Business news from Ukraine

UKRAINIAN EXPORTERS SEEK TALKS TO REVISE EU QUOTAS

KYIV. March 31 (Interfax-Ukraine) – Ukrainian business jointly with the Federation of Employers of Ukraine wants to ask the Cabinet of Ministers of Ukraine to start negotiations on amendments to the Ukraine-EU Deep and Comprehensive Free Trade Area (DCFTA).

Exporters believe that the Cabinet can and should be an official negotiator with the European Commission in Brussels in matters involving changes to conditions of Ukraine’s trade with the EU member countries. Ukrainian business is ready to hand over the address with conclusions and proposals to the new government.

“We have decided to initiate an address to the government and start these talks. We will demand that this become a public directive from the Cabinet,” Director General of the Federation of Employers Ruslan Illichev said in Kyiv on Wednesday.

The federation will insist on increasing the quotas for supplies of Ukrainian products to the EU market. The corn flour quotas could be increased by 12 times, the wheat quotas could be doubled, the nine-fold rise could be made for grape juice, the 15-fold rise for sugar. The tomato quotas could be tripled, flour quotas could be doubled. The poultry quotas could be increased by six times and the quotas for apple juice could be eliminated.

“We do not want to take the quotas from European producers. We want the EU during the revision of imports quotas redistributes them in favor of Ukraine: to reduce for some countries and increase for other countries,” Illichev said.

The federation has picked out four substantial issues for Ukrainian exporters: the revision of the imports quotas on Ukrainian goods outlined in the DCFTA; the reduction of imports duties on Ukrainian engineering products, particularly, automobile industry and electric equipment; the extension of the Generalised Scheme of Preferences (GSP) and the acceleration of the procedure for bilateral arranging the state veterinary and biosecurity control system.

FERREXPO ENTERS TOP THREE WORLD’S LARGEST PRODUCERS AND EXPORTERS OF PELLETS IN 2015

KYIV. March 30 (Interfax-Ukraine) – British-based Ferrexpo Plc, which controls Poltava and Yerystove processing plants in Ukraine (Poltava GOK and YeGOK), in 2015 ranked third among the world’s largest producers and exporters of pellets for blast furnaces, reaching a volume of production and exports of 11.7 million tonnes.

According to a press release from the company, the top five world leaders in terms of production and exports of pellets for blast furnaces include such vendors as Vale (Brazil, Oman) with the production of 23.9 million tonnes of pellets in the same period, LKAB (Sweden) with 13.7 million tonnes, Ferrexpo with 11.7 million tonnes, Metalloinvest (the Russian Federation) with 7.4 million tonnes and Cliffs (the United States) with 7.1 million tonnes.

It is noted that Ferrexpo expects an increase in the demand for pellets for blast furnaces in the long term due to the increased demand on the part of metallurgical enterprises for high-quality products. This will provide for the reduction of emissions of harmful substances into the environment and improve the quality of finished products.

As reported in a company annual report, in 2015 pellet production increased by 6%, to 11.7 million tonnes (in 2014 the figure stood at 11.08 million tonnes).

EBRD EXPANDS TFP FINANCING VIA CREDIT AGRICOLE BANK BY EUR 10 MLN

KYIV. March 30 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) has provided an uncommitted trade facility of up to EUR 10 million to Credit Agricole Bank to boost support of Ukrainian exporters and importers under its Trade Facility Programme (TFP).

The bank said in a press release that the Trade Facilitation Programme promotes international trade to, from, and within the EBRD countries of operations, including Ukraine.

Through the programme, the bank provides guarantees to international confirming banks, taking the political and commercial payment risk of international trade transactions undertaken by banks in the countries of operations.

Since its inception in 1999 the TFP has supported over 1,900 trade transactions worth almost €2 billion in Ukraine. 15 Ukrainian banks have been historically engaged in trade transactions under the TFP, covering a variety of export-import contracts between Ukraine and the European Union and even remote countries like Argentina, New Zealand and Vietnam.

The EBRD is the largest international financial investor in Ukraine. As of January 1, 2016, the bank had a total cumulative commitment of EUR 12 billion in 355 projects in the country.

Credit Agricole Bank was founded in 1993. Credit Agricole S.A. on January 1, 2016 owned 99.9961% of the charter capital of Credit Agricole Bank.

The bank ranked 14th among 123 operating banks as of October 1, 2015, in terms of total assets worth UAH 21.882 billion, according to the National Bank of Ukraine.

UKRHYDROENERGO TO INCREASE ELECTRICITY PRODUCTION BY 25% IN 2016

KYIV. March 30 (Interfax-Ukraine) – PJSC Ukrhydroenergo plans in 2016 to increase production of electricity by 24.6% compared to 2015, to 8.008 billion kWh.

According to the company’s data, it is planned to increase productive supply in the current year from 6.209 billion kWh to 7.797 billion kWh.

Ukrhydroenergo in 2015 saw net profit rise by 2.3 times compared to 2014, to UAH 1.091 billion, net income by 1.7 times, to UAH 4.469 billion.

Its EBITDA in 2015 grew by 64.7% compared to 2014, to UAH 2.688 billion.

Ukrhydroenergo in 2016 expects a UAH 1.645 billion inflow of credit funds within the second stage of reconstruction of the hydro power plant, including UAH 814.1 million from the International Bank for Reconstruction and Development, UAH 500 million from the EBRD, UAH 300 million from the EIB. The plant also plans in the current year to obtain UAH 30.5 million from the International Bank for Reconstruction and Development for the construction of Kaniv pumped storage hydro station.

Electricity generation by the by nine hydroelectric and pumped storage plants of the company in 2015 fell by 26.2% compared to 2014, to 6.426 billion kWh.

EBA ASKS AGRICULTURE MINISTRY TO ALLOW EXPORT OF VARIOUS GRAIN GRADES

KYIV. March 29 (Interfax-Ukraine) – The European Business Association (EBA) has asked the Ministry of Agricultural Policy and Food to support changes to the instruction on grain accounting and standards for wheat, corn, barley, rapeseeds and soybeans, which permit the formation of export batches of various grain grades stored in elevators.

According to a press release from the EBA, participants in the grain market have problems with the formation of export batches of grain at grain storage facilities and port elevators. These problems occur because of inconsistencies in the outdated state standards and departmental instructions and requirements of today’s market.

“The main problem is the impossibility of forming export consignments of various classes of cereals (mainly wheat) both at granaries and port terminals As a result, a deficit of infrastructure for the simultaneous storage of grains of different classes appears,” reads a statement.

The inability to mix grains leads to unnecessary logistics costs of domestic exporters, the excessive length of grain transshipment in ports and congested transport infrastructure.