Business news from Ukraine


KYIV. May 28 (Interfax-Ukraine) – Pivdenne Design Bureau (Dnipropetrovsk) is working on plans to modernize the Zenit launch vehicle, and the modernization will be conducted on the basis of technical solutions of Ukrainian medium launch vehicle of the Mayak family.

Director General and Chief Designer of Pivdenne Design Bureau Oleksandr Dehtiariov said in an interview with Interfax-Ukraine that the modernization of the Zenit launch vehicle is aimed at considerably cheapening the launch vehicle previously made in cooperation with Russia and increasing its market potential.

“The difficulties that we have with the exploitation of Zenit today are first linked to the fact that due to various negative factors, Zenit became expensive in production. It became more expensive than Proton [Russia’s heavy launch vehicle],” he said.

Dehtiariov said there are plans to modernize the Zenit launch vehicle on the basis of technical solutions of the new Ukrainian medium launch vehicle of the Mayak family: forming and expensive waffle structures will be removed from production.

“The upgraded Zenit will have Ukrainian engines, not Russian ones: first stage – RD-815 and second stage – RD-801. We also plan to replace the engine of the third stage, Pivdenne Design Bureau has large potential in this direction,” he said.

He said that until recently Zenit was used first in international projects to launch commercial satellites from the Sea Launch and Baikonur space centers and as part of the Federal Space Program of Russia.

He said the current portfolio of orders of the bureau includes orders for launches from Baikonur: one launch for autumn 2015 and one for 2016. This year it is planned to launch a Ukrainian satellite from Baikonur.

Commenting on Sea Launch, Dehtiariov said that unfortunately, Energia rocket and space corporation which became almost a 100% owners of Sea Launch after the restructuring of the consortium, failed to cope with this. Competitiveness was lost (on the global launch service market).


KYIV. May 28 (Interfax-Ukraine) – Kernel, one of the largest Ukrainian agrarian groups, saw $7.2 million in net profit in Q3 of FY2015 (July 2014- June 2015), while its net loss year-over-year stood at $25.1 million, the company said in a report.

The company said that its revenue fell by 10% year-over-year, to $607 million as the result of a decline in international agriculture commodity prices.

Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 54%, to $115.2 million, and EBITDA margin from 11.1% to 19%.

In Q3 2015 Kernel’s revenue from sales of sunflower oil sold in bulk totaled $275.1 million, which was 11% down year-over-year, that for bottled oil – $26.8 million (18% down). Grain trading brought $299.2 million to the company (3% down), export terminals – $16.7 million (26% up), silo services – $4.8 million (63% up) and farming – $46.7 million (34% up).

In 9M of FY2015 Kernel’s net profit stood at $85.5 million compared to net loss of $67.6 million year-over-year. Revenue grew by 1%, to $1.838 billion, and EBITDA soared by 2.5 times, to $338 million.

Kernel is a vertically integrated company that has been operating in the Ukrainian agribusiness sector since 1994. The group produces sugar and sunflower oil, distributes bottled oil under the brand names Schedry Dar, Stozhar and Chumak Zolota, exports oil and grain, and provides elevator storage services for grain and oilseeds.


KYIV. May 28 (Interfax-Ukraine) – Public joint-stock company Agrarian Fund, jointly with the Finance Ministry, is studying the possibility of raising UAH 2.2 billion for forward grain purchases in 2015.

“The Agrarian Fund has prepared a program and wants to find a chance of raising almost UAH 2.2 billion jointly with the Finance Ministry. They have an idea of issuing bonds to attract foreign funds,” Agricultural Policy and Food Minister of Ukraine Oleksiy Pavlenko said at a press conference in Kyiv on Thursday.

Pavlenko also said the Agrarian Fund has restricted working capital, but despite this the fund managed to finance UAH 780 million in advance payments under forward contracts.

Pavlenko added that the national budget does not foresee an increase of expenses in Agrarian Fund programs.

He went on to say that last year around UAH 2.2 billion was left in accounts Brokbusinessbank.


KYIV. May 27 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has provided UAH 547.5 million to build the Lviv-Ivano-Frankivsk via Bobrka (Lviv region) road.

This is stipulated in cabinet resolution No. 323 of May 25, 2015 on the approval of a procedure to use the national budget’s funds to develop roads in the Ukrainian part of the Carpathian Mountains (Mukacheve-Lviv, Tatariv-Kamianets-Podilsky and Stryi-Mamalyha roads).

“In 2015, the following spending for current repair of Ukrainian roads in the Ukrainian part of Carpathian Mountains is set using budget funds: UAH 547.5 million for N-09 Mukacheve-Rakhiv-Bohorodchany-Ivano-Frankivsk-Rohatyn-Bobrka-Lviv road, including UAH 37.5 million in Zakarpattia region, UAH 310 million in Ivano-Frankivsk region and UAH 200 million in Lviv region,” reads the resolution.

In addition, UAH 77.5 million has been provided for the N-10 Stryi-Ivano-Frankivsk-Chernivtsi-Mamalyha (to Chisinau) road, including UAH 40 million in Ivano-Frankivsk region, UAH 37.5 million in Chernivtsi region; and UAH 75 million has been provided for the R-24 Tatariv-Kosiv-Kolomyia-Borschiv-Kamianets-Podilsky road in Ivano-Frankivsk region.


KYIV. May 27 (Interfax-Ukraine) – A national mobile communications network of state agencies could be created on the basis of a virtual operator, according to advisor to the head of the State Service for Special Communications and Information Protection Vitaliy Kuksa.

“First the service is to draw up technical conditions. The technology using which the projects will be realized should be used on their basis. We should recommend the technology to the government. Then we can speak about the financial parameters of the project,” he told reporters.

Kuksa said that protected network could only be created with the development of LTE (4G) standard technology, and the best option, including from a budgetary point of view, could be the creation of a virtual operator.

“I could say from the technical point of view among [the] technologies for developing these networks we know the really protected network could be created only on the basis of LTE. Delays will be seen in 3G and 2G standards. Can the state create the operator from a zero? All these projects depend on financing. From the theoretical point of view, if we have three or four operators providing LTE services and we have a law on the joint use of infrastructure, in theory a virtual operator could be created. This could have been the best option. However, all operator issues, particularly, on the joint use of infrastructure, should be settled,” he said.

He added that the creation of the network is appropriate.

“Mobile communications meet no information protection requirements,” he said.


KYIV. May 27 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) plans to implement 130 projects in Ukraine in 2015 under a program to provide business advice to small- and medium-sized businesses (SMBs).

“For 2015 we plan that we will have 130 projects,” EBRD Director for Small Business Support Charlotte Ruhe said in Kyiv on Wednesday.

Since the program was launched in Ukraine five years ago, 400 SMBs operating in the food industry, wholesale and retail trade, electronics, etc. have participated. Out of them, 360 companies have been given advice by local consultants, others were supported by international advisers. Experts’ recommendations relate to the development of strategies for development, marketing policy, quality management, personnel, and streamlining business processes.

Under the program, over EUR 4.4 million was provided as grants, and donor funds were provided by the European Union, the governments of Sweden and the United States, the Central European Initiative Forum, the Early Transition Countries Fund, and the EBRD Shareholder Special Fund .

According to Ruhe, the efforts resulted in a 40% increase in sales of 71% of the EBRD’s SMB clients, while more than a half expanded their personnel, and about 15% were able to raise financing worth on average EUR 500,000.

Out of the aforementioned projects, about 37% are implemented Ukraine’s northern regions and around Kyiv, while the central and southern regions account for about 20% of the projects, western Ukraine accounts for 27%, and eastern Ukraine for 15%.

Ruhe said that last year the EBRD opened a regional office in Lviv to work with SMBs. In 2015, a similar office will be opened in Kharkiv.

What is more, the EBRD will launch two new initiatives for SMBs in Ukraine in 2015: support in promoting exports in the free trade area being created between the EU and Ukraine, and a Woman in Business program.