Ukraine

Business

Journal

6:28 AM Sunday, October 21, 2018
UBJ.am
UBJ.am Tuesday, July 24
Hutchinson Ports look to invest in Ukraine; ‘Dear Wind’ airline registered; Honey production dives; Modernization to double agricultural production; Sumitomo opens new plant; Kodisoft to raise up to $18 million.
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

Hutchison Ports, one of the worlds largest port operators, is ready to enter the Ukrainian market. The company — privately incorporated in the British Virgin Islands — has registered a Ukrainian subsidiary in Odesa, according to official state registers. Hutchison specialises in cargo handling, transit and other activities in the field of maritime transport. In 2017, Hutchison handled 13 percent of all global container shipments, or about 90 million TEUs. Hutchison first signed a memorandum of understanding with Chornomorsk port back in 2016 but sources say they have been waiting for infrastructure there to be up to scratch before making their move. The company is now expected to take part in an official tendering process to manage, reform and improve Chornomorsk port.

Hot on the heels of new low-cost carrier SkyUp, another airline has just been registered in Ukraine: Dream Wind. The airline has just been registered with the State Company of Civil Aircraft and already has two Boeing 737-300s on their books, according to state registries. The company also names their first director: Nikolai Savostyanov; previously head of the planning and operational management service of Borispyl International Airport. Official records show that the founders of the company are named as Anatoly Kuksa and Egor Romanenko. The new company and the parties involved couldn't immediately be reached for comment.

Ukrainian honey production is down 43 percent in the first half of this year, compared to the same period last year. The biggest buyers of Ukrainian honey are Germany, Poland and Belgium followed by other buyers in the EU. Multiple factors, including environmental issues, have been blamed for Ukraine's honey downturn. Officially, Ukraine is currently the fourth or fifth global producer and exporter of honey. China officially takes the number one slot, followed by New Zealand and Argentina, but many experts say that China exports syrups and synthetic honey while Ukrainian product is celebrated for being 100 percent natural and robustly certified to EU standards.

Ukraine's agricultural production might be high, but new technology and modernisation could double output over the next few years, a new report shows. Agriculture currently accounts for about 18 percent of Ukraine's economy but that could reach 25 percent if the state supports modernisation. Official government statistics show that agriculture currently employs just over 3 million people in Ukraine. So far in 2018, the industry has grown by almost 11.5 percent. Official data shows that salaries in agriculture are still relatively low, averaging at at 6,500 UAH, or about USD $300 — but this number is still a 25 percent increase over the same period last year. According to the Ministry of Agriculture, in the 2017-2018 season Ukraine exported 40 million tons of grain worth about USD $6.5 billion. China, Egypt and Indonesia are the leading importers of Ukrainian grains.

As German-Japanese engineering company Sumitomo Electric Bordnetze announces that they will open a factory in Khmelnytsiy to produce electric wiring for Volkswagen, observers point to Ukraine's recovering automotive sector. Factory managers there plan to hire 500 workers this year plus 1,500 more within 2 years. The announcement has been welcomed as indicative of western Ukraine's potential as an automotive manufacturing hub for Europe. Car production in Ukraine is recovering and factories in western Ukraine are reporting gradual improvements. Eurocar PJSC — a Ukrainian car factory in western Ukraine — used to produce Audi, Volkswagen and Skoda vehicles but now they're only producing Skoda. In 2008 the factory was producing 40,000 vehicles per year. The crises of recent years however saw that drop to a historic low of 4,000 in 2016. This year however, things are looking better and the company forecasts the production of 9,000 Skoda cars. Eurocar executives tell the UBJ that one car factory worker creates eight more jobs in the local economy and they hope for further support from government and more attention from prospective foreign investors.

Kodisoft, a Ukrainian maker of interactive restaurant tables, is looking to raise USD $12-18 million in series B funding, the CEO has told the UBJ. The company is currently valued at USD $80-98 million and wants to raise extra capital to increase and scale their production. The digital tables allow customers to order food, browse the Internet and interact with other diners. Users can even purchase goods from nearby shops and have them delivered to their dinner table. The tables have already been sold in nine tech-competitive countries including Singapore, Japan, Dubai and United Kingdom. The company currently produces an average of five tables per day from production facilities in Ukraine and sells them for up to USD $15,000 each. They're already used in outlets like KFC, Burger King, McDonald's and Starbucks.

The WTO has sided with Russia in a fertiliser case brought against Ukraine. A WTO panel largely ruled in favour of Russia in the suit brought against Ukraine, citing anti-dumping measures on imported ammonium nitrate, UNIAN has reported. Russia lodged a complaint last summer saying that duties had violated the WTO is anti-dumping agreement, reported Reuters.

Ukraine needs investors in the animal feed industry, government sources report. The government plans to attract more investment in this area as they move ahead with the privatisation of many leading producers. They are especially interested in investment from the United States and the European Union, according to recent statements from President Petro Poroshenko's office. At a recent conference in Washington DC, attended by American agro executives and senior officials from the Ukrainian government, a list was presented of 345 companies in the sector that could soon be subject to privatisation. 50 of these businesses are leading producers of animal feed here in Ukraine.

President Petro Poroshenko has had to explain why he vetoed a new anti-logging law. The president's office said that Poroshenko fully supports the strengthening of criminal liability in the illicit blogging trade, but he does not want to violate commercial agreements with the European Union. The president has said that he will sign the new law after relevant changes were made by Parliament. A robust new law — proposed in the wake of an investigation that revealed the scale of the illicit timber trade between Ukraine and the EU — has not been passed. The bill proposed that Ukraine place a limit on the harvesting of unprocessed timber to 25,000,000 m³ per year and that criminal liability for illicit logging and smuggling be strengthened. Poroshenko is expected to support the law once it shifts its focus to criminal liability and away from controls on the output of the logging industry.

Ukraine's finance ministry has launched an official page on Bloomberg. Acting finance minister Oksana Markarova announced the news during a working visit to the United Kingdom, the ministry's press service has said in a statement. "The page is a generally available resource for investors to learn about financial instruments offered by Ukraine, informing investors about Ukrainian sovereign financial instruments and to help expand the base of foreign investor security in Ukraine," the statement said.

Time to invest in Ukraine: There has never been a better time to invest in Ukraine, nor has there ever been more opportunity to attract a foreign investor to help scale your business or boost your outlook. The UBJ is on the frontline of reporting Ukraine's business news. If you have a great story, opportunity or area of interest, get in touch with us so we can see if there's a story there for our readers! Send your news to: news@theubj.com

We recommend
Uklon taxi’s into Africa; Solar cools; 44 gas fiel...
Editor Jul 27, 2018
Ukraine and US join forces against Nord Stream 2;...
Editor Jul 26, 2018
Ukraine close to finalizing IMF deal; Trade with I...
Editor Jul 25, 2018
--> --> -->