Business news from Ukraine

U.S. TO CONTINUE HELPING UKRAINE AS LONG AS IT CONDUCTS DEMOCRATIC REFORMS – NULAND

KYIV. Sept 14 (Interfax) – U.S. Assistant Secretary of State Victoria Nuland said the U.S. will continue providing technical and financial assistance to Kyiv as long as Ukraine conducts democratic reforms.

However, that requires the unity of all reformist forces, Nuland said at the 12th annual Yalta European Strategy meeting held in Kyiv on Saturday.

Speaking about the Minsk process and the future of Crimea, Nuland said the sanctions will remain in place until the Minsk agreements are fulfilled and until border control is resumed. She said the U.S. may soften the sanctions, but further breaches of the Minsk agreements will have consequences for Russia. As to Crimea, she said Ukrainian sovereignty should be restored over it.

Nuland reiterated that the U.S. will also continue providing diplomatic assistance. She said the U.S. is not part of the Normandy four or the Minsk process, but is working as an ally of the EU and the most important thing now is to use the moment of silence and fully withdraw heavy weapons. Nuland also said the elections in Donbas should be held in accordance with the Ukrainian legislation and should be monitored by the OSCE.

 

CONSTRUCTION ASKS FOR UAH 2 BLN FROM 2016 BUDGET FOR HOUSING PROGRAMS – OFFICIAL

KYIV. Sept 11 (Interfax-Ukraine) – The Regional Development, Construction, Housing and Utilities Economy Ministry of Ukraine has requested financing of UAH 2 billion from the 2016 budget to realize the state youth housing crediting program and the program on the provision of state support to construct or buy affordable housing under the 70/30 scheme.

“The budget request of the ministry includes UAH 1 billion for each program. This is around UAH 4 billion including funds invested by individuals,” Deputy Minister Roman Abramovsky said at a general meeting of members of the Constructors Confederation of Ukraine in Kyiv on Thursday.

He said that taking into account the expected payments by local budgets of around UAH 2 billion for the realization of the two programs, the total sum of the funds raised to the construction sector would reach around UAH 6 billion.

“We would insist on adopting these budget programs and providing for their financing,” he said.

Ukraine has five state affordable housing programs, however due to the absence of financing in 2014 the implantation of some programs was suspended.

UKRGAZVYDOBUVANNIA DISCOVERS NEW GAS FIELD IN ZAKARPATTIA REGION WITH PROMISING RESOURCES OF 2.4 BCM

KYIV. Sept 11 (Interfax-Ukraine) – Public joint-stock company Ukrgazvydobuvannia has discovered Liutnianske gas field in Velykoberezniansky District of Zakarpattia region, the press service of the company reported on Thursday.

“After drilling and tests of wildcat two, commercial gas inflow was recorded. Gas flow rate was 58,000 cubic meters during the 6mm-choke test. According to preliminary assessments of specialists from UkrNIIgaz, promising resources of the field are 2.4 billion cubic meters. Initial gas reserves of the gas reservoir opened by the well totaled 390 million cubic meters,” reads the report.

The press service said that test of the promising Liutnianske gas field started in 1991. Only in 2011, after seismic studies, the Liutnianska fold was discovered and the new Liutnianske gas field was discovered in 2015.

Ukrgazvydobuvannia plans to drill several more wildcats.

PIVDENNY MINING PLANS TO INCREASE INVESTMENT BY ONE THIRD IN 2015 – DIRECTOR

KRYVY RIH. Sept 11 (Interfax-Ukraine) – Pivdenny Mining (Kryvy Rih, Dnipropetrovsk region) plans to increase investment in development and maintenance of its production facilities to UAH 922 million in 2015, which is 32% up on 2014, Director General Kostiantyn Fedin said at the press tour at the mining plant on Wednesday.

He said that investment have sharply increased after the arrival of new investors in 2010.

“Since 2010, with the arrival of new shareholders, investment has increased and production has grown,” he said.

Fedin said that if in 2010 around 19.6 million tonnes of iron ore was made a year, not 24.5 million tonnes is made. The iron ore concentrate target for 2015 is 11.2 million tonnes.

He said that in 2010 investment totaled UAH 321 million, while in 2014 it was over UAH 700 million and in 2015 it is planned to invest over UAH 900 million (around UAH 922 million).

The top manager said that since 2010, the plant started building the conveyor ore transportation line, and the first phase was launched in 2013 and the second phase – in 2014.

Fedin said that today the plant is working on the verge of profit-making.

He said that production cost of one tonne of concentrate is $20-24, and logistics cost – $27.30 per tonne.

At present, the price of iron ore concentrate at a Chinese port is $56 per tonne.

Pivdenny Mining exports 80-90% of iron ore concentrate, while agglomerate is sold on the domestic market.

Pivdenny Mining is one of the main iron ore producers in Ukraine.

Pivdenny Mining is under control of Metinvest and Lanebrook Ltd. (a majority shareholder of Evraz Group), which acquired 50% of shares in Pivdenny Mining in 2007 from Privat Group (Dnipropetrovsk).

UNITED MINING-CHEMICAL COMPANY BOOSTS REVENUE BY 80% IN JAN-JULY

KYIV. Sept 11 (Interfax-Ukraine) – United Mining-Chemical Company state enterprise, which manages Vilnohirsk state mining and metallurgical plant (Dnipropetrovsk region) and Irshansk state mining and processing plant (Zhytomyr region), increased sales revenue on the domestic and foreign markets by 80% in January-July 2015 compared to the beginning of the year, to UAH 730 million.

The company said in a press release on Monday, referring to First Deputy Director General Oleksandr Hladushko, that if in February 2015 the company’s revenue for core products – ilmenite, rutile and zircon – did not exceed UAH 91 million, in July it totally exceeded UAH 165 million, which is 1.8 times more than at the start of the year.

The growth in revenue is linked to boosted sales.

“On the global titanium market crisis is only worsening and prices of our products continue falling, while revenue grew only thanks to growth of sales,” Hladushko said.

The marketing and sales department was able to resume cooperation with former clients of Vilnohirsk state mining and metallurgical plant and Irshansk state mining and processing plant in January-July and also found new clients, namely Jiangsu Sainty Machinery Corp (China), Mario Pilato (Spain) and China National Light Industrial Products Co (China).

The plants continue to focus on exports. In January-July the share of exports in ilmenite sales by Vilnohirsk state mining and metallurgical plant was 83%, rutile – 93% and zircon – 97%, while ilmenite sales by Irshansk state mining and processing plant totaled 100%.

“We’re working on the reorientation of Irshansk plant’s products to global markets, although before the plant was returned to state ownership from leasing by Crimea Titan it sold products only in Ukraine for almost 10 years, using the same system. It is hard to return the plant’s products to the global market, as all trade relations of the plant with the world were lost for a long period of time,” Hladushko said.

United Mining-Chemical Company sells its products in over 30 countries. Its main markets are the European Union, China, Turkey, the United States and African countries.

United Mining-Chemical Company started operating in August 2014 when the Ukrainian government decided to transfer Vilnohirsk state mining and metallurgical plant and Irshansk state mining and processing plant to its management.

POROSHENKO EXPECTS UKRAINIAN GDP TO GROW IN 2016

KYIV. Sept 11 (Interfax-Ukraine) – Ukrainian President Petro Poroshenko expects the Ukrainian economy to start recovering in 2016.

“I expect that we will be able to show GDP growth in 2016,” he said at the 12th Annual Meeting of the Yalta European Strategy (YES) in Kyiv on Friday.

Poroshenko said that Ukraine has managed to considerably cut inflation, stabilize the financial and banking systems, and has implemented budgetary discipline.

“Am I optimistic about the economic situation? I would say “yes!” he said.

Poroshenko said that Ukraine will also improve its investment climate, regardless of any obstacle, thanks to tax reform, although the country requires the support of foreign investors.

According to the government’s forecast as of August 2015, under the optimistic scenario, Ukraine’s GDP will grow by 2% in 2016 with inflation of 12% (December on December). However, the government’s macroeconomic forecast also includes a pessimistic scenario, under which GDP will fall by 0.3% with inflation of 14.7%.

The International Monetary Fund (IMF) and the Ukrainian government in the middle of this year revised its GDP decline forecast downwards – to 9% in 2015 with inflation of 45.8%. The National Bank of Ukraine (NBU) projects that GDP will fall by 9.5%, with inflation of 48%.