KYIV. May 6 (Interfax-Ukraine) – Inkerman Trade House LLC (Kyiv), a Ukrainian division of Inkerman International, seeks to boost sparkling wine sales by 2.8 times in 2016, to 2.2 million bottles.
“We seek to boost production of sparkling wine from 800,000 bottles last year to 2.2 million bottles. We think that these ambitious goals are realizable: demand on our products is high,” Director General of Inkerman Trade House Hanna Horkun said in an interview with Interfax-Ukraine.
She said that the company purchased some wine materials in Moldova for production of sparkling wine, as these materials were not present on the Ukrainian market.
“We have four types of sparkling wine and with plans to produce 2.2 million bottles it was not easy to find high-quality materials. I think that we bought all high-quality materials Ukraine had and bought additional good wine materials in Moldova, which, unfortunately, were not present on the Ukrainian market,” she said.
Inkerman Trade House in 2015 sold 864,500 decaliters of still wine and 123,580 decaliters of sparkling wine. Sales of sparkling wine increased by 52% compared to 2014.
The company’s share of the Ukrainian wine-making market has increased from 12.7% in 2013 to 16% in 2016. This is linked to the absence of Crimean wine and the increase in the price of imported wine.
Horkun said that before 2014 all production facilities of Inkerman International were located in Crimea. After the annexation of the peninsula, Inkerman International AB (Sweden) registered subsidiary Inkerman Trade House headquartered in Kyiv and transferred bottling of still wine to Tavria Cognac House in Nova Kakhovka in Kherson region. Sparkling wine initially was bottled in Odesa at the facilities of Odesavynprom.
“Under Ukrainian legislation we do not have a chance to cooperate with our own Crimean asset where shareholders invested over EUR 40 million. Over 2,000 our employees remain in Crimea. It is clear that we are responsible for our company, investment of shareholders and employees,” she said.
The winery in Crimea is neither a contractor nor asset in ownership in Ukraine. It is a separate structural unit of the holding. The Crimean plant continues operation and selling its products in Crimea, Russia and China.
Shareholders in Inkerman International AB are HTT BWH Holding Ltd (Finland, 40%), Eksen Investments Limited (Cyprus, 40%) and Board Chairman Valeriy Shamotiy manages Eksen’s shares and Lorimer Ventures Limited (Cyprus, 20%) and U.S. Horizon Capital manages Lorimer’s shares.
KYIV. May 6 (Interfax-Ukraine) – Khlibodar (Zaporizhia) intends in the near future to start production of flour enriched with magnesium in the framework of the “Healthy Ukraine” national program initiated by a group of scientists of the NanoSapiens project.
“Enriched flour will appear in stores in the near future, and later enriched bread and confectionery goods. I’m cautiously optimistic about the rate of promotion of these products through the networks because for this they have to become popular, while now people care more about the final cost of the product rather than its quality,” Khlibodar CEO Borys Shestopalov said during a press conference at Interfax-Ukraine.
However, he expressed hope that the number of producers supplying products enriched with micronutrients to the market would grow.
Shestopalov added that enriched flour would be available at warehouses in two weeks and delivery to retail networks would depend on promotion that has certain specifics.
Khlibodar group of companies has been working in the market since 1991. It is among the ten largest producers of flour and bakery goods.
KYIV. May 5 (Interfax-Ukraine) – Two more Ukrainian companies, Cheese Club (Kaniv, Cherkasy region) and PJSC Vinnytsia Roshen Dairy Factory, have been allowed to export dairy products to the European Union.
“Ukrainian companies are increasingly gaining the markets of the EU member states. Two more companies, Cheese Club and Vinnytsia Roshen dairy plant, have got the right to export dairy products to the EU market,” Deputy Minister of Economic Development and Trade Natalia Mykolska wrote on her Facebook page.
According to her, after the introduction of free trade with the EU more and more companies and manufacturers are entering the EU market. In particular, Milk Alliance group of companies was first among dairy companies in Ukraine to start exports to the EU.
Ukrainian manufacturers in 2015 also increased exports of berries to the EU. The leaders in exports growth were raspberry (up by 90%), strawberry (65%), and blueberry (64%).
KYIV. May 5 (Interfax-Ukraine) – OTP Bank (Kyiv) saw UAH 327.3 million of profit in January through March 2016 compared to loss of UAH 1.1 billion year-over-year, the bank has said in a press release.
Net interest income increased by 5.2%, to UAH 779.1 million.
Net fee income totaled UAH 174.2 million and this was 32.3% up year-over-year.
Assets in Q1 2016 increased by 7%, to UAH 22.7 billion.
A slight expansion of the entire deposit portfolio over the period by UAH 463 million was seen, to UAH 18.8 billion. Deposits of individuals grew by UAH 571 million, to UAH 9.3 billion and companies’ funds amounted to UAH 9.5 billion.
The entire credit portfolio in Q1 2016 increased by UAH 1.5 billion, to UAH 27.2 billion mainly thanks to growth of credits and debts of companies by UAH 1.3 billion.
Regulatory capital as of April 1, 2016 totaled UAH 1.75 billion.
Current liquidity – 64.43% (NBU’s requirement is no less than 40%).
OTP Bank was founded in 1998. Its sole shareholder is Hungary’s OTP Bank Plc. OTP Bank is part of OPT banking group, which also includes OTP Factoring Ukraine LLC, AMC OTP Capital, OTP Leasing LLC, and OTP Credit LLC.
OTP Bank ranked 13th among 123 banks operating in the country on October 1, 2015 by total assets (UAH 23.055 billion), according to the National Bank of Ukraine.
KYIV. May 5 (Interfax-Ukraine) – Ukraine and China will begin intergovernmental consultations on the liberalization of the visa regime between the two countries in May.
The corresponding agreement was reached after the talks between Chinese and Ukrainian foreign ministers, Wang Yi and Pavlo Klimkin, on the sidelines of the 5th meeting of foreign affairs ministers of Member States and Observers of the Conference on Interaction and Confidence Building Measures in Asia, which was held in Beijing on Wednesday, Chinese Ambassador to Ukraine Zhang Xiyun said at the second national forum on the support of export in Kyiv on Thursday.
“Yesterday, the two ministers [of foreign affairs] of Ukraine and China agreed to start the dialogue on the liberalization of the visa regime [between the countries]. The consultations on the liberalization of the visa regime will start on May 10,” he said.
According to the Chinese ambassador, since the beginning of 2016, a simplified visa regime for foreign citizens, including Ukrainians, has been already effective in Shanghai, Hangzhou and Nanjing.
Ukraine has made an important step towards the reform of the energy sector in line with European standards.
The National Commission for Energy, Housing and Utilities Services Regulation has for the first time introduced methods of forming a wholesale and retail price of electricity and the limit prices of the power grids, having thus fulfilled the requirements of the Antimonopoly Committee of Ukraine. The market-oriented procedure for determining energy prices allows for minimizing administrative interference in the energy sector and fully meets the European principles and international commitments of Ukraine. Work on the new approach lasted for more than a year and a large circle of participants were engaged, namely these were experts, representatives of power generating companies, the regulator itself and related ministries.
Since the creation of the current model of Ukraine’s electricity market, no document has been prepared before to regulate the formation of the wholesale market price: its components, criteria and the grounds for review. It resulted in the situation when power rates were set in far from the transparent way, assets between power generation companies were distributed in a manual mode, the market remained unpredictable, and there was no correlation between the prices of energy resources in the world and Ukraine.
Previously, the price of coal produced by state enterprises in Ukraine was set up by the regulators, and often did not cover production costs. Senior analyst at Dragon Capital Denys Sakva said that “the new approach will help break the vicious circle of mutual debts owed by thermal power plants, state-run enterprise Energomarket, and Ukrainian coal mines.”
Head of Ukraine’s National Commission for Energy, Housing and Utilities Services Regulation Dmytro Vovk sees two steps that one may take to resolve the situation. “The first one is to develop the guidelines for the formation of the wholesale and retail price while the old model of the market is in operation. And the other step is a new law on the electricity market, which would foresee a liberal pricing model for power generating companies with a fully competitive market, and the Commission will set prices for power rates. What is more, we think that several synchronized measures need to be taken to ensure a comprehensive approach,” Vovk said.
Amid the absence of the full-fledged coal market in Ukraine, global indices: API2 (Amsterdam, Rotterdam, Antwerp), API4 (Richards Bay, South Africa), Argus / McCloskey’s Newcastle were used as the benchmark for prices. Thus, the formation of prices of energy resources on the basis of prices in the international markets is already used in the gas sector of Ukraine.
“To form the prices of coal to set tariffs, we should consider the following parameters: API2, logistics and fixed costs. API2 is a key index for Europe, used for coal shipments to Europe. 90% of coal derivatives in the world are quoted on the basis of API2. Logistics is calculated in the following way: freight – delivery to Ukraine and rail transportation inside Ukraine. The reasons for this are the following: 40% of the coal that should be shipped to the Ukrainian thermal power plants in accordance with the Energy Ministry’s balance is A grade coal, which is not produced in Ukrainian-controlled territory. And the Commission takes measures to create conditions for regular and smooth coal supplies to the thermal power plants,” Dmytro Vovk said.
Denys Sakva adds that the formation of the wholesale and retail price based on the global indices makes pricing more transparent and minimizes the subjective factor of intervention by officials. “Pegging coal prices to international indices and avoiding forcible fixing of prices by the Fuel and Energy Ministry will remove the subjective component in setting tariffs. This is a more market-oriented method, which has not been used before at all,” Denys Sakva said.
Transparent pricing in the electricity sector is one of the basic conditions for the integration of the power grids of Ukraine and the EU (ENTSO-E). In 2011, Ukraine became a member of the Energy Community. One of the main objectives of the organization is to attract investments in power generation and boost competition. The transition to the unified principles of market pricing of electricity to stimulate its economy and transparency of energy markets is part of the coalition agreement.
“We believe that today we need to move the way as the Europeans did. [We need to] merge the markets to ensure that a larger number of players could come up with their bids. This requires technical measures and capital investment, but the Commission is ready to support these requests, allocate funds in the tariff for Ukrenergo, a backbone operator, in order to let the merger happen until the electricity market has been introduced. According to the draft law, which we have developed, the market will finally start operating from January 1, 2019.
Even if we move to market-oriented prices of coal, we still have the problem when Ukrainian thermal power plants are unable to compete. It could firstly be solved by replacing old facilities with newer ones. Because almost all of them are significantly worn out. They should be replaced with more efficient equipment that will meet international standards or at least the standards of the market which we are being merged with,” Vovk said.
It should be noted that the Commission on March 3, 2016, issued resolution No.289, which endorsed the procedure for forming the target wholesale and retail price of electricity.
