Business news from Ukraine

Business news from Ukraine

Expert: Post-war program to restore Ukrainian infrastructure should be based on FIDIC contracts

A large-scale post-war program to rebuild Ukraine’s infrastructure should be based on FIDIC contracts, says Mykola Tymofeev, CEO of Ukraine’s largest infrastructure construction company, Avtomagistral-Pivden.

“International donors prefer FIDIC contracts because they provide for a clear division of responsibilities between the client and the contractor, prevention of corruption risks, transparent dispute resolution practices, and professional arbitration. The investor is confident that the financed contract will be implemented on time – there will be no legal conflicts or lengthy litigation,” he said during the FIDIC Users Conference in London.

FIDIC is the largest international organization in the field of construction consulting, which unites more than a million practicing consulting engineers in 104 countries. The main goal of FIDIC is to regulate the relationship between the client and the construction contractor through standard forms of contracts. Infrastructure construction contracts financed by the World Bank, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) are executed under FIDIC model contracts.

The main topics of the conference in London included new practices for appointing dispute resolution boards, the use of AI technologies for tender preparation and project management, and reducing carbon emissions in construction projects. The event also included the awarding of the winners of the FIDIC Contract Users’ Awards 2024.

According to Mykola Tymofeev, Avtomagistral-Pivden is the only contractor from Ukraine invited to the conference. More than a decade ago, Avtomagistral-Pivden representatives became the first Ukrainian certified FIDIC consulting engineers. Currently, there are more than 20 such engineers in the company. FIDIC membership requires compliance with the FIDIC Charter on the norms of professional ethics and behavior of consulting engineers.

“The fact that we were invited to the conference is further evidence of the international recognition of our company, confirmation of the high professional level of our consulting engineers. “Avtomagistral-Pivden works under FIDIC contracts both in other countries and on international projects in Ukraine. But we are ready to implement all Ukrainian infrastructure projects under the same FIDIC rules to stop pressure and interference in our work from law enforcement agencies that do not exist in any other European country once and for all,” Tymofeev summarized.

He also noted that almost all of the experts with whom he spoke at the conference hope that next year our country will be able to launch a large-scale recovery program with international support. “Which, of course, should be based on FIDIC contracts,” Timofeev said.

Avtomagistral-Pivden LLC has been on the market since 2004. It designs and builds highways, bridges, interchanges, airfield complexes, and hydraulic structures. The company’s owner is listed in Opendatabot as Oleksandr Boyko. According to the financial results for 2023, the company’s net profit amounted to UAH 624.9 million, and revenue was UAH 8.215 billion.

https://interfax.com.ua/

 

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Onion price analysis in Ukraine

After the recent increase in price in Ukraine again decreased selling prices for onions, according to analysts of the project EastFruit. The main reason for the downward price trend was a decrease in demand in this segment, due to the fact that producers are increasingly offering for sale vegetables of medium and low quality.

Thus, today sales of onions are formed within the range of UAH 10-16/kg ($0.24-0.38/kg), which is on average 16% cheaper than at the end of the last working week. It should be noted that closer to the weekend wholesale batches of onions in Ukraine are already sold at prices inferior to the previous season.

Sellers are forced to reduce prices due to a noticeable decrease in demand in this segment. At the same time, the quality of onions in storage is rapidly deteriorating, so the owners are reducing prices in order to stimulate sales and sell out the available volumes of such products as soon as possible.

It is worth noting that most farmers today prefer to refrain from selling onions, citing extremely low prices. Recall that in early December 2023, Ukrainian producers shipped onions on average 20% more expensive than today.

You can get more detailed information on the development of the onion market and other horticultural products in Ukraine by subscribing to the operational analytical weekly – EastFruit Ukraine Weekly Pro. Detailed information about the product can be found here.

EastFruit

 

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EBRD to provide EUR80 mln loan to Ukrnafta for construction of small gas generation

On Wednesday, the Board of Directors of the European Bank for Reconstruction and Development (EBRD) approved a loan of up to EUR80 million to Ukrnafta under state guarantees for the construction of about 100 MW of small gas-fired distributed power plants and cogeneration facilities. According to the bank’s website, the loan will help solve the problem of electricity shortages and ensure uninterrupted power supply to households and businesses.

The total cost of the project will be EUR103.8 million, and it will also be financed by a grant of up to EUR22 million expected to be provided by the Netherlands, the United States and other donors through the EBRD’s Special Crisis Response Fund, as well as a technical support grant of EUR1.8 million from other donors.

“Ukrnafta is Ukraine’s largest oil producer and operator of the national network of filling stations. In March 2024, the company took over the management of Glusco’s assets and operates 547 filling stations – 462 owned and 85 managed.

The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, the company has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.

“Ukrnafta holds 92 special permits for commercial development of fields. It has 1832 oil and 154 gas production wells on its balance sheet.

Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share. In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company owned by private owners, which is now managed by the Ministry of Defense.

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Nearly 80% of AmCham Ukraine members expect war to end in 2025 – survey

More than three quarters – 77.8% – of participants in the annual meeting of the American Chamber of Commerce in Ukraine (AmCham) expect a ceasefire in 2025.
In a short survey of more than 230 respondents, more than two-thirds – 67.9% – expect US President-elect Donald Trump to visit Kyiv next year, Interfax-Ukraine reports.
Almost two-thirds – 62.7% – expect international flights to resume in 2025.

Media reports claim that Ministry of Internal Affairs intends to lease premises for service center from company that may have Russian beneficiaries

The Ministry of Internal Affairs is planning to move its largest service center to a furniture shopping center that may be owned by foreigners with business in Russia. This is stated in the material of Channel 5.

The journalists write that from January 1, 2025, the management of the MIA’s CSC plans to relocate the largest modern service center in Ukraine, which was opened only in 2021.

At the same time, the premises where the move is planned is located on the Velyka Kiltseva Road, where another MIA Service Center No. 8047 (110-A Velyka Kiltseva) is already 500 meters away.

“The new premises leased by the Ministry of Internal Affairs will be located at 110 Velyka Kiltseva Street, where the Araks furniture center chain is currently located. That is, a “duplicate” is actually being created,” the article says.

According to open registers, the company from which the MIA’s CMC plans to lease the premises may be affiliated with the Russian Federation. In particular, the owner of the website of the Araks furniture center chain, araks.ua, is Fiesta LLC (EDRPOU code 32792074). As of 02/23/2022, Fiesta LLC had owners from the Russian Federation. As of 02/23/2022, Fiesta LLC also registered the ARAX trademark, which, according to OpenData, had owners from the Russian Federation.

As noted in the article, the Register of Property Rights shows that the premises are currently mortgaged. The mortgagor is the aforementioned Fiesta LLC, and the mortgagee is the Black Sea Trade and Development Bank, registered in Greece.

In June 2023, Fiesta LLC changed its founders’ information. Thus, the founder Mezhlumyan Ararat Hrantovich, who was the CEO of Rentservice LLC, located in Moscow, was removed. At the same time, Artem Hrayrovych Chirkinian, who is allegedly a German citizen, remains among the founders, although he is listed in Russian registers as a person with the Russian TIN 772860730022, who is the founder of a number of Russian companies, in particular, he was the founder of LLC “Primavera”.

“The ultimate beneficial owner of Fiesta LLC, Chirkinian Hrayr Volodymyrovych, with whom the MIA concludes an agreement for the lease of the MIA’s data center, also has a Russian TIN 771583890710, which was issued by the Moscow Tax Inspectorate. None of the owners of Fiesta LLC, according to open sources, has Ukrainian citizenship,” the investigators point out.

Source: https://focus.ua/uk/ukraine/682338-mvs-planuye-orenduvati-primishchennya-dlya-servisnogo-centru-v-kompaniji-v-yakiy-mozhut-buti-rosiyski-beneficiari-zmi

“Biosphere” to open production in Uzbekistan and expand exports to Central Asia

Biosphere Corporation, one of the market leaders in the production and distribution of household goods, plans to open a production facility in Uzbekistan next year to produce recycled garbage bags rather than virgin polymers and actively promote its products in this and neighboring Central Asian markets, according to Andriy Zdesenko, the corporation’s founder and CEO.

“This will load our Polygreen plant in Fastiv, which currently has a 20% capacity reserve. And it will allow us to build another plant in Ukraine that will produce pellets and send them to Uzbekistan to produce garbage bags, which we will then supply to neighboring countries,” he said in an interview with Interfax-Ukraine.

“And then sponge sponges, foil-film, slider bags – the whole range that is necessary for development,” Zdesenko added.

He clarified that Uzbekistan has protected its market by banning the export of garbage bags of a certain thickness and thus stimulated the launch of domestic production. In addition, the cost of logistics to the region, for example, to Kazakhstan, has tripled due to the war, and delivery times have increased from three weeks to two months.

“Therefore, if we want to be in the market of Uzbekistan, where I think there will be 40 million people in five years, we need to produce there,” said the Biosphere CEO.

He also emphasized that there are about 100 million people around Uzbekistan, including Afghanistan, whose market is actively developing, and there are many trade hubs in the region where business is very active.

Biosphere Corporation has been operating in Ukraine for over 25 years. The product portfolio includes more than 1 thousand items under 16 own brands (Freken BOK, Faynyi Bonus, Vortex, Likit, Smile, Smile Baby, Superfresh, Bambik, Novita, Lady Cotton, Alufix, PRO service, GoWipes, Chysta Peremoha, Pany Blisk and PoketMon). The corporation is the official distributor of such international brands as TORK, Selpak and Fantom.

The corporation’s capacities in Ukraine are represented by three plants with a total production area of 35 thousand square meters in Dnipropetrovska, Kyivska and Khmelnytska regions, as well as logistics complexes with an area of 30 thousand square meters. Together with the French Groupe Lemoine, Biosphere also owns a plant in Estonia for the production of cotton products with an area of 8.5 thousand square meters.

At the end of 2023, the company opened a new FOOD business line with its own Cupsoul production, represented by such tea brands as Graff, Ritz Barton, and others.

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