Business news from Ukraine


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.


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.


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.


KYIV. May 22 (Interfax-Ukraine) – Style D LLC (Dnipropetrovsk), which is developing the ProStor chain of perfumes and cosmetics stores, plans to open around 100 stores in 2015, Style D Director General Denys Herman said at the first summit for owners and managers of shopping and leisure centers in Kyiv on Thursday.

“Last year our company opened 50 stores, in four months of 2015 we opened 30 stores. We plan to open 100 stores in 2015. Today our market share is 15%. We want to increase our share and presence on the market to 25% and more,” he said.

“How do we achieve this goal? We assess the drogerie market capacity at 2,500 outlets in the future. Four large players – Eva, Watsons, Cosmo and ProStor have around 1,000-1,100 stores. The market would double in next several years. We want to boost our share thanks to quick aggressive development,” he said.

Herman said that the company is interested in developing in shopping and leisure centers.

“However, it’s hard to agree the economic parameters [with the shopping centers]. We’re ready to pay $20 per square meter for leasing, but who is happy with these rent rates today? We’re ready to pay 10-12% of turnover, while shopping centers say: 15% and more,” he said.

Style D was created in 2002. The first store was opened in Dnipropetrovsk in July 2005.

ProStor is the largest national retail chain in the drogerie format.

Its private label portfolio includes the Bona, NEO, Violetta, VIVAfruts, super Diya and Tendresse de la Nature brands.

As of March 22, 2015, the chain included 197 stores in Ukraine.


RIGA. May 22 (Interfax-Ukraine) – Latvian Prime Minister Laimdota Straujuma said that Ukraine and Georgia will receive a visa-free regime in 2016, if they meet all the necessary criteria this year.

“For both Ukraine and Georgia it is important, if they should meet all the criteria by the end of the year, which will be stated in a new report of the European Commission, it is likely that next year these countries will be granted visa-free travel,” the Latvian prime minister told journalists before the plenary session of the Eastern Partnership summit in Riga on Friday.

Ukraine and Georgia are counting on a clear signal about the prospects for the introduction of a visa-free regime with the EU countries at the Eastern Partnership summit.


KYIV. May 21 (Interfax-Ukraine) – The European Commission at the Eastern Partnership in Riga has launched a new 10-year grant facility worth EUR 200 million to support small and medium enterprises (SMEs) in Ukraine, Georgia and Moldova as part of the agreements on Deep and Comprehensive Free Trade Areas (DCFTA).

According to a European Commission press release issued on May 21, this contribution is expected to unlock at least EUR 2 billion of new investments by SMEs in the three countries, which are to be financed largely by new loans supported by the facility. The financial means for the investments will largely come from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

“The European Commission promised concrete steps to boost trade and the exchange between the Union and our Eastern partners… They are a sign of the EU’s strong commitment to further deepen our cooperation with our Eastern partners,” President of the European Commission Jean-Claude Juncker said.

According to the documents, this includes projects common for all three countries and one more project for each country. For Ukraine this year, a guarantee facility worth EUR 330 million is to be launched, which includes an EU grant of EUR 40 million.

The EBRD facility to support SMEs worth EUR 8 million will be launched for Georgia (UAH 6 million of the EU grant) and for Moldova the EIB facility worth EUR 300 million to support fruit gardening will be launched (EUR 8 million of the EU grant).

The common projects for the three countries include a EBRD facility worth EUR 69 million on technical assistance to SMEs (EU grant is EUR 10 million to guarantee EBRD direct lending).

This year it is planned to launch two smaller projects: EBRD worth EUR 6 million (EU grant is EUR 4 million) – business advice on exports and new standards compliance; and EBRD, EIB and KfW worth EUR 90 million (EU grant is EUR 15 million) – for currency hedging.

It is also planned to launch two larger facilities: DCFTA Facilitation from the two banks: EIB with EUR 180 million (EU grant is EUR 22 million) macro-finance, market access and guarantees; and EBRD with EUR 422 million (EU – EUR 19 million) – access to finance, trade finance and advise for SMEs.

EIB and EBRD will extend DCFTA Facilitation facilities for Phase II and Phase III with provision of EUR 780 million (EU – EUR 34 million) and EUR 861 million (EU – EUR 38 million) respectively.