Business news from Ukraine

ARCELORMITTAL INVESTS $1.2 BLN IN KRYVORIZHSTAL, NO PLANS TO SELL PLANT – CEO

KYIV. June 22 (Interfax-Ukraine) – ArcelorMittal, the largest metal company in the world, has invested $1.2 billion ArcelorMittal Kryvyi Rih (former Kryvorizhstal, Kryvy Rih, Dnipropetrovsk region) and the company has no plans to sell the enterprise due to the difficult situation on the metal product markets, CEO Paramjit Kahlon said at a trade union conference held on June 11.

“We’re doing business. Sometimes it brings profit, sometimes – not, there are only losses. If we have losses, it does not mean that everything should be left. The corporation has spent $1.2 billion here,” he said.

Kahlon said that the company still has many projects, and some of them will be realized in the near future.

“What other foreign company spends such money in Ukraine? We do this not to throw once everything. Goods times would arrive, I’m sure in this. Then we won’t doubt and increase wages by 15% or 20%. Now times are hard. The enterprise will be able to survive them with your support,” he said.

When asked about the expected 12% reduction of the mining department workforce, Kahlon confirmed that this would happen.

“I cannot name the figure now, as everything should be checked,” he said.

Kahlon also said that the increase of wages by 8% announced in October, if finally agreed with the head office, would also affect employers with fixed salaries. He also said that increasing salaries for other workers should be discussed.

At the conference ArcelorMittal Kryvyi Rih proposed to representatives of the owner of the enterprise to increase salaries from October 1 by another 8%. It was also proposed that 50% of bonuses for 2015 will be paid by July 7, and the rest will be paid in February 2016.

The trade union of ArcelorMittal Kryvyi Rih insists on an increase of salaries for its workers, taking into account the devaluation of the hryvnia, and the growth of utilities tariffs, prices of food and articles of prime necessities.

EU TO RELEASE REPORT ASSESSING UKRAINE’S VISA-FREE TRAVEL PREPARATIONS BY DEC 15 – KLIMKIN

KYIV. June 19 (Interfax-Ukraine) – The EU will release a full report by December 15 on the preparations made by Ukraine towards obtaining a visa-free regime with the EU, Ukrainian Foreign Minister Pavlo Klimkin has said.

“We have a clear agreement on December 15 as a final date, when the European Union will present a full report on what has been done by Ukraine,” the minister said during an hour of questions to the government on Friday.

Klimkin said that Ukraine and the EU have an agreement on the expert missions which will assess Ukraine’s progress towards obtaining the visa-free regime.

EUROPEAN COMMISSION TO PROVIDE EUR 55 MLN OF TECHNICAL AID TO UKRAINE FOR SME

KYIV. June 19 (Interfax-Ukraine) – The European Commission will provide EUR 55 million of technical aid develop small and medium-sized enterprises (SME) in 15 regions of Ukraine.

Economic Development and Trade Minister of Ukraine Aivaras Abromavicius and European Neighbourhood Policy and Enlargement Negotiations Commissioner Johannes Hahn signed the memorandum of understanding in Kyiv on Thursday.

“I’m sure that the driver of the economy in the near term and close outlook should be small and medium-sized enterprises. This is the most mobile and active part of businessmen,” Abromavicius said during the signing of the memo.

The minister said that EUR 55 million will be used to open 15 centers for support of SME in Ukrainian regions. The centers will provide consultations to businessmen and help them to find new markets.

Abromavicius said that the today’s memo is a first part of the program which could open an opportunity for receiving EUR 40 million from the SME loan guarantee facility by Ukraine and in the future the sum could be extended to EUR 1 billion.

“The tool is intended to help SME to use new trade opportunities and improve access to financing,” Hahn said.

He said that taking into account the today’s memo the total sum of EU grants to Ukraine only this year amounts to EUR 200 million.

Е5Р TO HOLD MEETING IN OCT ON PROVISION OF FUNDS TO UKRAINE FOR ENERGY EFFICIENCY

KYIV. June 19 (Interfax-Ukraine) – The Eastern Europe Energy Efficiency and Environmental Partnership (E5P) is ready to provide some funds for energy efficiency in Ukraine.

The State Agency on Energy Efficiency and Energy Saving of Ukraine reported on Wednesday that the announcement was made by Е5Р Manager Anders Lund at a meeting with Agency Chairman Serhiy Savchuk where the sides discussed the possible ways of extending government support to modernize heating efficiency of public buildings.

Lund said that in October 2015 Е5Р plans to hold a broad coordination meeting where the issue of providing funds to Ukraine for energy efficiency.

“Taking into account the fact that the state program on modernization of heating efficiency is of great demand, the issue of raising grants for modernization of heating efficiency in the future periods has aroused,” reads the report, citing Savchuk.

The decision to create E5P was made on April 28, 2009 by the European Bank for Reconstruction and Development (EBRD), the European Commission, the European Investment Bank (EIB), the North Investment Bank (NIB), The Nordic Environment Finance Corporation (NEFCO), the International Bank for Reconstruction and Development (IBRD) and the International Finance Corporation (IFC).

EU MAY PROVIDE EUR 70 MLN TO UKRAINE FOR PROGRESS IN ESTABLISHING RULE OF LAW – EU COMMISSIONER HAHN

KYIV. June 19 (Interfax-Ukraine) – European Commissioner for Enlargement and European Neighborhood Policy Johannes Hahn has said the EU will provide assistance worth around EUR 70 million in acknowledgement of the progress Ukraine has made in establishing the rule of law.

The European Union will provide substantial assistance for Ukraine’s achievements in the field of rule of law, he said at a joint press conference with Ukrainian President Petro Poroshenko in Kyiv on Thursday.

He noted that there is no definite figure yet, but it may be around EUR 70 million and would come from the EU Framework Fund.

PRIVATIZATION IN UKRAINE SHOULD START WITH SALE OF LARGE ENTERPRISES – WSE HEAD

WARSAW. June 19 (Interfax-Ukraine) – The privatization of state objects in Ukraine should start with the sale of the largest enterprises, President of the Warsaw Stock Exchange (WSE) Board Pawel Tamborski, who is a member of the supervisory council for the reform of state enterprises under the Ministry of Economic Development and Trade of Ukraine, has said.

“We [the supervisory council] have just started work: under the leadership of Odesa Region Governor Mikheil Saakashvili we gathered a professional team, consisting of representatives of the European Bank for Reconstruction and Development (EBRD), the World Bank, as well as experts from Ukraine, having international experience. The council in terms of its structure consists of several departments and I was involved in the division responsible for privatization. Speaking about the privatization process, we encourage our colleagues in Ukraine first to enter the market with relatively large transactions, which to some extent reflect the state of the county’s economy. This is what helps to attract international investors and expand their presence in Ukraine, which in the future might serve as a foundation for the development of the domestic stock market,” he said while speaking at Warsaw Capital Market Summit 2015 in Warsaw.

According to him, relevant transactions could be carried out not only through the capital market, but also by special procedures – through sales to a strategic investor or merger and acquisition procedures (M&A).