KYIV. Dec 1 (Interfax-Ukraine) – Grain exports in FY 2016 (July-June) will total 4.5 million tonnes, the founder and board chairman of Kernel Andriy Verevsky said at a phone conference with investors.
“This financial year we plan to realize our ambitious plan: to export 4.5 million tonnes of grain,” he said.
Verevsky said that the company completed the winter crop sowing campaign, although due to bad weather, wheat sprouts are growing slowly.
“Today the situation is better than a month ago, but it is early to make the final decisions on further actions. Maybe, 10-15% of fields will be re-sowed with spring crops. It is not a problem for us. We have resources. We could re-sow with corn and soybeans, which would balance additional expenses,” he said.
Verevsky said that in September 2010 Kernel signed a contract with Creative on crushing 200,000 tonnes of sunflower seeds on a tolling basis. The contract would expire soon. There are no new contracts, although Kernel is working on this direction.
Kernel is a vertically integrated company which 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. Nov 30 (Interfax-Ukraine) – The European Union has offered Ukrainian businesses and investment projects funding worth EUR80 billion under the Horizon 2020 program
Managing Partner of the Poberezhnyuk and Partners law group Larysa Poberezhnyuk told Interfax-Ukraine the country signed an agreement with the EU in March on Ukraine’s participation in the Horizon 2020 program, which was ratified last August.
Horizon 2020 is the largest EU program for research and innovation with a budget of approximately EUR80 billion.
The period of the program’s implementation is seven years, from 2014 to 2020.
“This cooperation has opened up new prospects for the development of national business. Intelligent, sustainable and inclusive growth are the goals that Europe proclaimed in its strategy until 2020 that could be implemented in Ukraine thanks to this program, which allows us to get funding for innovative projects and new directions,” she said.
According to the lawyer, Ukrainian enterprises and companies have the opportunity to fully participate in these processes to develop their own business and implement new technologies.
KYIV. Nov 30 (Interfax-Ukraine) – Lozova Machinery (Kharkiv region), part of UPEC industrial group, plans to increase the share of the European market of total exports of agricultural machines to 40-50% in 2016 compared to 30% at present.
Vice President for Marketing and Sales at UPEC Roman Girshfeld told Interfax-Ukraine that the plans are based on the expected signing of agreements with large European dealers.
Some agreements were reached with representatives of large dealers in the EU (France, Romania, Poland, Germany, Bulgaria, Lithuania and Estonia) at the Agritechnica 2015 exhibition held on November 8 through November 14 in Hanover (Germany).
Girshfeld said that Lozova Machinery plans to increase exports by six times in 2016, and the large growth will be seen on the EU market.
“This year was a watershed year for Lozova Machinery and exports sales grew. Exports of agricultural machinery rose by 2.5 times, being 86 units,” he said.
He said that Lozova Machinery plans to cooperate with several key dealers in each European country.
It is also planned to expand the range of products.
KYIV. Nov 30 (Interfax-Ukraine) – An agreement between Ukraine and Japan on mutual protection and promotion of investment has taken effect, Ambassador of Japan to Ukraine Shigeki Sumi has said.
“The agreement on promotion and protection of investment between Ukraine and Japan comes into effect on November 27,” he said at a press conference in Kyiv.
According to the ambassador, talks between Ukraine and Japan began in 2011, and in February 2015 the agreement was signed by Minister of Economic Development and Trade of Ukraine Aivaras Abromavicius.
The diplomat hopes the agreement will contribute to the economic development of Ukraine.
In addition, Sumi said that Japanese businessmen are increasingly paying attention to the Ukrainian market. According to him, Ukraine’s advantage is its geographical location, the availability of skilled personnel, as well as labor costs. In this regard, the creation of production in Ukraine for exports to EU countries is a most profitable investment.
Ukrainian diplomats, government officials and businesspeople can predict the situation on the domestic and European markets after the full-scale launch of a free trade area between Ukraine and the European Union as of January 1, 2016, but so do representatives of the EU. Their reasons are: they are interested in a strong domestic market in Ukraine with a fair level of public purchasing capacity and a developed economic sector. To achieve this, the country should use all the capabilities it has available, namely to restore its industrial capacity.
This opinion was expressed by Head of the Delegation of the European Union to Ukraine, Ambassador Jan Tombinski at a roundtable meeting in Kyiv and it correlates fully with what Ukrainian industrialists have been insisting on for a long period of time.
“The European Union can provide Ukraine with the necessary infrastructure and modern production facilities. Currently, many Western countries have moved their industrial capacities to Asia, namely China or other regions. The proximity of Ukraine to the EU, its status as an active partner will attract European investors, here is a unique chance for your country,” Tombinski said.
In his words, although Europeans will only think about successful exports to the Ukrainian market after January 1, 2016, it is important that this market should be capable of paying — with a high level of public prosperity. Thus, the country should utilize all its available resources and develop as an economy.
The European Ambassador in fact repeated the view that has long been circulating in the business environment of Ukraine. In particular, the need for the revival of industry and a modern industry-oriented policy has become one of the priorities stipulated in the anti-crisis program of joint actions of the Ukrainian government and businesses, which was prepared by leading business associations, analysts and community activists in Ukraine. In fact, as of today, this is the only comprehensive economic development plan which has already been submitted to the government and will soon be presented to the European community in Brussels.
Restoration of industrial capacity, manufacturing value-added, high-technology products will guarantee the competitiveness of the economy and exports, according to Ukrainian industrialists. To achieve this, Ukraine should pursue a modern industry-oriented policy, in particular through appropriate government-supported programs. This applies primarily to engineering and car building and the defense industry. Such actions will activate the related industries, which will be able to create jobs for hundreds of thousands of Ukrainians.
“We have got what to offer to the world, of course, provided there is a reasonable state approach to the restoration and development of the industrial sector, support of domestic producers, creation of conditions for long-cycle production,” they underline.
As of now, Ukraine has experienced a 15% decline in production. The development of the industry is hindered by the lack of incentives for the production of goods, and there is a need for better access to loans, as the Central Bank’s current refinancing rate is 22%.
Industrialists and entrepreneurs support the cancellation of the existing additional tax on most imported goods at the rates of 5% and 10%. Such a move will boost multilateral trade and domestic production, reduce the import of raw materials and components, and will create preconditions for signing more contracts to produce high quality products at affordable prices.
This, in turn, will stimulate the internal market, create new jobs, and increase the population’s purchasing capacity. Ukrainian entrepreneurs from the most powerful union of industrialists and entrepreneurs —the Ukrainian League of Industrialists and Entrepreneurs (ULIE) and the Anti-Crisis Council of NGOs —have urged the Ukrainian parliament to revisit the issue as soon as possible and eventually cancel the additional import tax.
They stress that this correlates with agreements reached with the International Monetary Fund and the European Union on abolishing this tax by the end of 2015.
Moreover, the fiscal impact of the tax is no longer relevant due to negative effects caused by higher prices of raw materials, technologies, equipment, and components.
The tax was introduced to stabilize the balance of payments of Ukraine and boost budget revenue. However, none of the goals was achieved, and thus there is no reason for keeping the tax.
On the contrary, when manufacturers get access to the required materials and technologies that are critical imports, they can develop production, increase the added value of produce, thus stabilizing prices and being successful in export, being competitive both in Ukraine and abroad. This, in turn, means the development of the economy, an increase in tax revenues to the national budget and, very importantly, the preservation and creation of new jobs.
Obviously, this is a scenario the foreign partners of Ukraine are interested in, as the insolvent market is not what Ukrainian and Western communities would want.
It is worth mentioning that the additional import tax set at 5-10% was introduced earlier this year to make Ukraine’s balance of payments more stable. In general, it involves about 100 commodity groups, except for so-called “critical imports,” i.e. fuel, some medicines and other products.
