Business news from Ukraine

GOVERNMENT PERMITS BIOFARMA TO EXPORT BLOOD PRODUCTS, APPROVES EXPORT VOLUME

KYIV. May 25 (Interfax-Ukraine) – The Cabinet of Ministers has approved the proposal of the Health Ministry to permit PJSC Biofarma in 2015 to export donor blood components and products manufactured from blood and its components.

Corresponding decree No. 522-r dated May 25 has been posted on the website of the government.

According to the decree, donor blood products and its components are sold under the list and volume approved by the Cabinet.

As reported, on May 14 company with foreign investment PJSC Biofarma said that it intended to stop the production of drugs within seven days due to its inability to obtain government approval to export finished blood products under previously signed contracts. Biofarma Board Chairman Oleksandr Makovsky said that this concerns contracts for the supply of blood products worth a total of $7 million to Mongolia, Vietnam, Azerbaijan, Kazakhstan, and Belarus.

GERMANY READY TO FUNNEL EUR 200 MLN IN ENERGY EFFICIENCY FUND CREATED BY UKRAINE – ZUBKO

KYIV. May 22 (Interfax-Ukraine) – The government of Germany has announced its readiness to funnel EUR 200 million into the Energy Efficiency Fund, which is being created by Ukraine to raise assets from international financial organizations for projects to boost energy efficiency in Ukraine.
The condition for disbursing the German funds is the development by the Ukrainian government of a model to return the disbursed funds, Deputy Prime Minister and Minister for Regional Development, Construction, Housing and Utilities Economy Hennadiy Zubko said during a briefing at a forum on energy efficiency partnership in Kyiv on Friday.
“There is a clear offer from the German government about EUR 200 million, which could be injected in that Fund, but they need to be clearly demonstrated how these assets will be returned by the consumers of that Fund,” he said.
According to Zubko, as part of the search for such a model, the Energy Efficiency Fund is mulling the Ukrainian side’s financial participation in filling up the Fund at the expense of money left after the payment of subsidies allocated for the compensation of households’ housing and utilities costs, due to the introduction of energy efficiency and energy saving technologies, he said.
“We had a very simple proposal: to send that money to replenish the Fund, and due to a reduction in gas consumption, every year we’ll have fewer people who will apply for the subsidies,” he added.
According to him, the Ukrainian government is also in talks on raising loans for Kyiv-based Oschadbank, which participates in the Oschadny Dim (Saving
House) national program for partial reimbursement of interest rates on loans allocated to boost energy efficiency.
“I won’t announce [preliminary results of the talks] now, but we have initiated the talks with almost all [international financial organizations]:
the IFC, the European Investment Bank, the World Bank, and I think it also concerns investment funds which work not only on our market,” he added.
Zubko said a commercial organization was created in Germany to support energy efficiency in Ukraine.
“This is a commercial organization, which is ready to come with technologies, which is ready to bring money for these technologies and implement energy efficient projects. I simply would like to mention how huge interest in Ukraine and in opportunities to work on a huge market estimated at UAH 300 billion is,” he said.

FOREIGN INVESTORS INTERESTED IN BUYING SHARES IN FOOD AND GRAIN CORPORATION – AGRICULTURE MINISTRY

KYIV. May 22 (Interfax-Ukraine) – Foreign companies are interested in buying shares in PJSC State Food and Grain Corporation of Ukraine, Minister of Agricultural Policy and Food Oleksiy Pavlenko has said.
“There is the proposal to enter the corporation’s capital,” he told reporters at a panel discussion on the prospects of the privatization and development of the key state-owned enterprises from the scope of the Agricultural Ministry.
He added that the capabilities of foreigners in this process have not been discussed.
“Now there is the limit – it is the Chinese contract. But there are preliminary negotiations, there is a great interest of investors, American partners, Qatar, investors from Saudi Arabia, from China: at least two companies were ready to invest in this direction for the modernization of our silo capacity,” Pavlenko said.
According to him, the ministry will prepare a presentation which will show how it can attract investors through debts and capital for investment in this sector.
According to his estimates, the modernization of the corporation’s elevator capacities requires up to $200 million, the funds are foreseen in the second tranche under the Chinese contract.

AMSTAR EUROPE STUDYING BUILDING MANOR SPRINGS HOUSING ESTATE IN KYIV REGION

KYIV. May 22 (Interfax-Ukraine) – Amstar Europe, part of Amstar investment company (Denver, U.S.) is studying the possibility of realizing a project to build a cottage estate with the working title Manor Springs with almost 200 houses on a land parcel of 80 hectares on the Obukhiv highway in Kyiv region if positive changes in the Ukrainian property market are seen, Amstar Europe Vice President Oleksandr Hryban told Interfax-Ukraine at the “Crisis Square
Meter: Concept, Promotion, Sales” conference in Kyiv on Thursday.
“Expenses on engineer preparation and the cost of entering the market were
large: We would reach around $50-60 million in general,” he said when asked about the cost of the realization of the project today.
Hryban said that if investors make a positive decision on the project, the realization of its first phase with around 40 houses could be launched in 2016.
“Now we’re approving the detailed plan of territories, we carried out engineer and design works, maybe we will start engineer preparation of the project to start the realization of the first phase next year if the market changes,” he said.
Hryban said that further investment of Amstar in projects in Ukraine depends on the successful return of investment as part of the Skyline residential complex in Kyiv.
“If we see that we start receiving back money, we will get carte blanch from the investor who will allow us to reinvest these funds,” he said.
The decision of the possible reinvestment by Amstar in new projects in the Ukrainian real estate market could be linked to restrictions on carrying out transactions with foreign currency introduced by the state, he said.
Hryban said that the project foresees the construction of houses with a gross area of 280-430 square meters on land parcels of 0.13-0.15 hectares, and the houses would have approaches to artificial water reservoirs created by reclaiming channels of the old estuary of the Dnipro River.
Today, the acceptable price of one square meter for Amstar if the company launches the project is to be $2,000-2,200, taking into account land parcels, he said.

EU REMAINS SUPPORTIVE OF UKRAINE’S TERRITORIAL INTEGRITY, SOVEREIGNTY – RIGA SUMMIT STATEMENT

RIGA. May 22 (Interfax-Ukraine) – The EU remains supportive of Ukraine’s territorial integrity and sovereignty, reads the final statement of the Eastern Partnership summit in Riga.
“The EU reaffirms its positions taken in the Joint Statement made at the EU-Ukraine Summit on 27 April, including on the illegal annexation of Crimea and Sevastopol. The Summit participants reaffirm their positions in relation to ‘UN General Assembly Resolution 68/262 on the territorial integrity of Ukraine,'” reads the statement.
“The acts against Ukraine and the events in Georgia since 2014 have shown that the fundamental principles of sovereignty and territorial integrity within internationally recognized borders cannot be taken for granted in the 21st century on the European continent. The EU remains committed in its support to the territorial integrity, independence and sovereignty of all its partners,” reads the declaration.
The participants of the summit said they strongly support all efforts aimed at de-escalation and a political solution based on respect for Ukraine’s independence, sovereignty and territorial integrity.
“They call on all parties to swiftly and fully implement the Minsk Agreements of September 2014 and the package of measures for their implementation of February 2015,” reads the statement.
Summit participants expect all parties to honor their commitments in this framework. They call for the urgent release of all hostages and unlawfully detained persons. They express their full support for the OSCE and its efforts through the Special Monitoring Mission and the Trilateral Contact Group. They will also continue to support all diplomatic efforts within the Normandy format and appreciate the contribution of Belarus in facilitating negotiations.
“The Summit participants call upon all parties to fully cooperate with the international investigations and criminal proceedings to hold to account those who are responsible for the downing of MH17,” reads the statement.

CHERNOMORSKY SHIPYARD ATTRACTS ORDER WORTH $170,000 FROM BELIZE’S CONCORD SHIPBUILDING CORP.

KYIV. May 22 (Interfax-Ukraine) – Public joint-stock company Chornomorsky Shipbuilding Yard (Mykolaiv), part of Smart Maritime Group (SMG), has attracted an order worth UAH 3.5 million (around $167,000 at the exchange rate of UAH 21/$1) to repair the vessel ALMERIA placed by Belize’s Concord Shipbuilding Corp.

The SMG press service reported that under the contract signed by the sides in April, the shipyard will replace internal and external shell plating. The shipyard will also repair outfitting (lifelines, ladders, bollards, hatch covers) and the mechanical assembly section of the ship.

The press service said that at present the deep modernization of the vessel RION is being finished at the shipyard under the order of the division of the Ukrainian Sea Ports Authority – state enterprise Delta-Pilot (Mykolaiv).

“Despite the unfavorable economic and political situation in the country, the shipyard has managed to attract a number of significant contracts, which allow for a stable load of the enterprise and the timely payment of wages,” reads the report.

The company said that the shipyard plans to double production in 2015 compared with a year ago, to UAH 87.2 million.

Chornomorsky Shipbuilding Yard is the shipyard with the highest technical potential in Ukraine.

Chornomorsky Shipbuilding Yard, together with Kherson Shipyard, is part of Smart Maritime Group (SMG), the largest shipbuilding holding of Ukraine, founded in 2009 to manage the maritime assets of Smart-holding.