Business news from Ukraine

UKRAINIAN ENTREPRENEURS WORKING TO IMPROVE RESOURCE EFFICIENCY OF PRODUCTION

Ukrainian businessmen and scientists continue to cooperate with foreign partners and international organizations, including the United Nations Industrial Development Organization (UNIDO), to adapt and implement resource-efficient and cleaner production in the country. A number of initiatives are being implemented through a UNIDO project in Ukraine, in which such universities as “KPI” and NP “Kyiv Polytechnics,” as well as the Ukrainian League of Industrialists and Entrepreneurs (ULIE) have created a Center for Resource-Efficient and Cleaner Production.

It serves as a platform for conferences and research events, and one of them was the presentation of the results of such activity at enterprises located in Kyiv region.

The conference was aimed at expanding the number of participants in the UNIDO project, attracting new businesses and raising awareness of the public, companies, scientists and other entities that are interested in resource-efficient production. In the two years, the Center has examined 50 companies in four regions of Ukraine (Kyiv, Vinnitsa, Odesa and Zaporizhia), it has prepared more than 40 certified experts in this field. In 2015, the Center’s offices have opened in Lviv and Kharkiv regions.

Deputy Head of the Mission at the Austrian Embassy in Kyiv Klaus Iro stressed that improving energy and resource efficiency in the industry is currently a challenge of global character. The agenda of the 2015 United Nations Climate Change Conference in Paris proves this. For Ukraine, the diplomat said, these issues are of particular relevance in view of the fact that the Ukrainian economy has one of the world’s highest indicators of energy consumption in production.

This time, six companies located in Kyiv region joined the initiative. Following their comprehensive technical audit, the Centre proposed technical solutions that provide annual savings of natural gas by 4,403 m3, electricity by 128,464 kWh, and a reduction in the use of materials by 94 tonnes and CO2 emissions by 64 tonnes.

The overall economic impact that can be achieved from the introduction of the proposed solutions is about UAH 2.1 million per year.

“The significant results that have been achieved by the participating enterprises demonstrate the need to spread this experience to other regions and involve new companies in the project. The significant scientific potential of the Ukrainian universities and educational institutions will be conducive to the success of the project in Ukraine,” Director of the ULIE’s Corporate Security Department Serhiy Hudobin said.

Director of the Center for Resource-Efficient and Cleaner Production Ihor Shylovych says that most of the technical solutions proposed by the Center do not require additional investment, but the effect of their implementation can be a tangible reduction in inefficient resource and energy consumption.

Reference. The Center for Resource-Efficient and Cleaner Production was established in 2013. Its main purpose is to provide services to improve resource and energy efficiency, make production more environmental friendly. It conducts comprehensive engineering and technical assessments of production processes at enterprises. The project is implemented with financial support from the governments of Austria and Switzerland.

OVER UAH 230 MLN TO BE SPENT ON BUILDING SUBWAY IN KHARKIV IN 2016 – CITY COUNCIL

KHARKIV. Dec 25 (Interfax-Ukraine) – Kharkiv City Council at a session on December 23 approved the cost estimates for the program of the construction and development of the Kharkiv underground at the expense of the city budget for 2016.

According to an Interfax-Ukraine correspondent, the document provides for allocating UAH 232.475 million for this purpose, of which UAH 475,000 from the general fund and UAH 232 million from the special fund.

Funds from the general fund will be used for the financial support of the Kharkiv Directorate of Subway Construction, and the principal amount of the special fund (UAH 230 million) is intended for the construction of a section of the third line from the Oleksiyivska station to the Prospect Peremohy station. In addition, UAH 500,000 will be spent on building the Oleksiyivske depot with a connection branch to the third metro line, UAH 1.5 million for the construction of the third line from the Vaschenko Metrobudivelnykiv station to the station Odeska.

UKROBORONPROM SEES UAH 1.6 BLN IN NET PROFIT IN JAN-SEPT 2015

KYIV. Dec 25 (Interfax-Ukraine) – The Ukroboronprom State Concern saw UAH 1.626 billion in net profit in January-September 2015 compared to UAH 348 million of loss in 2014, the concern said on its website.

“In 2015, Ukroboronprom produced, modernized and repaired a record of 7,198 units of armament and equipment,” the concern said in a press release, citing Ukroboronprom Director General Roman Romanov.

This year Ukroboronprom’s enterprise made 673 armored vehicles, 1,830 units of rocket and missile artillery ordnance, 3,794 knots and parts, 275 vehicles and 246 communications and encryption units.

Romanov said that if from the middle of 2014 the concern’s enterprise mainly modernized old equipment, starting from 2015 production of new modern equipment was started. He said that a record was hit in 2015 thanks to bulk production, designing and production of new products, the program on replacing imported goods and preventing corruption at the enterprises.

Ukroboronprom state concern was established in accordance with presidential decrees dated December 9 and 28, 2010, as well as under government decree No. 1221 of December 29, 2010. Ukroboronprom, jointly with the government, manages state defense industry facilities.

At present, 112 Ukrainian defense industry enterprises, including state-run Ukrspecexport and its subsidiaries, are members of the state concern. Today, 21 enterprises of the concern are located in the occupied territory of Crimea and in Donbas.

KYIV WILL USE UAH 988.3 MLN FOR UPGRADING, UAH 189.2 MLN FOR HOUSING FACILITIES OVERHAULS IN 2016

KYIV. Dec 25 (Interfax-Ukraine) – The budget of Kyiv and the program of socio-economic development for 2016 within the program “The upgrading of cities, towns and villages” foresee funds in the amount of UAH 988.312 million, of which UAH 612.56 million at the expense of the general fund, another UAH 375.751 million from the special fund of the national budget.

According to the press service of Kyiv City Council, of the total funding for the program UAH 435.954 million will be allocated for the repairs of the road network and facilities, another UAH 122.54 million for the overhauls of the road infrastructure.

In addition, the city authorities intend to spend UAH 251.319 million on the improvement and maintenance in a proper condition of green spaces in the city and the urban areas next year, states the report.

According to the city council, a total of UAH 120.038 million of the capital budget will be used for the maintenance and operation of external illumination networks, as well as their repairs and the purchase of the relevant equipment, UAH 58.204 million for the maintenance and operation of pump-room complexes, urban cemeteries and the repair of landslide protection waterworks.

PARLIAMENT REVOKES ADDITIONAL IMPORT DUTY FROM JAN 1 2016

KYIV. Dec 25 (Interfax-Ukraine) – The Ukrainian parliament has revoked the additional import duty of 5-10% from January 1, 2016 under a proposal of the government.

A total of 268 lawmakers supported bill No. 3533 on Thursday.

The parliament authorized the government to introduce the additional import duty for the period of one year in the law of December 28, 2014. The document took effect only on February 25, 2015 after the publication of the cabinet resolution on the completion of consultations with international financial organizations on the introduction of temporary measures to stabilize the country’s balance of payment.

The law foresaw the introduction of a 10% duty on finished food, fats, vegetable oil and butter, alcohol and non-alcoholic drinks, tobacco, vinegar, live animals (goods groups 1-24 under the Ukrainian foreign trade code). The 5% duty is imposed on any other goods, apart from vitally important goods, including energy goods and some drugs.

The General Council of the World Trade Organization (WTO) on July 29, 2015 confirmed that the additional import duty imposed by Ukraine is in line with the WTO agreements.

UIA TO BOOST PASSENGER TRANSPORTATION BY 26% IN 2015, BY 17% IN 2016

KYIV. Dec 24 (Interfax-Ukraine) – Ukraine International Airlines (UIA, Kyiv) in 2015 will increase passenger transportation by 26% or 1 million people, to 4.8 million passengers, UIA President Yuriy Miroshnykov has said.

“The most pleasant is that this is more than in 2013 – we hit our record of 2013, the last pre-crisis year. In addition, we made this with less planes and employees,” he said in an interview with Interfax-Ukraine.

He said that the company expects to see profit under IFRS in 2015.

“All our partners – lessors, insurers, banks – demand these indicators from us. Under Ukrainian accounting standards the company will see loss. This is linked to large exchange rate fluctuations, especially in February 2015,” he said.

Commenting on the development in 2015, Miroshnykov said that the airline launched six international flights from Kyiv, including one long-haul Kyiv-Beijing flight, six regional international direct flights, mainly from Lviv and Odesa, two domestic Kyiv-Zaporizhia and Kyiv-Ivano-Frankivsk flights and the airline had experimented with domestic regional flights Lviv-Odesa and Kharkiv-Odesa.

Asked about the plans about passenger transportation in 2016, he said that the airline has the plans and the budget has been approved.

“We hope to exceed the five-million level for passenger flow and reach 5.5 million of passengers. This will be a rise of around 17% compared to 2015,” he said.

However, UIA plans to expand its fleet in 2016 to reach this goal for passenger transportation.

“We expect that six planes will arrive. They will be all Boeing 737-800NG aircraft, one new and five used… We will lose two planes by autumn [the leasing contract will expire]. The average age of UIA’s fleet will remain stable – around 11 years,” he said.

UIA was founded in 1992. It is the largest Ukrainian airline. The base airport is Boryspil airport. UIA’s fleet consists of 31 aircraft: 27 medium-haul and four long-haul aircraft.