- Ukraine’s Comeback: 5% GDP Growth This Year
- Sinking State Grain Corp. Blames It All on Foreign Cleanup Man
- China May Take the Motor Sich Hit – and Move On
- Kolomoisky Strikes Out in Courts: 0-3
- Saakashvili: Putin Planned to Invest $1.5 Billion in Ukrainian TV
Dragon Capital predicts Ukraine’s GDP will grow this year by 5.3%, Tomas Fiala, the investment bank’s CEO, said at the European Business Association. This would bring the GDP to $171 billion, “a figure comparable to 2013, although we have lost part of the country and part of the economy,” Fiala said, referring to Russia’s 2014 occupation of Crimea and half of the Donbas. Fiala, who also is EBA president, predicted the exchange rate will end this year where it started – 28 hryvnia to the dollar.
In the last quarter of 2020, Ukraine’s economy returned to pre-crisis levels, the same level as in Q4 2019, he said. “We expect that last year’s GDP fell by only 4%,” Fiala said. “This is one of the best results in Europe. Only Poland fell a little less.”
Facing default this July on a $1.5 billion loan from China, the management of Ukraine’s State Food and Grain Corporation has denounced that the British-American manager overpaid salaries during four months when he ran the state company last winter. The State Security Service agents served Simon Cherniavsky with papers from the State Fiscal Police charging him with embezzling the hryvnia equivalent of $321,000 in salaries paid to 18 outside staffers bought in to clean up the scandal-ridden state company. Cherniavsky, who engineered the 2017-2018 $1.1 billion restructuring of Mriya Agro Holding, resigned from the Grain Corporation last April, following the resignations of Prime Minister Honcharuk and Economy Minister Milovanov.
China and Ukraine should compartmentalize their economic relationship, not allowing President Zelenskiy’s sanctions on Chinese companies investing in Motor Sich to poison wider bilateral trade and investment ties, argues Zhao Huirong, a guest writer in China Daily, owned by the Chinese Communist Party. “The sanctions are targeted only at the companies involved in the [aircraft engine] deal, not at those engaged in joint Sino-Ukrainian projects,” writes Zhao, an Eastern Europe research fellow at the Chinese Academy of Social Sciences. “Zelenskiy doesn’t want to harm Sino-Ukrainian relations and instead seeks to forge deeper commercial ties with China.” However, he warns Motor Sich sanctions “have reduced the chances of a substantial increase in Chinese investment in Ukraine and prompted potential investors to consider the political risks in the country before investing.”
Ukraine plans to launch it‘s latest remote sensing satellite, Sich 2-30, into Earth orbit by the end of this year, Strategic Industries Minister Oleh Urusky told a recent meeting of spacecraft developers and customers of satellite services. Built by Yuzmash, the first satellite of the Sich family was placed into orbit in 2004 from a rocket launched from Russia. Urusky did not say what company or country would handle the launching. Reporting on the satellite plan, China‘s news agency Xinhua noted that Ukraine’s Cabinet of Ministers approved last month a 5-year, $1 billion space program.
In the latest of three court setbacks for Ihor Kolomoisky, a 6-year, $6 billion claim by Kolomoisky and his partners against Ukraine ended after the Arbitration Institute of the Stockholm Chamber of Commerce declared it had no jurisdiction in the case. “SUPER MEGA WIN!!!!!!!!!!!! in Stockholm arbitration,” Ukraine’s Justice Minister Denys Maliuska wrote on Facebook. “After almost six years of trial, the arbitration was denied them – denied completely.”
Separately, in London, an English judge ordered Kolomoisky and his business partner Gennadiy Bogolyubov to pay PrivatBank £1 million in addition to an existing court-ordered payment of £11 million. Two weeks ago, in Kyiv, the Court of Appeal rejected a lower court ruling in Kolomoisky’s defamation suit against Anders Aslund, the Swedish-American economist. Lawyers for Asters successfully argued the Aslund’s statements about Kolomoisky’s involvement in the $5.5 billion bankruptcy of PrivatBank were an exercise of protected free speech.
Defending his decision to close three pro-Kremlin TV channels, President Zelenskiy has met with managers of other major TV stations and with ambassadors of the G-7 nations. In both cases, the President said Russian state money funded the stations. “The President noted the sanctions decision was based on proof that the funding came from Russia and the targeted TV channels cooperated with terrorist organizations,” reported Zelenskiy’s website.
Zelenskiy acted as Russian President Putin planned more investment in Ukraine’s media, Mikheil Saakashvili, the former president of Georgia, wrote in an essay for the Kyiv Post: “Zelenskiy’s courage to stand up to Medvedchuk should be applauded.” “It is well-known that Putin had allocated one and a half billion dollars to Medvedchuk for his pro-Russia media hypnosis,” writes Saakashvili who chairs Ukraine’s National Reform Council. “And they were also planning to take over ICTV Holding.” Owned by Viktor Pinchuk, ICTV is Ukraine’s fourth most watched channel.
The closing of the three stations was appealed to the Supreme Court. A Presidential decree cannot be stayed until a higher court, the High Administrative Court, hears the case. Viktor Medvedchuk, the reputed shadow owner of the stations, complained: “With one stroke of a pen, Zelenskiy threw out 1,500 journalists and other employees of the three stations into the street and deprived millions of people of the right to receive objective information.” Medvedchuk’s party, the Opposition Platform – For Life, started impeachment proceedings in the Rada against Zelenskiy. The party has only 10% of the seats in parliament.
- Zelenskiy Closes 3 Pro-Russia TV Stations, Clips Wings of Their Owners
- Moves Ally Zelenskiy With Biden
- EIB Increased New Investment in Ukraine by 50% to €1 Billion
- Govt Real Estate, Surplus Prisons to Go to Business
- UIA Refunds Passengers $26 Million For Covid Cancellations
In a decisive move to ally firmly with the new Biden Administration, President Zelenskiy closed three pro-Russian TV stations, imposing 5-year sanctions on the stations and their legal owner, Rada MP Taras Kozak. Ukraine’s National Security and Defense Council alleged that Kozak funded the stations through sales of coal from Russia-controlled Donbas, an act the Council classified as ‘funding terrorism.’
Media reports allege the three stations lose $1.5 million a month and the real source of funds is the Kremlin. Most TV stations lose money in Ukraine and are subsidized to promote the political groups, of major businessmen, or oligarchs. The stations – 112 Ukraine, NewsOne and ZIK – had a total audience share of only 5%. But their news stations had higher ratings. After the stations continued streaming through YouTube, Oleksandr Tkachenko, Minister of Culture and Information Policy, asked YouTube to cut them off.
Regional TV stations will be vetted for pro-Russian content and possible closures, Oleksiy Danilov, secretary of the Defense Council, warned at a briefing aired by Ukraine 24 TV. “The state will be tough because we’re in an extremely difficult situation today,” he said. “We’re at war. Everyone needs to realize and understand this.”
Also sanctioned are the two private jet companies used by Kozak and Victor Medvedchuk, leader of the pro-Russia Opposition Platform For Life, in their flights from Ukraine to Moscow and Russia-controlled Crimea. Medvedchuk, a friend of Russian President Vladimir Putin, is widely seen as the real owner of the three TV stations. The 44-member, Opposition Platform accused Zelenskiy of censorship, called him a ‘fascist devil,’ and voted to impeach him. In the 424-seat chamber, that move is expected to go nowhere.
The US Embassy applauded the move, saying: “The United States supports Ukraine’s efforts to counter Russia’s malign influence, in line with Ukrainian law, in defense of its sovereignty and territorial integrity. We must all work together to prevent disinformation from being deployed as a weapon in an information war against sovereign states.”
The EU was more cautious, with the office of foreign policy chief Josep Borrell, saying: “This should not come at the expense of freedom of media and must be done in full respect of fundamental rights and freedoms and following international standards.”
Timothy Ash writes from London: “It was notable over the past 24 hours that President Zelenskiy went after Russian interests in Ukraine…Don’t think that Zelenskiy did this off the hoof. This was clearly in coordination, perhaps at the behest of the US. Zelenskiy is simply not strong enough to take on these interests without US backing.”
The European Investment Bank increased its new investments in Ukraine last year by 50% yoy, to more than €1 billion, bringing total EIB investment in Ukraine to €7.5 billion, Jean-Erik de Zagon, the bank’s resident representative for Ukraine, told reporters. Bank Vice-President Teresa Czerwińska said Ukraine now receives 60% of EIB money destined for the Eastern Neighborhood, a group of 16 countries to the east and the south of the EU. She said: “We delivered record investment of over €1 billion in Ukraine in 2020, focusing our operations on support for conflict-affected regions of eastern Ukraine, sustainable and green infrastructure, digitalization, innovation and business recovery after COVID-19.”
- €340 million to eastern Ukraine to improve water supplies and to rehabilitate kindergartens, schools, hospitals, office buildings
- €100 million to repair and rebuild 183 km roads in Kyiv-controlled Luhansk
- €300 million to improve the energy efficiency of 1,000 public buildings
- €200 million to buy trams, trolleybuses, and electric buses in 20 cities
- €50 million to build a 4-building, 70,000 square meter Ukrainian Innovation Campus at Kyiv’s UNIT.City.
- €30 million euros to digitalize Ukrposhta, building new sorting hubs and depots for the national postal operator.
- Loans to 75 small and medium sized companies hit by the corona pandemic, helping to save an estimated 18,500 jobs.
For this year, the EIB has agreed to repurpose €50 million from an existing facility to finance buying corona vaccines for Ukraine. The Cabinet of Ministers approved taking a €270 million loan for Boryspil International Airport. The money is to go to replacing the 40-year-old main runway, and adding new lights, de-icing facilities and an emergency rescue station. The EIB also is discussing with the government a major loan to improve rural drinking water across the country, reported the government portal.
Last month, a record 14 Chinese container trains rolled across Ukraine, reports Ukrzaliznytsia. The top destinations were: Poland – 7; Hungary – 6; Slovakia – 1. Two container trains from China finished their 2-week trip at UZ’s logistics center in Liski, on the left bank of Kyiv.
Kyiv’s tourism tax collections nearly dropped in half last year, falling to $1.2 million, according to the State Tax Service. Never a major source of revenue, the tax is a good barometer of tourism activity.
In a potential boon for Ukrainian IT startups, unused university real estate may be privatized three years of abandonment, according to a bill that has won preliminary approval of the Rada. In the US, several IT hubs, including California’s Silicon Valley and Boston’s Route 128 ‘Technology Corridor’, grew up around universities strong in science and engineering.
Leases to rent more than 2 million square meters of vacant government real estate across Ukraine will come up for online auction, the State Property Fund reports. In the first year of online auctions, 991 leases were sold and rents averaged 54% higher, says Leonid Antonenko, first deputy chair of the Fund. In coming weeks, 621 more leases will come up for auction. As leases expire, terms on about 10,000 more will be decided through public auctions.
The sale of prisons will start this month, Justice Minister Denis Malyuska tells Ukrainian Radio. This year, four abandoned prisons are to be sold through ProZorro.Sale, the online auction house. Over the last decade, Ukraine’s prison population had gradually reduced to 50,000. Reasons include: a declining population of young men, government policies to promote releases on parole, and a reluctance to incarcerate white collar criminals.
During the first 10 months of Covid controls, UIA has paid passengers back $26.5 million for flights affected by the pandemic. During this April-January period, “the airline has considered more than 101,000 passenger appeals,” UIA said in a press statement. The airline said Covid controls cut its 2020 passenger volume to 15% the level of 2019. Short staffed, the airline has augmented its online “Manage my Booking” service.
- Farming Profits Jumped 48% Last Year
- Grain Exports Slumped
- Central Bank Chief Predicts $5.6 billion in IMF Loans, Bond Sales This Year
- Foreign Investment Plunges in Solar and Wind
- Great Big Sucking Sound: Hungary’s Dream of Pulling China’s Container Trains Through Ukraine
Farming profits jumped 48% yoy, to $2.1 billion last year, according to the Agrarian Economics Institute. Boosting the sector, profits from crop production grew by 55%. Livestock production was down. Winners were: sunflower producers – profits were $753 million; wheat – $678 million; corn – $425 million; canola – $235 million; and milk – $135 million. From 2016-2018, farming profits averaged $2.6 billion. Losers were: egg producers down $175 million; cattle – $50 million; pigs – $25 million; and chickens down $12.5 million.
Grain exports are down 21% yoy, for the first seven months of the marketing year, reports the Ministry of Agriculture. Due to a poor corn harvest, wheat displaced corn as Ukraine’s top export. For the latest July 1 – February 1 period, the top three export grains are: wheat – down 18%, to 13 million tons; corn – down 30%, to 11.4 million tons; and barley – unchanged at 3.9 million tons.
Due to higher commodity prices, grain exports were down 53% yoy in January, but export earnings were down only 41%, reports the Ukrainian Agricultural Business Club. Halfway through the marketing year, Ukraine has used up three quarters of its self-imposed 17.5-million-ton wheat export quota. Due to the poor harvest, this year’s export quota is 15% below the 2019/2020 quota.
This year, Ukraine expects to issue $2.4 billion worth of Eurobonds, to receive $2.2 billion in IMF loans and to receive $1 billion in net new foreign investment in the government bond market, Kyrylo Shevchenko, governor of the National Bank of Ukraine, told Reuters. He said talks with the IMF continue and that the Rada may need to pass draft laws as conditions for more loans. On foreign purchases of Ukrainian bonds, he said: “There is a new optimism in international markets…We hope that this optimism will not bypass Ukraine.”
Timothy Ash writes from London: “I love the optimism – but expecting three tranches this year? Good luck with that…They are good at talking their book, and I guess keeping the Eurobond market warm. As long as they keep the IMF engaged and don’t screw up too much in the policy/ political front with global markets remaining very liquid then the Eurobond market should remain open and relatively cheap for issuers like Ukraine.”
The Finance Ministry lowered its average bond yield by 33 basis points, to 11.4%, in its weekly auction, the Ministry posts on Facebook. Selling the hryvnia equivalent of $189 million, the Finance Ministry sold: 3-month bonds at 9.29%; 2-year bonds at 11.88%; and 3-year bonds at 12.15 %.
Aiming to cut nonperforming loans in half by 2023, Ukraine is speaking with the IMF about creating a special financial court to settle bank loan disputes, Central Bank Governor Shevchenko told Reuters. The portion of bank loans judged non-performing is 42%. “That is why we are now discussing the option of creating a specialized court or chamber of the court in Ukraine, which will consider issues between creditors and borrowers, as well as between investors and recipients of investments,” he said.
Zaporizhia’s Semiconductor Plant, once Ukraine’s largest producer of silicon components for electronic and solar energy, goes up for auction this month on ProZorro. Six years after bankruptcy proceedings started, Ukreximbank is selling the plant and equipment. Bids can be submitted until February 17 the bank said. The sale is expected to net around $17 million.
Foreign investment in solar and wind power dropped last year to €1.2 billion, one third the €3.7 billion of 2019, reported the State Energy Efficiency Agency. In 2019, investors from a dozen countries commissioned 4.5 gigawatts of renewables, racing to commission projects in time to win high green tariffs. But one year ago, the government started to fall behind on payments, running up an overdue bill now near $1 billion. Carryover projects accounted for most of the 2020 investment. Today, there are only a handful of new projects as investors wait for the government to honor its promise last summer to pay the bills.
With the payment delays and lowered rates, executives of the biggest US wind investment, EuroCape Energy, are talking to lawyers specialized in political risk insurance, two other foreign investors in wind energy tell the UBN. In 2019, the US Overseas Private Investment Corporation, now called the International Development Finance Corporation, provided a $150 million loan for the first phase of what was to be a 500 mw Zaporizhia Wind Farm. With 100 mw commissioned, the lowered rates undermine the project’s profitability. Invoking the political risk insurance clause would probably freeze new DFC lending to Ukraine.
DTEK Kyiv Grids, formerly known as Kyivoblenergo, plans to invest $23 million in 2021 to upgrade the capital’s electricity infrastructure, the company reports. The investment – a 35% increase over the level of recent years – will go for reconstructing substations, replacing overhead lines, as well as developing a system of ‘smart grids’ and introducing modern customer service featuring an online portal and chatbots.
Designed to draw Chinese container train traffic through Ukraine, a road-rail intermodal container terminal now under construction near the Hungary-Ukraine border will have the capacity to handle 1 million containers a year. This would be more than double the number of containers that moved on UZ tracks in all of Ukraine last year. “The implementation of this project will lead to a very significant increase in traffic and revenue for Ukraine,” Janos Taloshi, CEO of East-West Gate, tells the Center for Transportation Strategies. After the project opens, the company plans to invest in infrastructure in Ukraine.
One year from now, East-West is to open with an initial capacity of 300,000 containers. The terminal is located 25 km south of Chop, Zakarpattia, in Fényeslitke, Hungary, a city where Soviet broad gauge tracks end at a terminus parallel to European narrow-gauge tracks. In coming years, Hungary plans to build a rail bypass around Budapest, a construction project that will allow East-West to work at full capacity. The chairman of East-West is Ruslan Rakhimkulov, a member of one of Russia’s wealthiest families. This is expected to overcome Russian Railways’ traditional reluctance to send Chinese container trains across Ukraine.
After Ukraine imposed sanctions on Chinese companies seeking to assert control of Motor Sich, the aircraft engine maker, Wang Wenbin, spokesman for China’s Foreign Ministry, said at a regular press briefing: “We noted relevant reports. China as always opposes unilateral sanctions on Chinese enterprises by foreign governments…We hope the Ukrainian side will uphold the legal rights and interests of Chinese enterprises and investors.”
- Foreign Trade Deficit Plummets
- Central Bank: Ukraine’s Economy Recovering Faster than expected
- Firefly Seeks to Raise $350 million For Bigger Rockets
- Hungary Loans €50 million for Cross Border Roads and Bridges
- Vinnytsia airport: Built to Handle Half a Million Passengers
Ukraine deficit in foreign trade in goods and services plummeted by 86%, to $1.7 billion last year, down from $12.1 billion in 2019, reports the National Bank of Ukraine. Ukraine’s deficit of foreign trade in goods dropped by more than half last year, to $6.1 billion, from $14.7 billion. By contrast, Ukraine’s surplus of foreign trade in services more than doubled, to $4.6 billion, from $1.75 billion.
“Ukraine’s economy also is recovering faster than anticipated,” according to official notes of the July 20 meeting of the central bank’s Monetary Policy Committee. The 10-member committee predicted: “The economy this year is expected to regain almost all of the ground it has lost to the coronavirus crisis.” With foreign investment flows returning to Ukraine’s bond market, one committee member predicted: “The 2019 scenario where foreign capital flooded the Ukrainian economy is likely to repeat itself.”
Firefly Aerospace Inc, a US rocket and space company, with deep Ukrainian roots, plans to raise $350 million to scale up production and work on a medium-class launch vehicle, Space News reports from Washington. “In the next five years we want to take Firefly from a $1 billion company when we go out and fly Alpha,” Firefly’s CEO Tom Markusic, told an IPO webinar. By developing Beta, a medium-class launch vehicle, Firefly aims in five years to become “a $10 billion company.” Owned by Ukrainian-American entrepreneur Max Polyakov and his investment fund, Noosphere Ventures, Firefly hopes to launch its Alpha rocket this spring from Vandenberg Air Force Base in California.
President Zelenskiy flatly rules out allowing Chinese companies to buy Motor Sich, Ukraine’s giant aircraft engine manufacturer. “We do not have the right to sell a controlling stake in the management of strategic defense enterprises of Ukraine to any country,” he told an Axios interviewer in Kyiv on Jan. 23. Asked if China would be allowed to buy the company, he responded: “Never, at least under my presidency… During my presidency, this will not be the case.”
Hungary has confirmed that it will loan €50 million to Ukravtodor to rebuild two bridges over the river border with Ukraine and a 10 km stretch of highway to better connect Hungarian and Ukrainian highway systems. While Hungary builds the last 26 km of a 307 km four lane divided highway from Budapest to the Ukrainian border, Hungarian money will finance a northern prolongation over the Tisa River and around Berehove to connect with Ukraine’s M-24. Traffic planners predict this extension could handle 12,000 cars and trucks a day.
About 50 km upriver, to the west, Hungarian money will finance a rebuilding of the road bridge over the Tisa at Chop, currently the busiest crossing point. Hungary first offered the loan to Ukraine’s state highway agency several years ago. The money was unlocked by last week’s visit to Kyiv of Péter Szijjártó, Hungary’s Minister of Foreign Affairs and Trade. Zakarpattia is the homeland of Ukraine’s Hungarian-speaking minority.
Private international construction companies will be invited to participate shortly in tenders to rebuild and maintain six highway segments in Ukraine, the Infrastructure Ministry reports. These first ‘public private’ highway partnerships were selected to have a maximum impact, Minister Vladyslav Krikliy noted, adding: “These highways connect 10 regions of Ukraine, where more than 12 million people live.”
The highways will not have tolls. The state will gradually repay private road companies for the work and maintenance through 20- or 30-year contracts. The forecast amount of total investment is around $1.7 billion. Experts from the World Bank and the International Finance Corporation drew on international experience to help design the PPP program.
Lemtrans, Ukraine’s largest freight wagon operator, increased its cargo last year by 23% yoy, Vladimir Mezentsev, the company’s general director, tells Interfax-Ukraine. With world iron prices jumping, Lemtrans carried 25 million tons of iron ore, 49% more than last year. The company, ranked by Forbes as one of Ukraine’s top 100 by size, wants to run private freight trains to the Black Sea ports. In a pilot program, Ukzaliznytsia has granted a provisional license last fall to a small Lviv freight hauler.
A second IKEA store in Kyiv will open this fall with the opening of Ocean Mall, developer Vagiv Aliyev said on the occasion of the opening the Ukraine’s first IKEA in his Blockbuster Mall. Due to coronavirus controls, visitors enter the new IKEA through a reservation system that sends an SMS to a mobile phone. Only 500 customers are allowed at one time at the new 5,000 square meter store. Mayor Klitschko welcomed the opening saying: “This is the positive signal needed to attract other international investors.”
As work starts this month on a 3-year, $57 million rebuilding of Vinnytsia airport and runway, designers expect it will become a major airport for central Ukraine, handling 500,000 passengers a year, 10 times the 2019 volume. “The service area of Vinnytsia airport is more than 6 million residents of the regions,” Kirill Khomyakov, head of Ukrinfraproekt, the state infrastructure construction agency. “Modernization of the airport will create new jobs, increase tourism potential and contribute to the region’s economy.” Wizz Air has talked to city authorities about launching flights from Vinnytsia to Berlin, Budapest, Vienna and Warsaw.
To draw factories to Vinnytsia’s 35-hectare Industrial Park, the park managers are offering free electricity hookups. This is made possible by Kness Group, a Vinnytsia-based company that is investing $10 million to building a dedicated energy supply system for the park.
- Ze Sides with Biden on Motor Sich, SBU Agents Break up Chinese ‘Shareholders Meeting’
- Ukraine’s First IKEA Opened in Kyiv
- Epicenter, Foxtrot Report Strong Retail Growth
- Sheraton Plans to Open in Kyiv By Year End
- Kyiv Moves to Lengthen Sikorsky Runway
- Russia Shuts Off Donbas, Crossings Down 99% yoy
State Security agents broke up a ‘shareholders meeting’ in Zaporizhia of Chinese and Ukrainian investors claiming ownership of Motor Sich, the helicopter and jet engine giant. President Zelenskiy came down decisively on the side of the US, placing 3-year sanctions on four Chinese companies close to the Beijing government and on Wang Jing, the head of Skyrizon Aircraft Holdings, the main Chinese investor company.
Two weeks earlier, Wilbur Ross, then US Commerce Secretary, added Skyrizon to a list of companies classified as prohibited military end-users, saying its activities threaten U.S. national security. Ross said: “Skyrizon — a Chinese state-owned company — and its push to acquire and indigenize foreign military technologies pose a significant threat to U.S. national security and foreign policy interests.”
Before sending agents to break down the doors of the meeting, Ukraine’s State Security agency, or SBU, warned that it “is documenting the facts of preparation for the destruction of the production facilities of the company.” For three years, the SBU has sought to block the takeover of Motor Sich, noting the China has a military helicopter production contract with Russia, a country that is waging a proxy war against Ukraine.
Ukraine’s “actions are a barbaric robbery and a serious violation of the legal rights and interests of Chinese companies operating abroad, an unprecedented disrespect for the principles and rules of international trade,” Skyrizon warned angrily in a press statement. “Sanctions against the company are erroneous and stupid actions that can only scare away potential investors from all over the world from Ukraine, finally drive the already dying aviation industry of Ukraine into a desperate situation.”
Skyrizon vowed to proceed with its $3.5 billion suit against Ukraine. China last year became Ukraine’s large trading partner. Ukraine’s two-trade with China through October was $12 billion. By contrast, Ukraine’s trade with Russia and with Germany was $6 billion. After Washington moved against Skyrizon, China’s Ministry of Commerce said the United States was using “all kinds of excuses” to suppress Chinese companies abroad.
Skyrizon’s Ukraine partner, DCH Group of Oleksandr Yaroslavsky, was more cautious, saying that “leading law firms” had concluded that “the Chinese investors are bona fide buyers and legal owners of the acquired shares in PJSC Motor Sich.” However, the Kharkiv group concluded: “All further actions of DCH will be carried out considering our interest in the development of the Ukrainian aircraft industry and exclusively in the legal field.”
Companies from several NATO countries, including Turkey, have looked at purchasing parts of Motor Sich, a conglomerate that employed 21,000 workers a decade ago. When the war broke out between Ukraine and Russia in 2014, Motor Sich lost its biggest customer and has been struggling ever since. Foreign Minister Dmytro Kuleba said: “I do not see any connection between the situation with Motor Sich and the general investment climate in the country.”
IKEA opened its first bricks and mortar store in Ukraine, at Kyiv’s Blockbuster Mall, the company announced on Instagram. The store will be the first in SE Europe new ‘city format’ – 5,000 square meters, instead of the usual 30,000 square meters. The Swedish furniture retailer has tried to enter Ukraine for the last 15 years. It was blocked first by corruption then by construction delays at Ocean Mall. Last May, IKEA started an internet store and was immediately overwhelmed. Since it opened distribution points in three Kyiv shopping centers: Auchan Rive Gauche, Metro Cash & Carry and Lavina Mall.
French sportswear brand Decathlon opens this spring its third store in two years in Kyiv. With the new store, Decathlon will have 8,500 square meters of retail space in Kyiv – in Prospekt Mall, Lavina Mall, and Retail Park.
At the first day after the January lockdown, about 300,000 shoppers visited Epicenter shopping centers around Ukraine – up 50% yoy, reports the Epicenter K press service. Best sellers were household chemicals and personal care products – up 170%. “The surge in trade in the first days is quite expected, because during the three weeks of lockdown we constantly received dissatisfied feedback from customers who were not able to buy the necessary goods,” said Vladimir Goncharov, deputy director general of Epicenter K, Ukraine’s largest retailer.
Despite the harsh spring lockdown, Foxtrot achieved a 20% growth in sales of its retail electronics last year, Foxtrot CEO Alexey Zozulya reports. Online sales grew strongly, with 9 million people visiting Foxtrot.ua. Half of online buyers took advantage of the new ‘self-pickup’ service at Foxtrot stores. Sales through all channels registered this growth: smartphones +14%; TVs +28%; computer equipment +67%; and laptops +80%.
Marriott International expects to open its first Sheraton in Ukraine, at Kyiv’s Olympiysky complex, by the end of this year, according to a press release. Delayed for a decade, the hotel project received new impetus last fall when the U.S. International Development Finance Corporation approved a $27 million loan for completing the hotel. The 14-story hotel will have 196 rooms and underground parking for 144 cars. The building stands at Velyka Vaslkyivska 55, between the sports stadium and the Olimpiyska metro on the Blue line. One kilometer to the north is Marriott’s other hotel in Ukraine, Aloft Kyiv, at Esplanadna 17.
The Kyiv City Council has made a preliminary decision to expand Sikorsky’s airport’s lone runway by 22%, to 2,810 meters. This would allow larger aircraft, such as Airbus A321, to land at Kyiv’s Right Bank airport, historically known as Zhuliany. Potentially, this would mean flights arriving from as far away as Bangkok.
Russia-controlled Donbas has virtually closed itself off from Ukraine-controlled Donbas, according to figures cited by the Kyiv Post. From 250,000 weekly crossings in January, 2020, the number of weekly crossings fell to less than 1,000 last month. Closures that started last March to contain coronavirus have become permanent. Of seven crossing points, five are closed and two, one for Donetsk and one for Luhansk, work shortened hours, only allowing crossings by people with ‘special permits.’ “Bars are open, clubs are open, the border with Russia is open, the only thing closed is the crossing points into Ukraine”.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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