Business news from Ukraine

OTIS ELEVATOR PRODUCER SEES 23.5% RISE IN SALES IN 2015

KYIV. April 25 (Interfax-Ukraine) – Private joint-stock company Otis lift producer (Kyiv) made 849 lifts in 2015, and this was 16.6% up on 2014. The company sold 830 elevators (23.5% up year-over-year).

The company said that the share of lifts of total production in money terms was 47.2% or UAH 322.94 million and of total sales – 41.7% or UAH 305.44 million.

The share of lift doors production decreased to 43.6% (from 48.6% in 2014) and lift door sales – to 39.9% (from 48.3%).

Otis in 2015 made 60,885 lift doors worth UAH 298.22 million and sold 60,000 doors worth UAH 291.89 million.

Earlier the company said that lift doors are supplied to Russia.

Otis last year provided UAH 63.08 million worth of lift services (UAH 64.9 million a year ago).

Otis’ net income under Ukrainian accounting standards grew by 21.5% in 2015, to UAH 731.66 million and net profit decreased to UAH 1.93 million compared to UAH 37.23 million in 2014.

Gross profit slid by 29.6%, to UAH 55.91 million and operating loss was UAH 1.55 million compared UAH 28.76 million of profit a year ago.

Otis has been operating on the Ukrainian market since 1992. It is part of U.S. Otis Elevator, the world’s leading manufacturer of elevators, escalators, and moving walkways. Otis Elevator is a subsidiary of United Technologies Corporation (UTC).

UKRAINE TO SET UP EXPORT AGENCY TO FACILITATE MACHINE BUILDING GOODS’ ENTRANCE TO FOREIGN MARKETS – POROSHENKO

ZAPORIZHIA. April 25 (Interfax-Ukraine) – The authorities are intended to set up an export agency, which will be responsible for entrance of the Ukrainian machine building produce to the foreign markets, President of Ukraine Petro Poroshenko said.

“What the state must do today for support of the machine building sector? The export agency will be set up to facilitate entrance of the Ukrainian enterprises of the machine building sector to the foreign markets, political aid for signing mentioned contracts to be granted,” he said during a visit to Zaporizhia region on Friday.

UKRAINE RECEIVES EUR 97 MLN FROM EU FOR SUPPORT OF DECENTRALIZATION

KYIV. April 25 (Interfax-Ukraine) – Ukraine’s government and the European Commission have signed an agreement on the provision of EUR 97 million for the U-LEAD with Europe: Ukraine Local Empowerment, Accountability and Development Program.

Deputy Prime Minister – Regional Development Minister of Ukraine Hennadiy Zubko and Head of the EU-Ukraine Support Group Peter Wagner signed this agreement, an Interfax-Ukraine correspondent reported.

“This is an investment into knowledge and the ability of communities to change, to grow, to establish the new quality of life. As the result of the implementation of this program over the next four years we want to see that we have brought up a new elite of strong and educated people who are willing to take responsibility and be real leaders,” Zubko said.

According to him, EUR 97 million provided by the EU will be spent on training of regional officials in strategic planning, budgeting, monitoring, e-governance, efficient financial management, etc.

The program is designed for four years and is aimed at supporting the local government reform, the decentralization in Ukraine and the regional development.

The U-LEAD program consists of two components: enhanced capacity to implement decentralization and regional policy reforms (education of local authorities of all levels, consultations on different matters, etc) and creating administrative service centres (it envisages the establishment of 600 such centers and training their staff).

The program is implemented in Ukraine by the EU and its member-states Germany, Sweden and Poland through the German Federal Enterprise for International Cooperation (GIZ) and the Swedish International Development Agency. The funds have been allocated by the EU – EUR 60 million, Germany – EUR 6 million, Sweden – EUR 30 million, and Poland – EUR 1 million.

UKRAINE CAN STIMULATE ARRIVAL OF LOW-COST AIRLINES TO COUNTRY – INFRASTRUCTURE MINISTERUKRAINE CAN STIMULATE ARRIVAL OF LOW-COST AIRLINES TO COUNTRY – INFRASTRUCTURE MINISTER

KYIV. April 25 (Interfax-Ukraine) – Ukraine’s Infrastructure Ministry is working on a program to stimulate the arrival of low-cost airlines to the country, foreseeing the provision of benefits to them, Minister Volodymyr Omelyan has said.

“We’re working on a program to additionally pay to low-cost airlines, or to provide them with benefits,” he said at a meeting with members of the European Business Association (EBA) in Kyiv last week.

The minister said that talks with these European airlines showed that they are currently not ready to come to Ukraine.

Omelyan said that among key obstacles is the absence of an agreement on Open Skies with the EU and the administrative restriction policy conducted by the National Bank of Ukraine.

He added that Ukrainian cities, particularly Lviv, threw cold water on the proposal to pay to low-cost airlines extra to organize flights.

MP SEEKS INCENTIVES FOR INVESTMENT IN MEDICINE PRODUCTION

KYIV. April 25 (Interfax-Ukraine) – A member of the parliamentary committee for healthcare Kostiantyn Yarynich has registered two bills with incentives for medicine production investment projects in Ukraine in order to reduce the tax burden on imports of equipment for medicine production.

He proposed amending to the Customs Code (bill No. 4509) and Tax Code (bill No. 4508) is made.

Yarynich told Interfax-Ukraine that bill No. 4509 implies the reduction of tax burden on economic entities that will implement investment projects to produce medicines and medical products.

The document envisages exemption from paying imports duty on equipment for production of medicines and medical products until January 1, 2017, using concrete Ukrainian foreign trade codes, which would make impossible abuse of law in applying the tax benefit.

The document says that imports duty exemption will apply only if imported equipment is used by taxpayers for own production of medicines and medical products if identical goods with similar quality indicators are not made in Ukraine.

Bill No. 4508 says that profit that taxpayers will receive from the above-mentioned investment projects and equipment used in production of medicines will be taxed at a zero rate in the first five years of the project implementation, 8% in next five years and 18% in 10 years.

The taxation regime applies if total investment for the project is no less than EUR 15 million, investors are to create over 200 jobs, salaries of workers are to be no less than 2.5 minimum salaries in Ukraine and income of taxpayers received from the investment project is to be no less than 75% of their total income over reporting period.

The document foresees the exemption from VAT for imports of equipment for production of medicines and medical products, including active pharmaceutical ingredients, if the equipment is used for the enterprise’s own production, it was made no more than three years ago before it was imported to Ukraine, it is not used, is not excisable and identical imported goods with similar quality indicators are not made in Ukraine.

POROSHENKO PROMISES SUPPORT TO AIRCRAFT BUILDERS ENTERING NEW MARKETS

KYIV. April 25 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko has said that he would provide support for Ukrainian aircraft manufacturers to enter new markets.

The press service of the head of state reported that Poroshenko visited the Ivchenko Progress Machine-Building Design Bureau of Zaporizhia during his working trip to the region and took part in the test launch of a new AI-450 engine. Poroshenko examined the enterprise and watched samples of test launches of various engines.

Poroshenko said that Ukraine is deservedly considered one of few countries in the world capable of producing modern aircrafts.

“The enterprise doesn’t stand still. It implements modern technologies and demonstrates positive economic and financial results,” he said.

He pointed out successful work of Ukroboronprom State Concern on the substitution of components previously supplied from Russia.

“We have elaborated an import substitution system. Our engineers have fulfilled this task,” he said.

According to the president, the volume of production at Ukroboronprom has been tripled. This means that thousands of jobs have been saved and new jobs have been created. Engineers have also remained at the Progress Design Bureau.

“Ukrainian aircraft manufacturing has a great future,” Poroshenko said, adding that Ukrainian products had recently entered the market of Saudi Arabia and India.