Ukraine Business News, Tuesday, June 11.

  • Prime Interest Unchanged
  • Bond Sales Recover on FX Confidence
  • EU Used Cars Flood Ukraine
  • South Korean Cars Coming
  • Naftogaz to Cut Gas Price by One Quarter
  • Norwegians and Chinese Build Big Solar Plant in Mykolaiv
  • MHP Builds Largest Poultry Plant in Europe
  • UZ Mulls Private Trains on the Boryspil Express
  • Russia Cuts Diesel, LPG Exports to Ukraine
  • Spring Planting Indicates Another Bumper Crop
  • Grain Traders Invest in Rail Cars, Port Expansions
  • Turkey-Ukraine FTA: 99% Done
  • Ukraine Starts Flying to the Balkans
  • Energy Prices To Go Up After Russia’s Export Ban
  • 5 Western Oil Cos. Bid for Ukraine Production Blocks
  • Chinese Interested in Ukrposhta



The dominance of Ukrainian state companies in tender bids for nine oil and gas production sharing agreements is “a major concern,” says the US-Ukraine Business Council. Noting that state-owned UkrGazVydobuvannya participated in nine of the 22 bids, the USUBC writes: “A major concern has been expressed by many energy experts about state-owned companies like UGV, being allowed to bid in a program designed to attract private international and domestic investors…State-owned companies do not need any additional privileges and incentives.”


The surge of foreign buying of government hryvnia bonds does not threaten to Ukraine’s finances, Yakiv Smoliy, governor of the National Bank of Ukraine, told reporters Thursday. “Since the beginning of the year, the inflow of foreign funds from foreign investors in comparison with the previous year has increased by almost seven times, and has reached about 40 billion UAH,” the central bank head said, citing the equivalent of $1.5 billion. “This portfolio is diversified in terms of time, and we do not see the simultaneous outflow of foreign investors from this portfolio…we do not see risks.”


Ukraine’s central bank kept its main interest rate unchanged at 17.5% on Thursday, citing the need to contain inflation risks that increased since the bank cut the rate in April. Pushing the National Bank of Ukraine to the side of caution were diesel fuel price hikes caused by Russia’s June export cuts and the understanding that an IMF second tranche would only come in the fall, after talks with a new government.


‘Green bonds’ could allow Ukraine to raise $73 billion in the 2020s, Andriy Frolov, deputy head of the Energy Efficiency Reform Office, told reporters Thursday, citing an International Finance Company estimate. Accompanied by Jean-Erik de Zagon, European Investment Bank representation for Ukraine, Frolov said draft regulations under review by the Cabinet of Ministers envisage launching Ukraine ‘green bonds’ as early as next year.


In the latest EU-Ukraine rail link, Ukrzaliznytsia and Slovak Railways Company start Sunday a daily train between Košice, Slovakia, and Mukachevo, Zakarpattia region. Slovak trains will run on the cross border European gauge track, originally laid during the Austro-Hungarian empire. The four-hour train will cost €7.5 and will stop in Chop (Ukraine) and Čierna nad Tisou (Slovakia).


The Finance Ministry doubled its bond sales at last Tuesday’s weekly auction, raising in equivalent UAH 8.4 billion, compared to UAH 3.8 billion last week. Purchases of hryvnia bonds recovered by 43%, compared to last week, hitting UAH 2 billion. Reflecting growing confidence in exchange rate stability, two bidders bought 3 year bonds for UAH 573.4 million at 17%. One third of auction receipts — UAH 609 million – came from the sale of 1 year bonds to seven bidders at 18.5%.  On Wednesday, Finance Minister Oksana Markarova told the Cabinet: “We are increasing our debt share in the national currency.”


Dragon Capital writes: “Modest demand likely reflects a combination of technical issues related to Clearstream’s launch, UAH weakness -3.6% in the past two weeks, to UAH 27.13:USD…we expect demand for UAH bonds to pick up in the coming weeks, including on the side of non-residents.”


Over the next four years, the hryvnia will gradually devalue against the dollar, moving from UAH27/$1 today, to almost UAH31/$1 in 2022.The projection is part of the government’s debt management strategy adopted Wednesday by the Cabinet of Ministers. In Feb. 2016, the exchange hit UAH27/$1. Since then, it has varied within a narrow band. According to the government forecast, the US dollar will cost: 28 hryvnia at the end of this year; 29.4 hryvnia in 2020; 30.5 in 2021; and 30.7 in 2022.


GDP growth is forecast at: 2019 – 2.8%; 2020 – 3.3%; 2021 – 3.8%; and 2022 – 4.1%.


Ukraine plans to cut government debt ratio to 52% of GDP this year and to 43% of GDP by 2022, Finance Minister Oksana Markarova told a televised Cabinet meeting on Wednesday. Building on a stable foreign exchange outlook, the government also plans to increase its share of hryvnia debt.


The EU is renewing its offer of €500 million in aid this year, contingent on Ukraine fulfilling the requirements set out last year in the EU’s fourth macro-financial assistance program to Ukraine. Valdis Dombrovskis, a European Commission vice president for financial affairs, reviewed the conditions Tuesday in a meeting in Brussels with Ukraine’s new president. Earlier, in March, Finance Minister Oksana Markarova with Dombrovskis and said later that Ukraine had fulfilled more than half of the commitments required to receive the €500 million tranche.


Through May, first time registrations of used imported cars were seven times higher than registrations of new imports, reports Ukravtoprom, the industry association. Boosted by a January-February tax amnesty for illegally imported cars, the used car registrations hit 231,000, seven times the number for the January-May period of 2018. Ukraine’s lowered import duties and Germany’s phase out of diesel cars keep the used car market hot. In May, used cars accounted for three quarters of the 31,000 cars registered for the first time.


Used Hyundai and KIA cars will be imported from South Korea by the AIS Group of Companies, a major auto dealer in Ukraine. Starting this month, AIS will import ‘global models’ fabricated between 2011 and 2014, with mileage below 200,000 km. “Unlike US auctions, which mainly offer cars after an accident, official Korean suppliers offer cars that do not require rebuilding,” Sergei Borovik, AIS marketing director, said in a company press release.


Naftogaz is lowering its gas prices by 23% from May to July. This government-mandated drop comes after the EU natural gas import price has fallen to one half of last fall’s levels. Today, the EU price is $4.34 per MMBtu, the lowest level since Sept. 2016. But Ukraine price has been stuck at last fall’s peak, $8.3 per MMBtu. At that time, the government sought to eliminate subsidies by moving Ukraine’s prices toward EU levels.


Teaching business executives how to avoid corruption and how to run a business transparently are the goals of ZmiNEW, Business Ombudsman Council’s new education project. After dealing with 5,600 complaints from business managers in three years, Algirdas Šemeta, the Ombudsman, believes training can head off corruption conflicts before they arise. At the project launching on Wednesday, he said: “Our new project aims to resolve issues between the business and government by providing a platform to communicate properly and thus breaking a systemic logjam.”


Norway’s Scatec Solar and PowerChina Guizhou Engineering Co. Ltd. have started to build a €124, 148 MW solar power plant in Prohressivka, 100 km west of Mykolaiv city. PowerChina is covering 65% of the construction costs of the station, which is to be ready by next June. For commissioning this year, before the ‘green’ tariffs expire, Scatec is building two other solar plants: a 47 MW station in Mykolaiv and a 30 MW station in Kamyanka, Cherkasy.


Ukraine could start exporting eggs to the United States this year, part of a major drive that sends Ukrainian egg products to 60 countries worldwide. Last year, exports were up 20% y-o-y, to 1.8 billion eggs, according to an industry overview in UkrLandFarming, parent of Avangard, a major egg producer, plans to invest over $200 million in a terminal to handle its egg exports to 40 nations worldwide.


Through April, poultry meat exports were up 40% to $199 million, compared to January-April of last year, reports Ukraine’s Association of Food Industry Producers. During 2018, poultry exports rose 21% in volume, to 329,000 tons and by 30% in monetary terms, to $507 million, according to the State Fiscal Service. So far this year, the top buyers are: Saudi Arabia – $55 million; Netherlands — $33 million; and Slovaki $20 million.


MHP is building in Vinnytsia the largest poultry farm in Europe, World-Grain reports, citing Yuriy Kosiuk, the company founder/CEO. Located in central Ukraine, this project represents a major expansion of an existing poultry farm to 560,000 tons of broiler meat a year.


Thanks to MHP exports, Ukraine became last year the third largest supplier of poultry meat to the EU and the sixth largest poultry exporter worldwide. According to Sergey Karpenko, general director of the Ukraine Poultry Union, the nation’s biggest sales markets are: The Netherlands, Iraq, Saudi Arabia and Slovakia.


The EBRD is reviewing a €100 million loan request from MHP to buy a 91% stake in Perutnina Ptuj, Slovenia’s main poultry producer. “Some media reports that the EBRD allegedly rejected this project are not true,” Anton Usov, the EBRD’s regional spokesman, tells Interfax-Ukraine.


Prior to Austria’s May 26 European Parliament elections, Kurier, a major Vienna newspaper, ran an article charging MHP was ducking EU quotas on chicken fillet imports by sending half-processed chicken cuts to its EU factories for final processing. The newspaper announced: “The KURIER managed to uncover the export tricks of MHP…when cutting the birds in Ukraine, a bone remains on the chicken breasts.”


In response, Sergii Karpenko, executive director of the Poultry Union, said Ukraine’s goal is to “deliver quality poultry products at affordable prices for our consumers.” He told GlobalMeat news site: “Unfortunately, we have seen a rise in anti-Ukrainian rhetoric ahead of the European elections later this month. We regret that fake news, misinformation and willful inaccuracies are freely used now in the debate about European poultry.”


Investing in increased ridership, Ukrzaliznytsia is building a multimodal station at Vydubychi, the southernmost stop on the Metro’s Green line, before it crosses the Dnipro. Due for completion this fall, this covered station will allow bus riders from the south and metro riders from the north to transfer at Vydubychi to the train Boryspil.


Russia has slashed monthly diesel exports to Ukraine to 25% of normal levels and liquefied petroleum gas exports to 40% of normal levels, reports Sergey Kuyun, director of Ukraine’s A-95 energy consulting group. To maximize market tension, Russia’s Economic Development Ministry will set levels of permitted exports each month.


In the face of Russia’s cuts, Ukraine’s diesel prices could go up another 5% this summer, to 31 UAH the liter, Kuyun writes on Facebook. With most consumer goods moving around the country by a truck this could imperil Ukraine’s goal to end this year with inflation at 6.3%. After the Kremlin announced the restrictions on April 18, diesel prices rose by 4%. With the June 1 export restrictions, Ukraine loses 25% of its diesel and 15% of its LPG. “Is it a lot or a little?” asks Kuyun.For diesel fuel – a lot. For gas – less, but also not easy.”


Easing economic pressure on Ukraine, European oil prices have receded to February lows. August futures for Brent on the London Stock Exchange ICE Futures traded Monday evening at $61.62 per barrel.


Pumping gas into storage at record rates, Ukrtransgaz has filled Ukraine’s 12 storage reservoirs to 37% of their 31 billion cubic meter capacity. After the national heating season ended April 5, the state pipeline company started filling the reservoirs, preparing for a possible end of Russian gas transit across Ukraine on Jan. 1. Separately, from January to April, natural gas production in Ukraine grew by 3.6% y-o-y to 7 billion cubic meters, the Energy and Coal Industry Ministry tells Interfax-Ukraine.


DTEK Group cut its coal imports by 24% during the first quarter, compared to the same period last year. The 225,000 ton drop in imports was partly covered by switching to gas and partly by expanding DTEK’s coal production by 1.35%, to 6.5 million tons.


Last year’s record 70 million-ton harvest may be the new normal for Ukraine’s top export – grain. With spring sowing completed, farmers seeded 14.8 million hectares, the same amount as last year, reports the Agrarian Policy and Food Ministry. Noting that favorable weather allowed farmers to start planting one month earlier than last year, Deputy Minister Volodymyr Topchiy says: “The period of hibernation was favorable, and the spring weather conditions were better than in 2018one can expect that the harvest of early grains in 2019 will not be lower than last year’s.”


The ministry predicts this year grain harvest will hit 70.8 million tons. The USDA predicts 72.1 million tons.


While this year’s grain harvest may match last year’s in size, the crop mix will shuffle as farmers look for highest prices. King corn will shrink by 7%, to 33.1 million tons, predicts APK-Inform consultancy. Wheat will increase to 26.2 million tons and barley will increase to 7.9 million tons. Sunflower seed harvest will stay virtually the same, at 14.9 million tons. As a result, sunflower oil exports will be unchanged – 5.9 million tons. Soybean production is to drop by 20%, to 3.7 million tons. In compensation, canola production is to go up by 29%, to 3.6 million tons.


Ukraine could export a record 50 million tons of grain in the 2018/ 2019 marketing year that ends this month, predicts Dragon CapitalWith 46.1 million tons of grain exported as of June 1, Dragon sees: “exports for the full marketing year to 49-50 Mt, up 23-25% y‑o-y and a new record high.”


Grain exports through Ukraine’s ports have grown by 45% since 2012, Andrew Shklyar, head of CTS-Consulting said last week at the Ukrainian Ports Forum. “Over the past five years, grain is the only type of cargo that has been growing annually,” he said in Odesa. “The volume of grain shipments since 2012 has increased from 27.5 million tons to 40 million tons in 2018. Grains make up almost a third turnover of Ukrainian ports.”


To catch up, companies are investing to move the grain to ports and to export the grain to the world.



  • Risoil SA increased grain exports from its terminals by 150% to 1 million tonsduring the first five months of this year, compared to the same period last year.
  • South Korea’s Posco International plans to inaugurate next monthin Mykolaiv a grain handling terminal with 140,000-ton storage capacity.
  • Posco, France’s Soufflet Group and Ukraine’s Astartaare in various stages of creating their own fleets of grain hopper wagons for rail transport.
  • Holland’s Louis Dreyfus Company expects to win from the EBRD a $35 million loanto buy 1,000 rail grain wagons for use in Ukraine. Louis Dreyfus has warehouses in Vinnytsia, Cherkasy and Zaporizhia and a port complex in Odesa with a storage capacity of 240,000 tons.
  • Ukrzaliznytsia held two ProZorro auctions in March, auctioning 24 grain routes, with a total 1,296 cars.Although the new electronic system bids up shipping costs, it gives shippers peace of mind, knowing that freight trains are to arrive on time, in working order.
  • UZ says its working fleet of grain cars has expandedto 13,180 grain wagons, enough to handle 40 million tons of grain a year.


The Turkey-Ukraine free trade pact is ‘99%’ negotiated, Vasiliy Bonday, deputy foreign minister tell Ukrainian Radio. Sticking points are several agricultural products and some services, he said. Last fall, Turkish President Recep Tayyip Erdogan said talks should be completed by the end of 2018.


Air Serbia flew from Belgrade to Kyiv last Monday, renewing a route dropped three years ago. The return of flights to the largest city in the Balkans is part of a mini-boom in flights to the long-overlooked region. This summer, Windrose has flights from Kyiv to Pula, Croatia and to Tivat, Montenegro. SkyUp has seasonal charters to Tivat; Tirana, Albania; and, starting Thursday, to Split, Croatia. This spring Ryanair and Wizz Air launched flights from Kyiv to Athens, competing with UIA. Ten days ago, Wizz Air launched flights from Kyiv Sikorsky to Thessaloniki, northern Greece.


Diesel and butane prices are to rise this week in the wake of Russia’s June 1 bans on energy exports to Ukraine. Last week, Ukrainian producers of liquefied petroleum gas increased their prices by 30%, Sergei Fedorenko, commercial director of UkrGazVydobuvannya, writes on Facebook. Kazakhstan’s Tengizchevroil had to suspend shipments of LPG to Ukraine last week after Russia refused to allow transit. The company accounts for about 15% of Ukraine’s LPG.


Burisma Group plans to build a $25 million plant capable of producing 50,000 tons of liquefied petroleum gas a year, reports Nefterynok. The natural gas would come from Burisma’s field in the Kharkiv region.


After no foreign energy companies bid for oil and gas licenses at two auctions this spring, five Western companies are among the 13 bidders for the 50-year oil and gas production sharing agreements. With bidding closed, the foreign bidders are Vermilion of Alberta, Canada; Aspect Energy of Denver, Colorado; SigmaBleyzer of Houston, Texas; Nafta of Slovakia; and EPH or Energetický a průmyslový holding, a.s., of the Czech Republic. reports that Ukraine’s Intergovernmental Commission is to evaluate bids in June and make its recommendations for winners to the Cabinet of Ministers.


Alibaba and other large Chinese companies are interested in taking part in possible privatization of Ukrposhta, Igor Smelyansky, CEO of the national postal operator, writes on Facebook. “Alibaba warehouses and its logistics are being built in Russia, Belgium, Latvia, Estonia (and soon in Africa), but not here,” Smelyansky writes of the world’s largest retailer and e-commerce company. “Alibaba likes to work through partners and share risks with them. But they want certainty, understandable strategies and clear rules at customs.”


During the first four months of this year, Ukraine’s agricultural exports increased by 19% to $7.1 billion. Sales were up $1.1 billion from January-April of last year. With farm products the nation’s top export item, the main destinations were: Asia – 42%; EU 33.5%; Africa – 16%; and former Soviet Union – 7%.


Dragon Capital’s Ukraine real estate fund earned a net profit of $3.17 million last year, turning around a 2017 net loss of $4.85 million. According to a filing on the London Stock Exchange, net asset value fell by 15%, to $36.2 million, due to a distribution of $9.8 million to shareholders of the Ukrainian Real Estate Investment Fund Dragon Ukrainian Properties and Development Plc. Dragon Capital Investments owns 61% of the fund.


Kristina Kvien, the U.S. new acting ambassador, or Charge d’Affaires, started work in Kyiv last week. Moving from Paris, where she had the number two job at the US embassy, Kvien has served as an economic counselor at the US embassies in Paris, London, and Bangkok. She has served at the US embassy in Moscow and has an MS in Strategic Studies from the U.S. Army War College.


Bolstered by a surge in ‘e-Residents’ of Estonia, the Ukrainian-Estonian Chamber of Commerce has opened in Tallinn. Aimed at IT entrepreneurs, the e-Residency program gives non-Estonians access to Estonian services such as banking, company formation, and payment processing. To date, 3,431 Ukrainians are e-Residents of Estonia, the third largest group of foreigners. Ukrainian e-Residents have founded 729 companies, the largest for any nationality. Wizz Air flies to Tallinn from Kyiv Sikorsky and Estonia’s Nordica flies from Kyiv Boryspil.


Lviv Airport handled 51% more passengers during the first five months of this year than during the same January-May last year. With 90% of passengers flying on international routes, the airport served 722,300 passengers. For comparison, the airport handled 708,000 for all of 2013. Lviv now has direct flights to 32 foreign cities, largely in the EU. On June 14, Earnest launches a Lviv-Venice flight. On July 21, Jonica launches a Lviv-Athens flight.


Flixbus, Europe’s largest bus operator, plans to announce next week the major expansion of its bus service between Ukraine and the EU. Based in Germany, Flixbus operates in 28 countries, serving 2,000 cities. In 2017, it started several routes to Ukraine. Last year, it opened in the United States, largely serving American border states from Los Angeles.


Die englische Originalversion stammt von unserem Partner UBN – Ukraine Business News. Weitere Informationen und ein Nachrichtenarchiv finden Sie unter:


The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to:


 Ukraine Business News, Tuesday, June 4.





  • IMF Team Goes Home on Good Note
  • Foreign Investors Eye Hryvnia Bonds
  • Black Sea Ports Draw World Class Operators
  • Shipbuilding Revives
  • Regional Airports Discover Europe: Kharkiv-Paris, Odesa-Rimini, Zaporizhie-Barcelona
  • Canadian Gas Co. Joins UGV To Bid for 50-year PSAs
  • US to Russia: Hands off Cyprus Gas
  • Danes, Americans Plan $250 million for Georgia’s Poti – a Russia Bypass Port
  • More Sun Oil Tankers For the Dnipro
  • Chinese Electric Buses to be Assembled in Ukraine
  • Real Wages, Real Retail Sales Show Solid Growth
  • Baltic-to-Black Sea Container Train to Start
  • Singapore’s Delta Wilmar Bets on Food Processing, Buys Chumak
  • World Bank OK’s $200 Million Ag Loan
  • After EU Gas Prices Drop in Half, Naftogaz Cuts Prices 8%
  • Halliburton Eyes $100 Million Fracking Deal with UGV
  • Foreign Bankers Named to State Bank Boards
  • Industrial Output Jumps 5%
  • As IT Eats Up Kyiv Office Space, Plans Unveiled for $50 Million Business Center

 Although the IMF review mission stayed in Kyiv for half of the expected two weeks, it left Wednesday on a positive note. “The IMF staff team has had very productive discussions with the Ukrainian authorities, including with President Zelenskiy,” team leader Ron van Rooden said Thursday. “The team has found that fiscal and monetary policies remain on track, and it stands ready to return to Kyiv to continue discussions after the forthcoming parliamentary elections as soon as a new government has clarified its policy intentions.

Foreign investment in Ukrainian government treasuries inched up again with Tuesday’s weekly auction, rising 2.1%, to UAH 42.3 billion, or $1.6 billion. Attracted by high interest rates and a stable currency, foreign investors have increased their holdings in the internal state bonds almost seven-fold since the start of the year.

Foreign investor interest in hryvnia bonds, combined with the political transition period mean that the Finance Ministry plans to focus this summer on hrvynia bond sales, pushing off new Eurobonds until late summer or early fall, reports, citing Wednesday’s Finance Ministry/IMF conference call with investors.  With demand strong, the Finance Ministry cut the interest rate on its 3.5 month treasuries from 18.5% last week to 17.89% this week.

With Naftogaz needing cash to fill reservoirs with 20 billion cubic meters of gas before the winter, US Energy Secretary Rick Perry told reporters in Kyiv last week that the US could provide guarantees to Naftogaz for the placement of Eurobonds for $2 billion. “This is one of the possible solutions,” he said.  “However, there may be other financial sources. There are different ways to finance the purchase of gas.”

World class port operators are starting to work in Ukraine’s Black Sea ports, Serhiy Vovk, director of the Center for Transportation Strategies, told Odesa’s Ukrainian Ports Forum 2019

  • P & O Maritime entered Ukraine over the last year, first towing vessels in Pivdennii (Yuzhne), then in Chornomosk, and this month, in Odesa.
  • South Korea’s Posco International bought 75% of a grain terminal in Mykolaiv.
  • Cargill will open in September a joint venture terminal in Pivdennii capable of handling half a million tons of grain a month.
  • The Louis Dreyfus company and its Ukraine partner, Brooklyn-Kyiv, signed an agreement at the Forum to build a 3 million ton a year grain terminal in Odesa.

As bigger and bigger ships serve Ukrainian ports, a record load of 63,000 tons of Ukrainian sunflower meal is approaching China. In mid-May, the JY Lake, a Panamax-class vessel, took on the load, partly at Mykolaiv’s Nika-Tera terminal, and partly in the waters off Ochakiv, with floating cranes. Ukraine’s previous record was 62,000 tons of meal shipped in January.

Aiming to transform Pivdennii port into ‘the Black Sea-Mediterranean vegetable oil hub,’ the Allseeds Group has more than doubled its storage tank capacity for sunflower and soy oil to 100,000 tons. Pumping 1,200 tons of cooking oil an hour, the company can now simultaneously load six ships docked at its Pivdennii six quays. Under its investment plan, the company plans to triple its oil handling capacity by the end of 2021.

Catering to Ukraine’s surging market for used cars from the EU, Euro Marine Logistics has started regular service between Greece and Chornomorsk of the “City of Amsterdam,” a roll-on/roll-off vessel. Just as Ukraine lowered import duties on late model year used cars, European countries and cities started imposing restrictions on diesel cars. In Ukraine, sales of used car imports now outstrip sales of new cars.

Shipbuilding and ship repair – a 200-year-old business in Ukraine – are reviving after a deep post-Soviet decline, according to statistics posted on news site. Revenues for the industry climbed by one third last year, to $113 million. Last year, 108 boats were repaired and 25 boats were built.


  • Smart Maritime Group, which has shipyards in Mykolaiv and Kherson, is building a third 110-meter, €2 million chemical tanker for Holland’s Veka Group. Smart Maritime Group revenue doubled last year, to $23 million.
  • The Danube Service Company shipyard in Izmail completed its second barge for the Grain-Transshipment Company. This Mykolaiv-based company is using the Izmail shipyard to renovate its entire fleet of eight barges for use on the Dnipro and the Southern Bug.
  • Nibulon puts to work in September, ‘Nibulon Max,’ a new transshipment vessel that will allow the company to transfer total of 40,000 tons of grain a day from river boats to sea vessels, without using land ports. Nibulon has a fleet 75 vessels, largely built in the company’s Mykolaiv shipyard.
  • Artel-Stroy of Mykolaiv is building a third tourist catamaran for Nibulon. Designed to carry 120 passengers, the 3-deck vessel will make summer excursions on the Dnipro, the Bug estuary and the Black Sea coast.

Regional airports received a boost last week as SkyUp started regular flights from Kharkiv, Odesa and Zaporizhie to Barcelona. Through June 11, SkyUp rolls out new flights from Kharkiv to Odesa, Rimini, Kutaisi, Larnaca and Paris. Next week, SkyUp starts flying from Odesa to Kutaisi and Rimini. On June 15, UIA starts flying three times a week between Odesa and Vilnius.

Targeting the Ukrainian market, Ryanair has unveiled a Ukrainian language version of its reservations website. By Nov. 1, Europe’s largest airline plans to double its Ukraine routes, to 33. On June 16, Ryanair starts flying from Odesa to Krakow and on June 17 from Kharkiv to Krakow.

Canada’s Vermilion Energy Inc. is pairing with UkrGazVydobuvannia to jointly apply for product sharing agreements to develop four oil and gas fields. If they win the 50-year contracts this month, the two companies are obliged to invest and take profits on a 50/50 basis. Based in Calgary, Vermilion already has projects in eastern Europe, in Hungary and Slovakia. Tuesday was the deadline for filing bids for the nine onshore production sharing agreements.

“This is the first major oil and gas company since Shell to invest in Ukraine for the purpose of extraction of natural gas,” said Andriy Favorov, gas business director for Naftogaz, the parent of UGV. Andriy Kobolyev, Naftogaz CEO, writes on Facebook: “Vermilion is ready to provide the latest and unique technologies of geological exploration, drilling, development, environmentally friendly technologies for the development of oil and gas fields.”

“Ukraine announces massive licensing rounds in 2019,” headlines a story on WorldOil news site. The story notes that concession licenses for nine more oil and gas blocks will go up for auction on June 18. In the two auction rounds this year, licenses were awarded for only nine of the 17 blocks offered. Only Ukrainians gas producers won acreages: UGV, Burisma Group, DTEK Oil & Gas, and Yedyna Oil & Gas Company. By the end of June, winners are to be chosen for the 10 production sharing blocks up for bid.

In the latest step to restore the Dnipro as a working river, TransShipOil plans to increase its river fleet from three ships to five this summer, reports the Center for Transportation Strategies. TransShipOil tanker ships work the lower 700 km of the Dnipro, picking up sunflower oil at six river stations — between Svitlovodsk and Ochakiv, the Black Sea port. The new tankers, with average cargo capacities of 3,000 tons, have been imported and reflagged for use in Ukraine. Ukraine is the world’s largest exporter of sunflower oil.

 On June 19, the EBRD board is expected to approve leading an €80 million syndicated loan to support renewable energy and energy efficiency in Ukraine. The EBRD would cover half of the loan, which would go to Ukreximbank, the nation’s third-largest bank in terms of assets. With many buildings and factories built in the era of cheap Soviet gas, Ukraine is investing to modernize and winterize.

Retail sales are up 7.9% in real terms for January-April, compared to the same period last year. Sales grew by 9.1% in April, fueled by the highest level of consumer confidence since Januar 2014. April’s consumer confidence level of 72 points, seems to reflect optimism surrounding the presidential election. Noting that first quarter real wages were up 10.9% q-o-qICU writes: “Consumer demand keeps rising thanks to solid growth in real household income.”

Chinese Skywell electric buses will be assembled in Ukraine under an agreement reached Tuesday, reports Produced by Nanjing Golden Dragon Bus Manufacturing Co., Skywell buses are now in use in Kyiv and Vinnytsia. Initially, the buses are expected to arrive here in SKD, or semi knocked-down, form.

A weekly Baltic-to-Black Sea container train will start this summer, according to an agreement signed Tuesday in Odesa by executives of the railroads of Lithuania, Belarus, and Ukraine. Called Containerships, the Klaipeda-Brovary-Odesa train will be the 18th regularly scheduled container train in Ukraine, according to Yevhen Kravtsov, Ukrzaliznytsia CEO. In March, a similar north-south container train starting rolling on a Belarus-Ukraine-Romania route. In April, UZ launched an east-west container train on a 1,400 km route between Nizhnedneprovsk and Sławków, Poland. Also in April, a test container train passed through Ukraine on a China-Hungary route.

To speed Ukraine-EU rail freight, Poland is investing in upgrading two rail crossings – Medyka-Mostyska, on the Lviv region border, and Dorohusk-Yahodin, on the Rivne border. Within the framework of the Germany-Poland-Ukraine transport corridor, tracks, switches, and traffic control devices are being upgraded. The goal is for the lines to carry longer and heavier freight trains, reports the Center for Transportation Strategies.

 Increasing investment in food processing, Delta Wilmar has bought Dragon Capital’s stake in Chumak, Ukraine’s leading producer of ketchup, mayonnaise, and tomato paste. It perfectly fits our group strategy of further downstream integration into food processing with high added value,” said Yuriy Golianych, general director of Delta Wilmar, the Ukraine unit of Singapore’s Wilmar International Ltd, widely considered to be Asia’s largest agribusiness group.

Separately, Delta Wilmar is building a $32 million vegetable oil processing plant at at Pivdenii, Ukraine’s largest port. Also at the port, formerly called Yuzhne, Delta Wilmar plans to build a plant capable of processing 2,000 tons of soybeans a day.

Setting a target of boosting Ukraine’s farm productivity by 30% by 2025, the World Bank approved Friday a $200 million loan for wide-ranging support to small and medium farmers. Noting that agriculture accounts for 42% of exports, the program aims to help farmers meet import requirements of the EU, China, the Gulf, the US, and Canada. An advocate of a private farmland market for Ukraine, the World Bank will pay for preparatory steps: transparency in land lease markets; registration of all state land; and strengthening land rights by raising owner awareness of their rights.

With European gas prices falling, Naftogaz is cutting gas prices by 8% for households and industrial users, to about $220 for 1,000 cubic meters. Since September, the EU natural gas import price has almost dropped in half. This came too late for President Poroshenko who took a highly unpopular move in November to raise gas prices 23.5% toward European levels. He lost the election in April.

Halliburton Ukraine has signed an initial agreement for a $100 million deal with Naftogaz to introduce modern ‘fracking’ techniques to Ukraine, 3D modeling of gas fields and lateral drilling for 26 wells. The deal between the Ukraine unit of the Texas company and UkrGazVydobuvannya, the Naftogaz production company, is designed to unlock 2 billion cubic meters of gas, the equivalent of 13% of UGV’s production last year.

Following Monday’s launch of government bond trading through the Clearstream depository, primary placements of hryvnia government bonds are to be also handled by the international trading platforms Refinitiv and Bloomberg Tradebook by the end of this summer, according to the National Bank of Ukraine. Currently, Ukrainian stock exchanges handle most primary and second trades of Ukrainian government bonds, about 100 billion hryvnias in trades during the first quarter of this year. Interfax-Ukraine reports that Ukraine’s Securities and Stock Market Commission says foreign-based trading platforms need to get permission to handle the trades.

With all air passengers counted for last year, Ukraine stands out as the air traffic leader of the former Soviet Union, ex-Russia. Of the 20 airports handling 1 million passengers of more, five are in Ukraine. Kyiv Boryspil leads the list with 12.6 million. Here is the ranking, in millions of passengers: Kyiv Boryspil — 12.6; Riga – 6.1; Almaty – 5.7; Vilnius – 4.9; Minsk – 4.5; Baku – 4.4; Astana — 4.3; Tbilisi – 3.8; Tallinn and Tashkent – 3; Kyiv Sikorsky – 2.8; Chisinau – 2.8; Yerevan – 2.7; Ashgabat – 2.5; Bishkek – 2; Lviv – 1.6 ; Odesa – 1.4; Dushanbe – 1.3; Kaunas and Kharkiv – 1.

 The European Investment Bank is loaning €200 million for the restoration of key infrastructure in government-controlled parts of Donetsk and Luhansk, Jean-Erik De Zagon, the bank’s Ukraine representative, tells reporters. The government has selected 293 projects totaling €110 million, largely for the repair of hospitals, clinics, schools, kindergartens, and apartment buildings. Loaned at concessional low interest, long term rates, the loan is part of the bank’s total Ukraine loan portfolio of €5.8 billion.

 Veteran bankers from Citibank, ING, EBRD and BNP Group are among the foreigners appointed to supervisory boards of three state-owned banks – Oschadbank, Ukreximbank and PrivatBank. Steven Fisher, formerly Citi’s Ukraine director, and Dominique Menu, formerly of BNP, have been named for Ukreximbank. Sevki Acuner, former EBRD director for Ukraine, and Peter Briggs, formerly of ING Group, go to Oschadbank. For the full list:

 Industrial output unexpectedly jumped by 5.2% y-o-y in April, the biggest increase in over two years, reports the State Statistics Service. The locomotive was construction, growing by 30% y-o-y. While residential construction was almost flat, infrastructure construction was up 45% and commercial was up 41%. Other hot spots identified by Alfa Bank are: food processing up 6.6% y-o-y; steel up 9.9%; machine building up 10.8% and chemical production up 14.7%.

 Kyiv’s tightening office real estate market is prompting Alexander Yaroslavsky’s DCH Group to revive a $50 million business center project at the northern end of Podol’s Mezhyhirska street. With construction planned for next year, the Class A office center would have 40,000 square meters of leasable space. The business center would be a 5-minute drive from Sergei Tigipko’s planned $600 million Rybalsky Peninsula ‘Lipki Island City Resort.’ This complex is to have 36 buildings with 6,200 apartments, 43,500 square meters of office space and 33,300 square meters of retail space.

 Both projects are to benefit from the Podolsko-Voskresensky Bridge which is to open for road traffic next year, according to Kyiv Mayor Vitali Klitschko. Under construction since 1993, the two-level, 7 km bridge is designed to carry 60,000 cars a day between Podol and the Left Bank. “Podolsko-Voskresensky is the largest arched bridge in Europe and will be one of the most durable in terms of loads,” Klitschko writes on Facebook. “It will be equipped with six lanes for automobile traffic and two railway tracks.”

 With a major bottleneck removed for EU-Ukraine rail traffic, the number of freight trains passing through the new Beskyd tunnel was up almost 19% in the first quarter of this year, compared to the same January-March period last year. Since the two-track tunnel opened under a Carpathian mountain ridge one year ago, on May 24, 10,500 freight trains with more than 500,000 cars have passed through, reports Yevhen Kravtsov, CEO of Ukrzaliznytsia.


 The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: