Business news from Ukraine

UKRAINIAN MARKET, PRODUCERS TO ADAPT TO EU STANDARDS THEMSELVES AFTER DCFTA TAKES EFFECT ON JAN 1, 2016 – OFFICIAL

KYIV. July 22 (Interfax-Ukraine) – When the Deep and Comprehensive Free Trade Area (DCFTA) between Ukraine and the European Union comes into effect Ukrainian companies will have to prove the compliance of their products with European standards, Director of the Government’s Office for European Integration of the Secretariat of the Cabinet of Ministers Natalia Hnydiuk has said.

“On January 1, 2016 we would not have all four freedoms linked to the free trade area opened. We would have an opportunity of the use, but we should prove this possibility and prove in steps that [Ukrainian companies]… can supply goods and services to the European Union market,” she told reporters in Kyiv on Tuesday.

She said that the DCFTA will take effect on January 1, 2016, however a lot depends on how effectively Ukraine introduces EU standards, as an open market for European goods and services will quickly start working in the country.

“We have the quota for six groups of goods, but Ukraine does not supply all the goods under other groups’ quotas, and the increase of quotas is the issue to be discussed by the EU,” she said.

Hnydiuk said that in 2015, programs aimed at supporting small and medium businesses, regional development, and the development of media will be realized in Ukraine.

“When we speak about top-priority areas [for Ukraine], we speak about those areas where we can be very concrete… [particularly] state procurement, agriculture, postal services, transportation – we should strongly develop these areas,” she said.

She added that as part of cooperation between Ukraine and the EU a meeting of the Sub-Committee on Energy, Transport and Environment will be held in October.

On July 12-16, the first meeting of the Ukraine-EU Association Committee took place in Brussels (Belgium).

BANK TRUST TO INCREASE CHARTER CAPITAL BY 73.9%

KYIV. July 21 (Interfax-Ukraine) – Bank Trust (Kyiv) will increase its charter capital by UAH 51 million, or 73.91%, to UAH 120 million, by issuing additional shares.

According to a bank report in the information disclosure system of the National Commission on Securities and the Stock Market, its shareholders at a general meeting on July 14 decided to increase the charter capital.

The bank will conduct a private placement of additionally issued shares with a par value of UAH 1.

As reported, in July of this year the National Bank of Ukraine (NBU) allowed the co-owner of Ukraine’s large confectionery company AVK, Volodymyr Avramenko, to acquire 100% in Bank Trust.

According to information on the NBU website, as of March 8 the owners of Bank Trust were three citizens of Russia: Ilya Yurov – 44%, Nikolai Fetisov and Sergei Belyaev – 28% each.

Bank Trust was registered in 2007.

Bank Trust ranked 81st among 133 banks operating in the country on April 1, 2015 by total assets (UAH 849.8 million), according to the NBU.

COMMISSIONING OF SOME 76,500 SQ M OF NEW OFFICES DECLARED IN KYIV FOR 2015-2016 – COLLIERS INTERNATIONAL

KYIV. July 21 (Interfax-Ukraine) – New supply on the office property market in Kyiv in 2015-2016, if all declared projects are commissioned on time, will total around 76,500 square meters, and by late 2015 it is planned that three key business centers with a gross lettable area (GLA) of some 37,000 square meters will be commissioned, Colliers International consulting company said in a press release issued on Monday.

“Among key projects that would enter the market by late 2015: Sigma business center with GLA of 19,500 square meters, a business center at 56, Chervonozoriany Avenue with GLA of 12,000 square meters and a business center at 3, Novovokzalna Street with GLA of 5,500 square meters,” the company said.

Colliers International said that in January-June 2015 four office facilities were commissioned in Kyiv with a total GLA of around 41,300 square meters: a business center at 132 Holosiyivsky Avenue with a GLA of around 15,300 square meters, a business center at 10 Verkhniy Val Street with a GLA of some 10,000 square meters, and a business center at 46 Gorky Street, and a business center at 8 Dorohozhytska Street, with a GLA of around 8,000 square meters each.

In H1 2015, the total supply of offices in Kyiv reached around 1.731 million square meters, the company said.

Collіers International provides services on commercial real estate. It unites over 16,300 specialists, working in 502 offices in 67 countries.

The representative office of Collіers International in Ukraine was established in Kyiv in 1997.

KERNEL SEES 12% RISE IN OIL AND GRAIN SALES IN FY 2015

KYIV. July 21 (Interfax-Ukraine) – Kernel, a large Ukrainian agrarian group, in FY 2015 that began in July 2014 increased grain sales by 12% year-over-year, to 4.744 million tonnes, the company said in a report on the Warsaw Stock Exchange (WSE).

The company said that bulk sunflower oil sales rose by 12%, to 1.03 million tonnes and bottled oil sales grew by 5%, to 98.914 million liters.

Over the period the holding crushed 2.523 million tonnes of oilseeds, which is 8% up year-over-year.

In April-June 2015, bulk oil sales were up by 1%, to 300,292, and sunflower oil sales were seasonally weak: they fell by 5%, to 18.134 million liters. A decline in domestic sales was due to lower purchasing power, which was more than compensated by growth in export deliveries.

Grain exports in Q4 FY2015 grew by 11% year-over-year, to 712,770 tonnes. Exports from Russia remained weak during the last quarter as farmers delayed export sales in expectation of a review of the high wheat export duty.

Export terminals’ throughput growth in FY2015 of 23% y-o-y to 4.8 million tons reflected the company’s execution of grain sales, as well as a higher share of grain delivered through our own export terminals. Export terminals’ throughput amounted to 949.6 thousand tons in Q4 FY2015 (up 13% year-over-year).

Kernel is a vertically integrated company which has been operating in the Ukrainian agribusiness sector since 1994. The group produces sugar and sunflower oil, distributes bottled oil under the brand names Schedry Dar, Stozhar and Chumak Zolota, exports oil and grain, and provides elevator storage services for grain and oilseeds.

KYIV TO RECEIVE EUR 100 MLN TO COMPLETE SHELTER FACILITY FOR CHORNOBYL NPP – OFFICIAL

KYIV. July 21 (Interfax-Ukraine) – Kyiv will receive the funds it requires to complete the Shelter Facility for the Chornobyl nuclear power plant (NPP), Deputy Prime Minister of Ukraine Valeriy Voschevsky has said.

“The result of the meeting was the fact that almost all donors confirmed their additional contribution to cover lacking EUR 100 million for the new Shelter facility,” he said at a briefing on Monday in Kyiv after the Assembly of Donors of the Chornobyl Shelter Fund and the Nuclear Safety Account in London on July 16.

In particular, Kazakhstan will provide an additional EUR 3.5 million, Saudi Arabia – EUR 20.5 million, Sweden – EUR 1 million, China – EUR 4 million and Lithuania – EUR 1 million.

“We could say that donor countries are interested in the completion of the project in November 2017 and we managed to settle the issue of contributions in the amount of EUR 100 million and they will be made in the near term. In fact, the project will be financed in full,” Voschevsky said.

He said that EUR 800 million was initially required for the Shelter project, although due to technical errors the cost grew by another EUR 615 million. The total cost of the project then grew to EUR 1.5 billion.

In addition, EUR 70 million is required for the waste nuclear fuel storage facility.

“The total cost of the project is EUR 255 million. Eighteen months are left until the project is finished, and around EUR 70 million is required,” Voschevsky said.

He said that the initial cost of the project was EUR 275 million, and finally it reached EUR 320 million. According to the plan, the facility is to be finished in late 2016.

 

CHERNOMORNEFTEGAZ PREPARING TO DEVELOP KERCH SHELF, BUILD REFINERY

SIMFEROPOL. July 21 (Interfax) – Chernomorneftegaz (CNG), a Crimean government-owned oil and gas company, has prepared the feasibility study for the development of oil fields on the Kerch shelf in the Black Sea and the construction of an oil refinery, CNG chief executive Sergei Beim said.

“Front end engineering design work is being done. We’ve done the feasibility study, now we’re taking the investment project through the Council of Ministers of Crimea. The location [for production] has been determined – the Kerch shelf. The plant will be near Kerch,” Beim said at a press conference in Simferopol on Monday.

He said there is no point in building an oil refinery in Crimea without increasing oil production.

“It will be a cluster. Right now production is just 800 tonnes per month. This is nothing. Not a single plant can be built with such an amount of production,” Beim said. CNG produces gas and oil at offshore fields off the coast of Crimea and onshore fields on the peninsula.

Beim told Interfax at the end of 2014 that CNG planned to be producing 50,000-60,000 tonnes of oil products per month in five years and to fully supply Crimea with oil products refined from crude produced at offshore fields.

He said the company plans to develop the Subbotinskoye (Subotynske) oil field with estimated reserves of 400 million tonnes of oil equivalent, which is located southeast of the Kerch Peninsula and the neighboring Pallas structure.