Business news from Ukraine

UKRAINIAN ENTREPRENEURS WILL CLOSELY WORK WITH CANADIAN BUSINESSES

Ukrainian businesses have got an opportunity to find reliable partners and customers in Canada. The Ukrainian League of Industrialists and Entrepreneurs (ULIE), being a major business association of Ukrainian industrialists and entrepreneurs, will sign a cooperation agreement with the Canadian Federation of Independent Business, which will feature an agreement to boost bilateral economic contacts. This was discussed at a meeting between ULIE President Anatoliy Kinakh and President, CEO and Chair of the Canadian Federation of Independent Business Dan Kelly at the European Business Summit in Brussels.

The Canadian Federation of Independent Business is a big association that brings together dozens of that country’s influential business structures, 109,000 small- and medium-sized businesses. This type of business is the backbone of the economy of Canada and should become the same in Ukraine, the two officials said. In particular, the partners propose focusing most of attention on the development of entrepreneurship and are ready to share experience for well-considered and effective investment in the most promising sectors of the economy.

Signing an agreement on cooperation will become proof of intent to develop cooperation. As early as this summer, talks between the organizations will take place in Canada, and they will draft a joint plan of action with detailed tasks, deadlines, and commitments.

ULIE President Kinakh says these efforts will allow Ukrainian businesses to increase and diversify their exports, without limiting themselves to the European destination in order to find compensation of the loss of the eastern markets and attract foreign investors to develop production, launch new projects.

In this context, the parties spoke for the need to sign an already initialed agreement on the free trade area between Ukraine and Canada, as it will significantly improve the efficiency of economic partnership between the two countries, will become am incentive to boosting exports and imports, and investment.

It must be noted that the said agreement provides for a gradual (over a decade) mutual reduction in import duties on most of the product groups, as in the end it should lead to the cancellation of 98% of them.

Ukrainian shipments to Canada in January-February 2016 grew by 73.3% year-over-year, to $19.4 million, while imports from that country rose by 29.3%, to $47.9 million.

BUNGE INVESTS $180 MLN IN LAUNCH OF HANDLING COMPLEX AT MYKOLAIV SEAPORT

MYKOLAIV. June 16 (Interfax-Ukraine) – Transnational company Bunge has invested $180 million in building a handling complex with an oilseed refinery, an oil handling terminal and the expanded grain terminal.

The company said in a press release that the project is one of the largest U.S. investments in the Ukrainian agrarian sector.

Thanks to the operation of the new handling complex launched by Bunge Ukraine exports of Ukrainian-made products and cargo handling at the port would increase by 1 million tonnes.

The capacity of the sunflower oil refinery allows refining 790,000 tonnes of oilseeds a year (2,400 tonnes of sunflower seeds and 1,700 tonnes of soybeans a day).

The company’s annual transshipment capacities grew by 1.75 million tonnes of grain, oil cake and oil.

Bunge Ukraine Managing Director Dmytro Horshunov said that the complex continues the company’s strategy aimed at developing infrastructure at Mykolaiv seaport. In 2011 the company built a handling terminal at this port and it expanded Ukraine’s exports capacity by 3 million tonnes a year.

“The total cost of the two projects is $280 million. We will continue investing not only in the development of infrastructure and exports capacity of Ukrainian ports, but also in Ukrainian agriculture in general,” he said.

Ukrainian President Petro Poroshenko at the ribbon-cutting ceremony said that this investment is evidence of improving investment climate in Ukraine.

“The opening of the complex confirms firm confidence of investors in the better future of Ukraine,” he said.

The president said that this project would allow increasing purchase prices of agricultural products, currency income and strengthening the Ukrainian currency exchange rate. These projects in Ukraine show that reforms conducted in the country are effective, the head of state said.

Poroshenko thanked Bunge Ukraine for its social projects. The company sent over UAH 1 million to support ATO soldiers in the past 12 months.

 

BUILDING OF UKRAINE-POLAND GAS INTERCONNECTOR TO START IN 2017

KYIV. June 16 (Interfax-Ukraine) – Gas transportation operators of Ukraine and Poland, Ukrtransgaz and Gaz-System, have drawn up a feasibility study for building a gas interconnector between the two countries of 99.3 kilometers long. The companies are ready to start drawing up blueprints..

“The start of construction is scheduled for 2017,” the head of the public and media relations department at Ukrtransgaz Maksym Beliavsky said on Wednesday.

He told Interfax-Ukraine that Ukrtransgaz and Gaz-System have approved one of the three routes and seek to start blueprint works in July.

The first phase of the project implies construction of the interconnector intended to increase exports of natural gas from Poland to Ukraine with an annual capacity of up to 5 billion cubic meters. The second phase would boost exports to 8 billion cubic meters a year. The decision to implement the second phase would depend on the situation on the market.

Beliavsky said that the advanced technology of horizontal directional drilling to pass water reservoirs under their beds.

The route crosses 24 rivers, 27 roads and once railway tracks and 14 other gas pipelines.

Ukrtransgaz said that over 1,000 company employees will be involved in the project.

As reported, on December 17, 2014, Ukrtransgaz and Gaz-System signed a cooperation agreement on the preparation of a feasibility study on the merger of the Polish and Ukrainian gas transport systems.

The document foresees not only integration of the gas transport systems of the two states with the purpose of increasing imports of gas to Ukraine from Europe via Poland, but also storage of European gas in Ukrainian underground storage facilities and its supplies to EU consumers.

U.S. DEPARTMENT OF ENERGY SUPPORTS UKRAINE, READY TO HELP WITH ENERGY EFFICIENCY

KYIV. June 16 (Interfax-Ukraine) – Ukraine’s Prime Minister Volodymyr Groysman during his working visit to the U.S. met with U.S. Secretary of Energy Ernest Moniz.

“Representatives of the U.S. Secretary of Energy have assured of their readiness to support Ukraine, and to help in Ukraine’s achieving energy efficiency,” the information and communications department of the office of the Cabinet of Ministers reported on Wednesday.

At the meeting, the two officials discussed the government’s plans in achieving energy independence of Ukraine. Groysman said that energy independence is a matter of national security of Ukraine. “Our task is to diversify, to become an energy efficient state, and we are currently working on this. The energy reform is among our priorities,” the prime minister said.

He also reported the first steps of the government in achieving this. He spoke about the introduction of a single market price for natural gas by the government. This decision will help overcome corruption in the sector, spur the domestic production of gas and help achieve energy efficiency in the country. At the same time, those who are unable to pay for gas will receive assistance after the market prices for gas will be established.

According to Groysman, the Ukrainian government also focuses on the nuclear power industry and the development of alternative energy. In the near future, the government plans to adopt the strategy of hydropower development. The prime minister said that the share of the hydropower sector may be increased to 15.5% of all the power generated in the country, compared with the current 8.5%.

Groysman also spoke about the need for the modernization and restructuring of Ukrainian coal mines. In addition, the government focuses on the reform of the national oil and gas company Naftogaz Ukrainy.

The prime minister thanked the U.S. government for its support of Ukraine’s energy sector.

UKRAVTODOR STARTS HOLDING TENDERS VIA PROZORRO PROCUREMENT SYSTEM

KYIV. June 16 (Interfax-Ukraine) – Ukraine’s State Agency of Automobile Roads (Ukravtodor) on June 13, 2016 first posted two tender announcements on smart tender.biz electronic platform, which is part of the ProZorro public procurement system.

According to Ukravtodor’s press release, the agency seeks to select an organization that will control the state of roads and the quality of road works. The approximate cost of the agreement is UAH 20 million.

The second announcement concerns the selection of executors of research and design works for the road sector consisting of 92 lots and totally worth some UAH 34.359 million.

“The switch to the ProZorro system is an important step on the way to reload the whole public procurement system in the road economy,” acting head of Ukravtodor Yevhen Barakh said.

He expressed hope that the auction mode would considerably decrease expenses on the organization of these works.

Soon Ukravtodor intends to purchase office materials for the needs of the agency’s employees. The road sector is to fully switch to electronic trading from August 1, 2016.

DARNITSA PHARMACEUTICAL FIRM SEEKS TO BUY OUT 25% OF BORSCHAHIVKA CHEMICAL PLANT

KYIV. June 16 (Interfax-Ukraine) – Private joint-stock company Darnitsa pharmaceutical firm (Kyiv) has proposed to shareholders in public joint-stock company Research and Industrial Center Borschahivka chemical and pharmaceutical plant (Kyiv) that the firm will buy out 25% of shares in the Borschahivka plant for UAH 80,000 per share.

Darnitsa pharmaceutical firm said in the Holos Ukrainy newspaper on Wednesday that the company seeks to buy 2,588 shares with a face value of UAH 4.759 million for UAH 207.04 million.

Darnitsa will accept the proposals of shareholders in the plant before August 31, 2016.

The firm will pay in cash or settle cashless payments using own funds of Darnitsa pharmaceutical firm.

The pharmaceutical firm said that the shareholders who will sell their shares will receive dividends accrued for 2015.

As reported, on March 20, 2015, an auction was held where Kyiv City sold its 30% stake in Borschahivka chemical and pharmaceutical plant for UAH 171.844 million. The financial company Kub, which represents the interests of Darnitsa pharmaceutical company, bought the stake. The Antimonopoly Committee of Ukraine in January 2016 permitted private joint-stock company Darnitsa Pharmaceutical Firm (Kyiv) to acquire over 50% of share in the plant.

However, Borschahivka chemical and pharmaceutical plant said that the plant is not holding negotiations on the sale of a controlling stake in the company and the company has attracted international advisors to receive recommendations on defining the value of the enterprise and protecting it from unfriendly actions.