Business news from Ukraine

SALES OF BUSES IN UKRAINE GROW IN JULY

KYIV. Aug 8 (Interfax-Ukraine) – The new bus market in Ukraine in July 2016 totaled 98 buses, which is almost twice up year-over-year and 66% up on June 2016, according to the Ukrautoprom association.

The leader is Ataman bus made by Cherkasy Bus: 27 buses were sold compared to 10 in July 2015 (no bus was sold in June).

PAZ buses are second (25 buses sold compared to one bus sold in July 2015 and 14 in June 2016).

Ruta buses sales (on the basis of Russia’s GAZel) made by Chasiv Yar Bus Plant (Dontesk region) decreased by three compared to July 2015, to 13.

Sales of Etalon fell by three to seven and sales of IVAN (made by ZAZ) buses to six.

Electron Corporation appeared on the bus market in Ukraine in July (Lviv). The corporation made 11 Electron buses for Lviv.

The association said that four Ford and two MAZ buses were sold in July, as well as three buses of other manufacturers.

According to Auto-Consulting Group, in July 2016 bus sales in Ukraine more than doubled, and in January-July 2016 some 405 buses were sold, which is 2.2 times up year-over-year.

INDONESIA INTERESTED IN UKRAINIAN TURBINES FOR GENERATING ELECTRICITY – INDONESIAN PRESIDENT

JAKARTA. Aug 8 (Interfax-Ukraine) – Indonesian President Joko Widodo says his country is interested in cooperation with Ukraine, namely in the manufacture of turbines that generate electricity.

“We have considered the issue of cooperation of Indonesia with Ukraine in the areas of the manufacture of turbines for power generation,” he told reporters after talks with Ukrainian President Petro Poroshenko.

The Ukrainian president said, in turn, that the question of cooperation in the supply of power generating equipment had been discussed at the meeting.

“Ukraine is a strong producer and reliable supplier of energy equipment to over 40 countries. We see active participation of Ukraine in the implementation of ’35 Thousand Megawatts’ project initiated by Mr. President [Joko Widodo],” Poroshenko said, saying that it was discussed in detail at meetings with his Indonesian counterpart.

GROYSMAN: UKRAINE IN SEPT TO LAUNCH INVESTMENT SUPPORT OFFICE UNDER COORDINATION OF MARKAROVA

KYIV. Aug 8 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers in September 2016 intends to launch the investment support office with financial backing by equity funds managed by Western NIS Enterprise Fund (WNISEF, created in 1994 with seed capital of $150 million paid by the U.S. government), Ukrainian Prime Minister Volodymyr Groysman has said.

“The goal is to create the entry point for attracting investment,” he said opening a government meeting in Kyiv on Monday.

Groysman said that the governmental envoy will be appointed to coordinate the operations of the office with the government, ministries and other authorities. The Cabinet approved First Deputy Finance Minister Oksana Markarova for the post. She worked for 17 years in investment business, in particular in WNISEF, before coming to the Finance Ministry early 2015.

The prime minister said that foreign investors show their interest to Ukraine, but they demand some conditions.

“We need a coordination mechanism. We should understand where the entry point is and how authorities would help,” he said.

He said that the task of the office is to bring an investor by hand to successfully implement a turnkey project if the investor shows interest.

Groysman said that the attraction of investment is crucially important to bring Ukraine from the state of the country with the raw material type of economy.

Among other tasks on this way is development of infrastructure, provision for political stability, protection of investors’ rights and conducing of judicial reform.

The prime minister said that experience of similar offices in the United States, Lithuania, Poland, Georgia, the Czech Republic and Germany was taken into account when the office in Ukraine was created. He said that the office will be located in the building of the government.

Groysman said that on September 1, 2016, Markarova will present proposals on the director of the office and his or her team.

The prime minister added that if the governmental office shows success, similar regional offices in the regions or municipal offices could be created.

SWISS GERALD METALS, AUSTRALIA’S COMMODITY MINERALS TO OPEN OFFICES IN UKRAINE

KYIV. Aug 8 (Interfax-Ukraine) – International geological companies Gerald Metals from Switzerland and Commodity Minerals from Australia intend to open offices in Ukraine, Ukraine’s State Service for Geology and Deposits has reported.

“The top priority direction for the State Service for Geology and Deposits for 2016 is the creation of a common geological catalog. The service attracts international geological companies. Two foreign companies have given their consent to open offices in Ukraine,” the authority said in a press release.

Gerald Metals is a large global company producing non-ferrous and precious metals operating on five continents in 40 countries. The company has offices in 18 countries.

The authority added that negotiations with other geological companies are underway.

Head of the State Service for Geology and Deposits Mykola Boyarkin said at a meeting with representatives of the U.S. Embassy this week devoted to the problems of unlawful production of amber that there is a proposal to increase the issue of permits to use deposits by the State Service for Geology and Deposits. Geological information for the investor should be prepared.

“The service is working on the creation a common ‘geological library’ – digitizing the geological data catalog and involving large geological companies. These companies would prove that it is worth to invest in our country by their presence on the Ukrainian market,” he said.

SOCAR FIRST WINS UKRZALIZNYTSIA’S TENDER TO SUPPLY DIESEL FUEL, WOG CHALLENGES DECISION

KYIV. Aug 5 (Interfax-Ukraine) – Socar Ukraine Trade House LLC first won a tender held by Center for Provision of Production of public joint-stock company Ukrzaliznytsia to supply diesel fuel, although the bidder of similar tenders WOG Aero Jet which price was 15.3% higher challenged the results of the tender,” Ukrzaliznytsia has reported.

“Socar Ukraine first won the tender of Ukrzaliznytsia to buy diesel fuel,” Ukrzaliznytsia said in a press release on Tuesday.

Center for Provision of Production on August 1, 2016 signed a contract to supply 14.1 tonnes of diesel fuel with Socar Ukraine at the price of UAH 17,700 per tonne (VAT included) and on the same day the oil trader shipped 730 tonnes of diesel fuel.

The company said that this offer was better than offers of other bidders: WOG Aero Jet – UAH 20,400 per tonne with VAT and OKKO Business Contract – UAH 20,700 per tonne with VAT.

Commenting on the claim of WOG Aero Jet sent to Ukraine’s Antimonopoly Committee, Ukrzaliznytsia said that the contract is considered signed, as the committee has not made any decision under the claim. The claim was published later than information that the contract is signed.

The press service of Ukrzaliznytsia added that WOG Aero Jet on August 1, 2016 also filed a claim to the National Anti-Corruption Bureau of Ukraine.

KYIVSTAR SEES 34% RISE IN EBITDA IN Q2 2016

KYIV. Aug 5 (Interfax-Ukraine) – Kyivstar mobile operator saw a 34% rise in earnings before interest, tax, depreciation and amortization (EBITDA) in April-June 2016 year-over-year, to UAH 2.03 billion, the company said in a report on Thursday.

Revenue grew by 11%, to UAH 3.69 billion thanks to a rise of 14-15% in average revenue per user (ARPU), while the number of subscribers shrank by 2% year-over-year, to 25.4 million.

In H1 2016, Kyivstar increased EBITDA by 38%, to UAH 3.85 billion with growth of revenue by 12%, to UAH 7.16 billion.

Capital investment almost halved (by 49%), to UAH 975 million, including a fall of 38% in Q2 2016, to UAH 727 million.

Kyivstar said that increase of EBITDA margin to 54.9% is linked to a rise in revenue, reduction of expenses on interconnection and a fall in structural operating expenses.

“A rise in payments for frequency bands related to the 3G license, growth of utilities tariffs and rent rates and devaluation of the national currency affected operating expenses,” the company said.

Revenue from mobile data transfer grew by 79% compared to Q2 2015, to UAH 262 million with retaining the number of subscribers at 800,000. The growth is linked to the development of 3G network, the launch of attractive tariffs and active promotion of offers for smartphones.

The company said that it expanded 3G network coverage in Q2 2016 with 48% of Ukrainian residents now having access to it.

The number of mobile Internet users decreased by 5% in a year, to 10.3 million, while data traffic grew by 83%, to 283 megabytes.

Kyivstar said that competition on the Ukrainian telecommunications market is toughening, and the trend would grow.