Business news from Ukraine

POLISH GROCLIN TO FOCUS ON PRODUCTION AT ITS PLANTS IN UKRAINE

KYIV. April 12 (Interfax-Ukraine) – The Groclin manufacturer of automobile seat covers and upholstery for car seats to reduce costs intends to focus on production at its two plants in Ukraine (Zakarpattia and Ivano-Frankivsk regions), taking into account a cheaper labor force, according to Polskie Radio (Polish Radio).

“Groclin is convinced that wages are too high in Poland. It is more profitable to manufacture upholstery in Ukraine, where wages are less than half,” reads the report.

In this regard, the company plans in 2016 to reduce production at Polish factories in Grodzisk Wielkopolski by 65% and the main plants for the company in 2017 will become those in Uzhgorod and Dolyna (Ivano-Frankivsk region).

“In 2017 some 60% of produce will be sold in Ukraine,” reads the report citing Groclin Board Chairman Andre Gerstner.

Polish Groclin Group specializes in the production of automobile seats and seat covers. It has five production facilities in Poland, Ukraine and Germany. The staff totals 1,630 people. Most of the customers are the leading carmakers, including VW, Volvo, Renault, BMW, Ford and Opel.

GEOS TO INVEST EUR 10 MLN IN BUILDING RESIDENTIAL COMPLEX IN BUDAPEST

KYIV. April 12 (Interfax-Ukraine) – Kyiv-based GEOS construction company (Geos Construction LLC) seeks to realize a project on construction of a residential complex in the historic part of Budapest (Hungary) in 2018.

The company told Interfax-Ukraine that the cost of the project is EUR 10 million. The ERKEL Residences nine-storey complex will be built in Ferencvaros district of Budapest.

The company said that gross area of premises will be around 9,000 square meters, including over 5,000 square meters of residential area. It will have 71 apartments.

The apartments will be offers with internal decoration, furniture and household appliances.

A three-level underground parking area will be built.

The company said that the completion of construction is scheduled for Q2 2018.

GEOS plans in 2016 to implement the project of constructing an apartment building in the Roscoe Village district in Chicago (the United States). The house will be located on a land plot of about 290 square meters, while the area of the planned building will be 465 square meters.

Geos Construction LLC was founded in 2008. It builds residential and non-residential buildings and facilities.

ELVORTI GROUP OFFICIALLY LAUNCHES METALIT FOUNDRY

KYIV. April 12 (Interfax-Ukraine) – Elvorti Group (Kirovohrad), an agricultural machinery manufacturer, has officially presented a new foundry – private joint-stock company Metalit.

The company said that the new company was created on the basis of a foundry shop of public joint-stock company Chervona Zirka, a large agricultural machinery manufacturer in Ukraine. Investment in the foundry reached UAH 120 million.

Metalit produces cast section weighing from 500 grams to 55 kilograms from cast iron using automated equipment made by Danish Disa. The production capacity is 2.5 tonnes per hour. The equipment is unique in Ukraine.

Some UAH 108 million was investment into equipment, particularly, Germany’s Otto Junker induction melting furnace with a production capacity of 5 tonnes per hour, Italy’s Fomet automated pouring control device and Disa casting line with a production capacity of 100-120 cast sections a year and the Disa Core device.

Metalit can supply products for various engineering, hydraulic systems, machine building and railway transport.

“Companies that cooperate with Metalit have managed to increase the quality of their products, while Hydrosila stopped importing casting sections from Turkey,” the press service said.

The foundry has a next generation filter system designed under European standards by Germany’s FLSmith.

HORSE BREEDING OF UKRAINE POSTS UAH 6.4 MLN NET PROFIT

KYIV. April 11 (Interfax-Ukraine) – State enterprise Horse Breeding of Ukraine, which provides breeding pedigree horses, in 2015 saw UAH 6.4 million of net profit against UAH 875,000 of net loss in 2014, company director Denys Ptushko has said at a briefing at Interfax-Ukraine.

“In 2015 we managed not only to preserve but also increase horse numbers: as of January 1 the figure stood at more than 1,700 animals, which is 2.6% more than in the previous year,” he said.

According to Ptushko, the structure of horse breeds was as follows:

Ukrainian Saddle horse – 417 animals, Orlovsky Trotter – 398 horses, Russian Trotter – 338 horses, Thoroughbred horses – 292 animals, Novo-Oleksandrivska Heavy Draft horses – 111 animals, and 144 working horses.

In addition, the company branches by early 2016 had 3,380 pigs, 448 cattle and 187 sheep.

In general, the company last year increased production of agricultural goods in monetary terms by 8.2%, to UAH 74.9 million, the profitability of sales amounted to 17.4%, increasing by 7.9% compared to 2014.Horse Breeding of Ukraine was established by the government of Ukraine through the reorganization of state-owned horse breeding enterprises. The company includes 14 branches in ten regions of Ukraine, including ten studs, three breeding centers and Odesa Hippodrome.

REGIONAL DEVELOPMENT MINISTRY: UKRAINE NEEDS $57 BLN OF INVESTMENT IN ENERGY EFFICIENCY

KYIV. April 11 (Interfax-Ukraine) – The total amount of investment required for energy efficiency measures in Ukraine is $57 billion, according to an analytical report by the Ministry of Regional Development, Construction, Housing and Utilities Services, posted on the ministry’s website.

According to the ministry, at the extent of investment in the energy efficiency Ukraine could reduce the annual consumption of natural gas for heating from 18.6 billion cubic meters (bcm) to 7.2 bcm.

According to the report, most investment is required for rehabilitation of private houses and multi-apartment buildings – $28 billion and $17 billion respectively. Such measures will allow to reduce the annual consumption of natural gas for heating by 4.7 bcm and 2.3 bcm, respectively.

The modernization of the sector of heat generation and heat supply networks will allow to reduce the annual consumption of natural gas by 2.4 bcm, this requires $6 billion of investment.

 

IFC TO LEND $95 MLN FOR KERNEL TO REPLENISH WORKING CAPITAL

KYIV. April 11 (Interfax-Ukraine) – The World Group’s International Finance Corporation (IFC) is to lend $95 million to Kernel Holding S.A. and its subsidiaries for financing their working capital.

The Board of Directors will decide on the loan on May 10, IFC said in an announcement on its website.

“IFC loan will support a leading grain trader, crusher and a primary agricultural producer with significant linkages to the economy of rural areas. Kernel employs over 14,500 people on a full time basis, including 8,690 in its farming division. Through its wide origination network Kernel annually procures in excess of 2 million tons of sunflower seeds and more than 3 million tons of grains from about 5,000 farmers. In 3 years, the company plans to increase its procurement volumes by 30%, which would expand its reach to 6,500 farmers,” the announcement reads.

IFC’s financing will be channeled throughout the agri supply chain (farmers,

SMEs) and will also inject additional liquidity into the Ukrainian agri sector, which currently experiences working capital shortages.

Kernel is a vertically integrated company which has been operating in the Ukrainian agribusiness sector since 1994. The group produces sugar and sunflower oil, distributes bottled oil under the brand names Schedry Dar, Stozhar and Chumak Zolota, exports oil and grain, and provides elevator storage services for grain and oilseeds.

Kernel in the first half of the 2016 fiscal year (July 2015-June 2016) saw net profit rise by 79%, to $140.4 million while revenues fell by 19%, to

$998.7 million.