The Ukrainian businesses’ representative office which opened in Brussels on April 21 has joined the process of searching for business partners, investors, and markets for domestic entrepreneurs. This is extremely important as it is being carried out before the establishment of a free trade area between Ukraine and the European Union (EU), which will become effective as of January 1, 2016. The creation of the Deep and Comprehensive Free Trade Area (DCFTA) with the EU is the peak of the Ukrainian economy’s approach to Europe. The implementation of this procedure will in many aspects influence further economic development and, possibly, even the country’s future.
“Ukraine should fulfill its ‘home task’ with more responsibility to streamline its economy with the conditions of the Association Agreement with the EU, and increase the influence of civil society on the quality and dynamics of structural reforms in the country. We will suggest focusing on the development of the industrial sphere as well as small- and medium-sized businesses, which are the backbone of the economy, create jobs, and generate tax revenues for the national budget. It’s of paramount importance under the conditions of economic crisis and before the changes Ukrainian enterprises will face following the full inauguration of the DCFTA between Ukraine and the EU next year,” ULIE President Anatoliy Kinakh said.
Today, Ukraine has to speed up the adaptation of its legislation to free trade conditions with the EU. Some tasks have been realized in this direction – three bills (on standardization, metrology, and technical regulations) were adopted to overcome technical barriers, and two more (on food safety and animal identification) were passed to eliminate biosecurity obstacles. However, Ukraine should speed up the introduction of EU technical and sanitary standards, mutual recognition of certificates of conformity for products, and the harmonization of tax legislation with EU norms and regulations. Also, Ukraine continues to have very complicated and long standardization and certification procedures.
Complicated preparations of the economy for DCFTA conditions and European integration in general require clearly organized infrastructure and good management. However, Ukraine is still without a deputy prime minister for European integration to whom a relevant government office should be subordinated.
The ULIE Office is developing cooperation with all of the EU institutions – the European Parliament (EP), the European Commission (EC), the External Action Service, etc. – in order to intensify the European integration process. Its relations with BUSINESSEUROPE – the leading EU organization of entrepreneurs and employers including more than 40 national entrepreneurs’ associations of the Old World, are also very important.
The ULIE Office is planning to include the Ukrainian side in talks on the possible revision of the EU Neighborhood Policy concerning Ukraine, especially its businesses. Eastern Partnership programs for business development, crediting, and training of representatives of the real sector of economy have made a noticeable contribution to the reconstruction of the economies of new EU members, namely Poland, Lithuania and Latvia. They received and continue to obtain funds for the structural modernization of enterprises and increased economic competitiveness. Similar programs for Ukraine exist, which envisage the allocation of around EUR 11 billion until 2020, three quarters of which are loans and the rest are grants. However, merely 3% (between EUR 250 million and EUR 350 million) of these funds are designed for supporting small- and medium-sized businesses, and it is still difficult to receive these funds.
“European support is almost unavailable for Ukrainian businesses, first of all, because of unrealistic conditions of crediting. We will raise this issue when communicating with our European colleagues in order to change the situation, streamline cooperation mechanisms with nowadays reality, and bring specific results,” Kinakh said.
The ULIE Office in Brussels will carry out a very important information function – giving Ukrainian businesses an opportunity to learn about various EU institutions’ programs, select the ones that could give our entrepreneurs modernization prospects in line with the DCFTA requirements.
Many EP members, EC representatives, diplomats, businessmen and public activists, including the ULIE management, and clergy attended the Office’s ribbon-cutting ceremony.
The Interfax-Ukraine News Agency is the media partner of the ULIE Office opening in Brussels. It has set up a specific information product – Ukraine Open for Business – containing Ukrainian business news for Europeans, which will help European partners better understand Ukrainian economic trends and prospects.
KYIV. April 24 (Interfax-Ukraine) – The State Agency for Automobile Roads of Ukraine (Ukravtodor) has started assessing the level of interest of potential investors in participating in the realization of the first concession project in Ukraine – construction, further exploitation and maintenance of the new Lviv-Kamianets road.
The press service of the agency said that starting this week and until May 15 inclusively all interested companies, residents or nonresidents of Ukraine, that want to be an investor in the project and are in line with bidder requirements can send letters of intent to the international cooperation department of Ukravtodor.
The letters do not foresees any liabilities for companies and are written in any form, and companies can add information or presentation materials on the projects realized by them.
The concession tender is due to start in May 2015. If the tender is a success and the winner is selected, the winner is to settle the financial close of the project in 2016.
KYIV. April 24 (Interfax-Ukraine) – The Infrastructure Ministry of Ukraine has drawn up proposals on developing infrastructure at Ukrainian ports.
The press service of the ministry reported that among the proposals are promising projects on r existing and construction of new facilities and the development of port-side areas at Illichivsk, Izmail, Mariupol, Kherson, Odesa, Berdiansk, Bilhorod-Dnistrovsky, Mykolaiv ports and other seaports. The projects foresee public private partnership.
“We want to attract investors to develop the port infrastructure of the country. We’re working on the creation of effective conditions for the realization of investment projects. The seaports of Ukraine have a powerful competitive potential among Black Sea region countries and we could even increase it, improving infrastructure. We met several potential investors, visited ports and showed existing abilities,” reads the report, citing Deputy Minister Yuriy Vaskov.
The ministry said that the project to develop infrastructure at Odesa seaport foresees the building of a yacht complex along Androsivsky pier. Investment totals around UAH 152 million.
The project foresees the reconstruction of the handling complex near berth seven and berth eight. The annual complex’s capacity is 1.5 million tonnes. Investment totals some UAH 200 million.
It is planned to reconstruct a handling complex near berth 10 and berth 12 with the possible construction of a grain handling complex with an annual capacity of 2.5 million tonnes. The investment amounts to near UAH 282.5 million.
The project foresees the reconstruction of a handling complex on the base of berth 14 for general cargo with an annual capacity of up to 1-1.5 million tonnes. Investment totals around UAH 300 million.
The Ukraine shipyard will be also optimized and developed. Investment amounts to some UAH 1.2 billion.
The project will be financed using investors’ funds.
KYIV. April 24 (Interfax-Ukraine) – ByFrederic Group, whose core business is seed planting, agricultural machinery sales and servicing, plans to build a port terminal on the Kremenchuk water reservoir in Cherkasy region to ship agricultural cargo.
According to a post on the website of Cherkasy District Administration, a memorandum on the realization of the investment project worth up to EUR 20 million was signed by the district administration and Semtek LLC, part of ByFrederic Group.
“Now, technical documents are being prepared. It would take two or three years to build the port,” the marketing department director at ByFrederic Serhiy Silin told Interfax-Ukraine.
He said that the project foresees the construction of a terminal. An elevator with a storage capacity of 60,000 tonnes of agricultural products will be built at the port, and a railway line passes through the site. Also, the company will lease river transportation to ship cargo.
ByFrederic is an international agricultural enterprise specialized in seeds sales (maize, sunflower, rape, soybeans, etc.) as well as sales and services of agricultural equipment. Currently, the group of companies consists of seven representative offices: two of them are in Ukraine (Shpola, Cherkasy region and Kyiv), five of them are in Russia (Moscow, Saratov, Rostov, Krasnodar and Pavlovskaya), and the group also works in Belarus, Georgia and Kazakhstan.
The founder of the group is French citizen Frederic Chavigny.
KYIV. April 24 (Interfax-Ukraine) – Ukraine has great potential of entering the European genetically modified-free soybean market, demand on which is stably growing in the EU, President of Donau Soja Matthias Krön said at a press conference held at Interfax-Ukraine.
He said that the EU countries import around 32 million tonnes of soybeans every year, mainly from the United States, Brazil and Argentina, which is used to feed animals. Only 5 million tonnes of soybeans are GM-free soybeans. European consumers set stricter requirements for animal products, especially on the quality of fodder.
“Today Europe imports 5 million tonnes of GM-free soybeans. A small share of it arrives from Ukraine. My vision is that in the future Ukraine could provide for 30-50% of these soybeans. Of course, there are many challenges. The issues with transportation and possibilities of processing soybeans should be settled. Of course, this will not happen today, but in next five or six years,” he said, adding that at present Ukraine is a large soybean producer in Europe.
Business Development Director in Ukraine at Probstdorfer Saatzucht Ges.mbH & CoKG, a member of Donau Soja, Felix Gohn, said that over the past several years Ukraine has increased the number of soybean fields from 1.4 million hectares to 2 million hectares and the country should define in what market segment it should develop. He said that the premium segment with higher added value holds prospects.
Svarog West Group Board Chairman Andriy Hordiychuk said that GM-free soybeans could cost $20-120 per tonne more on the global market than GM soybeans. The share of GM-free soybean production in Ukraine is 30 to 70%, according to various data, despite the fact that Ukrainian law bans the planting of GM soybeans.
Hordiychuk said that Svarog West Group recently entered Donau Soja and plans to promote its products to the European market.
“In 2015 we start a project with Donau Soja on the certification of our fields – these are around 10,000 hectares of soybeans which will be in line with additional quality requirements. These are procedures of additional control of production process,” he said.
Hordiychuk said that in summer 2015 the company plans to start building a soybean processing plant to supply high-protein cake to the EU market. The target for 2015/16 agricultural year is at least 140,000-150,000 tonnes of products with the label “GM-free produce from Ukraine.”
KYIV. April 24 (Interfax-Ukraine) – ArcelorMittal Kryvyi Rih (Dnipropetrovsk region) has confirmed its plans to invest $1.2 billion in the company’s development in 2014-2019.
ArcelorMittal Kryvyi Rih CEO Paramjit Kahlon said at a press conference held at Interfax-Ukraine in Kyiv said that at present the company focuses on quickly-realized projects allowing it to cut the cash cost of metal products.
“The top-priority projects for us are those projects which could be realized quickly and should influence the cash cost of products, the measures that we could take to cut dependability on natural gas and expensive coke,” he said.
He said that plans on large investment projects have been retained.
“As for investment projects, we plan to build at least three continuous steel slab casting plants,” he said.
Kahlon said that the company pays special attention to reducing natural gas consumption, and that a PCI (pulverized coal injection) plant is currently being built.
“As for PCI – in December 2015 we plan to finish the building of the first PCI plant at the largest blast furnace nine. In general, after the launch of the whole PCI complex natural gas consumption will fall by 60-65% – from the current daily volume of 2 million cubic meters to 500,000 cubic meters in the future. This will allow for increasing competitiveness,” Kahlon said.
He said that there is a lack of skilled contractors and specialists in Ukraine, which could affect the terms of commissioning of the plants.
Kahlon said that the company is permanently investing in the upgrade of production facilities and it is a socially responsible company.
“We took responsibility of providing stability of work of our employees. We would like it [to be so] that they do not have the prospect of losing [their] jobs. We’re a responsible business which continues investing in Ukraine,” he said.