Business news from Ukraine

UKRAINIAN GAS MONOPOLY THINKS RUSSIA MAY DELAY GAS TRANSIT TALKS

Chief Executive Officer of NJSC Naftogaz of Ukraine Andriy Kobolev has expressed fears that the Russian side will do everything to delay negotiations on the extension of the contract for gas transit through Ukraine, expecting possible changes in the country’s top officials and policy. “Most likely, they are waiting for elections in Ukraine and they want to see if there is any change in power and the country’s political course. They will do everything possible to launch the Nord Stream 2 pipeline construction,” Kobolev told the Kyiv-based Interfax-Ukraine news agency.
Kobolev said Russians now express readiness to study the issue of moving to work within the framework of European legislation, but they are stalling and trying to introduce the issue of negotiating settlement agreements in a trilateral format.
“Until recently, Russians’ position was not constructive. Before the agreement on something under the transit contract, they want to talk about amicable deals within the Stockholm litigation, that is, raise questions that are unacceptable not only for us, but for any party , which won in court,” he said.
Kobolev expressed hope the third party of the negotiations represented by the European Commission would have an impact on Russia, since stalling the process is not advantageous to Ukraine and European consumers of Russian gas.
“As our experience shows, a force majeure signing at the end of 2019 would be a very bad story. I hope that the position of Europeans may lead to a change in the tactics of Russians and they will be forced to negotiate before the end of 2019 about a new format of relations from January 2020. We are working actively on this now. The European Commission is in agreement with us in the application of European law. If we agree on this as a basis, then all further actions become much easier and more effective,” Kobolev said.

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SEFCOVIC HOPES TO BEGIN TRILATERAL GAS TALKS WITH EU, RUSSIA, UKRAINE IN JULY

Trilateral negotiations of the European Union, Russia, and Ukraine on Russian gas transit via Ukraine after 2019 may begin in early July, according to European Commission Vice President Maros Sefcovic. “Time is a precious commodity. I hope to start working with Russia and Ukraine on the trilateral gas agenda in early July,” he wrote on Twitter. “Complex negotiations ahead,” Sefcovic wrote. He said in late May that the objective of these negotiations will be to determine details of gas transit via Ukraine after 2019 and guarantees of such transit.

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38% MOLDOVANS NAME RUSSIA BEST FRIEND, UKRAINE GETS ONLY 2%

Moldova’s integration with the European Union is favored by 38% of the country’s citizens; with the Eurasian Economic Union, by 34%, according to the findings of a social survey unveiled by the Centre for Sociological Research of Moldova (CCSM) at a press conference on Friday. Another 22% said Moldova should unite with Romania, the pollster said. At the same time, more than half of respondents (54%) opposed Moldova’s accession to NATO, 24% backed the idea, and 22% were still undecided.
Asked who is Moldova’s best friend, 38% named Russia, 37% Romania, 8% Germany, 5% the United States, and 2% named Ukraine. Other countries were cited by a combined 10%.
At the top of a rating of trusted foreign leaders is Russian President Vladimir Putin (57%), followed by Romanian ex-president Traian Basescu (49%), Belarusian leader Alexander Lukashenko (34%), German Chancellor Angela Merkel (27%), Georgian ex-president Mikheil Saakashvili (17%), U.S. President Donald Trump (15%), Ukrainian President Petro Poroshenko (10%) and French President Emmanuel Macron (9%).
The survey was conducted among 750 respondents in Chisinau on April-30 – May 8. The margin of error is 3%.

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UKRAINE INCREASES GOODS FLOW WITH EU TO $8.581 BLN, TRADE WITH RUSSIA GROWS BY 14.9%, TO $2.615 BLN IN Q1 2018

Ukraine in January-March 2018 increased goods flow with the European Union (EU) countries by 17.7% year-over-year, to $8.581 billion, the National Bank of Ukraine (NBU) has said on its website. The central bank said that both exports grew by 26.5%, to $4.058 billion and imports rose by 10.7%, to $4.523 billion. The deficit of balance of trade with the EU narrowed to $465 million from $878 million.
In addition, goods flow with Russia grew by 14.9%, to $2.615 billion. Imports rose by 28.4%, to $1.906 billion, while exports fell by 10.1%, to $0.709 billion. The deficit of balance of trade with Russia grew to $1.197 billion from $692 million.
The share of goods flow between Ukraine and the EU of total Ukraine’s foreign trade in January-March 2018 grew to 37.7% from 35.3% and with Russia to 11.5% from 11%.
In general, exports of goods from Ukraine in January-March 2018 grew by 10.4%, to $22.782 billion, imports – by 11.9%, to $12.359 billion and exports – by 8.6%, to 410.423 billion.

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UKRAINE CUTS IMPORT OF MEDICINES FROM RUSSIA BUT BOOSTS PHARMACEUTICAL EXPORT TO RUSSIA

Ukraine in January-February 2018 considerably increased exports of medicines to Russia, cutting their imports from the country. According to the State Statistics Service, in January-February 2018, Ukraine exported medicines for $3.5 million to Russia, which is 18% more than a year ago. Imports of medicines from Russia to Ukraine over the period fell by 40.4%, to $2.85 million.
Last year Ukraine exported medicines to Russia for $27.89 million, which is 31.9% more than a year ago, and imported medicines for $29.79 million from Russia (15.9% down). In 2017, Ukraine exported medicines for $171.17 million, including to the CIS for $143.057 million.
As reported, at present, because of the sanctions imposed on Russia, Russia is discussing the ways of replacing imported medicines and reducing dependence on foreign pharmaceutical companies. The decline in the imports of Russian medicines to Ukraine began after the introduction of the requirement of compliance of drugs with GMP standards in Ukraine.

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BREWERS AB INBEV AND EFES FINALIZING MERGER IN UKRAINE AND RUSSIA

Turkish brewer Anadolu Efes and AB InBev have received all required regulatory approvals to combine their businesses in Russia and Ukraine, have signed binding transactions agreements and expect to complete the deal in March, Efes said. Anadolu Efes also disclosed the structure of the deal. Its subsidiary Efes Breweries International N.V. will transfer is 99.999% owned subsidiary Moscow Efes Brewery (MEB) to its wholly owned new subsidiary AB InBev Efes B.V. Then AB InBev Western European Holding will contribute its Russian and Ukrainian assets to this company in exchange for new shares in AB InBev Efes.
After the issue of new shares, Efes Breweries International and AB InBev Western European Holding will each own 50% of AB InBev Efes.
AB InBev’s Russian and Ukrainian assets have been valued at $1.002 billion-$1.233 billion for the deal, based on the discounted cash flow method, while the assets of Efes were valued at $962 million-$1.145 billion. The combined business is expected to result in annual cost synergies of about $80 million-$100 million. The merger of operations in Russia and Ukraine will strengthen the competitive position of both companies’ brands, with potential for future growth, Efes said. The combined business will aim to lead the Russian and Ukrainian beer markets, the company said.

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