Business news from Ukraine

UKRAINE TO JOIN EU, YET NATO MEMBERSHIP IS IN QUESTION – MINISTER

KYIV. April 21 (Interfax) – Ukraine will definitely join the European Union but its membership in NATO remains in question in the case of the alliance’s ineffective response to contemporary challenges, Ukrainian Foreign Minister Pavlo Klimkin said.

“I think that throughout the long period of its existence NATO has been focused on Article 5, i.e. mutual defense commitments, hard security. And we are saying that we are fighting a hybrid war. I am not 100% sure that NATO is fully prepared to fight similar or future hybrid wars and that NATO currently has a structure optimal for dealing with such [challenges] […] No doubt, NATO has been adapting. So, I am always frank about our critical need for participation in structures and guarantees. Yet we will have to seek other options if the alliance fails to provide guarantees for Ukraine,” he said in an interview with the online publication Evropeiska Pravda published on Friday.

He gave an affirmative answer to the question whether Ukraine would become an EU member.

Speaking of alternative ways to provide Ukraine’s security, Klimkin said, “These ways of the provision of security can create much bigger challenges to our partners than those they are currently anticipating from Ukraine’s possible NATO membership.”

Klimkin dwelled on problems existing within the North Atlantic alliance and said that the alliance was lacking consensus on many aspects of its development. “NATO is an organization with a rather complicated structure, incorporating, for instance, Canada and Turkey. So, a lot will depend on the development of NATO in the near future,” he said.

CROPS HANDLING CAPACITY OF UKRAINE’S PORTS TO GROW BY 10 MLN TONNES/YEAR IN 2-3 YEARS – UGA

KYIV. April 20 (Interfax-Ukraine) – The grain handling capacity of Ukrainian ports will increase by 10 million tonnes per year by 2018, President of the Ukrainian Grain Association (UGA) Volodymyr Klymenko has said.

“At present the handling capacity is about 45 million tonnes. In the next two or three years another 10 million tonnes will be added,” he told reporters during the First National Forum of Export Support in Kyiv.

Klymenko said that a number of companies are currently expanding or building new port terminals. In particular, Noble trading company plans to launch a terminal in Mykolaiv port in November. Also, Cargill is carrying out construction work at Illichivsk port.

In addition, according to Klymenko, a very important item for the development of grain logistics is the Infrastructure Ministry’s decision to perform dredging work in the Dnipro River. The work is expected to begin in mid-July. This will be preceded by a tender for its execution and the formalizing of permits.

“If we start doing this work, we have prepared the second projects on the Pivdenny Buh River. And then the desire to clean the Desna River will appear,” Klymenko added.

 

NOVA POSHTA TO EXPAND IN INTERNATIONAL MARKETS

KYIV. April 20 (Interfax-Ukraine) – Nova Poshta (Kyiv) plans to expand its operation in international markets in 2015, the co-founder of the company Viacheslav Klimov said in an interview with Interfax-Ukraine.

He said that two companies – Nova Poshta Moldova and Nova Poshta Georgia – were previously created and that test deliveries to the countries have been made.

“We’ve faced rather serious obstacles linked to Ukrainian law in the customs area. These are external factors for us with which we could work. There are Nova Poshta employees in the two countries, and they are working on the organization of deliveries from/to Ukraine and in the domestic market of the countries,” he said.

Klimov said that the two countries differ considerably.

“If Georgia is a European country with large influence and presence of leaders of global express delivery, in Moldova there is no such market, and the main problem is to explain what we offer, as it was in Ukraine in early 2000s. Anyway, we’re satisfied with starting this market venture, despite the crisis. This is a huge experience, and we believe it [to be] an element of development. I’m absolutely sure that in 2014 Nova Poshta would appear in several other countries,” he said.

Klimov did not disclose what other countries the company plans to enter.

When asked if the strategy is justified, Klimov said that it is absolutely justified, as Ukraine is becoming more and more open for Europe and the world each day, despite the events happening in Ukraine.

BRITAIN’S HUNNEWELL PARTNERS TO INVEST $100 MLN IN UKRAINIAN ASSETS

KYIV. April 20 (Interfax-Ukraine) – Britain’s Hunnewell Partners, the manager of a fund worth around $1 billion, has opened an office in Kyiv to invest in Ukrainian assets, member of the National Commission of Ukraine for Energy and Housing and Utility Services Regulation (NCER) Andriy Herus has said.

“In plans is to invest $100 million in projects in Ukraine by late 2016. We want to believe that this is the start of a trend,” Herus wrote on his Facebook page.

Herus told Interfax-Ukraine that Hunnewell Partners has leased space in the Gulliver shopping center in Kyiv. At present, its employees are selecting projects, including in the energy and agricultural sectors. The commission plans to offer some investment projects in the energy sector.

Hunnewell Partners was founded in September 2011. Its core business is venture investment.

RADA TAX, CUSTOMS COMMITTEE SUPPORTS REDUCTION OF ADDITIONAL IMPORTS DUTY

KYIV. April 20 (Interfax-Ukraine) – The parliamentary committee for tax and customs policy supports the reduction of the additional imports duty of 5-10% approved in late 2014, Committee Chairman Roman Nasirov said at the National Export Forum.

“Taking into account the upward pace of foreign trade with goods in the first months of 2015, the imports duty could be revised downwards… I could say for sure that the tax and customs committee will support the decision,” he said.

Nasirov said that the introduction of the additional imports duty affected the Ukrainian processing industry as the cash cost and the price of goods exported from Ukraine grew.

As reported, on February 25, 2015, due to worsening of the balance of payment Ukraine introduced the additional imports duty on all goods, apart from critical imports stipulated in the law on the stabilization of Ukraine’s balance of payment passed by the Ukrainian parliament in late 2014.

The law foresees the introduction of a 10% duty on finished food, fats, vegetable oil and butter, alcohol and non-alcoholic drinks, tobacco, vinegar, live animals (goods groups 1-24 under the Ukrainian code). The 5% duty is imposed on any other goods, apart from vitally important goods, including energy goods and some drugs.

KHARKIV TRACTOR PLANT, SAMPO ROSENLEW TO REACH OUTPUT OF 500 COMBINES A YEAR BY 2018

KYIV. April 20 (Interfax-Ukraine) – The joint venture of PJSC Kharkiv Tractor Plant and Sampo Rosenlew (Finland) intends to start producing about 200 harvesters from 2016, and by 2018 to increase output to 500 units per year.

“This year we plan to assemble an experimental batch of harvesters, certify them and, starting from 2016, at least 200 combines will be assembled, and by 2018 we will reach the amount of at least 500 units,” Kharkiv Tractor Plant CEO Vladyslav Hubin said, when signing a memorandum of cooperation with the Finnish company.

He said that the localization of production in Ukraine will help reduce the cost of 3085 series combines by 20%.

As reported, a contract to create a joint venture by Kharkiv tractor plant and Sampo Rosenlew was signed in December 2014. The plant in 2014 produced and sold 1,455 tractors, which is 10.4% or 137 units more than a year ago, and this year the plant plans to sell more than 2,000 tractors (37.5% up).

Last year the company sold tractors to more than 30 countries and was present in the markets of Europe, Asia, Africa and Latin America.

Sampo Rosenlew is a Finnish company, which is engaged in the production of harvesters and forestry equipment. Sampo Rosenlew supplies products to over 50 countries. The main markets of the company are the Nordic countries, North Africa, Ukraine, Azerbaijan, and Belarus.