Business news from Ukraine

ZAPORIZHIA AUTOMOBILE PLANT STARTS PRODUCING PILOT BATCH OF SOUTH KOREAN TRACTORS

Zaporizhia Automobile Plant (ZAZ), part of the UkrAVTO Corporation, has started producing a pilot batch of LS Mtron tractors to study the process of production and demand, Spokesman of the Corporation Dmytro Skliarenko has said. “The creation of a joint venture with the manufacturer is not being discussed yet,” he told Interfax-Ukraine.
The corporation does not disclose other details of the project. As reported, in autumn 2017, the UkrAVTO Corporation, the leading player on the Ukrainian automobile market, was studying consumer demand on tractors of South Korea’s LS, which has not yet been presented in Ukraine. UkrAVTO presented these tractors at the AGROEXPO 2017 exhibition held in Kropyvnytsky.
The company said that this step looks completely logical and justified, since the agricultural sector begins to show upward pace and has a great potential and prospects for larger development.
Later the distribution agreement with LS company was signed. LS is the exclusive supplier of tractors under the governmental agriculture development program in South Korea.
According to experts, according to their characteristics, LS are direct competitors of the most popular MTZ Belarus tractors in Ukraine.
UkrAVTO intends to stake in Ukraine on two models of LS tractors: V-series with a capacity of 70-80 hp and H-series with a capacity of 110-140 hp. The LS tractors’ price starts from $38,000, and the price of the most powerful is $70,000.
At the same time, ZAZ, at present, amid the crisis in the automotive industry in Ukraine, has stopped the production of passenger cars.
UkrAVTO was registered in 1992. It holds a controlling stake in CJSC ZAZ and Poland’s FSO. The corporation includes over 400 car servicing enterprises in all Ukrainian cities, distribution and dealer companies of the leading car brands and the filling station network.

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SMART ENERGY MULLING PARTICIPATION IN OIL AND GAS ELECTRONIC AUCTIONS

The Smart Energy Group is mulling a possibility of participating in the first electronic oil and gas auction scheduled for March 6, 2019, Smart Energy CEO Sergei Glazunov said at a press conference in Kyiv. “We looked at 10 licenses that are exhibited on March 6. There are several interesting facilities there, and we are now deciding whether to participate in them. We hope that the auctions will be held as expected – transparently and in an understandable way,” Glazunov said.
As reported, on October 24, 2018, a temporary procedure for implementing a pilot project for the introduction of electronic trading in the sale of licenses for the use of subsoil came into force. In accordance with it, the licenses are sold exclusively through electronic bidding.
On December 6, 2018 the State Service for Geology and Mineral Resources put up the first 10 sites for electronic oil and gas auctions. At the second round at the end of January seven more sites were exposed.
The first auction will take place on March 6, 2019.

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ONE OF THE LARGEST UKRAINIAN AGRICULTURAL GROUPS KERNEL ACQUIRES RAILCAR BUSINESS FOR $64 MLN

One of the largest Ukrainian agricultural groups Kernel has acquired 100% of shares in Rail Transit Kargo Ukraine (RTK-Ukraine) for $64 million, the company has reported on the Warsaw Stock Exchange (WSE).
According to the report, RTK-Ukraine is the owner of 2,949 grain railcars accounting for nearly 15% of the market and making it the second largest grain hopper wagon fleet operator in the country after the state monopoly Ukrzaliznytsia.
“The acquisition shall not only contribute an estimated incremental EBITDA of up to $20 million annually and protect the company against ever rising logistic costs, but it shall also procure the smooth and efficient flow of grains from inland silos to the ports as company’s export volumes increase following the commissioning of TransGrainTerminal in the port of Chornomorsk,” the company said.
Adjusted for working capital and net debt, the company paid $49 million in cash at completion while the remaining balance shall be released upon the achievement of certain conditions.

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SMART ENERGY GROUP PLANS TO INVEST UAH 1 BLN IN NATURAL GAS PRODUCTION

Smart Energy Group plans to invest about UAH 1 billion in increasing natural gas production in 2019, director general of the group of companies Serhiy Hlazunov has said at a press conference in Kyiv.
“Investments are foreseen for drilling new wells – we have plans to drill four new wells this year. We also plan to overhaul both our wells and those of Ukrgazvydobuvannia located in our fields,” he said.
According to him, the company as a whole expects to overhaul five wells this year. Of the four wells planned for drilling, one could be put into operation before the end of 2019.
Commenting on gas production plans, he added that the company expects a 10% growth (about 30 million cubic meters), to 325.2 million cubic meters.
In 2018, the group of companies increased natural gas production by 31% compared with 2017, to 296.7 million cubic meters, gas condensate output by 40%, to 25,700 tonnes, that of liquefied gas by 49%, to 6,900 tonnes.

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DTEK RES STARTS PREPARATION FOR BUILDING 240 MW POKROVSKA SOLAR PLANT

DTEK Renewables (DTEK RES) starts preparation for the construction of Pokrovska solar power plant with a capacity of 240 MW in Dnipropetrovsk region.
The press service of DTEK Group told Interfax-Ukraine a contract has already been signed with Siemens, which has been elected general contractor for the construction of a 35/150 kV substation with the supply of all key equipment.
“We are launching another important project in the renewable energy industry of Ukraine. The construction of such large infrastructure projects as Pokrovska solar plant is a significant contribution to the implementation of the Energy Strategy of Ukraine. Only through the work of this solar plant, we plan to produce about 400 million kWh of “green” electricity that will allow reducing carbon dioxide emissions by 400,000 tonnes. Investments in the project will amount to about EUR200 million,” DTEK Renewables CEO Philipp Leckebusch said.

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AREA UNDER AGRICULTURAL CROPS IN UKRAINE IN 2019 WILL REMAIN AT 2018 LEVEL

The areas sown with agricultural crops in all categories of farms of Ukraine for the 2019 harvest will be within 27.7 million hectares, or at the 2018 level.
According to the Ministry of Agrarian Policy and Food, grain crops this year are to be sown on an area of 14.8 million hectares (54% in the structure of the areas), which corresponds to the standards for the best ratio of crops in crop rotation.
As reported, with reference to the ministry, Ukraine increased the area under winter crops in 2018 by 160,000 hectares, to 8.2 million hectares.
The gross grain harvest in Ukraine in 2018 amounted to about 70.1 million tonnes compared to 62 million tonnes in 2017.

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