Business news from Ukraine

E-COMMERCE MARKET IN UKRAINE COULD EXPAND BY 35% IN HRYVNIAS IN 2016

KYIV. July 19 (Interfax-Ukraine) – The e-commerce market in Ukraine in 2016 could grow by 35% in hryvnias and by 10-15% in the U.S. dollars, according to a forecast of the Ukrainian Direct Marketing Association.

“The e-commerce market would show growth of around 35% in 2016. First since the start of the hryvnia devaluation growth in the U.S. dollars is expected. It would not be so large – some 10-15%,” the association told Interfax-Ukraine.

The association said that the most optimistic forecasts are from representatives of the fashion segment.

“In H1 2016 the segment growth could exceed 40%, and this would give chances for key players to return to 2013 figures in the U.S. dollars.

The electronics and household appliances segment are not so optimistic in their forecasts and anticipate growth of up to 10% in hryvnias, the association said.

The association said that the total e-commerce market volume in Ukraine in 2015 was $1.1 billion (B2C sales of only new goods). The e-commerce market in hryvnias grew by 32%, and in the U.S. dollars it fell by 31% compared to $1.6 billion in 2014.

The association also said that according to a study of Factum Group, in 2015 the share of Internet users was 58% of the country’s population. 17% of Internet users (around 3.7 million people) bought goods in online shops. Last year consumers were more active in buying goods using mobile devices. 26% of users did shopping using tablet PCs or smartphones.

“The number of users who buy goods on foreign website grew in 2015. According to MasterCard, the largest number of goods was bought on aliexpress.com, and 47% of Ukrainian buyers made orders on the Chinese marketplace,” the association said.

Factum Group Ukraine is an integral part of the well renowned international research network Factum Group. Factum Group offers a complete, extensive and innovative service for research users looking for high expertise in their day to day challenges and the complexities of the fast developing CEE market.

TERRA FOOD SEES 30% RISE IN PACKAGED CHEESE, ANALOGUE CHEESE SALES IN H1 2016

KYIV. July 19 (Interfax-Ukraine) – Cheese and analogue cheese sales by one of the largest Ukrainian industrial and retail holdings Terra Food grew by 30% in January-June 2016 year-over-year.

The company said in a press release on Monday the growth is linked to the strengthening of positions of its key brands on the market and the active development of distribution.

The company made around 8,500 tonnes of cheese and analogue cheese focusing on the cheese promotion in January-May 2016.

Today Terra Food produces cheese under the Ferma and Vapniarka brands and analogue cheese under the Tulchynka and other regional brands.

“When we only launched packaged cheese under the Ferma brand in 2013, our segment share was less than 1%. Today, the Terra Food’s share of the packaged cheese segment is around 18%,” Marketing Director Iryna Zhyvotova said.

She said that Terra Food produces cheese at three own sites: Kryzhopil cheese factory, Vapniarka cheese factory and Tulchyn butter and cheese factory.

UKRAINE’S FIRST SURGERY TO INSTALL MECHANICAL HEART SUCCESSFUL

KYIV. July 18 (Interfax-Ukraine) – Ukraine’s first surgery to install a mechanical heart was successful, the patient breathes and speaks on his own and says his relatives have visited him, CEO of Heart Institute (Kyiv) Borys Todurov has said at a press conference.

According to him, a German company under the guarantee of payment provided the patient with a mechanical heart worth about EUR120,000. There was no budget funding, so charity funds are attracted.

“The German firm has provided [the heart] on parole,” he said.

Todurov noted this heart is highly reliable, but is not the most expensive one. In general, there are five companies in the world that produce such equipment.

According to him, the patient, who was established the mechanical heart, will be able to live a normal life, while he should just avoid strenuous exercise and swimming. The patient will also need to constantly wear a bag with batteries [its weight is about 4-5 kg] and monitor the battery charge every ten hours.

Commenting on the process of surgery, Todurov said it lasted about four hours.

CABINET APPROVES PROGRAM TO DEVELOP HYDROPOWER SECTOR UNTIL 2026 INCREASING CAPACITY BY 1.6 TIMES

KYIV. July 18 (Interfax-Ukraine) – The Cabinet of Ministers of Ukraine has approved a program for the development of the hydropower sector until 2026, the implementation of which will allow to increase the installed capacity of hydropower plants in the country by 1.6 times (3.6 GW) compared with the beginning of the year, to 9.5 GW.

According to PJSC Ukrhydroenergo Board Chairman Ihor Syrota, who represented the program, the commissioning of new facilities, as well as the reconstruction and modernization of the existing hydropower plants will allow to bring the share of hydropower in the total structure of electricity generation in the country to 15.5%.

As part of construction of new facilities the matter concerns the completion of Dnistrovska hydroelectric pumped storage power plant (1.25 GW) and Tashlyk hydroelectric pumped storage power plant (0.3 GW), the construction of Kaniv hydroelectric pumped storage power plant (1 GW), Kakhovka hydroelectric pumped storage power plant (0.25 GW) and the Verkhniodnistrovsky cascade of hydro power plants (0.39 GW). Modernization will increase the installed capacity of hydropower plants by 0.425 GW.

The expert noted the purpose of the program is improving the reliability of work of Ukraine’s united power system, its integration with the European energy system, reducing fossil fuel consumption and anthropogenic impact on the environment.

KHARKIV CREATING CENTRE OF ADMINISTRATIVE AND SOCIAL SERVICES WITH USAID SUPPORT

KHARKIV. July 18 (Interfax-Ukraine) – The heads of the Kharkiv regional administration and representatives of the Regional Mission of the U.S. Agency for International Development (USAID) visited the construction site of one of the largest in Ukraine administrative and social services centre on Friday.

The project is a part of the agreements that were reached during the visit of the delegation of the Kharkiv region to Washington and the memorandum signed between the region and the U.S. embassy.

“One of the priorities set by the President of Ukraine Petro Poroshenko is to create modern and transparent conditions for receiving administrative services Ukrainian citizens, head of Kharkiv Regional State Administration Ihor Rainin told reporters. Establishment of the centre will allow us to minimize the risk of corruptive practices. If we do not create such conditions, corruption will have to be fought forever.”

The construction of the centre building is funded by the city budget, coordinated by Kharkiv Regional State Administration, whose specialists provide methodological, administrative and organizational support.

“The centre is equipped with modern office equipment, the relevant software will be provided by the USAID,” First Deputy Head of the regional administration Yulia Svitlychna, who personally oversees the project.

Having inspected the centre construction together with the Agency’s Regional Mission Director John Pennell, Svitlychna said that the works are carried out according to the schedule and the construction will be fully completed next year spring.

“This centre will provide the services that can not be obtained in any of the existing services. These are services of social and pension areas, residence and entrepreneurship registration, a driver’s license obtaining along with certificates from the State Register of property rights and the Land Register. One can solve the issues here with a minimum number of visits to the authorities and in the shortest terms,” Svitlychna said.

According to Pennell, in addition to the centre equipping, USAID will assist training its staff.

“This facility will create all conditions so that the citizens would be able to receive administrative and social services at a better level and in a more transparent format,” Pennell said.

As agreed with the USAID, this project can be extended to the surrounding regions in order that the residents of other regions were able to conveniently and comfortably receive services in the administrative centre in Kharkiv.

“We take the establishment of this centre of administrative services very seriously, as we do not want to repeat the mistakes of the existing similar institutions. I can guarantee that this will be the best centre in Ukraine,” Svitlychna said.

UKRAINE, EIB AGREE ON NEW INFRASTRUCTURE AND ENERGY EFFICIENCY PROJECTS – FINANCE MINISTER

KYIV. July 18 (Interfax-Ukraine) – Ukraine counts on new projects with the European Investment Bank (EIB) in infrastructure and energy efficiency, Ukrainian Finance Minister Oleksandr Danyliuk reported after a meeting with EIB Vice-President Laszlo Baranyay on Friday.

“We have agreed about the continued support of Ukraine by the EIB, in particular in new projects in the field of infrastructure and energy, which means new roads and winterized schools,” the finance minister wrote on Facebook.

According to him, during the meeting they also discussed the current state of the implementation of ongoing projects.

According to the information on the EIB website, three projects for Ukraine are currently waiting for approval by the EIB board. These are a EUR 150 million project with Ukrzaliznytsia for the railway modernization, a EUR 400 million project with Ukrhydroenergo on Kaniv pumped storage hydro station and a EUR 200 million project for the development of local transport to 20 cities.

This week, the Ukrainian government has approved the concept of Energy Efficiency Fund, which is planned to be launched in 2017 with the support of international financial institutions.

EIB Senior Corporate Banker Jean-Jacques Soulacroup reported earlier the European Investment Bank (EIB) intends to invest about EUR 800 million in projects in Ukraine in 2016, while in future mulls the annual funding of up to EUR 1 billion for the country. Last year, the EIB provided loans worth EUR 1.2 billion to Ukraine.