Business news from Ukraine

Business news from Ukraine

“Ukrzaliznytsia” has reduced freight transportation volumes by 12.4%

JSC “Ukrzaliznytsia” (UZ) in the first half of 2023 transported 70.5 million tons of cargo, which is 14.5 million tons or 12.4% less compared to the same period of 2022, according to the UZ report on the results of freight work for the first half of the year.

According to statistics, 28.2 million tons of cargo, or 40% of all volumes, were transported in export traffic in the first half of 2023, which is less by 5.2 million tons or 15.4% compared to the first half of 2022.

It is noted that the volume of transportation of iron and manganese ore fell by 44.7%, or 7.003 million tons – to 8.672 million tons.

“Russia’s blockade of sea ports led to a significant restriction of exports. Cargo flows were redirected mainly through Ukraine’s western international railroad crossings to EU countries. Thus, 90% of ore exports are directed through western border crossings,” the UZ report states.

Exports of ferrous metals fell in the first half of the year by 37.8%, or 1.410 million tons – to 2.322 million tons, and although in March-May it significantly exceeded last year’s figures, in June this gap narrowed due to the destruction of the Kakhovska HPP and reduced production of enterprises in Nikopol, Zaporizhzhya and Kryvorizhzhya districts.

Also, by the end of the first half of the year, the export by rail of minstroymaterials decreased – by 56.9%, or 924.3 thousand tons – to 701 thousand tons.

At the same time, in January-June this year, the volume of grain transportation increased – by 44.5% or 4.027 million tons – up to 13.072 million tons and vegetable oil – by 22.5% or 135 thousand tons – up to 736 thousand tons.

In addition, in the first half of 2023, the volume of cement transportation increased – by 33.4% or 130.7 thousand tons – up to 522.4 thousand tons.

As reported, in June this year UZ transported 12.4 mln tons of cargo, which is 31.9% more compared to June 2022 and 7.9% more compared to May 2023, including export shipments of 4 mln tons (+24.3% and +5.6%, respectively).

Transportation of grain cargoes in June 2023 increased to 2 million tons (+48.4% vs. June 2022), construction materials – to 3.1 million tons (+87%), hard coal – to 2.3 million tons ( +16.3%), iron and manganese ore – to 2 million tons. (2,8%).

For comparison, in May this year, Ukrzaliznytsia transported grain cargo 1.83 million tons, construction materials – 2.5 million tons, hard coal – up to 2.22 million tons, iron and manganese ore – 1.96 million tons.

As of today, UZ has 19 railway border crossings with EU countries and Moldova, of which 14 main ones are functioning and provide freight transportation in the direction of: Poland (4 crossings), Romania (2 crossings), Slovakia (2 crossings), Hungary (2 crossings) and Moldova (4 crossings).

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Ukraine has almost stopped exporting titanium-containing ores this year

Ukraine in January-June this year reduced exports of titanium-containing ores and concentrate in physical terms by 96.1% compared to the same period last year – to 6.196 thousand tons.
According to statistics released by the State Customs Service (SCS) on Monday, in monetary terms, exports of titanium-containing ores and concentrate decreased by 82.9% to $10.386 million.
At the same time, the main exports were to Turkey (32.05% of supplies in monetary terms), Japan (30.91%) and India (9.35%).
Ukraine did not import these products during this period.
As reported, Ukraine in 2022 reduced exports of titanium-containing ores and concentrate in physical terms by 41.8% year-on-year to 322.143 thousand tons, in monetary terms by 19.6% to $130.144 million. The main exports were to the Czech Republic (47.91% of shipments in monetary terms), the United States (11.94%) and Romania (9.75%).
Ukraine in 2022 imported 196 tons of similar products from Senegal (70.41%) and Turkey (29.59%) for $115 thousand.
In Ukraine, titanium-containing ores are currently mined mainly by United Mining and Chemical Company PJSC (UMCC), which has taken over Volnogorsk Mining and Metallurgical Combine (VGMK, Dnepropetrovsk region) and Irshansk Mining and Processing Combine (IGOK, Zhytomyr region), as well as by Mezhdurechensky GOK LLC and Valki-Ilmenit LLC (both located in Irshansk, Zhytomyr region).
In addition, production and commercial firm “Velta” (Dnipro) built a mining and processing plant at Birzulovskoye deposit with a capacity of 240 thousand tons of ilmenite concentrate per year.

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Ukrainian meat producers want to resume exports to Chinese market

Ukrainian producers of meat and meat products have asked the Ministry of Agrarian Policy and Food to consider the possibility of exporting these products to China, the press service of the ministry said.
“We specifically met with specialized associations and representatives of the State Consumer Service before the trip of the Ukrainian official delegation to China, where the details of cooperation in terms of exporting our meat, in particular pork, will be discussed. It is important for us to discuss all the details between market participants so that this issue could be solved efficiently,” First Deputy Minister of Agrarian Policy and Food Taras Vysotskyy said on Tuesday at a meeting of the working group on the development of the meat industry, as quoted in the press release.
The Ministry of Agrarian Policy and Food noted that China is one of the most attractive markets for Ukrainian exporters of poultry, beef and pork meat, as the largest number of applications Ukrainian meat exporters currently receive is from the Chinese market. Because of COVID-19 and the war, exports, particularly of beef, to this country have been suspended.
“Currently, there is a certain warming in trade relations between Ukraine and China and the list of our exporters of beef, pork continues to expand. Also on the agenda is the issue of poultry meat exports,” – stated in the message.
The agency specified that information on key issues has already been exchanged with the Chinese customs in order to prepare bilateral meetings between the countries, which will be held in the near future.

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In January-June, Ukraine reduced imports of lead and tin, but increased imports of zinc

According to customs statistics released by the State Customs Service of Ukraine, Ukraine reduced imports of lead and lead products by 71.8% to $583 thousand ($86 thousand), imports of tin and tin products by 39.3% to $1.130 million ($176 thousand), but increased imports of zinc and zinc products by 1.7% to $20.628 million ($4.708 million).
Zinc was shipped abroad for $72 thousand ($14 thousand in June) in six months, compared with $1.302 million in January-June-2022. Exports of tin and products amounted to $52 thousand ($3 thousand in June) against $392 thousand in the comparable reporting period last year.
Ukraine reduced imports of lead and lead products by 66.6% to $2.839 million.
Imports of tin and tin products fell by 33.5% to $3.312 million, and imports of zinc and zinc products decreased by 58.7% to $38.690 million.
Zinc exports for 2022 totaled $1.331 million, compared to $550 thousand in 2021. Exports of tin and tin products totaled $424 thousand in 2022, compared to $346 thousand the previous year.

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USPP demands to finalize draft law on protection of information infrastructure

The Ukrainian Union of Industrialists and Entrepreneurs (USPP) has demanded that the draft law No. 8087 “On Protection of Information Infrastructure” be finalized due to contradictions with the European legislation, excessive centralization and expansion of powers of the State Service for Special Communications and Information Protection (Gospetsvyaz).
According to information on its website, the relevant appeal was sent to the chairman of the Verkhovna Rada Ruslan Stefanchuk, all parliamentary committees and factions and the president of the country following the results of public hearings organized by the USPP together with the Council of Advocates of Kyiv region with the participation of representatives of the Ministry of Defense, the government, the legal community, representatives of anti-corruption bodies, the public, the IT business and experts.
“The main drawback of the draft law No. 8087 at the public hearings was called the fact that it significantly expands the powers of the State Spetsvyaz and assigns it unprecedentedly broad powers,” the USPP information says.
In particular, in its opinion, the supervisory body will have the right to carry out inspections of any enterprises, access to their facilities and premises, any of their documentation and information, to provide mandatory requirements to any business entity, regardless of whether it is a large corporation, IT-business enterprise or self-employed person (FLP, lawyer, etc.). In addition, the State Spetsvyaz will have the right to involve any other bodies, in particular the SBU and cyber police, in such inspections.
Other shortcomings in the appeal named inconsistency, “and sometimes even contradictions” with the EU Directive on Network and Information Security (NIS2 Directive), adopted on December 14, 2022 and coming into force in the EU on October 18, 2024.
“The NIS2 Directive does not apply to entities with national security activities and also establishes a clear list of criteria regarding the companies to which it applies. At the same time, Bill 8087 covers all state bodies and business entities without exception, burdening even the smallest of them with exorbitant administrative and financial burdens,” the USPP argues.
In its opinion, the bill forms one vertical of cybersecurity systems uniting all state information resources, which will make it more vulnerable to cyberattacks instead of more expedient decentralization.
In addition, the appeal criticizes the fact that the bill does not only affect cybersecurity in general and public sector cybersecurity in particular, but also largely concerns the private information sector, business climate, investment attractiveness, etc.
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Ukraine has turned from salt exporter into importer – statistics

The share of imported salt in the Ukrainian market in January-June 2023 reached 15%, 211.737 thousand tons were purchased on foreign markets for $46.196 million.

According to statistics released by the State Customs Service (SCS), the largest supplier of salt to Ukraine remains Turkey, which provided 32.4% of all salt imports in the first half of 2023 and earned $14.966 million.

Egypt and Romania accounted for 23.3% and 17.7% of shipments, for which these countries earned $10.745 million and $8.174 million, respectively.

A year earlier, the top three importers of Ukrainian salt were Turkey with a market share of 29.8% of supplies, Poland and Romania with 22.8% and 19.8% respectively. Their revenue from its sale amounted to $7.492 million, $5.722 million and $4.969 million, respectively.

The State Customs Service recalls that in 2022, the share of imported salt in the domestic market totaled 15%. On foreign markets Ukraine purchased 438.105 thousand tons of salt for the amount of $92.116 million.

In 2021, the level of imported salt in Ukraine did not exceed 2%, which amounted to 142.813 thousand tons at $12.920 million.

For export in this pre-war year, Ukrainian enterprises supplied 710.041 thousand tons of salt, from the sale of which they received $28.323 million.

In 2022, Ukraine reduced salt exports by 80% to 142.038 thousand tons compared to 2021, with revenues of $3.821mn.

The main buyers of Ukrainian salt in 2021 and 2022 were Poland (import share of 39.1% and 44.4%, respectively), Hungary (27.4% and 27.3%) and Romania (7.3% and 5.1%).

In the first half of 2023, exports of Ukrainian salt amounted to only 149 tons at $32 thousand. It was bought by Romania (93.5% of supplies) and Moldova (3.2%).

Earlier, the analytical “Club of Experts” analyzed the situation with export and import of salt in Ukraine, for more details see the link

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