an incineration plant in the city on the terms of public-private partnership.
According to an Interfax-Ukraine reporter, the commission chose as an investor British company Stopford Projects Limited, an agreement with which the city council plans to sign in February this year.
“Today this project has been approved by the session decision. This is very important. We already have an agreement on which specific conditions will be determined. To be honest, I still do not believe it. We are now waiting for investment,” Dnipro Mayor Borys Filatov told journalists on Wednesday, January 31.
A waste processing plant should be built in Dnipro at the expense of investor funds within several years. The cost of construction is 60 million pounds sterling. The enterprise is to be built on the territory of the Pravoberezhny testing ground. Under the terms of the tender, the contract with the investor is signed for 15 years. After the expiration of the contact, the facility will become the property of the city council.

The largest mobile communications operator of Ukraine Kyivstar at a tender of the National Commission for Communications Regulation (NCCR) bought the right to use radio frequencies in the 2,530-2,535/2,650-2,655 MHz, 2,525-2,530/2,645-2,650 MHz and 2,520-2,525/2,640-2,645 MHz ranges for UAH 916.3 million to develop 4G network, which was in line with the company’s plans.
“As we planned we bought three lots providing for the continuous frequency range of 2×15 MHz, which allows providing services at the highest speed as possible, understanding that… we soon would need additional frequencies for the full-featured launch of IoT products, developing Mobile ID and other services,” the company said in a press release, citing Kyivstar President Peter Chernyshov.
He said that the auction turned out to be competitive, which underlines the good preparation of the regulator and the interest of the market.
Kyivstar has by now prepared more than 500 towers in the largest cities of Ukraine, sea resorts, at border crossing points to launch 4G in the 2,600 MHz band, and in 2018 plans to install another 600 towers, the press service said.
The company recalls that NCCR will officially announce the winners of the tender on its website within five days, and in the next 30 days the operators are required to pay the full amount of the license cost. The operators are obliged to start the provision of 4G communication services in one of the regions within a period not later than six months after receiving the license, and deploy the network in all regional centers – no later than 54 months from the date of obtaining the license.
Late August last year, Kyivstar reported that in 28 months after receiving the license for 3G communications, the operator built and put into commercial operation more than 7,300 3G towers.
Kyivstar is the largest Ukrainian mobile communication operator, serving about 26.4 million subscribers as of the end of the third quarter of 2017.