The Supervisory Board of Ukrzaliznytsia JSC (UZ) has approved the indexation of freight transportation tariffs, the company’s press service reports.
“Tariffs for rail freight transportation have not been indexed for almost two years – since the summer of 2022, and the previous indexation did not bring tariffs to an economically justified level. During this time, the producer price index for industrial products has already reached 176.4%. At the same time, the railroaders proposed to limit the indexation of tariffs to a much more moderate figure: only 37%, or about 13% per annum, given that 2.5 years have passed since the last indexation,” the press service said.
It is noted that the proposals to increase tariffs were approved by the board of UZ on December 5, 2024.
The approved changes will be further submitted for consideration by the Tariff Council under the Ministry of Communities and Territories Development of Ukraine, UZ said.
The company reminded that according to the Cabinet of Ministers Resolution No. 1392 of December 16, 2009 “On Ensuring Transparency of the State Tariff Policy for the Transportation of Goods by Rail within Ukraine”, tariffs for the transportation of goods by rail within Ukraine should be indexed annually.
“Unfortunately, this rule was not regularly implemented and the dynamics of indexation of tariffs for rail freight transportation lagged far behind changes in prices for the main resources consumed by the railroad,” UZ said, recalling that tariffs for rail freight transportation had not been indexed for almost two years – since the summer of 2022, and the previous indexation did not bring tariffs to an economically justified level. During this time, the producer price index for industrial products has already reached 176.4%.
Since the last revision of freight transportation tariffs, electricity prices have increased by 166%, diesel prices by 110%, spare parts for diesel locomotives by 217%, spare parts for electric locomotives by 22%, bearings by 37%, and solid-rolled wheels by 20%.
It is noted that this deprived the company of the opportunity to repair infrastructure and rolling stock to the required extent, as well as to index the salaries of railway workers, of whom more than 10 thousand are defending Ukraine in the ranks of the Armed Forces, and to fulfill social obligations to them.
“The indexation of freight transportation tariffs is vital for the Ukrainian railways to operate sustainably and meet safety standards. The level of tariff indexation was calculated to be at least sufficient to finance operating expenses and carry out critical infrastructure repairs,” the press service of Ukrzaliznytsia quoted Hafer Cheetah, chairman of the company’s supervisory board, as saying.
It is reported that the planned indexation will make it possible to finance the repair of rolling stock and infrastructure at the minimum required level. Otherwise, there will be significant risks to the continuity of the safe operation of the state’s critical infrastructure.
Oleksandr Pertsovskyi, Chairman of the Board of Ukrzaliznytsia, promised to openly present and explain to customers the changes in the upcoming freight tariffs.
“We will openly present and explain the indexation proposals to our customers, both the largest and smaller shippers from all sectors of the economy, and will also fix with them what compensations and operational improvements they expect from Ukrzaliznytsia,” the press service quoted the chairman of the board of Ukrzaliznytsia as saying.
He emphasized that the railroad continues to deliver cargo reliably despite daily shelling and is restoring track and power infrastructure as soon as possible to avoid letting customers and the entire Ukrainian economy down.
“At the same time, we owe a significant debt to the railroad workers themselves – their salaries are significantly lower than the industry average, and a number of social benefits have been suspended. Indexation of tariffs is critically necessary to ensure that the working conditions of railway workers do not deteriorate,” Pertsovsky said.
Earlier it was reported that the Tariff Council under the Ministry of Community Development, Territories and Infrastructure (MiRD) approved the draft decision on the unification of tariffs for freight transportation by rail.
As reported, Ukrzaliznytsia and representatives of Ukrainian business are working together to unify the tariff setting system for rail freight transportation proposed by Ukrzaliznytsia starting in October 2022.
Former Ukrzaliznytsia CEO Yevhen Lyashchenko said in an interview that without unification, the company would not be able to end the year with a profit. According to him, the company’s plan for 2024 is not to increase freight tariffs but to harmonize them. This implies a complete change in the model of their calculation by simplifying the tariff system, which consists of five different classes and more than 20 coefficients. The proposals include a single tariff for the transportation of empty wagons and a division into classes linked to transportation technology.
According to preliminary estimates, the harmonization of tariffs should bring the company an additional UAH 3-4 billion by the end of the year, depending on when the government approves this decision.
Pharmaceutical company Lekhim PrJSC (Kyiv) plans to appoint Crowe Erfolg Ukraine LLC as the auditor of the company and consolidated financial statements of its subsidiaries (Lekhim Group of Pharmaceutical Companies) for 2024 and 2025.
As the company reported in the information disclosure system of the National Securities and Stock Market Commission (NSSMC), the shareholders will consider such a proposal of the board of directors of the company at a meeting on December 27.
As reported, in 2023, Lekhim reduced its net profit by 4.3 times compared to 2022 to UAH 56.929 million.
The Lekhim Group of Companies includes Lekhim-Obukhiv LLC, Lekhim Kharkiv PrJSC, Technolog (Cherkasy region), and Lekhim-Vilnius CJSC.
Lekhim produces more than 200 medicinal products of almost all therapeutic groups. It registers more than 10 new drugs annually. The products are exported to more than 35 countries. One of Lekhim’s anti-tuberculosis drugs has been prequalified by the WHO.
Crowe Erfolg Ukraine is a member of Crowe Global, one of the world’s largest audit networks.
The U.S. Department of Commerce (U.S. Department of Commerce) has maintained the existing anti-dumping duties on construction steel rebar from Ukraine, Belarus, Indonesia, Latvia, Moldova, Poland and China.
According to the Ministry of Commerce in the Federal Register on December 13 this year, such conclusions are contained in the findings of the United States International Trade Commission (USITC) dated December 10, 2024, following the fourth five-year review of the duties.
The document emphasizes that the USITC believes that the elimination of duties on rebar from Belarus, China, Indonesia, Latvia, Moldova, Poland, and Ukraine “is likely to result in continued or recurring material injury to the U.S. industry within a reasonable foreseeable time.”
It is specified that the Commission decided to conduct the review of the duties on November 1, 2023. Hearings on this topic were held on October 3, 2024.
As reported, on November 1, 2023, the U.S. Department of Commerce published information on the initiative of the fourth review of anti-dumping duties on rebar from seven countries.
The amount of the duty on the supply of Ukrainian reinforcing bars (Steel Concrete Reinforcing Bars) to the US market since their introduction (2002) is 41.69%.
It was also reported that in mid-2000, the Rebar Trade Action Coalition (RTAC), an association of American producers of iron bars, and its individual members, Ameri Steel (Tampa, FL), Auburn Steel Co, Inc. (Auburn, NY), Birmingham Steel Corp. (Birmingham, AL), Border Steel, Inc. (El Paso, TX), CMC Steel Group (Seguin, TX), Marion Steel Co. (Marion, OH), Nucor Steel (Darlington, SC) and Riverview Steel (Glassport, PA) – filed a petition with the International Trade Commission to initiate an anti-dumping investigation against imports of these products, in particular from Ukraine.
The Ukrainian respondent in this investigation was Kryvorizhstal, which was later acquired by Mittal Steel, renamed ArcelorMittal.
In mid-2001, the Commission recognized that rebar supplies, in particular from Ukraine, were harming U.S. producers of similar products by supplying them at dumped prices, and in 2002 an anti-dumping duty of 41.69% was imposed.
Under US law, anti-dumping duties are reviewed every five years.
“ArcelorMittal Kryvyi Rih is the largest rolled steel producer in Ukraine. It specializes in long products, including rebar and wire rod.
In January-November this year, Ukraine increased imports of aluminum ore and concentrate (bauxite) in physical terms by 82.3% compared to the same period last year, up to 30,140 thousand tons.
According to statistics released by the State Customs Service (SCS) on Monday, bauxite imports in monetary terms increased by 78.2% to $3.672 million during this period.
The imports came mainly from Turkey (76.74% of supplies in monetary terms), China (21.06%) and Spain (2.12%).
Ukraine did not re-export bauxite in the period under review, as well as in January-November 2023.
As reported, in 2022, Ukraine reduced imports of aluminum ore and concentrate (bauxite) in physical terms by 81.5% compared to the previous year – to 945.396 thousand tons. Imports of bauxite in monetary terms decreased by 79.6% to $48.166 million. Imports were mainly from Guinea (58.90% of supplies in monetary terms), Brazil (27.19%) and Ghana (7.48%).
In 2023, Ukraine imported 19,830 thousand tons of bauxite worth $2.360 million.
Bauxite is an aluminum ore used as a raw material to produce alumina, which is used to make aluminum. They are also used as fluxes in ferrous metallurgy.
Mykolaiv Alumina Plant (MAP) imports bauxite to Ukraine.
Foreign investors are not yet ready to finance projects in Ukraine due to weak demand for steel products and high risks.
Yuriy Ryzhenkov, CEO of Metinvest Group, said this in an interview with Bloomberg Television when asked about the impact of the war on investment in Ukraine, the need for peace guarantees and the company’s investment opportunities in neighboring countries.
“The situation in Ukraine remains quite complicated, and we do not see any slowdown in the war. On the contrary, the hostilities have become even more intense over the past six months. Consequently, the investment climate is still not favorable for investments in Ukraine. However, as an international player, especially in European markets, Metinvest has decided to launch a project to build a green steel plant in Italy. This plant will be a pilot project for us and our partner Danieli to restore the Ukrainian steel industry after the war is finally over,” the CEO said.
According to him, freezing the war is not enough, as Ukraine has a negative experience with the Minsk agreements. Therefore, the country now needs reliable security guarantees, and this is the only way to attract large investments, including in green steel. Before that, it is unlikely that significant investments will come to the country.
Regarding the project in Italy, the company’s CEO said that its cost is estimated at EUR 2.5 billion and will be financed through equity investments, as well as mainly with the support of loans from European financial institutions, including state and public funds.
“If we are talking about Ukraine, we will need the same amount of investment to change the Ukrainian steel industry. That is why I emphasize that without the final end of the war and reliable security guarantees, the implementation of these plans in the near future looks unlikely. It is hard to imagine that investors would agree to invest substantial funds in the modernization of the Ukrainian steel industry in the current environment,” Ryzhenkov explained.
He reiterated the need for at least security guarantees: “I’m not sure what kind of peace agreements should be signed, but security guarantees should come from our allies and partners – from the United States and Europe. And they must be strong enough to convince investors that this is a real end to the war and that Russia will not attack again in a few months or years.”
The CEO also noted that investors are simply not investing at the moment: investments supported by European and other governments are being implemented, as well as state investments. However, private investments have been suspended, and investors are waiting for the situation to be clarified.
At the same time, the CEO explained, “we are open to any projects that can provide synergy with our resource base in Ukraine. We are considering the possibility of acquiring and modernizing facilities that do not yet belong to the category of decarbonized steel, but have the potential to become so. There are several facilities in neighboring countries that meet this criterion, but I will not name them, as this may affect the negotiations.”
In addition, the company is studying distressed steel assets with decarbonization potential that can be restored and brought back into operation – these assets are mainly located in Southern and Eastern Europe, which is the region of the group’s operations, and that is why they attract Metinvest’s attention.
Answering a question about the situation on the steel markets, the CEO stated that demand in the steel industry remains weak, especially in Europe.
“Steel companies across Europe are facing difficulties. However, steel remains the most versatile material in the world, and the industry is highly cyclical. So we are currently in the downward stage of the cycle, but we know that a recovery is inevitable in the future. That is why we are ready to invest today to take advantage of future growth,” Ryzhenkov summarized.
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the United States. Its major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
Vitagro Group of Companies has invested a total of about $50 million in the development of its projects since the beginning of the full-scale invasion, the company’s development and investment director Serhiy Savchuk said at the conference “Doing Agribusiness in Ukraine” in Kiev on Wednesday.
According to him, the main investments were made in the construction of a plant for the production of microfertilizers and plant protection products (PPP) Vitagro Partner, biomethane and bioethanol plants, as well as in increasing the capacity of the oil extraction plant.
Savchuk specified that about $8 million was spent on the construction of the Vitagro Partner plant and more than $6 million on the construction of the biomethane plant. The biomethane plant was the first in the country to be connected to the gas transportation system of Ukraine, and it has been pumping biomethane for export for the third month already.
Investments in the bioethanol plant totaled $20 million, while the expansion of the oil extraction plant’s capacity cost less than $15 million.
“Projects that were planned and developed already during the war. Vitagro Group felt that even in the conditions of war it is possible to work and develop new projects, so, for example, at the state auction bought a distillery in Ternopil region and now it produces 25 thousand tons of biomethane per year. In parallel, the production of protein feed additive for animals (DDGS) is launched, the capacity of which will be 25 thousand tons per year”, – said the representative of the company.
VITAGRO group of companies was established in 1999. In 2021, it employed 5 thousand employees, its revenue amounted to $211.3 million, EBITDA – $101 million.
The group has a land bank of 85,000 hectares. The group also has a seed and crop protection products plant, as well as sunflower oil production facilities and one of the five largest orchards in Ukraine. VITAGRO also has 5,000 head of cattle and 110,000 head of pigs, elevator capacity for 400,000 tons, as well as three brick factories and nine asphalt plants, four solar power plants with a total capacity of 16 MW.
The first pilot biomethane project of VITAGRO was presented in June 2023 in Dobrogorshcha village in Khmelnytsky district of Khmelnytsky region, where a biomethane plant with a capacity of 2.9 million cubic meters per year was built on the basis of a farm and a biogas plant. The investment in the project is estimated at EUR7.6 million. The manure, silage and straw from the group’s farms with pigs and cattle will be used for methane production.
According to the information in the Unified State Register of Legal Entities and Individual Entrepreneurs, the main beneficiary of Vitagro is MP Serhiy Labaziuk, while its CEO is Petro Labaziuk.
