Business news from Ukraine

UKRAINE USES 90% OF QUOTA ON DUTY-FREE SUGAR EXPORTS TO EU – MINISTRY

KYIV. Sept 14 (Interfax-Ukraine) – Since early 2015, Ukraine has supplied 18,000 tonnes of sugar under the duty-free quota provided by the European Union (EU), which has a total of 20,070 tonnes.

Agricultural Policy and Food Minister of Ukraine Oleksiy Pavlenko wrote on his Facebook page that ending sugar stocks as of early 2015/16 agricultural year (September–August) have been estimated at 500,000 tonnes. It is expected that 1.2-1.3 million tonnes of sugar will be produced, which will fully satisfy domestic demand.

As reported, according to Ukrtsukor association, sugar production in 2014/15 agri-year grew by 75%, to 2.1 million tonnes, while the domestic market fell to 1.6 million tonnes due to the reduction of sugar supplies to Crimea, Donetsk and Luhansk regions.

Ukrtsukor Director General Mykola Yarchuk said that in 2015/16 agri-year a total of 35-36 sugar refineries would work in Ukraine.

UkrAgroConsult consulting agency predicts that sugar production will drop to 1.3-1.4 million tonnes in the new agricultural year.

 

EU TO PROVIDE EUR 90 MLN TO SUPPORT DECENTRALIZATION PROJECTS IN UKRAINE

KYIV. Sept 14 (Interfax-Ukraine) – The European Union (EU) is ready to provide EUR 90 million for decentralization projects in Ukraine, EU Commissioner for European Neighborhood Policy Johannes Hahn said at a meeting with Deputy Prime Minister and Regional Development, Construction, Housing and Utilities Economy Minister of Ukraine Hennadiy Zubko.

The press service of the Ukrainian government has reported, referring to Zubko, that Ukraine has offered to set up 40 sub-regional groups to support reforms, including the provision of large scale financing to maintain ties with the general public and to provide training.

“These groups will provide technical assistance through training of local authorities at all levels. In addition, the teams will also coordinate the training of the newly elected MPs and civil servants regarding their new managing responsibilities,” Zubko said.

The EU funds will also be allocated to enhancing the State Fund of Regional Development, especially taking into account the need for additional investment to establish and enlarge the services of united communities, Zubko said.

“We are interested in creating a network of agencies or offices to train staff in the regions to ensure the elaboration and implementation of regional development projects, including project analysis and management of investment projects,” he said.

“Ukraine relies on the expert assistance of its European partners in the process of amending the Constitution of Ukraine. For us it is also crucial [for there to be] facilitation in the development of a package of laws on decentralization in 22 areas, especially basic laws on self-government, prefects, administrative and territorial structure, land relations, tax and budget laws, social standards, administrative services and local police,” Zubko said.

U.S. TO CONTINUE HELPING UKRAINE AS LONG AS IT CONDUCTS DEMOCRATIC REFORMS – NULAND

KYIV. Sept 14 (Interfax) – U.S. Assistant Secretary of State Victoria Nuland said the U.S. will continue providing technical and financial assistance to Kyiv as long as Ukraine conducts democratic reforms.

However, that requires the unity of all reformist forces, Nuland said at the 12th annual Yalta European Strategy meeting held in Kyiv on Saturday.

Speaking about the Minsk process and the future of Crimea, Nuland said the sanctions will remain in place until the Minsk agreements are fulfilled and until border control is resumed. She said the U.S. may soften the sanctions, but further breaches of the Minsk agreements will have consequences for Russia. As to Crimea, she said Ukrainian sovereignty should be restored over it.

Nuland reiterated that the U.S. will also continue providing diplomatic assistance. She said the U.S. is not part of the Normandy four or the Minsk process, but is working as an ally of the EU and the most important thing now is to use the moment of silence and fully withdraw heavy weapons. Nuland also said the elections in Donbas should be held in accordance with the Ukrainian legislation and should be monitored by the OSCE.

 

CONSTRUCTION ASKS FOR UAH 2 BLN FROM 2016 BUDGET FOR HOUSING PROGRAMS – OFFICIAL

KYIV. Sept 11 (Interfax-Ukraine) – The Regional Development, Construction, Housing and Utilities Economy Ministry of Ukraine has requested financing of UAH 2 billion from the 2016 budget to realize the state youth housing crediting program and the program on the provision of state support to construct or buy affordable housing under the 70/30 scheme.

“The budget request of the ministry includes UAH 1 billion for each program. This is around UAH 4 billion including funds invested by individuals,” Deputy Minister Roman Abramovsky said at a general meeting of members of the Constructors Confederation of Ukraine in Kyiv on Thursday.

He said that taking into account the expected payments by local budgets of around UAH 2 billion for the realization of the two programs, the total sum of the funds raised to the construction sector would reach around UAH 6 billion.

“We would insist on adopting these budget programs and providing for their financing,” he said.

Ukraine has five state affordable housing programs, however due to the absence of financing in 2014 the implantation of some programs was suspended.

UKRGAZVYDOBUVANNIA DISCOVERS NEW GAS FIELD IN ZAKARPATTIA REGION WITH PROMISING RESOURCES OF 2.4 BCM

KYIV. Sept 11 (Interfax-Ukraine) – Public joint-stock company Ukrgazvydobuvannia has discovered Liutnianske gas field in Velykoberezniansky District of Zakarpattia region, the press service of the company reported on Thursday.

“After drilling and tests of wildcat two, commercial gas inflow was recorded. Gas flow rate was 58,000 cubic meters during the 6mm-choke test. According to preliminary assessments of specialists from UkrNIIgaz, promising resources of the field are 2.4 billion cubic meters. Initial gas reserves of the gas reservoir opened by the well totaled 390 million cubic meters,” reads the report.

The press service said that test of the promising Liutnianske gas field started in 1991. Only in 2011, after seismic studies, the Liutnianska fold was discovered and the new Liutnianske gas field was discovered in 2015.

Ukrgazvydobuvannia plans to drill several more wildcats.

PIVDENNY MINING PLANS TO INCREASE INVESTMENT BY ONE THIRD IN 2015 – DIRECTOR

KRYVY RIH. Sept 11 (Interfax-Ukraine) – Pivdenny Mining (Kryvy Rih, Dnipropetrovsk region) plans to increase investment in development and maintenance of its production facilities to UAH 922 million in 2015, which is 32% up on 2014, Director General Kostiantyn Fedin said at the press tour at the mining plant on Wednesday.

He said that investment have sharply increased after the arrival of new investors in 2010.

“Since 2010, with the arrival of new shareholders, investment has increased and production has grown,” he said.

Fedin said that if in 2010 around 19.6 million tonnes of iron ore was made a year, not 24.5 million tonnes is made. The iron ore concentrate target for 2015 is 11.2 million tonnes.

He said that in 2010 investment totaled UAH 321 million, while in 2014 it was over UAH 700 million and in 2015 it is planned to invest over UAH 900 million (around UAH 922 million).

The top manager said that since 2010, the plant started building the conveyor ore transportation line, and the first phase was launched in 2013 and the second phase – in 2014.

Fedin said that today the plant is working on the verge of profit-making.

He said that production cost of one tonne of concentrate is $20-24, and logistics cost – $27.30 per tonne.

At present, the price of iron ore concentrate at a Chinese port is $56 per tonne.

Pivdenny Mining exports 80-90% of iron ore concentrate, while agglomerate is sold on the domestic market.

Pivdenny Mining is one of the main iron ore producers in Ukraine.

Pivdenny Mining is under control of Metinvest and Lanebrook Ltd. (a majority shareholder of Evraz Group), which acquired 50% of shares in Pivdenny Mining in 2007 from Privat Group (Dnipropetrovsk).