Business news from Ukraine

CENTRENERGO SEEKS TO IMPORT 300,000 TONNES OF COAL VIA PORTS BY LATE 2016

KYIV. Aug 3 (Interfax-Ukraine) – Public joint-stock company Centrenergo by the end of this year seeks to import around 300,000 tonnes of coal via ports, acting Director General Oleh Kozemko has said in an interview with Business Censor online publication.

He said that the oral order was made after a meeting of a working group headed by Deputy Prime Minister Volodymyr Kistion on July 25.

“The company was ordered to diversify supplies. I as acting director general support this. The other question is at what price to buy and how it will be compensated for the company in the tariff. For the chief the key efficiency indicators are profit and profit margin,” he said.

Kozemko said that the purchase price of coal in South Africa is even higher than the price of steam coal with delivery from Rotterdam port under the formula provided by the National Commission for Energy, Housing and Utilities Services Regulation (NCER). Today, the indicative Rotterdam price of one tonne of coal with caloric value of 6,000 kilocalories per kilogram is around $51 (for 12 months) plus freight of around $5.

“The cost of coal included in the wholesale market price is $56 or UAH 1,400 per tonne with caloric value of 6,000 kilocalories per kilogram on the CIF conditions (not taking into account handling and railway tariff). The best offer for coal from South Africa received by Centrenergo is $72 per tonne with delivery to port on the same conditions. The best price for imported coal is $16 more than the Rotterdam price,” he said.

He also said that we will sign contracts to supply coal from South Africa only when he received the state appraisal.

“We are waiting for the document from the Institute of Legal Expertise. We have one question to it: would the purchase of imported coal be considered the loss caused to the company,” he said.

“If the company has a mixture of imported and Ukrainian coal, it will be able to see profit. If Centrenergo has to increase imported coal volumes, the company could see loss. If the company fully switches to imported coal, the indicative price set by the NCER for 2016 would not cover expenses,” Kozemko said.

He recalled that early 2016 the company imported coal from South Africa at $56 per tonne, but its caloric value was 5,200 kilocalories per kilogram.

POROSHENKO SIGNS BILL ALLOWING UKRAINIAN AVIATION INDUSTRY TO SET UP JV WITH FOREIGN PARTNERS

KYIV. Aug 3 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko has signed a bill amending some Ukrainian laws in part of the creation of conditions for international cooperation of aircraft builders and developing Ukrainian aircraft building.

According to the law passed by Ukraine’s Verkhovna Rada on July 14, 2016 and takes effect next day after its publication, the founders and/or members of such joint ventures can be foreign business entities, except for those located or operating in the territory of the state recognized an aggressor or occupant state and/or with respect to which sanctions are applied.

The document also provides for the extension until 2025 of state financial support to the system of sales of domestic aircraft through the mechanism of cheaper loans (partial compensation of interest rates).

It is expected the adoption of the law will allow up to 2020 to bring about UAH 5-10 billion of investment in the industry and increase sales by 20-25%.

Currently the leading Ukrainian designer and manufacturer of aircraft Antonov State Enterprise (Kyiv), part of Ukroboronprom Concern since 2015, is drafting plans on joint production with foreign partners, including An-132 multi-purpose transport aircraft and An-148/158/178 next generation aircraft family.

Among potential foreign partner are Saudi Arabia, Germany and India.

UKRAINIAN MINING-METAL COMPANY: UKRAINIAN ROLLED METAL PRODUCTS MARKET SEES 35% RISE IN H1 2016

KYIV. Aug 3 (Interfax-Ukraine) – The Ukrainian rolled metal products market grew by 34.8% in January-June 2016 year-over-year, to 1.93 million tonnes, not taking into account pipes or to 2.15 million tonnes with pipe production, private joint-stock company Ukrainian Mining-Metal Company (Kyiv) has said in a press release.

Over the period growth in imported goods supplies was 58%, to 31,000 tonnes.

“In H1 2016, the imports goods share was 16.3% compared to 13.9% in H1 2015. The upward trend was seen in supplies of beam channels (a rise of 90.8%), angles (a rise of 21.4%), channel bars (a rise of 36%), hot-rolled steel (a rise of 52.6%), galvanized steel (a rise of 56.5%), cold-rolled steel (a rise of 42.5%), rods (a rise of 18.2%0 and grids (a rise of 32.1%),” the press service said.

According to data from state-run enterprise Ukrpromzovnishekspertyza, 2.37 million tonnes of Ukrainian rolled steel in 2015, 740,000 tonnes of imported rolled steel, and in 2014 – 3.22 million tonnes and 1.13 million tonnes respectively.

Ukrainian Mining-Metal Company was founded in 1998. It is a leader among Ukrainian metal traders in rolled steel and pipe sales.

NEW GERMAN AMBASSADOR TO UKRAINE GETS TO WORK IN KYIV

KYIV. Aug 3 (Interfax-Ukraine) – Newly appointed Ambassador of Germany to Ukraine Ernst Wolfgang Reichel presented the copies of his credentials to Deputy Foreign Minister for European Integration of Ukraine Olena Dzerkal on August 1, the Ukrainian Foreign Ministry reported on its website.

According to German media, Reichel has worked as the German Foreign Ministry’s envoy for the Southeastern Europe, Turkey and the countries of the European Free Trade Association since July 2013.

From 2012 to 2016, Christof Weil served as the German ambassador in Kyiv.

SAHAIDATSKA AGRICULTURAL FIRM TO INVEST UAH 11 MLN IN DAIRY FARM IN KIROVOHRAD REGION

KYIV. Aug 2 (Interfax-Ukraine) – Sahaidatska agricultural firm (Kirovohrad region) will invest about UAH 11 million in a dairy farm.

According to the website of Kirovohrad Regional State Administration, the project to construct and reconstruct the premises of the dairy farm is implemented on the site of a former poultry farm, where some buildings of the agricultural company were rebuilt and re-equipped. The company continues reconstruction of the former poultry farm to keep heifers.

The automated dairy farm complex will be able to hold 600 cows when the work is finished.

The launch of the first stage of the farm is scheduled for autumn 2016.

Now the company’s total stock is 400 animals.

Sahaidatska agricultural firm cultivates about 2,000 hectares of farmland in Ustynivka district in Kirovohrad region. The major crops are barley, corn, and sunflower.

IRAN TO MULL OIL SUPPLIES TO SLOVAKIA, CZECH REPUBLIC VIA UKRAINE

KYIV. Aug 2 (Interfax-Ukraine) – Iran will mull Ukraine’s proposal about the possibility of transiting Iranian oil through the Ukrainian pipeline system to Slovakia and the Czech Republic, Iranian Petroleum Minister Bijan Zangeneh has said after talks with Ukrainian Minister of Energy and Coal Industry Ihor Nasalyk in Tehran on August 1.

According to the Iran Petroleum Ministry, Tehran is also ready to start cooperation in oil supplies directly to Ukraine, despite the fact that Ukrainian oil refining capacities are small and the country imports fuel.

The Iranian media resources IRNA and Shana added Kyiv have asked Tehran to consider the possibility of Iranian gas transit through the Ukrainian territory.

Zangeneh said Ukraine is attractive in its advanced power engineering industry. The parties are currently working on cooperation in the field of turbines and gas compressors.