Business news from Ukraine

XINWEI GROUP AND SKYRIZON FROM CHINA TO PROVIDE $100 MLN TO UKRAINE’S STATE BUDGET

Skyrizon Aircraft, a Chinese private company, and Xinwei Technology Group listed on the Shanghai Stock Exchange under the terms of agreements with Ukroboronprom state concern will provide Ukraine’s aircraft manufacturing industry with grant financing in the amount of $100 million in case of obtaining permission from the Antimonopoly Committee of Ukraine (AMC) to purchase more than 50% of shares in PJSC Motor Sich (Zaporizhia), an informed source in the government has told Interfax-Ukraine.
“The receipt of these funds in the special fund is already provided for in Paragraph 9 of Article 11 of the law on the national budget of Ukraine for 2019: some UAH 2.8 billion at the exchange rate at the time of adoption of the state budget,” the source said.
He noted that this condition is one of the key in agreements between the Chinese investors and Ukroboronprom approved by the government together with the transfer to the Ukrainian state corporation of a blocking stake in the amount of more than 25% of the shares for the joint management of Motor Sich.
The source noted that this project on the development of aircraft production in Ukraine and the construction of semi knocked-down production in the Chinese city of Chongqing was launched in 2015 on the basis of cooperation agreements between Motor Sich, Skyrizon and Xinwei Group. Within its framework, the Ukrainian company in 2016 received preferential credit financing in the amount of $100 million, and in Chongqing the construction of an assembly plant has now begun.
The basic document for the project is the agreement on cooperation dated April 27, 2018 between Ukraine represented by Ukroboronprom and Skyrizon and Xinwei, which underwent an independent examination of British law by one of the world’s largest law firms, the source said.

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UKRAINE COULD INCREASE GRAIN EXPORTS TO CHINA

Ukraine could increase grain exports to China in the 2019/2020 marketing year (MY, July-June), Olena Neroba, the adviser to the president of the Ukrainian Grain Association (UGA), has said at a press conference. According to her, China this year has experienced a significant reduction in the number of pigs due to ASF, and since substitution of pork with imports is quite expensive and time consuming, China is likely to compensate for the deficiency of protein in poultry. This factor and the trade war with the United States will lead to an increase in demand for barley and other grains, which Ukraine can take advantage of, Neroba said. If earlier practically the only importer of Ukrainian barley was Saudi Arabia, then the opening of a new market will allow increasing the volume of exports of this crop and raising the price.
She also noted that Ukraine this season has felt some U.S. influence on the Egyptian market, which is one of the main consumers of Ukrainian corn. According to the expert, although the absolute figures of exports to Egypt increased slightly compared to last year, however, the share of Egypt in in the structure of Ukrainian grain exports declined.

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UKRAINE INTERNATIONAL AIRLINES PERMITTED TO TRANSPORT HAZARDOUS FREIGHT BY CHINA

Ukraine International Airlines (UIA) has been permitted to transport dangerous goods of six categories from the Chinese aviation authority, the airline has said.
The license gives UIA the right to transport to/from China consumer goods, which are specified as “Dangerous Goods.” These are smartphones, computers, tablets, photo cameras and other electronical items of well-known world brands, which are produced in China.
“It took us over three years for receiving the license, during this time the company was subject to numerous thorough checks by the Chinese Aviation Authority. As a rule, China checks the reliability of the carriers who are going to transport the goods specified as “Dangerous Goods” very scrupulously. Now all the formalities are finalized, UIA has new opportunities for organizing the transportation of consumer goods on non-stop flights Kyiv – Beijing – Kyiv by wide-body long-haul Boeing-777 aircraft,” Peter Kukharchuk, UIA Logistics and Cargo Director, said.
He said that UIA was among the first ones to receive a license for transportation of several categories of dangerous goods, gives us significant competitive advantages.
UIA received a license for transportation of dangerous goods of categories 2, 3, 5, 6, 8 and 9 from China.

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INKERMAN WINE MAKER STARTS SUPPLIES TO CHINA

Inkerman Ukraine LLC plans to increase wine production to 7-8 million bottles per year in 2019 compared to 7 million bottles in 2018, director general of the company Hanna Horkun has said.
According to her, the company intends to open several export markets in 2019, in particular, China, Japan, the Baltic countries, Nigeria, and Poland.
“In the Ukrainian market, we rank third following Villa Krim and Koblevo, and our export share is still scanty. In 2018, we had a goal to stand on our feet in our domestic market. At the same time, we have been exporting goods to Canada for a long time, exported sparkling wine to Switzerland,” the expert said.
She noted that the first shipment to China will be in June 2019.
At the same time, this year Inkerman plans to increase its share in the domestic market by redesigning the classic collection, penetrating the regions and launching the new Prima Maria line.

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UKRAINIAN UKREXIMBANK SIGNS AGREEMENT ON COOPERATION WITH CHINA EXPORT & CREDIT INSURANCE CORPORATION

Ukreximbank (Kyiv) and China Export and Credit Insurance Corporation (Sinosure) on April 17 signed a framework agreement on cooperation in Kyiv, a press release from the bank said. The agreement foresees that Sinosure will provide insurance support for those projects for the which applications were filed through Ukreximbank and contracts were concluded by Chinese enterprises in Ukraine. In particular, the matter concerns the implementation of construction projects in Ukraine and other countries, in which Ukreximbank is involved, as well as projects in the field of infrastructure, agriculture, energy, transportation, oil, gas and chemical industries.
The total limit of Sinosure financial insurance for use by Ukreximbank will be $500 million. The loan term will be set depending on the parameters of each contract and could reach 15 years, the report said.
“An agreement on cooperation for the first time signed between the Ukrainian bank and China Export and Credit Insurance Corporation is a landmark event, as it opens up great potential for expanding external financing channels for the key sectors of the national economy,” the press service of Ukreximbank said, citing chairman of the bank board Oleksandr Hrytsenko.
Sinosure is the official export credit agency of China, founded in 2001. Sinosure is the only state-financed insurance organization.

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CHINA WILL ISSUE $29.7 MLN TECHNICAL AID TO UKRAINE

China in 2019-2020 will provide Ukraine with free technical and economic assistance for 200 million yuan ($29.7 million), most of which will be used to purchase special emergency rescue vehicles and equipment for the State Emergencies Service.
The corresponding intergovernmental agreement was signed in Kyiv on April 11, the Ministry of Economic Development and Trade reported.
According to the report, the State Emergencies Service should receive more than 50 units of machinery, in particular, cranes, crawler bulldozers, motor graders, fire trucks with lifting platforms and fire trucks with a ladder for rescue operations.
The signed intergovernmental agreement also provides for the provision of equipment for simultaneous translation and conference systems of the Ministry of Economic Development and Trade, as well as the implementation of other coordinated Ukraine-China intergovernmental projects.

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