Business news from Ukraine


KYIV. Feb 16 (Interfax-Ukraine) – Biofarma pharmaceutical company (Kyiv region) plans to retain investment in its development in 2016 at the level of 2015 – $12 million.

“In general, in 2015 our investment reached $12 million. We plan not the smaller sum for 2016,” Board Chairman Kostiantyn Yefymenko told Interfax-Ukraine.

He said that last year Biofarma invested $5 million in construction of a probiotic workshop, $3 million in reconstruction of the Sumy blood donor center and $2 million was invested in designing of new medicines.

In addition, Yefymenko said that in 2015 Biofarma renewed the marketing and sales service.

“Now persons with experience of work in famous international corporations are among our top managers. Today this is important as in 2015 we introduced some new medicines to the market and we’re preparing new forms of our products, including nasal sprays, eye drops and suppositories. Probiotics have been launched to the active promotion,” he said.

Yefymenko said that blood preparations are a top-priority direction for the company. In money terms revenue from their sales is 40%.

Biofarma is among the ten largest Ukrainian drug manufactures. Biofarma produces more than 20 immunobiological preparations of blood, as well as drugs obtained by recombinant DNA technology and probiotics.

Niobera Investments Limited (Cyprus) holds 100% in Biofarma. According to the National Commission for Securities and the Stock Market of Ukraine, Biofarma Board Chairman Kostiantyn Yefymenko is the ultimate beneficiary of a large shareholder in Niobera Investments Limited. Shares do not belong to members of the executive body.

In 2014, Biofarma built a pharmaceutical plant in Bila Tserkva (Kyiv region). Investment totaled $42 million.

In 2014, Biofarma cut its net profit by 9.91% from a year ago, to UAH 25.801 million.


KYIV. Feb 15 (Interfax-Ukraine) – The acceleration of the pace of increasing the minimum capital of banks will lead to the artificial withdrawal of small and medium-sized banks from the market, according to the Ukrainian Credit Banking Union (UCBU).

“The union believes that such actions of the National Bank of Ukraine (NBU) do not correspond to the current state of the economy as a whole, accelerate the artificial removal of small and medium-sized banks, which have been stably and transparently operating in Ukraine for many years, fulfill the National Bank’s economic regulations, have positive results of audits and other indicators confirming their reliability, from the market,” reads a press release from the UCBU.

According to the document, the NBU’s policy aimed at withdrawing a group of small and medium-sized banks from the market is contrary to the national interests of the country, international practice, as well as prevents the resumption of confidence in the banking system as a whole. Such policies should be discontinued and reoriented to the creation of proper conditions for the activity of small banks, which stably work in their own niche in the banking services market. According to the union, in modern conditions such banks require a separate program of support and development.


KYIV. Feb 15 (Interfax-Ukraine) – The Defense Ministry of Ukraine and METRO Cash & Carry LLC have signed a contract to supply food to military servicemen of the western naval base of the Naval Forces of the Armed Forces of Ukraine in Odesa.

“The agreement on supply of food according to a catalog for the western naval base in Odesa where the experiment on the introduction of the alternative feed system for military servicemen successfully continues has been signed,” the Defense Ministry said on its website on Thursday.

The head of the food reformation system for the Armed Forces of the project office of the Defense Ministry Diana Petrenia said that according to the preliminary results of the electronic reversed auction the cost of a food set per serviceman of the western naval base a day will be UAH 42.39 and on the ship – UAH 44.41.

She said that the previous cost of the food set per serviceman (before December 31, 2015) was UAH 57.24 and UAH 59 on the ship.

She also said that this week it is planned to sign an agreement on supply of food under a catalog in the National Army Academy in Lviv.

It is planned to expand the catalog for military servicemen in the Anti-Terrorist Operation (ATO) zone.

“We’ve worked out 100 additional items for the field set. Calories will be increased. In most NATO member countries military servicemen in the field eat meals ready to eat or cooks are involved. Military cooks will cook in the ATO zone,” the ministry said.

It is also planned to improve the military food quality control system.

Head of the tender committee of the Defense Ministry Oleh Svyrko said that the ministry will initiate amendments to the existing legal base on the application of fines to bidders who violate the qualification requirements or contract conditions.



KYIV. Feb 15 (Interfax-Ukraine) – The export-credit (insurance) agency that it is planned to create to insure, guarantee and cheapen crediting of exports could start operating in the third quarter of 2017, Deputy Economic Development and Trade Minister, Trade Representative of Ukraine Natalia Mykolska said at a meeting with railway producers in the ministry on February 12.

“In 2016, we plan to finish the preparation work, legal and project documents, including the actual launch of the export-insurance agency in 2017, in line with concrete products, and it is likely that this is the third quarter of 2017,” she said.

She said that at the presentation of reforms of state-run banks made on Thursday it was said that Ukreximbank starts fulfilling its direct functions, work with exporters, importers and state support of Ukrainian exporters.

“It is planned to create the state insurance agency that will be involved in insurance and non-banking guarantees, maybe risk hedging,” she said.

Earlier she said that the co-founder of the export-insurance agency could be an international institution.

As reported, the Cabinet of Ministers of Ukraine in late December 2015 decided to create the export-credit agency. The founder of the agency was to be Ukreximbank.


KYIV. Feb 15 (Interfax-Ukraine) – The Ukrainian League of Industrialists and Entrepreneurs (ULIE) an the Anti-crisis Council of NGOs demand to increase the level of professionalism and responsibility in the public administration area, call on starting the team work of all branches of power jointly with business and society to allow the economy to stably develop.

“We demand that the president and parliament reloads the government. The state need the technocratic government that would stick to a plan on going out of the crisis…. would be personally responsible for concrete results in the set terms and would remove the principles of personal fidelity or party liabilities from practice,” the ULIE said in a press release after discussing the government’s report for 2015 on February 12.

The League said that the positive results of the government’s work last year were restructuring of debts, diversification of energy sources, reform of public procurement and attempts to trigger the tax reform, in particular, to reduce single social security tax to 22%, refuse from advance payments of profit tax by companies, revoke the imports duty, as well as deregulation measures.

“However, there are not enough convincing arguments that enough grounds were created to resume growth of the Ukrainian economy and to carry out long-awaited reforms in 2016 as it is forecasted in the government’s report,” the ULIE said, pointing at the worsening of investment conditions and state support of national producers on the global markets.

“The currency restrictions, too high credit rates at Ukrainian banks do not allow receiving funs required to diversify exports of Ukrainian companies that suffer from the Russian embargo most of all,” the ULIE said, citing Head of the crisis Council of NGOs and ULIE President Anatoliy Kinakh.


A number of major business associations, NGOs and think tanks in Ukraine are now working to prepare a package of proposals to qualitatively improve the tax system, which, in turn, should stimulate the economy and ensure GDP growth in the current year.

A new bill, as proposed by the business community, should provide for a radical reduction in all major fiscal rates, preserve the simplified tax system along with the settlement of controversial issues around it, maintain special rules of taxation for the agricultural sector, cancel advance payment of taxes, which is stipulated in the current Tax Code, and VAT accounts, etc.

Related debates go on as part of round table discussions and meetings of NGOs’ expert groups and other organizations. The Ukrainian League of Industrialists and Entrepreneurs and the Anti-Crisis Council of NGOs stress that the preparation of the package of the proposals should be completed in the first quarter of this year, so that the expert debates could shift to the parliamentary level in spring.

The implementation of the bill, which is being prepared, will not in general have a negative impact on budget revenues, representatives of the Ukrainian business community say, as its provisions are aimed at a reduction in the share of the shadow economy, a recovery in business activity, an increase in the investment attractiveness of Ukraine’s economy (primarily through stimulating the domestic investor), and the restoration of economic growth.

The reduction in the tax rates will be compensated by an increase in tax revenues thanks to the growth of production and sales of goods and services, invigoration of the domestic market (an increase in households’ purchasing capacity and the development of small-sized businesses), measures to bring the economy out of the shadows. Ukraine’s GDP is expected to grow by 17% as a result of these efforts.

What is more, a large-scale business forum has been scheduled for March 2016 to discuss the business and investment climate, tax reform, activation of the domestic market as well.