Business news from Ukraine

44% of Ukrainian enterprises are ready to invest in development

Despite problems with finding workers, rising prices of raw materials and physical threats, Ukrainian businesses are optimistic about the future, 44% of surveyed enterprises are ready to invest in their development or recovery, these are the results of the February New Monthly Enterprises Survey (#NRES) of the Institute for Economic and Policy Research (IEP).

“Businesses are quite optimistic about investment given that a full-scale war is ongoing. For example, 42% of businesses believe that now is more or less a favorable time to invest in equipment. For comparison, at the beginning of 2015, when the ATO was in an active phase, the share of such enterprises amounted to only 14%”, – commented the results of the study, Eugene Angel, a senior researcher at the IEI.

The IEI also pointed out that business is gradually coming out of the state of complete uncertainty and begins to make plans for the future: in February 2024, only about 15% of business owners and managers could not give an answer about their business plans for the next six months, while a year ago there were about 40% of them.

At the same time, the level of uncertainty in the perspective of two years is still quite high – about 50% of respondents.

“A significant decrease in the number of those who find it difficult to make plans for the next six months indicates that optimism is returning to Ukrainian businesses. Moreover, the share of enterprises operating at 100% capacity is gradually increasing: in February 2023 there were 6% of such enterprises, now there are already 15%. But, of course, it is difficult for businessmen to make plans for the long term (2 years) in the conditions of war”, – said Oksana Kuzyakiv, Executive Director of IEI.

According to the published data, for the second month in a row the Business Activity Recovery Index (BAI) decreased – by almost 10 p.p. – From 0.43 to 0.34. As for its components, the share of enterprises that reported that their business activity was better than in the previous year decreased from 56.0% in January to 44.8% in February, nothing changed for 44.0% (30.9% in January), the share of those for whom the situation was worse than a year ago remained without significant changes for several months in a row (13.1% in January and 11.2% in February).

According to the survey, the main obstacles to investment are economic uncertainty, political instability and insufficient corporate profits.

As for the obstacles to doing business, February 2024 saw some changes in the list of obstacles: the assessment of rising prices for raw materials and commodities rose from 46% to 49%, and labor shortages rose from 41% to 46%, which respectively moved them to the 1st and 2nd places.

At the same time, the obstacle “not safe to work” dropped from 1st to 3rd place, although its value decreased slightly from 46% to 45%.

Estimates of power outages dropped from 26% to 24%, which is only the 7th most important obstacle, while corruption and pressure from law enforcement agencies ranked even lower in the survey.

In February, compared to January, the share of enterprises operating at full capacity slightly increased – from 13% to 15%, while the share of non-operating enterprises remains unchanged for half a year and amounts to 2% of respondents.

The survey emphasizes that the share of positive assessments of the government’s policy to support business is 8% and has remained unchanged for more than half a year, while 55% (58% in January) assess it neutrally, and 18% negatively (16% a month earlier).

IEI specialists also recorded a slight decrease in problems with finding labor: qualified workers are difficult to find for 31% of surveyed entrepreneurs (32.4% in January), and unskilled workers – for 26.5% of respondents (27.4% a month earlier).

The monthly IEI survey in February involved 542 Ukrainian enterprises located in 21 out of 27 regions of Ukraine. The field stage of the 22nd wave of the survey lasted from February 19 to February 29, 2024.

, , , , ,

Ukrposhta’s investments in development will amount to UAH 1.3 bln – Smelyansky

Ukrposhta JSC’s investments in development in 2024 will amount to about UAH 1.3 billion of its own funds, the company’s CEO Igor Smelyansky said at the Forbes Ukraine Business Breakfast on Wednesday.

According to him, the investments will be directed to the organization of container exchange with the transportation of goods by large-sized transport, due to the growth of parcel shipments. Investments in the creation of container exchange capabilities on the basis of one branch amount to UAH 100 thousand, Smelyansky said.

In addition, in 2024, Ukrposhta plans to buy a letter sorting machine. The machine will sort up to 50 thousand letters per hour using the QR code of an electronic stamp. The unit will be purchased with credit funds, the company’s CEO said.

“Ukrposhta plans to open another 300 post offices in Ukraine “to make the coverage as we want it to be.”

The branches will be opened in Kyiv, Odesa, and Dnipro, Smelyansky said.

According to him, Ukrposhta will open 18 new sorting facilities in the next four months, and a sorting center in Lviv will start operating in two weeks.

At the same time, Ukrposhta will not develop the oversized cargo business due to the high costs of further delivery of goods related to taxes.

Ukrposhta’s CEO emphasized that the company has not abandoned the idea of acquiring the bank. According to him, the effect of the transfer of PINbank to the company will amount to UAH 5 billion over three years.

“We will reduce budget expenditures on pension delivery by UAH 5 billion over three years,” Smelyansky said.

, ,

Kyiv farmers to receive UAH 100 mln for development of horticulture and greenhouses

Financial assistance in the amount of UAH 100.858 million will be provided to 25 agricultural enterprises in Kyiv region as part of the government’s e-Work program to support small and medium-sized businesses, Deputy Minister of Agrarian Policy and Food Denys Bashlyk said on Facebook.

According to him, the funds will be used to develop horticulture, berry growing, viticulture, and greenhouse farming. Thus, farmers will receive grants worth UAH 80.858 million for the development of horticulture and UAH 20 million for greenhouses. So far, UAH 74.401 million has been paid to them.

In addition, since the beginning of the year, 902 farmers in the Kyiv region have received UAH 10.402 billion in bank loans for farm development, the deputy minister stated.

As reported, since the beginning of the year, 12.3 thousand agricultural enterprises have received UAH 65.2 billion in bank loans for development. Of these, 9.6 thousand agricultural enterprises received UAH 37.5 billion in loans under the state program “Affordable Loans 5-7-9”.

, , , ,

Ukrainian Metinvest will invest in development of logistics center in Poland

Metinvest mining and metallurgical group will invest in a logistics center in Poland in order to increase the supply of Ukrainian metal products for export, the company’s CEO Yuriy Ryzhenkov said in an interview with the leading Polish business publication Business Insider.

According to him, Zaporizhstal and Kamet Steel are currently operating at 65-70% and 75% of their capacity, respectively. About 25% of products are sold on the domestic market, the rest goes mainly to the EU. At the same time, steel is sold mainly in neighboring countries, such as Poland, Slovakia, the Czech Republic, Romania, and Bulgaria.

The company also sells metal products to Italy, Germany or France.

“Steel mills can hardly complain about the low level of sales, but iron ore enterprises were less fortunate. Here, in addition to domestic consumption, China was also a buyer. However, in the current situation, exports there are practically impossible, since the Black Sea ports are blocked, therefore, the border countries of the EU also remain buyers here. Iron ore enterprises now use about 35-40% of their capacity. We tried to send raw materials to China through Romanian and Polish ports. However, unfortunately, the economy of this logistics simply does not work in the current market,” the top manager said.

He noted that at the same time, the coal production of the company in Ukraine operates at 100% capacity. The mined coal is supplied to the group’s coking enterprises in Ukraine, and is also sold on the local market. The rest is sold abroad, mainly in Slovakia and Poland.

“In 2022, our steel production decreased by 69% compared to last year. This affected a number of financial indicators. For example, our profit in 2022 is 54% less than last year,” the CEO said.

He also stated that Metinvest’s strategy has not changed – the company wanted to connect Ukraine and Ukrainian iron ore with the European steel production chain. Therefore, the group continues to look for opportunities to acquire assets that would allow it to use the Ukrainian raw material base, produce products in the EU and supply them to European consumers.

, , , ,

Insurance associations of Ukraine support bill on reforming sphere of urban development

The Insurance Business Association together with the League of Insurance Organizations of Ukraine and the Kharkiv Union of Insurers supported the draft law “On introducing changes to certain legislative acts of Ukraine on reforming the sphere of urban planning” (No 5655) with the recommendation to adopt it at the second reading and in whole by the Supreme Council.
The relevant opinion of professional associations of insurers promulgated in an open letter, the association noted in a post on Facebook on Monday.
“The current text of the bill provides for liability insurance of authorized persons for urban planning control. Considering the international insurance and reinsurance practice, we consider it advisable to further extend such practice to performers of certain types of architectural and construction works, who take part in the creation of construction objects, namely architects, design engineers, engineers for technical supervision and the like”, – notes the General Director of the Association “Insurance Business” Vyacheslav Chernyakhovsky, whose words are contained in the message.
As reported, the bill number 5655 provides for the activities of the examination of design documentation for the construction expert organization and implementation of urban planning control at the prior conclusion of the contract of professional liability insurance, without the presence of which the activities of the expert organization and authorized person for urban planning control is impossible.

, , ,

Cabinet allocates additional 150 million UAH for grants for development of processing enterprises

The government on November 25 allocated UAH 152.7 million to finance establishment or development of processing enterprises and agricultural producers within the framework of the program “eRabota”, the Ministry of Economy said.
“Due to the funds allocated today entrepreneurs have to create more than a thousand jobs”, – as the first Vice Prime Minister – Minister of Economy Yulia Sviridenko stated in the release.
The department specified that 119 million UAH out of this amount is provided for the creation or development of processing enterprises, which will receive 22 enterprises and due to which 405 jobs are planned to be created.
The Ministry of Economy specified that 11 grants will be given for food production, four – for the repair and installation of machinery and equipment, two grants each for furniture production and chemical products, one grant each for the production of rubber and plastic products, wood processing and manufacture, as well as for textile production.
According to the release, the remaining 33.7 million UAH will be received by 6 companies in the form of grants for the establishment or development of horticulture, viticulture and berry growing. In particular, it is planned to grow apples, hazelnuts, walnuts, blueberries and blueberries, which should create 635 jobs (28 – permanent and 607 – seasonal).

, , ,