Business news from Ukraine

U.S. READY TO INVEST IN UKRAINIAN DEFENSE INDUSTRY ONLY AFTER REFORMS CONTINUE, CORRUPTION TACKLED – AMBASSADOR

KYIV. Feb 19 (Interfax-Ukraine) – U.S. business will be able to invest and share solutions with the Ukrainian defense industry only if Ukraine continues to press ahead on critical reforms and tackles corruption, U.S. Ambassador to Ukraine Geoffrey Pyatt has said.

At the Ukrainian Defense & Security Forum 2016 in Kyiv on Thursday he said that representative of U.S. defense companies are taking part in the forum.

“These companies will be good partners. They have the ability to bring to you best-in-the-world technology and their demonstrated expertise at integrating with other international partners. But they have requirements. They will want to see that the government sticks to the path of reform, that you uphold your IMF commitments, that the government continues to make progress on the critical topic of rule-of-law reform. And they want to ensure, most of all, that they are working in an environment where the risks that they are taking are business risks, and not risks of unpredictable legal and judicial environment,” he said.

“Private sector support and investment from the United States will only come as Ukraine continues to take meaningful steps to reform its trade and investment climate,” Pyatt said.

“The war against corruption Ukraine is fighting is a critical element of winning the war the Kremlin has brought to your country. I know that all of you in this room understand that, and I want you to understand also how committed the United States is to standing by the Ukrainian people in this difficult time, he said.

UKROBORONPROM ESTIMATES INVESTMENT TO TRANSFER PRODUCTION TO NATO STANDARDS BY 2018 AT UAH 20 BLN

KYIV. Feb 19 (Interfax-Ukraine) – The need for investment to transfer production of weapons and military equipment at the facilities of Ukroboronprom State Concern to NATO standards until 2018, according to preliminary estimates, stands at more than UAH 20 billion.

Head of the state concern Roman Romanov announced this at Ukrainian Defense and Security Forum 16 under the patronage of the Defense Ministry and Ukroboronprom in Kyiv.

“According to the most conservative estimate, UAH 21 billion is required for this purpose,” he said.

Romanov said that among the key criteria for implementing the task of transition to NATO standards are a further development of technological cooperation with foreign partners, the promotion of the started reforms in the defense sector, primarily in the field of fight against corruption.

The Ukroboronprom head also noted the agreements achieved with NATO in early 2015 on Ukraine’s accession to the alliance’s current procurement system.

MOTOR SICH SEES 2.37 TIMES RISE IN NET PROFIT IN 2015 –TENTATIVE DATA

KYIV. Feb 19 (Interfax-Ukraine) – Public joint-stock company Motor Sich (Zaporizhia) saw a rise of 2.37 times in net profit in 2015 under international financial reporting standards (IFRS), to UAH 3.67 billion, according to tentative data presented in a company report on holding a general meeting of the company’s shareholders scheduled for March 24.

Total assets rose by 29.4%, to UAH 20.748 billion.

In the assets inventories grew by 50.3%, to UAH 10.246 billion, total bills receivable was up by 8.6%, to UAH 2.714 billion, cash and equivalents expanded by 51.5%, to UAH 1.24 billion, while long-term financial investment narrowed by 17.7%, to UAH 170.799 million.

In liabilities undistributed profit rose by 36.4%, to UAH 13.563 billion, equity capital – by 34.4%, to UAH 14.71 billion, current liabilities – by 46.4%, to UAH 4.822 billion, while long-term liabilities fell by 32.3%, to UAH 1.216 billion.

Motor Sich is one of the world’s largest manufacturers of aircraft engines, as well as industrial gas turbines. It supplies products to 106 countries.

SEA PORT AUTHORITY ALMOST DOUBLES NET REVENUE IN JAN-SEPT 2015

KYIV. Feb 18 (Interfax-Ukraine) – State-run enterprise Sea Port Authority of Ukraine saw UAH 4.9 billion of net revenue in January-September 2015, which is 80% up year-over-year, according to a report on the operation of 100 largest state-run enterprises of Ukraine for the period of January-September 2015 posted on the website of the Economic Development and Trade Ministry of Ukraine.

According to the report, the authority saw a rise of 2.8 times in net profit over the period, to UAH 3.4 billion, and net cost-effectiveness grew to 67.9%, while a year ago it was 44%.

“Hryvnia devaluation played a large role in the considerable increase in the company’s profit, which led to a sharp rise in revenue in hryvnias with the retaining of the cash cost,” the ministry said.

Sea Port Authority of Ukraine is a state-run enterprise that supervises the functioning of 13 seaports in Ukraine. The enterprise was founded in 2013. It owns port infrastructure facilities. 80% of revenue is denominated in the U.S. dollars, while the hryvnias in its expenses prevails.

 

UPEC TO INVEST UAH 5 MLN IN NEW JOINT PRODUCTION OF TRAILERS WITH BRITAIN’S LARRINGTON TRAILERS

KYIV. Feb 18 (Interfax-Ukraine) – The UPEC industrial group, a large private engineering company in Ukraine, will invest around UAH 5 million in the launch of new production of Harvester trailers as part of a joint project with Britain’s Larrington Trailers.

The press service of the group told Interfax-Ukraine, referring to Vice-President for Marketing and Sales Roman Girshfeld, investment will be sent mainly to buy modern metal-processing equipment and introduce solutions and experience of British partners.

The localization of production would allow UPEC to create around 100 new jobs. The full trailer joint production cycle will be started on the basis of Lozova Forging-Mechanical Plant.

Lozova Machinery plan to make 25 trailers in H2 2016 and at least 100 in 2017.

Girshfeld said that the price of trailers made in Ukraine will be 20-25% less than those made in Britain.

He said that new trailers will be of great demand with farmers, as today the loss of harvest due to the use of old machinery during transportation is 5-10%.

Larrington Trailers CEO Richard Larrington said that it is planned to start production of soil processing machinery of Lozova Machinery in Britain.

EBRD LAUNCHES NEW PROGRAM TO FINANCE CLEAN TECHNOLOGIES IN UKRAINE FINTECC

KYIV. Feb 18 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) has launched the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) programme in Ukraine, EBRD Director for Ukraine Sevki Acuner said at a press conference in Kyiv on Wednesday.

“The three-year programme is supported by $7 million grant funding from the Global Environment Facility (GEF) and a €4 million grant from the EU’s Neighbourhood Investment Facility (NIF). FINTECC will help Ukrainian businesses invest in the best available technologies, which will lead to a reduction in greenhouse gas emissions. These may include energy, materials and water efficiency technologies as well as renewable energy technologies not yet available or rare in Ukraine,” he said.

Acuner said that EBRD plans to provide financing of up to EUR 40 million under the program.

Terry McCallion, Director of the EBRD’s Energy Efficiency and Climate Change team, said that under the programme, individual companies may receive grant funding covering up to 25% of the cost of a new technology and capped at $ 1 million.

He said that EBRD anticipates that around 15 projects will be realized in Ukraine. $500,000 of grant funds will be provided to each project on average.

In turn, Walter Tretton, Head of Energy, Climate, Transport and Environment section at the EU Delegation to Ukraine, said that several programmes will be organized for Ukraine soon. This concerns the EU for business to support Ukrainian exporters who mainly present innovative products.

“I hope that the programme will be approved if not in the next several weeks, but in coming months,” he said.

Tretton said that the new programme to finance energy efficient projects in the housing sector of Ukraine will be organized via EBRD and local banks.