Business news from Ukraine

LARGE U.S. PRODUCER OF E-CIGARETTES ENTERES UKRAINIAN MARKET

The large U.S. producer of e-cigarettes – JUUL Labs – is entering the Ukrainian market, which will be the 14th international market for the company.
“We will be represented in Ukraine by the original American product. The Cigar House Fortuna will become our distribution partner. We will be represented in the six largest cities of the country – Kyiv, Odesa, Lviv, Kharkiv, Dnipro and Zaporizhia. We plan to enter 1,000 retail outlets. Products in stores will appear in the middle of next week,” General Manager of JUUL Labs for Ukraine and the CIS Ivan Darkov said at a press conference in Kyiv on Tuesday.
According to him, the company intends to oblige each outlet to sign a contract with the distribution partner that it will identify every customer who buys the product.
“If an outlet does not comply with the demand, the company will stop supplying its products. We do not plan to go on Facebook, Instagram, as these channels are aimed at popularizing the product mainly among young people, and also sell products through other online sales channels,” Darkov said.
He said that now the company has no official representation in Ukraine, as well as plans to open its own production.
“In Ukraine, there are more than 8 million adult smokers of traditional cigarettes. Based on the price, our product belongs to the premium segment. We plan to have over 200,000 customers for our products in Ukraine in three years,” the company’s general manager in Ukraine and the CIS said.
In addition, according to him, JUUL Labs intends to participate in the development of bills to regulate the market of e-cigarettes in Ukraine.

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UKRAINIAN MARKET OF IMPORTED ALCOHOL WILL GROW BY 10% IN 2019

The market of imported alcohol in Ukraine in 2019 will grow by 8-10%, Bayadera Group, one of the largest alcohol companies in the Ukrainian market, predicts.
“According to experts, the imported alcohol market in 2019 will grow by 8-10%. Significant development is expected in the segment of foreign wines, while premium and luxury brands will have a steady increase of 2-3%,” the press service of Bayadera Group reported.
According to Bayadera Group, the structure of the import market in Ukraine has changed towards still wines (25%) and whiskey (20%). Sparkling wine and champagne (15% each) rank third among imported alcohol, brandy and cognac (about 12%) rank fourth, while rum (10%) is fifth.
According to the report, Bayadera Group imports almost all categories of alcohol, sales of imported products in 2018 increased by 17%. The main imports are Italian, French, Spanish, Chilean and German wines. The company intends in 2019 to focus on manufacturers, with which it already works, it does not plan to bring new large brands to the market.

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LARGEST PAYMENT SYSTEM OF JAPAN INTERESTED IN ENTERING UKRAINIAN MARKET

Japan Credit Bureau (JCB), the largest payment system in Japan and one of the five largest payment systems in the world, is interested in entering the Ukrainian market, the National Bank of Ukraine (NBU) said on Facebook.
The relevant intentions were expressed by JCB General Manager Takashi Suetsugu at a meeting with the leadership of the National Bank.
“Mr. Suetsugu announced JCB’s interest in entering the Ukrainian market and the intention to submit a corresponding package of documents to the regulator in the near future. For his part, Yakiv Smolii welcomed JCB’s intention to work in Ukraine, noting that the National Bank stands for a competitive environment in the payment market and uniform rules of regulation for all participants,” the report says.
According to JCB, as of the end of 2017 some 117 million customers were holders of its cards. The total annual transaction volume of the system was $281 billion. To date, JCB payment cards are serviced in 190 countries of the world. Payment cards are issued in 23 countries.
In total, there were 43 payment systems in Ukraine as of October 1, 2018, including the NBU Electronic Payment System, 29 systems for servicing transfers within the country, and 13 systems for cross-border remittance.

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U.S. MANUFACTURE OF ROLLING STOCK GREENBRIER TO ENTER UKRAINIAN MARKET

The Greenbrier Companies, Inc. (Oregon, the United States), the manufacture of rolling stock, seeks to enter the Ukrainian market in the near term.
“We have been studying the Ukrainian market for several years and assume that we will come to this market in the near future,” Assistant Vice President for International Marketing at Greenbrier Adem Saglik said at the Rail Expo 2018 exhibition in Kyiv.
At the same time, he said that in order to make the Ukrainian market more attractive to foreign companies, it is necessary to make a number of legislative changes.
“It is important to adopt several laws, in particular, on market liberalization, so that private operators also have access to the market and there is competition… It is very important for us to see that private traction is supported by the government of the country,” he said.
According to Saglik, the sooner Ukraine liberalizes the traction market, the more European companies will come and start working.
Earlier, Greenbrier considered the option of creating a leasing company in Ukraine.
The Greenbrier Companies specializes in the manufacture and repair of railway rolling stock, provides management and leasing services for rail cars.

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SOME INDIAN PHARMA COMPANIES INTERESTED IN ENTERING UKRAINIAN MARKET WITH AYUSH PRODUCTS

Some Indian pharmaceutical companies are interested in entering the Ukrainian market with Ayurveda, Yoga, Unani, Siddha and Homoeopathy (AYUSH) products, President of the Indian Pharmaceutical Manufacturers’ Association (IPMA) Dr. Ramanan Unni Parambath Menon has told Interfax-Ukraine. “Many pharmaceutical companies are present on the Ukrainian market with AYUSH products and many of them are interested in entering it,” he said, adding that the Ayurvedic term is incorrect for this segment of medications.
“AYUSH is ab abbreviation for Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy,” he said.
Commenting on the specifics of the Ukrainian regulatory base for the import of AYUSH products, Dr. Menon said that in Ukraine some of these medications are registered both as medicines and as biologically active additives.
“In India, there are separate rules for registration of AYUSH products. There are no separate rules in Ukraine. We would like these rules by analogy with India to be implemented in Ukraine,” he said.
In this case, according to Dr. Menon, some AYUSH preparations have a full package of documentation for the registration of medical products required by the State Expert Center of the Ministry of Health of Ukraine.
In turn, Head of the Representative Office of Dia Pharma Limited Ukraine Mr. Thamarai Pandian said that there are special rules of registration for AYUSH medications drawn up for the WTO in some countries like Switzerland, Germany, Hungary and some other EU countries.
“The Health Ministry of Ukraine could have introduced the same WTO rules in Ukraine,” the expert said.
At present, there are 278,000 Ayurvedic specialists, over 200 Ayurvedic educational institutions and 112 Ayurvedic skill enhancement institutions. Some 15,000 people graduate from them every year.
There are 7,439 private companies in India that produce Ayurvedic medications and over 20 companies with the international GMP certificate.

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LENDING TO TO SMALL AND MEDIUM-SIZED ENTERPRISES BECOMES DRIVER OF UKRAINIAN MARKET

Lending to small and medium-sized enterprises (SME) becomes a driver of the banking market, Deputy Board Chairperson of the bank Globus Olena Dmitriyeva said at a roundtable organized by the Financial Club in Kyiv on Tuesday. “SME becomes a driver of lending, as in this segment the quality of the portfolio is twice better than the quality of portfolios of corporate clients. 75% of banks started lending to SME, and this is a good trend,” she said. Dmitriyeva said that at present, banks are trying to relax the decision making processes for lending to SME.
Head of the SME department at Piraeus Bank Svitlana Bazhenova said that from October 2017 through February 2018, the SME loan portfolio in Ukraine grew by UAH 25 billion.
“The growth of SME share of total portfolio of loans issued to businesses by Ukrainian banks grew from 51% to 52% of the total loan portfolio. The growth was mainly generated by loans to SME,” she said. Deputy Director of the SME department at Ukrgasbank Semen Puskai pointed out the importance of programs to support development of SME.
“We are optimistic about the future of the SME segment, as there are now many assistants in this area. There is the state that implements programs to reduce the cost of loans for agrarians, and we also see the active participation of international financial institutions like the German-Ukrainian Fund, the EIB and IFC. When decentralization began municipalities started joining the project. They cheapen lending rates and support business in their region… To date, the programs signed and declared with the municipalities are quite numerous, but it is necessary that these programs start working as soon as possible and then, there will be cheaper rates,” he said.

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