Business news from Ukraine

UKRAINIAN SMART HOLDING AND CHINESE CRCC PLAN TO COOPERATE IN INFRASTRUCTURE PROJECTS

Representatives of the top management of the industrial and investment group of PrJSC Smart Holding (Kyiv) and China Railway Construction Corporation Ltd. (China) discussed the opportunities of cooperation and implementation of common investment projects in transport infrastructure and logistics.
According to the company’s press release on Friday, during the meeting, the Chinese side was presented an investment project for the development of an industrial park based on a logistics hub managed by LLC Naval Park in Mykolaiv, as well as a development project for existing sea port of Ochakiv, including dredging and construction of new infrastructure.
The Chinese side has expressed interest in the projects and will continue to study them in detail. The parties agreed to continue the dialogue and organization of visits to the relevant facilities.
Director General Oleksiy Pertin, First Deputy Director General Yulia Kiryanova, other representatives of top management of Smart Holding, participated from the company’s side. Executive Director of the subsidiary of CRCC – CRCC14 Overseas Construction and Development Co Ltd Li Junqiang and Deputy General Manager of China Railway 14th Bureau Group Wang Chuang took part in the discussion from the Chinese side.
Commercial sea port Ochakiv is located on the Dnipro-Buh estuary in Mykolaiv region on the north-eastern outskirts of Ochakiv. At present, it has facilities for transshipment of goods in the amount of over 500,000 tonnes per year. The port has five berths with depths of up to 7.35 meters. As part of the investment project, it is planned to create one of the deep-water estuary ports on the Black Sea based on the existing small port. It is planned to construct coal and grain terminals in the port, as well as a terminal for transshipment of iron ore raw materials. It is planned also to deepen the port water area to 15-18 meters, as well as to lay 70 kilometers of an underwater railway line.
China Railway Construction Corporation (CRCC) is the second largest state-owned construction company in China. It is engaged in the construction of transport infrastructure, the production of special construction equipment, residential property, as well as logistics. The company has a representative office in Ukraine. Subdivisions of the company, within the relevant memorandums with the Infrastructure Ministry plan to implement projects in Ukraine for the development of railway infrastructure, as well as infrastructure for inland waterways.
Smart Holding owns 23.76% of the Metinvest mining and metallurgical group, some 95% of shares of the shipbuilding holding Smart Maritime Group, some 99.97% of shares of the trading and financial company Santis LLC. The company also owns large assets in the fuel and energy industry, development and agricultural sector.
The main beneficiary of Smart Holding is businessman Vadym Novinsky.

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AMERICAN CHAMBER OF COMMERCE DEVELOPS DETAILED LOCKDOWN EXIT PLAN

The American Chamber of Commerce in Ukraine has developed a detailed quarantine exit plan with concrete steps at each stage, President of American Chamber of Commerce in Ukraine Andy Hunder told Interfax-Ukraine.
The main asset of any company is its people. Safety and security of employees are extremely important for every diligent employer. That is why the Chamber already has a detailed plan for exiting the lockdown that has been presented to its Board of Directors. Our employees are our strategic priority, thus we focused on soft and gradual return to work, Hunder said.
He said that the starting point for the Chamber will be the fourth phase of lockdown, which was announced by the government.
After that, we will introduce one week of mandatory work from home. We will recommend working from home in the second week. We will start to introduce flexible modes of work in the third week. So only in the fourth week we will be able to talk about returning to office, the Chamber’s president said.
The organization said that timely and transparent communication is critical in this process.
In the first and second weeks, the main steps are daily disinfection of office, procurement and provision of personal protective equipment for employees, reorganization of office to observe a social distance of 1.5-2 meters between workplaces. We will continue observing these requirements. We will also consider the possibility of conducting coronavirus (COVID-19) testing for all our employees, Hunder said.
According to the Chamber’s plan, temperature screening, the introduction of a clean desk policy, work in small groups or work in shifts (not all employees will be in the office at the same time) will be introduced during the third and fourth weeks. Participation in meetings will be possible only if absolutely necessary, in compliance with all safety rules, the Chamber’s president said.
The psychological aspect is also an important component of returning to office, thus the heads of the Chamber’s departments will meet with each member of their team. We hope that under these conditions, returning to office will be as safe and comfortable as possible for each employee, he said.
Hunder said that amid lockdown, the Chamber continues to actively provide information about businesses at the highest level, and also holds events for member companies in the online mode.
For some time after the Chamber’s team exits the lockdown, it is still planned to host events in the online mode, he said.
There is not a single business that, one way or another, would not feel the effect of coronavirus outbreak. Now the team of the Chamber and its member companies are actively preparing to exit lockdown, but the reality we will all return to will be different, he said.
Hunder also said that a month ago, the Chamber launched a video project on Facebook, titled Leadership in Times of Crisis, whose goal is to support businesses in difficult times and show how member companies respond to challenges and support their employees.
Hunder also said every day he holds several video interviews with the CEOs of the Chamber’s member companies. They are all sure of one thing – we have already started to live in a new reality. For each company, this reality is different, as someone adapts their business models, some companies completely work in the online mode, and some, on the contrary, strengthen their positions and provide even more services. Thus, after lockdown everything will change, namely, models, approaches, formats of work. Most importantly is the fact that the values and future strategies will be reassessed, he said.
Many companies are already successfully working remotely.
For example, Twitter whose 5,000 employees have been working from home since early March. Twitter management decided to keep their employees working remotely all the time. This is a new reality in action, the Chamber’s president said.
However, cooperation with the International Monetary Fund, the victory over the COVID-19 pandemic, the recovery of the Ukrainian economy and the preservation of jobs are the top priorities for business, he said.
The Chamber continues to cooperate with the government of Ukraine in these directions. It will also review its detailed strategic priorities and initiate proposals to support the Ukrainian economy, Hunder said.

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RESTRUCTURING PLAN OF UKRZALIZNYTSIA TO BE READY BY END OF 2019

A plan on restructuring of JSC Ukrzaliznytsia, which foresees division of the company into three operators (infrastructure, freight and passenger) and a production block, will be prepared by the end of 2019, Ukrzaliznytsia head Yevhen Kravtsov wrote on Facebook.
“We will fulfill the order of [President of Ukraine] Volodymyr Zelensky in time,” he said.
According to Kravtsov, a gradual plan would become a part of the implementation of the Ukrzaliznytsia’s strategy agreed with the Cabinet of Ministers and approved by the supervisory council in June 2019. After the plan is fulfilled and approved by the supervisory board, Ukrzaliznytsia will begin making certain steps under the control of the government, he added.
“[Infrastructure Minister] Vladyslav Krykliy, [Prime Minister] Oleksiy Honcharuk back European model. The main is that infrastructure remains under state regulation, when passenger and freight carriages are carried under the market conditions,” he said.
As reported, Ukrainian President Volodymyr Zelensky has instructed the Cabinet of Ministers of Ukraine to prepare a plan on restructuring of JSC Ukrzaliznytsia by the end of 2019.
The president appointed Honcharuk and Krykliy responsible for the preparation of the plan.

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JULY TAX COLLECTION PLAN OVERFULFILLED BY UAH 5 BLN

The State Tax Service (STS) of Ukraine in July 2019 managed to ensure UAH 5 billion more in tax payments to the national budget, however, total tax payments collected by the State Fiscal Service [which consists of the tax and customs services] is UAH 14 billion lower than the target figure, STS Serhiy Verlanov said.
“According to a recent update, the tax service collected UAH 5 billion more in July [than it was planned],” Verlanov said at a press briefing in Kyiv on Thursday.
Yet, he said, funds collected by the customs unit is lower than the target.
“Yes, we’ve got questions to ask the customs,” he said.

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IKEA UPDATES PLAN OF ENTERING UKRAINE

The Swedish company IKEA, the world’s largest retailer of furniture and household goods, has to adjust its plans to enter the Ukrainian market due to the delayed construction of the Ocean Mall trade and entertainment center in Kyiv, in particular, the company is considering alternative ways for launching business in Ukraine.
“IKEA confirms its desire to change the daily life of Ukrainians for the better by offering affordable products and solutions for home. Due to the delay in construction and obtaining permits for the Ocean Mall shopping center, the company is considering alternative options that will allow it entering the Ukrainian market as soon as possible,” the company told Interfax-Ukraine.
The report says more detailed information regarding the release of IKEA in Ukraine “will be made public as soon as it becomes available.”
As reported, in September 2018, IKEA officially announced the opening of the first store in Ukraine in a city store format in 2019. The object should have been opened in Ocean Mall in Kyiv.

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