Business news from Ukraine

ULIE CO-FOUNDS BELT&ROAD INDUSTRIAL AND COMMERCIAL ALLIANCE IN BEIJING

KYIV. June 16 (Interfax-Ukraine) – Business associations of 21 Asian and European countries, including the Ukrainian League of Industrialists and Entrepreneurs (ULIE), have founded the Belt&Road Industrial and Commercial Alliance (BRICA).

The founding ceremony for BRICA was held in Beijing on Thursday, the ULIE said in a press release.

“We want to ensure that our partners should see our country not only as a transit zone for shipment of goods to Europe, but also as a platform for the formation of new enterprises,” the ULIE quoted its first vice president Vasyl Khmelnytsky as saying.

According to him, the ULIE hopes to attract more investment and promote the interests of Ukrainian business through the establishment of this new alliance.

BRICA is an international non-governmental organization which brings together on a voluntary basis national business associations from Asia and Europe. The name ‘One Belt, One Road’ comes from the eponymous initiative of the Chinese government aimed at establishing a new model of international cooperation and development through the strengthening of the existing regional bilateral and multilateral mechanisms and structures of interactions, which involve China. To implement the strategy and investment projects in the countries that have joined it, China has set up a separate fund, which already has over $40 billion in authorized capital, the ULIE reported.

UKRAINE’S REGIONAL DEVELOPMENT MINISTRY, GIZ AGREE TO IMPLEMENT EUR 5.85 MLN PROJECT

KYIV. June 15 (Interfax-Ukraine) – The Ministry of Regional Development, Construction, Housing and Utilities Economy of Ukraine and the German Corporation for International Cooperation (Deutsche Gesellschaft fur Internationale Zusammenarbeit, GIZ) have agreed on the implementation of the project for the development of Ukrainian cities with the funding of EUR 5.85 million.

The relevant agreement was signed by Deputy Prime Minister – Minister of Regional Development Hennadiy Zubko, Director of the GIZ Office in Ukraine Sabine Muller and Director of the Integrated Urban Development in Ukraine project Mathias Brandt.

“At present, the integrated urban development is critically important for Ukraine because powers are being transferred local authorities and new tools are being developed to address the issues related to financing and territory planning,” Zubko said.

Integrated plans for the development of Vinnytsia, Zhytomyr, Poltava and Chernivtsi are planned to be developed as part of the project. Each of the cities needs to provide free office space worth EUR 200,000.

EU SEEKING SUPPORT FOR INITIATIVES TO DEVELOP BLACK SEA REGION – EU COMMISSIONER

ODESA. June 15 (Interfax-Ukraine) – The European Union (EU) seeks to support various initiatives intended to develop the Black Sea region, EU Commissioner for Environment, Maritime Affairs and Fisheries Karmenu Vella has said.

The idea is that each country has own challenges in this region and there are common challenges for the whole region, he said at the Third Black Sea Stakeholder conference in Odesa on Tuesday.

Vella said that the EU backs the region in general.

He added that he sees the largest potential for development of the Black Sea region in the tourism industry.

Conference participants discussed the prospects for increasing the region’s attractiveness for tourists, scientific cooperation, sustainable use of the Black Sea and other issues.

STATE FOOD-GRAIN CORPORATION REACHES AGREEMENT WITH CHINA CCEC ON GRAIN PREFERENTIAL MARGIN

KYIV. June 15 (Interfax-Ukraine) – Public joint-stock company State Food-Grain Corporation and China National Complete Engineering Corporation (CCEC) have reached an agreement on the size of the preferential margin of 1.5% of the price, but no more than $5 per tonne and only if CCEC is the ultimate recipient of grain.

“Our achievement was an agreement with China’s CCEC on the size of the preferential margin of 1.5% of the price, but no more than $5 per tonne and only if grain is supplied to CCEC,” acting Board Chairman Borys Prykhodko said at a press conference in Kyiv on Tuesday.

Earlier the preferential margin was $5 per tonne. This was outlined in the contract on the provision of a $1.5 billion loan by China to the corporation.

Prykhodko said that since the start of 2015-2016 agricultural year (July-June) the corporation has shipped 660,000 tonnes of grain to CCEC.

“We are meeting our liabilities. We presented 132 offers to our partner on the possibility of shipping 5.2 million tonnes of grain, and only 13 offers were implemented,” he added.

He said that in 2015 the corporation supplied 1.5 million tonnes of grain through CCEC and this was 16% more than in 2014.

STATE FOOD-GRAIN CORPORATION TO INVEST OWN UAH 230 MLN IN ELEVATOR MODERNIZATION IN 2016

KYIV. June 15 (Interfax-Ukraine) – Public joint-stock company State Food-Grain Corporation seeks to invest UAH 230 million in modernization of own elevators in 2016.

“We have allocated UAH 230 million from the company’s budget to upgrade our elevators,” acting Board Chairman Borys Prykhodko said at a press conference in Kyiv on Tuesday.

He said that the corporation intends to use the fund by the start of the late crop harvesting.

The corporation wants to invest money in building a port terminal. The project is being designed and discussed with the Infrastructure Ministry.

Prykhodko did not disclose what funds will be used to build the terminal.

The corporation increased grain exports from 2.34 million in 2014 to 2.85 million in 2015.

In Q1 2016 the corporation shipped 925,000 tonnes of grain for exports.

“If we are lucky, in 2016-2017 agricultural year we will export 3.5 million tonnes of grain,” he said.

He said that Mykolaiv port elevator handled 1.219 million tonnes of grain in 2015 and Odesa port elevator – 542,400 tonnes.

Prykhodko added that the capacity of the corporation does not allow full implementation of grain handling and exports plans. The corporation seeks to build the new terminal.

The government in August 2010 decided to create the State Food and Grain Corporation of Ukraine. The corporation has a chain of branches, comprised of grain storage facilities, flourmills, fodder factories and a cereals factory. The 53 subdivisions of the corporation can store a total of 3.75 million tonnes of grain, which includes the grain handling capacities of Odesa and Mykolaiv ports of some 2.5 million tonnes of grain cargo per year.

DCH GROUP OWNER YAROSLAVSKY INTENDS TO RESUME OPERATION OF KHARKIV TRACTOR PLANT

KHARKIV. June 15 (Interfax-Ukraine) – The owner and president of DCH Group Oleksandr Yaroslavsky, who holds a controlling stake in Kharkiv Tractor Plant, has no plans to attract external investment for resumption of the plant’s operation.

“[The situation at] the plant is hard, but taking into account our experience, one can restore it. There are specialists, production facilities and desire. I have money and I am not going to involve anyone,” he said at a press conference in Kharkiv on Tuesday.

Yaroslavsky said that the problem with blocking the enterprise’s account and arrest of its assets should be resolved to quickly launch tractor production. The arrest is linked to criminal cases against the head of Kharkiv Tractor Plant Andriy Koval appointed in March 2016.

He said that if the accounts are unblocked, the plant will be able to pay wage arrears to its employees. The debt has reached UAH 20 million.

The businessman said dozens of millions of U.S. dollars would be required for the successful operation of the enterprise.

Yaroslavsky said that at his meeting with Ukrainian President Petro Poroshenko on June 9 the latter supported the proposal to resume production for the defense sector at Kharkiv Tractor Plant.

“On Thursday I spoke with the president and we discussed this issue. We backed this idea… We will have to launch production. We need a state order and investment. It is estimated at UAH 350-400 million,” he said.

Yaroslavsky said that the enterprise can sell its products on the Ukrainian market, as well in Kazakhstan and Russia.

As of June 14, 2016, Yaroslavsky held 62.44% of shares in Kharkiv Tractor Plant and the rest of the shares belonged to Siegfried Wolf.