Business news from Ukraine


The business delegation of Pharmexcil, the Pharmaceuticals Export Promotion Council of India, will visit three importing countries, including Ukraine, Turkmenistan and the Russian Federation at the end of November. The Indian Pharmaceutical Manufacturer’s Association (IPMA) said the delegation of Pharmexcil will hold business meetings with the local pharmaceutical companies and regulatory agencies to stimulate Indian pharmaceutical exports.
In Kyiv, the delegation of Pharmexcil will meet with the representatives of the Ministry of Health and pharmaceutical companies.
According to Pharmexcil, the sales of Indian medicines in Ukraine in 2017-2018 increased by 14.4%, to $95.96 million. In the 2016-2017 fiscal year, India exported pharmaceutical products worth $83.91 million to Ukraine.
India as a manufacturer in Ukraine in 2017 ranked third in terms of pharmacy sales in packages after Ukraine and Germany, and in monetary terms (in the national currency) it ranked fourth after Ukraine, Germany, and the United Kingdom. Among the Indian pharmaceutical companies that are actively working in Ukraine, in particular, are Macleods Pharmaceutical, Dr Reddy’s, Euro Lifecare Ltd.

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The Ukrainian business retains positive expectations regarding the level of business activity for the next 12 months, according to a poll of company heads conducted by the National Bank of Ukraine (NBU) in the third quarter of 2018. “As in the previous polls, business activity is expected to boost by respondents of all types of economic activity. The most optimistic forecasts are in the processing industry. The business expectations index for the next 12 months was 117.2%,” the central bank reported on its website. The high economic activity growth pace remains mainly due to improved forecasts for the total sales of own products, as well as investment expenditures on machinery, equipment and inventory. At the same time, enterprises of all types of activities, except agricultural, expect further growth of foreign investments.
At the same time, the business pointed out a low level of stocks of finished products and the lack of its own production facilities in the event of an unexpected increase in demand.
The expectations of the respondents regarding the need for borrowed funds in the near future remained virtually unchanged compared with the previous quarter. At the same time, the majority of respondents who plan to attract loans are interested in financing in national currency. At the same time, the share of respondents planning to attract bank loans is declining for the third quarter in a row amid high credit rates.
The expectations of all enterprises in terms of production of goods and services in Ukraine for the next 12 months remain high: more than 30% of respondents expect production to grow, and about 50% are convinced that it will remain at the same level. Positive expectations have been observed for the last 10 quarters in a row.
For the second quarter in a row, the surveyed enterprises are lowering inflation expectations. “According to the survey, consumer price growth is expected to be at the level of 8.9% (in the second quarter of 2018 – 9.6%). The main factor affecting the price increase is the hryvnia exchange rate to foreign currencies (82.8% of responses). Production costs are at the second position, but the weight of this factor decreased by 3.1 percentage points compared to the previous quarter – to 68.5%,” the NBU said.
According to representatives of enterprises surveyed, in the next 12 months, consumer income and prices in global markets will affect the dynamics of consumer prices.
The National Bank said that the survey was conducted from August 3 through September 4, 2018. A total of 682 enterprises from 22 regions (excluding the temporarily occupied territories of the Autonomous Republic of Crimea, as well as Donetsk and Luhansk regions), which represent the economy by main types of activities, ownership and size by the number of employees, took part in the survey.



Pharmacy sales in Ukraine in monetary terms in January-August 2018 increased by 32% compared to the same period in 2017, to UAH 55.233 billion. Business Credit company told Interfax-Ukraine sales in natural terms for the specified period rose by 2%, to 1.005 million packages, while the weighted average price increased by 29%, to UAH 55 per unit of goods.
According to the company, retail sales of medicines in January-August in monetary terms grew by 34%, to UAH 45.42 billion, in natural terms by 13%, to 679.897 million packages.
As reported, in the first half of 2018 pharmacy sales in Ukraine in monetary terms were up by 36% compared to the same period in 2017 and amounted to UAH 43.011 billion, while sales in natural terms by 5%, to 780.737 million packs.
Retail sales of drugs in the first half of the year in money terms increased by 38%, to UAH 35.454 billion, in natural terms by 16%, to 530.846 million packs.

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The business confidence indicator in the construction market of Ukraine in the third quarter of 2018 improved by 2.8 percentage points (p.p.) compared to the second quarter, but remained negative at minus 18.7%. According to the survey of construction companies by the State Statistics Service, the assessment of a shortage of the current volume of orders reduced by 5 percentage points, to minus 40%, which corresponds to the situation in the first quarter of 2018.
According to the results of the survey, 42% of companies rated their current order volume as insufficient, 55% as normal for the season and only 2% as exceeding the norm.
Some 39% of respondents expect an increase in prices for their services in the third quarter of this year, which is 6 p.p. less than in the second quarter, while 2% of the companies surveyed predict a decrease in the cost of construction work, and 58% do not expect any changes in the price policy.
According to the service, companies participating in the survey are provided with orders for an average of five months, which corresponds to the indicators of the first and second quarters of this year.
The service said in the third quarter unfavorable weather conditions will not affect the work of construction companies, but 45% of respondents will continue to experience financial constraints. In addition, 27% of companies will be constrained by an insufficient demand, 19% by a shortage of labor.
Some 13% of the companies surveyed expect a reduction in the number of their employees in July-September 2018, while 22% predict an increase in the number of employees.

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SD Capital investment company, founded by the co-owner and Director General of the TIS port (a stevedoring company operating at the Yuzhny port) Andriy Stavnitser and TIS manager Filip Hrushko, is ready to invest in some projects not in the field of port business. “We are ready to invest not only in the port business. This vehicle, in Russian – a tool for investment, was created by Hrushko and me a little more than a year ago. There are about 15 projects in the pipeline today, but this does not mean that they will all be implemented: three or four may be left, and maybe even one. Let’s see,” Stavnitser said in an interview with Interfax-Ukraine.
According to him, the projects can be very different: the automotive industry, agriculture and natural resources.
“I would probably be happy if we made five of these projects in the next 18 months,” Stavnitser said.
Speaking about the fields of projects, he said that 70% of these projects concern food security and processing.
“This is the production of meat, dairy products, vegetables and fruits, berries, honey – simply everything is there! I think the world of those people who banned the export of sunflower seeds many years ago. Thus, the industry of oil refinery appeared,” the head of the TIS port said.
He also said that SD Capital is ready to act as a private equity investor, to buy and develop assets.
“We rely on our money, money of our friends and family, our old business partners who can also co-invest. And, of course, we want to see strategists here. The more strategists are in this country, the less space remains for corruption and more space for good lobbying and support of the best Western practices,” Stavnitser said.
Among other things, talking about the employees of SD Capital, he said that today 15 people are working.
“It’s normal. There should not be a lot of people. We have a good team. The average age is about 25 years old: all young, funny and interesting. An American girl recently joined us, who fell in love with the Ukrainian IT specialist and she moved here. She has a lot of experience. We have a lot to learn from her, because here all the experts are still homegrown, and there the traditions are completely different,” Stavnitser said.

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