Business news from Ukraine

DAN-FARM UKRAINE TO LAUNCH PIG FARM IN ZHYTOMYR REGION EARLY 2017

KYIV. Nov 24 (Interfax-Ukraine) – Dan-Farm Ukraine LLC seeks to launch a pig farm with 25,000 pigs in Korosten district of Zhytomyr region.

“We started building it [the pig farm] in 2014. It is being finished. We plan to launch it early next year,” First Deputy Director General Vadym Shestakov told reporters at the Agricultural Olympus 2016 international congress in Kyiv on Tuesday.

He said that the company has a sow farm with 3,000 sows in Khalcha. The farm can produce up to 100,000 pigs a year.

Some EUR 10 million has been invested in the pig farm in Zhytomyr region. The total cost of the project is EUR 12 million.

“The project has five phases. Now we are launching two pig farms, a feed processing room and two administrative buildings,” he said.

The company does not plan to slaughter pigs. This will be discussed after boosting the number of pigs and the launch of new pig farms.

Dan-Farm Ukraine is not involved in exports due to the complicated epizootic situation in Ukraine due to African swine fever (ASF).

According to the unified register of companies, the owners of the company are Dutch companies Berry Farm ApS and Ukraine-Agro A/S.

POROSHENKO ENACTS RATIFICATION OF AGREEMENT WITH ISRAEL ON UKRAINIANS’ TEMPORARY EMPLOYMENT – MEETING WITH KNESSET SPEAKER

KYIV. Nov 24 (Interfax-Ukraine) – President of Ukraine Petro Poroshenko and Speaker of the Israeli Knesset Yuli-Yoel Edelstein have met in Kyiv to discuss the acceleration of the signing of a free trade agreement between the two countries and also touched on political cooperation.

“The head of the state said that he had signed the Law of Ukraine on the ratification of the agreement between the Cabinet of Ministers of Ukraine and the Government of the State of Israel on temporary employment of Ukrainian workers. The agreement will provide for the employment of thousands of qualified Ukrainian specialists who will get reliable social guarantees and rights during their work in Israel,” the president’s press service said.

The parties discussed the issue of accelerating the conclusion of the Free Trade Agreement between Ukraine and Israel where the special attention is paid to boosting investment cooperation.

Poroshenko thanked the Israeli side for the support of the United Nations General Assembly’s resolution on human rights in Crimea.

In turn, the speaker of the Israeli Knesset thanked Ukraine for hosting events to honor the memory of victims of the Babi Yar (Babyn Yar) tragedy that occurred 75 years ago.

As reported, on November 16 the Verkhovna Rada, Ukraine’s parliament, ratified the agreement on temporary employment of Ukrainian workers in certain industries in Israel.

BUSINESSMAN KHMELNYTSKY MULLING EXPANSION OF INNOVATION PARK PROJECT TO LVIV, KHARKIV

KYIV. Nov 22 (Interfax-Ukraine) – The first results of operation of the innovation park on the territory of Kyiv Motorcycle Plant, the anchor projects of which are UNIT Factory and Technology Companies’ Development Center (TCDC), would allow making a decision on the viability of expanding this project to other cities in the country, in particular, Lviv and Kharkiv, the businessman, famous developer and founder of K.Fund Vasyl Khmelnytsky has said.

“I would open the first part [of the project in Kyiv]. I will see how the university works and how the project as a cluster works. Then I would assess the possibility of expanding the project to Lviv and Kharkiv. I have sites there,” he said in an interview with Interfax-Ukraine.

Khmelnytsky said that 25 ha were allocated in Kyiv for the future innovation park. The presentation of the park and the managing company is scheduled for May 2017. Total investment in its development is estimated at $100-400 million.

Commenting on the anchor projects, the founder of the park said that UNIT Factory created in partnership with French coding school 42 is free and open to all with the condition of working in Ukraine for three years after graduation. He said it should become a powerful source of IT specialists for companies that would be residents of the innovation park. He said that the number of students in UNIT Factory would be increased from current 300 to 3,000.

“In three years we would create the environment where it would be hard for a person to leave our park. There will be everything there: institutes, startups, support center, many various free services, cafes, restaurants, accommodations and medical services. We would create a real cluster,” he said.

He said that the second anchor project of the innovation park is TCDC with gross area of 3,500 square meters. It will support small and medium-sized high-tech projects offering offices at the rent rates starting from $5 per square meter to compensation of up to 70% of the cost of educational programs. Kyiv Mohyla Business School will be the educational partner of the center. Yevhen Sarantsov’s BlackBox Capital would be responsible for management in the technology sphere. In addition, a managing company, an advisory board, Juscutum law firm, BIONIC IT-University, two high-tech laboratories VR Lab (Crytek) and Smart City Lab would support the center. Construction works would be finished in December 2016. Total investment in TCDC is assessed at UAH 100 million.

“We propose to companies to move to us with a discount. Thirty companies are ready to do this. In addition, we have arranged with Fablab Fabricator that they would be residents of the park. Then we will try to attract other companies, look for an investor, then find contractors to grow and expand. The main thing they would stay with us,” Khmelnytsky said.

He said that he wants to attract not only IT companies, but also representative of a wider cluster of new technologies.

The businessman said that he does not have plans to create a venture fund or enter IT business himself.

“I do not create my own IT companies. We would have 30 companies. Let them agree with each other, hire someone. I am ready to create the environment. The better environment is the higher rent rates will be. I will earn on this. I am afraid that if I create an IT company, I would become a rival [in the eyes of other companies],” he said.

Khmelnytsky said that if promising startups and companies start working in the park venture funds would show their interest to them.

Commenting on his previous project – Bionic Hill innovation park, when it was planned to open a large research and development (R&D) town with 35,000 jobs in the suburbs of Kyiv on 147 ha of the former military unit, he said that the project has been frozen until favorable conditions on the market appear.

“There was no chance for Bionic today, as many foreign companies left the country for some reasons. I wanted to create the environment mainly for our specialists who would work in western R&D centers. Today they went away and now it is hard to do from the economic point of view,” the businessman said.

He said that he would realize the project in the future.

“I am sure that it would build it. When I speak about UNIT, this is Bionic, but of the smaller scale and in the city,” he said.

Khmelnytsky is a majority shareholder in UDP, which is engaged in implementing large-scale infrastructure projects. Kyiv International Airport, Ocean Plaza shopping mall, Novopecherski Lypki residential complex, Boulevard of Fountains, RiverStone and Parkove Misto are among them.

K.Fund was founded in 2015 to support projects related to education and the economy.

FISH AGENCY PROPOSES TO INCREASE FEE FOR INDUSTRIAL FISH CATCH BY AT LEAST 2.5 TIMES

KYIV. Nov 22 (Interfax-Ukraine) – The quarterly fee for fish catch in Ukrainian water basins for industrial companies should be increased by at least 2.5 times, the State Fish Agency of Ukraine has said.

According to its proposals, the fee for catch of one tonne of Black Sea anchovy could grow from UAH 46.62 to UAH 118.24, bream – from UAH 223.98 to UAH 564.43 and pike perch – from UAH 323.02 to UAH 814.01.

According to the new tariffs, catch of one tonnes of mullet could be UAH 995.17, Black Sea goby to UAH 231.71, kilka – UAH 50.90 and trout – UAH 594.17.

“The fee for fish catch was revised in 2011. The existing tariffs are small and do not suit the current economic situation. According to inflation figures, we propose to increase the fees by at least 2.5 times,” Chairman of the Fish Agency Yarema Kovaliv said.

He does not rule out that the fee could be increased even more.

CHINA’S GCL, CCEC PLAN TO BUILD SOLAR PLANT OF OVER 1 GW IN CHORNOBYL ZONE

KYIV. Nov 22 (Interfax-Ukraine) – Chinese companies GCL System Integration Technology (a GCL subsidiary) and China National Complete Engineering Corporation (CCEC) intend to build a solar power plant in the Chornobyl exclusion zone, according to a report by GCL.

According to GCL’s calculations, construction should begin in 2017. The plant capacity will exceed 1 GW.

At the same time, CCEC is entrusted with the functions of general contractor and project manager. GCL will provide consulting services and organize supply of equipment for the project.

Earlier China’s CNBM declared it owns ten largest solar stations in Ukraine.

BUSINESSMAN KHMELNYTSKY INTENDS TO INVEST IN ‘GREEN’ ENERGY PROJECTS

KYIV. Nov 22 (Interfax-Ukraine) – Businessman, famous developer and founder of K.Fund Vasyl Khmelnytsky intends to start implementing projects in the “green” energy sphere in the near term, believing this segment is promising in Ukraine.

“We are mulling projects in the ‘green’ energy now. Today it is profit-making and right – the country is to have 10% of ‘green’ power capacity before 2020, and today it has only 1%,” he said in an interview with Interfax-Ukraine.

Khmelnytsky said that the projects concern power generation at the feed-in tariff. He also is studying the solar and biogas power plant projects.

“This is a separate new direction. We are looking for them [directions]. We want to get rid of less effective and find more effective. We think that this one is more effective, while building shopping centers is less effective,” he said.

He said that in the conditions of low buying power the commercial and housing real estate market in 2017 could face serious difficulties.

Among other promising directions to invest money in Ukraine is processing of agricultural products, he said. Khmelnytsky took the project of an industrial park in Bila Tsekva and the project of an innovation park on the territory of Kyiv Motorcycle Plant as examples.

The businessman said that he is ready to take loans to realize projects in the “green” energy sphere, while he decreases his credit portfolio in all his businesses.

“We have loans in the U.S. dollars at 12% per annum and in hryvnias at 25% per annum. We almost do not take [new loans],” the businessman said.

Commenting on other sources of financing, he said that Novopecherski Lypki and Boulevard of Fountains in Kyiv are profit-making projects.

He said that the situation at the Kyiv airport is bad due to a sharp decline in public income, but it starts improving.

“I think that we have passed the bottom. The situation is slowly improving now, but it is far from that we had five years ago,” Khmelnytsky said.

He said that the airport would try to invite new low-cost airlines. The airport is ready to participate in the programs to attract foreign tourists.

Commenting on other businesses from his portfolio, the businessman said that they are hostages of the difficult economic situation in the country and low income of the public.

“I think that we will start growing. There will be more money and it would be profit-making again. Now when many businesses are working with losses now and I do not have losses, I think that this is good. This is my approach,” he said, asked about the outdoor advertisement operator PTM-Ukraine and the movie producer and distributor Star Media.

He said that one more asset from his portfolio – Biopharma – also suffered from crisis, as 30% of the market was lost: Crimea, Donetsk, Luhansk and a large part of Donbas.

“Local pharmaceutical companies had competitive advantage – the devaluation has passed and we managed to use it: here with local staff and materials we were more flexible than importers,” he said.

In general, Khmelnytsky, being First Vice President of the Ukrainian League of Industrialists and Entrepreneurs (ULIE), said that the main task for Ukraine is the acceleration of economic growth as quickly as possible thanks to creation of new production facilities. This would quickly help to restore public income growth.

“I am interested in economic growth. People should earn more and then they would spend more. My businesses would sell something to them. I do not have any thought that one can survive in this stagnation as we have today. We should unite to accelerate economic growth,” he said.

Khmelnytsky is a majority shareholder in UDP, which is engaged in implementing large-scale infrastructure projects. Kyiv International Airport, Ocean Plaza shopping mall, Novopecherski Lypki residential complex, Boulevard of Fountains, RiverStone and Parkove Misto are among them.

K.Fund was founded in 2015 to support projects related to education and the economy.