Ukraine Business News, Tuesday, February 19





  • Gas transit through Ukraine fell by 7%
  • Mariupol Cargo Diverted to Kherson and Mykolayiv
  • Fastest Growing Airlines in Ukraine
  • South Korea’s Posco Buys Mykolayiv Grain Terminal
  • M&A up 78%, Foreign Investment up 47%
  • Internet of Things Spreads
  • Roads, Railroads and a New Icebreaker: Ukraine’s €675 Million Wish List for EU Aid to Azov
  • Low Interest Loans to Ease Debt Burden
  • Izmail Airport, Port Dredging, Danube Ferry and New Road Open
  • More Rail Relief for Besieged Mariupol
  • A Boeing Maintenance Hub For Kyiv
  • Kyiv to See Record 6 Shopping Centers Opening in 2019
  • Ukrainians Go Cashless
  • Foxtrot, JYSK, Novus, ATB, and Brocard Expand in 2019
  • Restaurants Groups
  • Developers Shift to Offices, Warehouses

While Russian gas transit through Ukraine fell by 7% last year, it spiked up 26% year-on-year in January, to 7.6 billion cubic meters. Today, about one third of Russia’s gas exports to Europe cross Ukraine. Russian officials say they will not need Ukraine’s gas pipelines in the 2020s. But recent years show they needed Ukraine as a back up when the Nord Stream pipeline had problems. Russia’s 10-year gas transit contract with Ukraine expires at the end of this year. Russian officials say they will renegotiate seriously only after they know who will be Ukraine’s next president.

Posco’s purchase of the big grain terminal under construction in Mykolayiv means “billions of dollars and hundreds of additional jobs” for the Black Sea port, Yuri Budnik, head of the seller, Onexim Group, writes on Facebook. Writing “I don’t have the right to disclose the details of the agreement,” Budnik said negotiations with the South Korean company took two years. The terminal, capable of handling 2.5 million tons of grain a year, is to open in July.

Kherson and Mykolayiv, the two Black Sea ports closest to the Sea of Azov, had the biggest cargo increases of Ukraine’s 10 largest ports in January, the Sea Ports Authority reports. Because of Russian harassment of Ukraine-bound merchant ships, cargo handled by Mariupol in January was down 27% year-on-year. By contrast, cargo handled by Kherson last month was up 27% y-o-y. Cargo handled by Mykolayiv was up 19%. On Monday, EU Foreign Ministers meet in Brussels to discuss sanctioning Russia for its interference in shipping in the Azov.

Turkish Airlines, the busiest foreign airline serving Ukraine, increased its passengers on Ukraine routes by 28%, topping 800,000, the airline’s Ukraine director, Dinser Saychi, tells reporters. With the number of flights up 9%, the average occupancy was 71%.

Wizz Air was the fastest growing airline in Ukraine last year, recording a 73% increase in flights, to 15,251, according to UkSATSE, Ukraine’s air traffic control agency. For the other top five: UIA increased its flights by 8% to 61,691; Turkish up 9% to 29,972; Belavia up 10% to 16,003; and LOT Polish up 24% to 15,813. Ryanair launched flights last fall and was not counted in the year-on-year comparisons.

Kyiv’s train to the plane will expand with trains from Kharkiv and Dnipro going directly to the new rail platform at Boryspil Airport, Roman Wepritsky, regional rail head, tells Channel 5. Last year, Boryspil accounted for 61% of Ukraine’s 20.5 million air passengers. To make airport access easier for Kyiv residents, Ukrzaliznytsia is building a multimodal — rail, metro, bus and car — terminal at Vydubichi, the green line metro station. Launched in December, the airport line is a money maker for the state railroad. Each passenger pays the hryvnia equivalent of $2.85 – 15 times more than the ticket for a comparable suburban train ride.

South Korea’s Posco Daewoo is buying 75% of a 2.5 million ton a year grain export terminal under construction in Mykolayiv. South Korea, a nation of 52 million people, imports almost all its wheat and corn – about 15 million tons. This year, Ukraine is to export 47 million tons of grain. Last year, Choi Jeong-woo took over as Posco chairman and the steel giant on a path to become a global grain trader. Posco became a corporate member of President Poroshenko’s National Investment Council and sent executives to Ukraine on fact finding visits here. In a deal where investment values were not made public, Ukraine’s Orexim Group retains minority ownership of the terminal.

Ukraine increased food exports last year by 5.4%, to $15 billion, according to the Ukrainian Food Export Board. Grains accounted for about half of exports. India was the biggest buyer of Ukrainian farm products — $1.8 billion, largely soy and sunflower oil. China came in second — $1 billion, largely for corn and sunflower oil. The Netherlands came in third — $643 million for chickens, butter and corn. Spain was in fourth place, with Saudi Arabia close behind with $510 million.

Farm exports account for 39% of foreign currency entering Ukraine, Prime Minister Groysman told the Cabinet of Ministers Wednesday. President Poroshenko told the Dragon conference Tuesday that a key challenge for the 2020s is for Ukraine to add value to farm exports by increasing processing.

Mergers and acquisitions increased by 78% in 2018 year over year, to $1.8 billion, KPMG reports in its annual Ukraine M&A Review. The number of deals increased by 19%, to 80. Foreign investment increased by 47% to $508 million in 25 transactions. “The Ukrainian economy is recovering” says the report. Noting the two elections this year, KPMG predicts that foreign investment growth in 2019 will be “modest.” “Ukraine is now on the verge of change,” the report says. “And if reforms continue, the number of mergers and acquisitions will only increase with the growing number of foreign investors considering access to the local market.”

Despite the lack of a farm land market, agriculture attracted the highest portion of foreign investment. Saudi Agriculture and Livestock Investment Company, or SALIC, bought Mriya Agro Holding for a reported $242 million. Switzerland’s Julius Baer paid $73 million for a stake in Kernel Holdings. Japan’s Sumitomo paid $45 million for a controlling 51% stake in Spectrum-Agro and Spectrum Agro-Engineering. Noting last year’s record 70 million ton grain harvest, KPMG says: “International investors are even more closely looking at the Ukrainian agricultural sector.”

Capital investment grew by almost 20% in 2018, Prime Minister Groysman tells the cabinet Wednesday. “957 industrial and industrial facilities were repaired and reconstructed – new products and new jobs.” He says the government’s investment promotion office, UkraineInvest, is facilitating $2 billion in planned foreign investments.

Kyivstar, Ukraine’s largest mobile telephone company, is testing in Kyiv and Odesa its Narrowband Internet of Things network, or NB IoT. After testing with client businesses this month, it plans to launch the network nationwide later this year. This low power next network offers indoor coverage, low cost, long battery life, and high connection densities for items like gas and water meters. ‘Smart’ street lights turn on when it gets dark. ‘Smart’ traffic lights turn red when approaching cars break speed limits. ‘Smart’ water, gas, and sewage lines detect breaks.

Lifecell, Ukraine’s third largest mobile operator, is partnering with IoT Ukraine to launch IoT networks, first in Kyiv and Lviv, later in Dnipro, Kharkiv and Odesa. To cover 90% of Kyiv, the Turkish company is erecting 40 base stations, a network capable of connecting 200,000 sensors. With Kyivgas, lifecell’s IoT network allows the gas company to read thousands of gas meters. Ericsson, which supplies the radio equipment, estimates that, by 2024, four billion devices will be connected to the Internet around the world. Vodafone Ukraine is testing NB IoT Vodaphone technology, a platform used for 77 million connections worldwide.

EU foreign ministers meet Monday in Brussels to discuss aid to Ukraine’s southeast and sanctions on Russia for interfering with merchant shipping in the Azov. With unanimity needed, EU sanctions are expected to be wrist slaps. For aid, Ukraine has drawn up a wish list for improving road and rail access to its Sea of Azov ports, Berdyansk and Mariupol. With the airports of both cities closed, highways and faster trains would speed freight and bring tourists to the coast. Two weeks ago, Viktor Dovhan, Infrastructure vice minister, visited the area with EU officials. Last week, drew up this €675 million list


€7 million to upgrade tracks and signals to increase freight and passenger train capacity by 60% on the 480 km Mariupol-Zaporizhia line.

€15 million for four new GE diesel locomotives and upgrading the locomotive depot at Volnovakha, Donetsk region.


€40 million to complete rebuilding the 224 km Mariupol-Zaporizhia road into a highway. With completion expected next year, half of roadwork is done.

€70 million to complete repairing the 143 km Berdyansk highway north to Vasylivka, on the Dnipro River.

€130 million to complete repairing the 321 km Dnipro-Mykolaiv road. A major artery feeding cargo to the Black Sea, this road takes seven hours to traverse.

€313 million to repair and rebuild the 419 km Mariupol-Berdyansk-Melitopol-Kherson road. Known as the M-14, this is Ukraine’s major east-west road running along the north shore of the Sea of Azov. If rebuilt as a highway, it would allow trucks to take cargo from Mariupol to Kherson port in five hours.


€24 million – a dredging ship dedicated to Ukraine’s Sea of Azov portsν

€16 million – upgrade of navigation safety systems, weirs and sea wallsν

€60 million – a new icebreaker; Ukraine’s only icebreaker, the Kapitan Belousov, was built in 1954.

To escape poverty, Ukraine needs to grow by at least 5% a year, the Prime Minister said. After growing by about 3.3% last year, Ukraine’s GDP growth will slow this year to 2.8%, according to consensus forecasts. Vowing to continue free market reforms, Groysman said: “For us, a priority is the growth of the economy above 5%. This requires investments. In order for investments to come, we need clear rules and guarantees of the security of these investments.”

Interest rates could be lowered later this year if inflation stays on track to end the year at 6.3%, Yakiv Smoli governor of the National Bank of Ukraine, told Dragon. Last month, year-on-year inflation was 9.2%, down from 9.8% in December.

Within two months, Ukraine hopes to win the second tranche of EU €500 million macro financial aid, Finance Minister Oksana Markarova told reporters at Dragon. At the same time, she is negotiating a new loan guarantee with the World Bank and new low interest loans with G7 countries. In December, the World Bank extended a $750 million guarantee, enough for the government to borrow $1 billion at low rates. “Our priority is concessional lending,” Markarova said. She aims to use low interest loans to help Ukraine lower its indebtedness to 50% of GDP by 2021.

Izmail airport, closed for a decade, will reopen, Yuro Dimchoglo, deputy chairman for Odesa Regional Council, tells the Center for Transportation Studies. “We are planning to relaunch the airport,” he said referring to the 1,840 meter concrete strip which handled flights from Kyiv and Istanbul until 2009. This summer, European discount airlines are expected to start flying to Odesa and officials want to develop tourism in Bessarabia. On an Embraer 190 or an Antonov 158, Izmail would be a 45-minute flight from Kyiv, or a 15-minute hop from Odesa, 200 km to the east. While Odesa officials work on lining up the $1 million needed for airport upgrades, they also talk with a local air company, Odesa Aviation, about starting flights.

Ukraine’s long delayed car and truck ferry across the Danube, from Olivka to Isaccea, Romania, should start this summer, Maxim Stepanov, chair of the Odesa Regional Administration, writes on Facebook. He posted photos of Orlivka’s newly completed ferry terminal buildings for passport control and the road ramp to the Danube. On Tuesday, President Poroshenko inaugurated the newly rebuilt European route E47, a road that cuts the Odesa-Orlivka drive time to four hours. But to reach Isaccea – 800 meters across the river – drivers have to make a 2h15, 95 km detour, through Moldova. Ferry service would provide a big shortcut for truckers and tourists.

On the opposite end of the country, in Mariupol, work is underway to ease isolation caused by Russia’s harassment of merchant ships. To remove a rail bottleneck, Ukrzaliznytsia plans to double a final 25 km section of single track on the 480 km Mariupol-Zaporizhia line. This €4.5 million project would allow daily trains to increase from 30 today, to 49 in the future — 42 freight and seven passenger, Viktor Dovhan, deputy infrastructure minister, writes on Obozrevatel news site. Dovhan also said the state railroad might purchase four more GE diesel locomotives to service the line. Separately, Evhen Kravtsov, Ukrazaliznytsia, promises a “completely renovated Kiev-Mariupol night express,” referring to a ride that takes 17 hours.

Driving investment in rail, cargo at Mariupol sea port was down 27% in January, year over year, to 335,000 tons, the port administration reports. By contrast, cargo was down 10% in 2018, over 2017. After Russian harassment of Ukraine-bound ships proved enduring, some shippers reacted by boycotting the port, Ukraine’s largest on the Azov. Far from marginal, Mariupol carried the largest volume of metal exports for Ukraine last year – 4.1 million tons, just over the 4 million from Odesa.

Two Boeing 737-500 jets are undergoing maintenance and painting in Kyiv, a first step toward creating a Boeing maintenance hub next to Sikorsky (Zhuliany) Airport, reports BiznesTsenzor site. Using the same runway as the airport, Kiev’s Civil Aviation Plant 410 plans to expand beyond servicing Antonovs to service 40 Boeings a year by 2024. Ryanair, Europe’s largest carrier, has an all-Boeing 737 fleet. Last November, David O’Brien, the airline’s chief commercial officer, told President Poroshenko that the carrier has a five-year, $1.5 billion investment strategy for Ukraine. It includes basing and maintaining 15 Boeings in Ukraine.

Six new shopping centers, containing a record 400,000 square meters of rentable space, are to open in Kyiv this year, according to the Ukraine Retail Center. This would be eight times the new leasable space of last year and a record for the capital, says Daryna Kulaga, a market analyst for Jones Lang LaSalle Ukraine. Although developers often do not reveal construction costs, the six could total around $350 million.

By June, these Kyiv shopping entertainment centers are to open: Smart Plaza Obolon – 10,000 sq.m; Oasis, Heroes of the Dnipro metro station – 13,200 sq.m; Blockbuster Mall, Stephan Bandera Ave. — 135 000 sq. m; and River Mall, Dnipro Embankment Left Bank –59,682 sq. m.

By September, two more are to open: Ocean Mall, next to Ocean Plaza, Lybidska Metro station — 100,000 sq. m.; and Retroville, on Pravda Ave. — 80 718 sq. m.

In Odesa, Gargarin Plaza is to open by May with 20,000 sq. m.

The overall vacancy rate at Kyiv shopping centers fell to 3.7% at the end of last year, Jones Lang LaSalle reports. This is down from 5.6% at the start of 2018. Annual store rents rose to $1,140 per square meter, almost the level of 2013.

Ukrainians are among the world’s fastest adopters of contactless, cashless payments systems, Inga Andreeva, general director of Mastercard Europe SA, tells reporters. Last year, Ukraine registered the fourth fastest growth rate in the world for taking to this technology, which typically involves waving a smartphone or digital wrist watch in front of a terminal to pay with Google Pay or Apple Pay. Common in the Kyiv metro system, contactless terminals start working this week in the busiest station of Kyiv’s suburban ‘elektrichka’ trains.

With 38% of Ukrainians businesses accepting cashless payments, there is room to grow. The EU average is 60%, Mastercard says. Some businesses resist going to credit cards and contactless because it means paying taxes. But 64% of business managers surveyed by Mastercard say they prefer cashless for its simplicity and potential to boost sales. By last September, according to National Bank of Ukraine estimates, cashless payments accounted for 44% of transaction in Ukraine – a 13% increase since the start of the year.

Foxtrot plans to double online sales this year, to 20%, Valery Makovetsky, chair of the supervisory board of home appliances and electronics chain, tells Interfax-Ukraine. In traditional bricks and mortar, Foxtrot plans to invest $10 million this year reformatting about one third of its 162 stores. Last year, it opened 18 new stores across Ukraine, largely in small cities. Depot Development Group, the umbrella group controlling Foxtrot, also is building or expanding shopping centers in regional cities – Chernihiv, Kriviy Rih, Kropyvnytskyi, and Zaporizhia.

Danish furniture retailer JYSK plans this year “to dynamically expand the network in different regions of Ukraine,Yevhen Ivanytsia, JYSK Ukraine director. tells Interfax-Ukraine. Last year, JYSK expanded its Ukraine store network by one third, to 48. With stores in 20 cities, JYSK expanded into new neighborhoods – with three stores in Khmelnytskiy and five in Odesa.

Novus, the supermarket chain, opened five supermarkets and a 7,000 square meter warehouse last year in Kyiv, the retailer reports. Founded a decade ago, Novus now has 43 stores, 34 of them in Kyiv and Kyiv region. One year ago, the EBRD opened a $25 million credit line to Novus to open more stores and the logistics center.

ATB, the discount shop chain, plans to keep expanding this year, after opening 80 new stores and rebuilding 41 more last year, the Dnipro-based company reports. With 990 outlets, there are ATB stories in 253 cities and towns in 22 regions of Ukraine.

Brocard intends to open 5-7 new perfume and cosmetics stores this year in Ukraine, increasing its network to nearly 100, Brocard-Ukraine LLC tells Interfax-Ukraine. Three stores – for Dnipro, Kharkiv and Lviv – will be in a new compact format: Brocard Niche Bar. Last year, Brocard opened four stores – two in Kyiv and two in Odesa.

Owners of one of Ukraine’s largest restaurant groups plan to open 200 new restaurants by 2021, largely in Ukraine, Oksana Serediuk, co-owner of the chain, tells Interfax-Ukraine. Serediuk and her husband, Taras, operate restaurants under the brands Mafia, Casta, Bao, Nam, Georgia, Brilliant Bar and Yakitoriya. This year, the group plans to double its restaurants in Moldova to six. In Ukraine, six are under preparation, including one in Volnovakha, Donetsk, 15 km west of the front line.

Dmytro Borysov, the Kyiv restaurant entrepreneur, plans to open 100 ‘fast casual’ restaurants in Kyiv this year, he tells the Kyiv Post. According to his surveys, 70-80% of Kyiv residents eating out want to pay no more than $5.25 per person. One of his big hits, Bilyi Nalyv, on Kreschatyk, charges €1 or 29 UAH per menu item. In the last year, he has taken this successful formula to Kharkiv, Lviv, Lutsk and Odesa.

Coca-Cola has launched a €10.5 million production line in Brovary, Kyiv region. Capable of bottling 40,000 bottles an hour, the line expands the Brovary plant capacity to 100 million cases a year.

Ukrainians spend 44% of their income on food and non-alcoholic beverages, according to the latest household survey conducted by the State Statistical Survey. The average household cash income during the third quarter of 2018 was $335. The average household was 2.1 people.

Real estate developers now are moving from residential to offices and warehouses, says Volodymyr Mysak, head of capital markets for the Ukraine office of Cushman & Wakefield. Offices vacancy rates have dropped to 4.9% and monthly rental rates have increased to $29 per square meter. Similarly, warehouse vacancies are at a cyclical low – 3%. Last year, investment in commercial real estate hit $300 million, a 10-year high, he told the Ukrainian Steel Construction conference.


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


Ukraine Business News, Tuesday, February 12





  • Germany’s Used Diesel Cars Flow to Ukraine
  • Banks Make First Profits Since 2013
  • Online Auctions Sell State Properties
  • Make Market For Farmland Rents
  • First New Highrise in a Decade Proposed for Kyiv
  • Boryspil: Europe’s Fastest Growing Airport in its Size in 2018
  • Foreign Exchange Freedom Starts Today
  • Agro Businesses Power Crop Growth
  • Sunflowers Up, Sugar Down
  • Oil & Gas Tenders Advance
  • Central Bank Wants to Cut Inflation in Half This Year
  • Banker Survey: Loans to Grow
  • Foreign Trade Hits $100 billion
  • Food Sales to EU up 50% Since 2016
  • €4.5 Billion to Upgrade Roads, Railroads, Ports and Airports in the 2020s
  • GDP Grew by 3.4% in 2018
  • Dragon and AVentures Invest in Ciklum
  • Retail Up
  • E-Commerce Up More

With diesel bans spreading through Germany cities, 71% of the 51,500 used cars registered in Ukraine last month were diesels. Volkswagen, Opel, Audi and BMW accounted for about half of the imported used cars. Further depressing prices of Germany’s 15 million diesel cars, manufacturers are offering trade in deals, offering new, lower emission for older models. In coming years, diesel bans are expected to take effect for the city centers of Athens, Copenhagen, Paris and Madrid.

After four years of losses, Ukraine’s banks collectively earned a profit last year — $775 million. In 2016, the banks lost $1 billion. Part of the profits came from expansion of retail lending in hryvnia, which increased by about 30%, says Kateryna Rozhkova, first deputy governor of National Bank of Ukraine. Of the nation’s 77 banks, 64 were profitable. The most profitable were banks with foreign capital and PrivatBank. The main losses took place at Russian state capital, which underwent severe restrictions.

Foreign direct investment totaled $2.5 billion last year, reports the National Bank of Ukraine. About $1.5 billion of the total went into the real sector. For an economy the size of Ukraine’s — $125 billion – foreign direct investment should be five times higher, over $12 billion economists say.

Mini-privatizations – the sale of state properties under $9 million – are on track, with auctions selling 187 properties in January. During the rest of 2019, 605 more properties are to go on sale, reports the State Property Fund. Started six months ago, the program has brought $25 million to the state treasury and has released hundreds of properties to the private sector.

Since September, rents for 301 state-owned plots of farmland have been set through electronic auction, reports the Justice Ministry. Using Blockchain technology, OpenMarketLand has been the electronic platform, often serving to set land lease prices in a transparent way. So far, the government has netted $1.1 million through the new leasing system.

After a decade long drought in high rise construction starts in Kyiv, a Ukrainian group wants to build a 100-meter tall hotel and office complex at 107-109 Velyka Vasilkivska, facing the Palace of Ukraine metro station and concert hall. Located midway between St. Nicholas Roman Catholic Cathedral and Ocean Plaza shopping mall, the builders, Ukrzhitlobud, would need a city variance for rising higher than the 27-meter limit on buildings in the historic district. Nashi Groshi news site notes that building permits have been given for ‘hotels’ that end up being apartment buildings. Of the 11 buildings in Kyiv higher than 110 meters, eight are residential. All were built in the 2000s. The last one, No. 1 Obolon Embankment, was completed in 2013.

Kyiv Boryspil’s 19.4% passenger growth rate last year was the highest of any European airport of its class, 10 to 25 million passengers. According to Airports Council International Europe, runners up were: Moscow Vnukovo — +18.4%; Budapest — +13.5%; Warsaw Chopin –+12.8%; and St Petersburg — +12.1%. By comparison, the average growth rate for non-EU European airports last year was +8.3%. Boryspil handled 12.6 million passengers last year. With more growth expected, Boryspil reopens Terminal F in April.

Albania, Greece and Italy are targets for new, scheduled flights from Kyiv. Italy’s Ernest Airlines plan to launch flights this summer from Kyiv Sikorsky to Tirana, Rome and Genoa. (On March 21, it starts flights from Kharkiv to Rome and Milan.) On March 31, Wizz Air starts flights from Kyiv Sikorsky to Athens and Thessaloniki. On the same day, Greece’s Astra Airlines is to launch Kyiv-Athens service on its BAe 146 regional jets. Two days later, on April 2, Ryanair starts flights from Kyiv Boryspil to Athens.

Starting from February 7, foreign currency exchange rules are liberalized in a package of laws drawn up under a guiding philosophy: “Everything that is not directly prohibited is allowed.”

Replacing laws dating back to 1993:

– Currency controls are abolished on transactions up to UAH150,000, currently $5,360.- Individuals

– Ukrainians and foreigners

– will be allowed buy foreign currency online up to UAH 150,000 per day.

– To transfer foreign currency abroad, licenses are abolished and replaced by electronic limits: €50,000 per year for individuals; €2 million per year for companies.

– For foreign individuals, the limits for sending money abroad without having a bank account in Ukraine are increased 10-fold, to UAH150,000, or $5,360.

– Ukrainian companies are allowed free use of accounts in foreign banks, except for transferring funds to their accounts

– The doubling of the deadline to settle export-import operations – to one year.

Most major banks will offer account holders the option to buy foreign currencies online, Oleh Churiy, deputy governor of the National Bank of Ukraine, predicted to reporters Wednesday. “Some already starting Feb. 7. Some maybe later.” Asked if the new laws mean the end of Ukraine’s ubiquitous exchange shops, he said no. “After all, they work not only with the population, but also with the “gray” and “black” markets.”

Starting Friday March 1, the central bank cuts the mandatory amount of foreign currency that businesses must sell for hryvnia to 30% of export earnings, from 50% today, Churiy said. Without specifying dates, he said the Bank will eventually abolish this limit and the limit of on repatriation of dividends. As the first step on dividend repatriation, he said the bank plans to raise the monthly limit to €10 million, from €7 million today.

Olha Trofimtseva has been promoted to Acting Minister of Agrarian Policy and Food, replacing Maxim Martyniuk who was appointed Acting Minister two months ago. Trofimtseva earned a doctorate in agricultural science from Humboldt University of Berlin and worked for a decade for German farm companies and institutions. Fluent in German and English, Trofimtseva became well known to foreign investors after becoming Deputy Agriculture Minister for European Integration in September, 2016.

Farming companies powered last year’s big jump in grain and bean production, the Statistics Service reports. Production by agro businesses increased by nearly 17%. Family farm production was flat. Overall, production rose by 12.7% to a record 70 million tons. Year over year, the big gainers were: corn – up 44% to 36 million tons; barley – up 11% to 7 million tons; rye — up 23% to 400,000 tons; and rice – up 8% to 69,000 tons. The big loser was wheat – down 6% to 25 million tons.

Ukraine increased sunflower production last year by almost 16%, strengthening its lead over Russia as the world’s largest producer of sunflower oil. Production increased to 14.2 million tons, according to the Statistics Service. Other oil seeds also increased: soy – up 14% to 4.5 million tons; and canola up 25% to almost 3 million tons.

The EU may expand its Ukraine import quotas for beef, pork and poultry, Ukraine’s Agrarian Confederation reports, drawing on comments to the Rada Agricultural Committee by Christian Ben Hell, head of Agriculture section of the EU Delegation to Ukraine. Noting that Ukraine’s food exports to Ukraine have increased by one third since 2017, he reportedly said: “We are doing everything possible to enable Ukrainian products to enter the EU markets. In particular, we plan to expand the quotas for the supply of beef, pork, poultry products.”

With $2 billion in American, European and Chinese windpower investment planned for Ukraine’s Azov Sea coast, Troshchenko pitched visiting EU and European Investment Bank officials for financing for a German-made Liebherr LHM 550 mobile harbor crane to unload and store wind turbine blades. Logistics operator Holleman Ukraine is considering building a warehouse at Berdyansk for windpower equipment. Denmark’s Vestas Wind Systems A/S, General Electric Wind Energy and China Machinery Engineering Corporation are already using Berdyansk, the closest port to the three largest wind projects. In the last year, 12 ships with oversized wind turbine cargo docked at Berdyansk.

Tender terms for Ukraine’s first petroleum sharing agreements since 2012 will be released in two weeks, reports Drilling for web site. Companies will have until mid-May to submit applications. The 12 PSAs are expected to be valid for 50 years. To stimulate investment, winners will have to spend $16 to $36 million in the first five year on seismic research and exploration wells. Foreign companies are encouraged to bid.

Separately, the government puts up for auction on March 6, 10 blocks for production under a royalty formula. A second auction, of seven blocks, will be auctioned on April 29. Oleh Kirilyuk, director of Ukraine’s Geological and Mineral Service, described these seven blocks last week in London as “more than 2 thousand square kilometers, {with] the estimated resources of more than 2 billion cubic meters of gas.” By the end of this year, government plans to auction off rights to 30 onshore blocks. Foreign companies can participate through Ukraine subsidiaries.

Determined to cut inflation in half – to 5% next year – Ukraine’s central bank retained its key interest rate at 18%, the highest level in Eastern Europe. The interest rate was hiked by two percentage points last year, contributing to inflation falling to 9.8% in 2018. Economic growth this year will be 2.5%, down from an estimated 3.3% last year, predicts the National Bank of Ukraine. High interest rates contribute to a vicious cycle: with interest rates high, local entrepreneurs can only turn to friends and family for business loans; a lack of good paying jobs prompts labor migration; wage remittances – currently $1 billion a month – fuel demand, pushing up inflation.

Loans and deposits will grow in 2019, Ukrainian bankers tell the central bank in a survey of 61 Ukrainian banks, accounting for 96% of all banking assets in the country. Three quarters of banks surveyed predict growth of corporate loans and 62% of respondents predict growth of consumer loans. Two thirds predict growth in deposits from the public and from businesses. “The value of deposits is the highest in the entire history of observations,” the National Bank of Ukraine said, referring to the quarterly survey. The bankers did not predict a change in interest rates this year.

Ukraine’s foreign trade recovered to $100 billion last year, according to the National Bank of Ukraine. Exports were up 9%, to $43.34 billion, while imports were up by 14%, to $56.3 billion, leaving a trade deficit of $13 billion. For exports, the growth champions in dollars were: grain – up 11%; and metals up 15%. On the import side, the big growth sectors were: energy — up 15%; engineering products –up 18%; food up 18%; and industrial goods – up 21%. With the loss of much of the Donbas industrial area, Ukraine’s foreign trade last year was 28.5% below the 2014 level of $140 billion.

If reelected this spring, President Poroshenko promises to improve the rule of law, allowing Ukraine to become one of the top 50 countries in the world for investors by 2022. Currently, Ukraine ranks in 71st place, out of 190 countries, in the World Bank’s Ease of Doing Business index. In 2014, at the start of his presidency, Ukraine was in 87th place. In an interview with “Ukraine” TV channel. Poroshenko also promised to make Ukraine self-sufficient in energy. The presidential election vote will be March 31, with a second runoff round on April 21.

Ukraine’s food exports to the EU have increased by 50% since 2016, hitting $6.3 billion last year, reports Olha Trofimtseva, Deputy Agriculture Minister for European integration. Last year, the top three products were: grains –$2.2 billion; oil seeds — $1.1 billion; and vegetable oil –$1.1 billion. The top five buyers in the EU were: the Netherlands — $1.2 billion; Spain — $1 billion; Italy — $739 million; Germany –$667 million; and Poland — $657 million.

With food processing growing, Ukraine is moving from “Europe’s breadbasket” to “supermarket of the world,” Trofimtseva tells EURACTIV. She calls for more investment in food processing and agro tech.

The best aid for Ukraine is free trade, argues Ben Aris, editor/founder of bneIntelliNews. “If the West really wants to help Ukraine, it should drop the quotas on imports from the Ukraine – or at least greatly expand them,” he writes. “Business would boom and investment should flow behind very quickly.” Noting that Ukraine’s egg and poultry sector “could largely destroy the industry in Western Europe,” he says: “If quotas are to be lifted it would have to be done in steps.” Noting political realities, he adds: “Relaxing the restrictions on Ukrainian exports to Europe would benefit everyone, except the European agricultural lobby.”

Ukraine’s poultry exports jumped by 30% in dollars last year, hitting $507 million, according to the State Fiscal Service. In volume terms, exports were up 21%, to 329,000 tons. Top buyers were: the Netherlands, Slovakia and Saudi Arabia. Last year, Ukraine rose in the world ranking of chicken exporters to 6th place, overtaking Russia and Canada.

Through 2023, €4.5 billion in low interest loans have been committed to support 39 infrastructure projects to upgrade many of Ukraine’s highways, ports, airports, and railroads to EU standards. Largely designed to speed freight and passengers on east-west lines between Ukraine and the EU and to move export goods to the Black Sea ports, the aid is coordinated by the European Commission and is composed of European Investment Bank and World Bank loans and some grants, Infrastructure Minister Volodymyr Omelyan tells reporters.

The building package includes: 13 highways — €2.15 billion; nine ports — €873 million; nine rail — €851 million; six airports — €470 million; and two river projects — €112 million. Several projects will be open to public-private partnerships.

Ukraine’s GDP grew by 3.4% last year, reports Stepan Kubiv, Minister of Economic Development and Trade. Ukraine’s GDP grew by 2.5% in 2017 and by 2.3% in 2016. The 2018 growth is the highest since 2011, when growth was 5.5%.

Dragon Capital and AVentures Capital have acquired minority stakes in Ciklum, the London-based IT outsourcing company with about 3,000 employees in Kyiv. Andriy Nosok, Dragon’s Managing Director and Co-Head of Private Equity, said: “We believe that ongoing global digital transformation will support increasing demand for IT solutions and services, and that Ciklum is very well positioned to capitalize on this sustainable trend.” Michael Boustridge, Ciklum CEO, said: “This investment will continue to propel Ciklum’s rapid growth in delivering cutting edge technologies to clients around the globe.” All three companies are privately owned and the investment amounts were not made public.

Retail trade in Ukraine increased 6.1% in real terms last year, slightly below the 6.5% increase for 2017. The biggest jumps were in Ukrainian-controlled Luhansk – up 27% — and Donetsk – up 14%. Fueled partly by remittances from Ukrainians working abroad, retail was one of the three pillars of growth last year’s 3.4% growth – led by agriculture – up 8.2%; and construction – up 6.3%. Concorde Capital’s Evgeniya Akhtyrko writes: “We expect real retail to increase 6-7% yoy in 2019. It will be driven by real disposable income growth.”

E-commerce grew by 31% in Ukraine last year, the second fastest rate in Europe, following only Romania’s 37%, according to the Better Regulation Delivery Office, or BRDO, a regulatory advisory body funded by the EU. While growing faster than the world average of 24%, Ukraine has plenty of room to grow, Alexander Kubrakov, BRDO IT director, tells reporters. In 2017, online accounted for 3.2% of retail sales in Ukraine, compared to 8.8% in the EU, 10.2% in the US, 17.8% in Britain. To further promote online sales, the BRDO recommends the government allows online stores to email sales receipts, instead of requiring they issue printed paper receipts.


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


Merry Christmas and a Happy New Year!

Dear Clients, Colleagues & Partner,

The team at HWC wishes you peace, joy, and prosperity throughout the coming year. Thank you for your trust and partnership. We look forward to working with you in the years to come.

We’re so glad to have you as a client and look forward to serving you in the future.

Happy holidays and warm wishes for 2019!

Веселого Різдва і щасливого нового року!

Шановні клієнти, колеги та партнери,

Команда HWC бажає вам миру, радості та процвітання протягом усього наступного року. Дякуємо за вашу довіру та партнерство. Ми з нетерпінням чекаємо на співпрацю з вами у наступному році.

Ми дуже раді, що ви є нашим клієнтом, і будемо раді служити вам у майбутньому.

Щасливих вам свят!  З теплими побажаннями на 2019 рік!


Investing in Ukraine: Success Stories, Trend and Best Practice

On 26th of November 2018, the Ukrainian Circle Vienna and the Ambassador of Ukraine Dr. Alexander Scherba invited to a discussion evening with the title “Investing in Ukraine: Success Stories, Trends, and Best Practice” in the Palais Kaiserhaus in Vienna. A very interesting and multifaceted lecture by Wolfgang Gomernik, partner of DELTA Ukraine, created the right framework for the subsequent bilateral discussions with representatives of companies already investing in Ukraine and interested in Ukraine as a business location. From the perspective of HWC partner Sven Henniger, the event was an all-around success.

Інвестиції в Україну: Історія Успіху, Тенденції та Найкраща Практика

26 листопада 2018 року бізнес-клуб Ukrainian Circle Vienna та Посол України д-р Олександр Щерба запросили на вечір-дискусію під назвою “Інвестиції в Україну: історія успіху, тенденції та найкраща практика” у Палаці Кайзерхауз у Відні. Дуже цікава та багатогранна лекція партнера компанії DELTA Україна Вольфганга Гомерніка створила правильну основу для подальших двосторонніх дискусій з представниками компаній, які вже інвестують в Україну та зацікавлені в Україні як місці розташування бізнесу. З точки зору партнера HWC Свена Хеннігера, ця подія була суцільно успішною.


Updated information on taxes, accounting, and personnel in Ukraine

Henniger Winkelmann Consulting tries to stay up-to-date with all the changes happening in business and, especially, accounting sphere in Ukraine. We want to satisfy all our clients’ necessities and to provide our services on the highest quality level. Thus, we decided to update most of our brochures on the web-site to share new and useful information. The brochures contain information on topics such as Tax Payer, HR, Payroll, Residence & Work Permit, Tax & Accounting Issues, Renewable Energy, Agribusiness, IT R&D center and others.

Оновлена інформація з питань податків, обліку та персоналу в Україні

Хеннігер Вінкельманн Консалтинг намагається бути в курсі всіх змін, що відбуваються в бізнесі та, зокрема, в бухгалтерській сфері в Україні. Ми хочемо задовольнити всі потреби наших клієнтів і надавати наші послуги на найвищому рівні. Таким чином, ми вирішили оновити велику кількість наших брошур на веб-сайті, щоб поділитися з вами новою та корисною інформацією. Брошури надають інформацію з податкових питань, HR, розрахунку заробітної плати, дозволу на проживання та роботу, проблем податкової та бухгалтерської звітності, відновлювальної енергії, агробізнесу, центру інформаційних технологій та інших питань.


Going Global, 14 & 15 Nov. 2018, ExCel London

Despite economic political and social challenges across the Globe, expansion overseas remains high on the UK business agenda. But for any company looking to enter international markets – including Ukraine, getting to grips with payroll, accounting, business set up, documentation, staffing regulations, taxation and navigation of the business world in a foreign language can be daunting. HWC with partner Sven Henniger took part at this event with 3.000 visitors to provide guidance, understanding in possible opportunities, and confidence to prepare for and successfully overcome the nuance of conducting business in Ukraine.

Going Global, 14 & 15 Лист. 2018, ExCel London

Незважаючи на економічні, політичні та соціальні проблеми на земному глобусі, експансія за кордоном залишається у порядку денному у Великобританії. Але для будь-якої компанії, яка прагне вийти на міжнародні ринки, включаючи Україну, залучення до заробітної плати, бухгалтерського обліку, створення бізнесу, документації, штатного розкладу, оподаткування та навігації діловим світом на іноземній мові може бути складним. HWC разом зі своїм партнером Свеном Хеннігером взяла участь у цьому заході з 3000 відвідувачами, щоб забезпечити керівництво, розуміння своїх можливостей та впевненість у підготовці та успішному подоланні нюансів ведення бізнесу в Україні.


Upper Austria Export Day, Linz, November 12th, 2018

Upper Austrian goods exports will increase by 6.8% to € 39 billion in 2018, representing 25.8% of Austria’s total export volume. The Upper Austrian Export Day 2018 was organized by the Export Center Upper Austria and a part of the go-international internationalization initiative. The Upper Austrian Export Industry met with 40 business delegates from all over the world for the exchange of experience among others also about Ukraine. HWC Partner Sven Henniger held interesting and promising talks with existing customers and partners as well as companies interested in Ukraine. The Upper Austria Export Day 2018 is a knowledge and networking platform for entrepreneurs and traditionally THE meeting place of the domestic export industry. It provides a comprehensive overview of all export issues and highlights new business, export and collaboration opportunities.

День експорту Верхньої Австрії, м. Лінц, 12 листопада 2018 року

Експорт товару з Верхньої Австрії збільшиться на 6,8% до 39 млрд. євро в 2018 році, що становить 25,8% загального обсягу експорту Австрії. День експорту Верхньої Австрії 2018 року був організований Експортним центром Верхньої Австрії в рамках ініціативи міжнародної інтернаціоналізації. Верхня австрійська експортна промисловість зустрілася з 40 делегатами бізнесу з усього світу для обміну досвідом, також на тему України. Партнер HWC Свен Хеннігер провів цікаві та перспективні переговори з існуючими клієнтами та партнерами, а також компаніями, які цікавляться Україною. День експорту Верхньої Австрії 2018 року – це знання та мережева платформа для підприємців, та традиційне місце зустрічі внутрішньої експортної галузі. Він надає повний огляд усіх питань експорту та висвітлює нові можливості для бізнесу, експорту та співпраці.


Internship experience by Ostap

My experience at HWC revealed to be a great opportunity to learn about business strategies and more about Ukraine, that is something that I will carry with me for a long period of time. Currently, I’m a Double Degree Student in Economics and Finance between the University of Federico II of Naples and Católica Lisbon School of Business & Economics. During the winter I’ve been concerned about finding an internship that could provide me general knowledge about what I am studying and provide the opportunity to get to know better my own country that is Ukraine. While doing online research on consulting companies in Ukraine, HWC was the company that got my attention. I emailed the company to get a bit more information, and after a simple skype interview, I’ve got the spot for an internship for the period between 18 of June and 24 of August.

It revealed to be a winning strategy. During this period, I’ve been working on several projects, from designing and writing the company presentation to creating and renewing bureaucratic documentation, from working on a pro-bono case for a potential expansion of a foreign company on the Ukrainian territory to writing new brochures with Ukrainian regulations in collaboration with the accountant team, and many other activities. The team is amazing, I’ve integrated with it in a very short period of time and had no problem of communications in expressing my concerns and doubts for which I’ve always got help and clear answers. Another big advantage of this experience is the attention I’ve been given by Thomas Winkelmann and, even if on distance, by Sven Henniger. Skype calls, meetings, discussions, suggestions and constant help from all the team made me think about many things and how they could be improved.

Summarizing it’s been a fantastic experience where I earned not only knowledge about technical things but also friends and colleagues for whatever is going to be my future career.

Відгук про стажування від Остапа 

Мій досвід в HWC дав мені відмінну можливість дізнатися про різні бізнес-стратегії і в загалі про Україну, і все це я буду носити з собою протягом тривалого періоду часу. На данний момент я студент в магістерській програмі з подвійною ступенем по економіці і фінансам між Університетом Federico II з Неаполя і Católica Lisbon School of Business & Economics. Взимку 2017 я цікавився як знайти стажування, яке могло б дати мені загальні знання про те, що я вивчаю, і надати можливість краще пізнати мою власну країну, якою є Україна. Шукаючи онлайн консалтингові компаній в Україні одна з них привернула мою увагу – HWC. Я зв’язався з компанією, щоб отримати трохи більше інформації. Після простого інтерв’ю у Скайпі, я отримав місце для стажування на період між 18 червня по 24 серпня.

Протягом цього часу я працював над різними завданнями: від проектування і написання презентації компанії до створення та оновлення бюрократичної документації, від роботи над проектом для потенційного розширення іноземної компанії на території України до написання нових брошур про українське законодавство у співпраці з командою бухгалтерів, і багато інших завдань. Команда приголомшлива, я дуже швидко інтегрувався і не відчував проблем в спілкуванні, висловлюючи свої думки і сумніви, на які у мене завжди була допомога і ясні відповіді. Ще один з великих плюсів цього досвіду є увага, яку я отримав від Томаса Вінкельманна і, навіть якщо дистанційно, від Свена Хеннігера. Скайп дзвінки, зустрічі, обговорення, пропозиції і постійна допомога всієї команди змушували мене замислюватися над багатьма речами і над тим, як їх можна поліпшити.

Підводячи підсумок, це був фантастичний досвід, де я заробив не тільки знання про технічні речі, але і знайшов хороших друзів і колег якою б не була моя майбутня кар’єра.


Event for children of the rehabilitation center

On October 20, took place another HWC-organized event for the children of the Rehabilitation Centre. Dr. Thomas Winkelmann (Managing Partner of HWC), who is an active scuba diver, showed self-made underwater videos and told about the history of diving. Children admired images of colourful fish, turtles, corals, sharks, sunken ships and much more. They could not see enough of the pictures and asked lots of questions. During the subsequent tea drinking with cupcakes, the children were given many fluffy toys as a surprise. Due to the children’s enthusiasm, the next film event has already been agreed for the 31st of October.

Подія для дітей реабілітаційного центру

20 жовтня відбулася чергова подія для дітей реабілітаційного центру, організована HWC. Др. Томас Вінкельман (керуючий партнер HWC), який є активним дайвером, показав саморобні підводні відеоролики та розповів про історію дайвінгу. Діти були захоплені зображеннями барвистих риб, черепах, коралів, акул, затонулих кораблів та набагато більшим. Вони не могли надивитися на світлини і задавали багато запитань. Під час подальшого чаювання з кексами дітям були презентовані пухнасті іграшки як сюрприз. Завдяки дитячому ентузіазму, на 31 жовтня вже було узгоджено проведення дитячого кінопоказу.


Swiss Business Mission to Ukraine

The Embassy of Switzerland in Ukraine together with their Swiss partners Switzerland Global Enterprise (S-GE), Joint Chamber of Commerce (JCC) and Économiesuisse invited from 30th of September till 2nd of October 2018 well known Swiss companies to Ukraine.

The Business Mission provided an excellent opportunity to learn more about the increasing market potential in different industries as well as investment opportunities in Ukraine.

During this Business Mission to Ukraine, Henniger Winkelmann Consulting Partner Dipl.-Kfm. Sven Henniger provided a presentation „Starting large projects with small steps“ which covered, in general, all outsourcing opportunities which foreign Investors are able to use, depending on their business need – starting from BPO in Ukraine, Shared Service Center, IT Outsourcing to Production in Ukraine.

For any further question in this regard, please don’t hesitate to contact us.

Швейцарська бізнес місія до України

Посольство Швейцарії в Україні спільно з швейцарськими партнерами, Швейцарським Глобальним Підприємством (S-GE), Об’єднаною Торговою Палатою (JCC) та Économiesuisse, запросили з 30 вересня по 2 жовтня 2018 р. відомі швейцарські компанії до України.

Бізнес-місія дала чудову можливість більше дізнатись про зростаючий ринковий потенціал різних галузей, а також інвестиційні можливості в Україні.

Під час цієї ділової місії в Україні, партнер Henniger Winkelmann Consulting Dipl.-Kfm. Свен Хеннігер представив презентацію „Starting large projects with small steps“, яка охоплювала в цілому всі можливості, які можуть використовувати іноземні інвестори в залежності від їхньої бізнес-потреби – починаючи з аутсорсингу бізнес-процесів в Україні, Спільного Центру Обслуговування, ІТ-аутсорсингу до виробництва в Україні.

Для подальших питань щодо цього звертайтеся до нас.