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  • Kyiv’s UNIT.City Gets Big Capital Injection
  • State Property For Sale: Alcohol Distilleries, Empty Prisons
  • Ukraine-Slovakia Angle For Cut of China-EU Trade
  • Hungary Dangles Goodies for Zakarpattia
  • Zelenskiy Hints the Borders May Not Open Monday

Ukraine’s largest manufacturer building materials, Kovalska Industrial and Construction Group, plans to invest $70 million of its own money to build five business centers in Kyiv’s Unit.City innovation park, Serhiy Pylypenko, Kovalska’s CEO, told reporters. By 2025, Kovalska plans to build “five business campuses with a total area of 70,000 square meters, he said. To develop the projects, Kovalska has hired APA Wojcoechowski, a Polish architectural firm, and TEBIN, the international engineering company.

The large scale factory complex of one of the Soviet Union’s largest tractor plants will be reborn as a “Ukrainian Silicon Valley” under a proposal by Oleksander Yaroslavsky, Kharkiv’s leading industrialist. The Kharkiv Tractor Plant, producer of 3 million tractors, would be reborn as ‘Ecopolis KhTZ,” a high-tech business park under a plan presented yesterday to the Kharkiv City Council. “The best international architects and commercial consultants are already working with us,” said Vitaliy Barannikov, Ecopolis director from Yaroslavsky’s DCH Group. Noting that Belarus companies will be invited to move there, he said: “We plan to create a full cycle for the implementation of high-tech projects – education, development, their introduction into production.”

Three distilleries – one in Kharkiv, and two in Vinnytsia – go up for auction next month in the first concrete step to dismantle Ukrspyrt, the state alcohol giant. With starting prices range from $700,000 to $1 million, the sales will be on ProZorro.Sale. The goal is to sell all 41 viable properties of Ukrspyrt, ending the state alcohol monopoly and earning the treasury $75 million.

Chipping away at state ownership of property 30 years after the collapse of communism, the State Property Fund auctioned 142 ‘small’ lots last summer, netting $46 million. The headline grabbing sale was of Kyiv’s Dnipro Hotel, which netted $40 million. By the end of this year, Dmytro Sennychenko, head of the Fund, hopes the sales total will hit $100 million.

With investors learning how to act in a prolonged coronavirus pandemic, the government is debating the doubling of next year’s target revenue from privatizations to $430 million. In March, as corona fears swept the country, the Rada passed a law banning large-scale privatizations.

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For Sale: Central city location, thick walls, excellent security. Joining the state drive to dispose of ‘excess property,’ the Justice Ministry is selling three abandoned prisons – in Lviv, Odesa, and Kyiv’s leafy suburb of Kotsiubynske, near Irpin. Behind the sale, Ukraine has cut its prison population by almost two thirds – from 137,000 in 2013 to 53,000 today, reports The Kyiv Post. Justice Ministry plans to use the money to improve food and conditions at existing prisons.

As three of Ukraine’s biggest cities have grown up around these Czarist and Soviet-era prisons, residential developers are studying the offerings. Kyiv’s Irpin Correctional Center has several buildings totaling 24,000 square meters on eight hectares. Odesa’s Southern Correctional Colony has several buildings totaling 14,000 meters. Lviv’s Correctional Colony №48 located on 10 hectares near the center of Lviv. It has 40 buildings 42,000 square meters.

Seeking to draw China-EU container trains through Ukraine and Slovakia, the transport ministers of Slovakia and Ukraine signed an agreement to facilitate the creation of train-truck logistics hubs. Both countries envy the surging China-EU rail traffic through Belarus-Poland, a route is carrying double last year’s volumes. “Both Ukraine and Slovakia are extremely interested in developing their transit potential and improving the process of organizing the delivery of goods in containers from EU countries to China and back,” Ukraine’s Infrastructure Miniser Vladyslav Krikliy said at the signing ceremony in Bratislava with Slovakia’s Transport Minister Andriy Dolezhal.

With China the top trading partner of Ukraine, the expansion of Ukraine’s food exports was the topic of a meeting   yesterday between Fan Xiangong, China’s ambassador to Ukraine, and Ihor Petrashko, Ukraine’s Minister of Economy, Trade and Agriculture. In the first six months of this year China-Ukraine trade hit $6.4 billion, up 21% over the first half of 2019.

Next year, the drive from Berehove, Zakarpattia to Budapest could take 2.5 hours on a 300 km, 4-lane, divided highway under a plan offered by Hungary to Ukraine on Wednesday. Hungary plans to build the final 40 km of its M3 motorway, extending it from Budapest to Ukraine’s border, Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó told his Ukrainian counterpart Dmytro Kuleba at a meeting in Uzhgorod. Szijjártó also offered: to build a bypass road around Berehove and to extend it to the border; to rebuild Berehove’s hospital; and to rebuild and widen the main Hungary-Ukraine crossing point – the bridge over the Tisa River at Chop. The price for Ukraine is respect for the language rights of Hungarian-speakers living in Zakarpattia.

Danish furniture store Jysk Ukraine increased sales by 24% in its financial year ending Aug. 31. “Dramatic, unpredictable, but the best in Jysk history: despite the coronavirus, Jysk achieved a record turnover” of $83 million, Yevhen Ivanytsia, executive director of Jysk in Ukraine, writes on LinkedIn. In the last year, Jysk opened 13 new stores, making for a total of 67 now. The company plans to reach 100 stores by the end of 2023.

With Ukraine now averaging 3,500 new coronavirus infections a day, the epidemic is expected to rise to 5,000 new cases a day by December, Oleh Ruban, head of State Consumer Protection Service, tells RBK-Ukraina. With infections expected to remain high, Ruban predicts that Kyiv will remain at the current orange level of restrictions through the winter.

President Zelenskiy hinted that Ukraine’s travel restrictions may be extended past their current expiration date. “Today we have 3,000 cases a day – unfortunately, this is the second wave of coronavirus in Ukraine,” Zelenskiy told reporters in Slovakia. “When the situation in Ukraine stabilizes, the borders will be open without fail.”

On Sept. 30, Belavia restores its transit flights between Kyiv Boryspil and Moscow Domodedovo, via Minsk. The flights will be weekly, on Wednesdays, will cost $185 one way, and will take 3h45. Direct flights stopped in 2015 and direct trains stopped in March. Due to coronavirus controls, only Ukrainians who are permanent residents in Russia or who are family members of Russians are allowed into the country.

 

  • UkraineInvest Works on 46 Incoming Investments
  • Zelenskiy Says Economic Recovery Has Started
  • Demand for Hryvnia Bonds Dries Up
  • Ukraine Reaches Out to Slovakia, Hungary, and Bulgaria
  • Bonus on UIA Flights to NY: A Winter Refueling Stop in Iceland

UkraineInvest, the state promotion agency, says that it working on 46 investment projects that should bring $2.2 billion in new foreign investment to Ukraine by the end of 2022. To reach out to foreign investors, UkraineInvest plans to open “10 to 15 international offices,” Serhiy Tsivkach, the agency’s new executive director, told reporters Tuesday.

To highlight investment opportunities, UkraineInvest has launched an online, bilingual English-Ukrainian investment guide. The guide profiles 60 of 600 most promising opportunities in the country today. “It is an analytical tool in which you can find information about investment projects, the country’s resource potential, changes in regulatory policy,” Prime Minister Shmygal writes, adding that it will be updated quarterly. “You can find information about every sector of the Ukrainian economy: from agriculture and energy to infrastructure and IT.”

President Zelenskiy says Ukraine’s economic recovery will be “tangible and sustainable” by the end of this year. Exports increased in July and August and that central bank foreign reserves are growing, he told Slovakia’s “Economic Newspaper,” Hospodarske noviny. Similarly, Dragon Capital said Tuesday that Ukraine’s economy is recovering faster than expected and should be back at pre-crisis levels by the end of next year.

Industrial production continues to lag in Ukraine, recording a 5.3% yoy drop in August. In June, the fall was 5.6% and in July it was 4.2%, according to the State Statistics Service. Through August, industrial production was down 7.4%, compared to the first eight months of 2019. Dragging down the index in August, processing was down 7.7% and production of investment goods was down 27%.

Faced with weak demand, the Ministry of Finance sold at its weekly auction only 5% of the volume of government hryvnia bonds as one week before. The sale of the hryvnia equivalent of $11.8 million in bonds came as the government rejected most bidding, only conceding on 12-month bills. Here the weighted average rate rose by 18 basis points to 9.46%. The 2.5-year bills sold with yields of 10.5%.

Concorde Capital’s Evgeniya Akhtyrko writes: “It looks like even state-owned banks are refusing to allocate their resources to assets with non-competitive interest rates. Apparently, Ukraine’s market players are assigning a high risk to the market, and we don’t see much chances for this to improve in the nearest time. Meanwhile, if the government resorts to hiking interest rates, that would undermine the proposal under consideration by the Zelenskiy administration to flood the economy with low-cost loans in order to stimulate economic growth.”

Foreigners decreased holdings last week by UAH1.6 billion, or $57 million, the largest withdrawal since July. Overall, foreign holdings fell below $3 billion, with their share of total bonds outstanding falling to 9.7%. ICU writes: “This week, the decline in foreigners’ portfolios will continue…The main reason will be weakening of the hryvnia.”

President Zelenskiy visited Slovakia, part of a campaign to promote trade and investment ties with Ukraine’s often overlooked southwest neighbors: Slovakia, Hungary, Romania and Bulgaria.

In Slovakia, Zelenksiy signed an agreement allowing the resumption of scheduled flights to Uzhgorod, a Ukrainian airport that uses Slovakian for takeoffs and landings. Ukraine’s president tells the Slovak newspaper Hospodárske Noviny that he also wants to ease the bureaucratic path for Chinese freight trains crossing Ukraine and entering the EU through Slovakia. Zelenskiy’s visit also will highlight the normalization of gas transit from Ukraine, following six weeks of repair on the pipeline border connector near Budince, Slovakia.

Hungary’s low-cost airline Wizz Air announced that it will resume flights from Kyiv and Lviv to Bratislava on Oct. 2. If Slovakia falls off Ukraine’s list of coronavirus ‘green’ countries, flights will be postponed. With the launching of a Budapest-Kyiv Boryspil flight, Ryanair will match Wizz Air’s Ukraine destinations: Kharkiv, Kyiv, Lviv and Odesa. Wizz Air also flies Budapest.

In Uzhgorod, Hungary’s Foreign Minister Péter Szijjártó met with his Ukrainian counterpart, Dmytro Kuleba. The meeting was largely designed to soothe tensions over the status of the Hungarian language in Zakarpattia and to prepare for a meeting of the leaders of Ukraine and Hungary, Zelenskiy and Prime Minister Viktor Orban. The foreign ministers agreed to hold a business forum of Hungarian and Ukrainian companies, “as soon as possible.” Kuleba said: “We want more trade, interpersonal, infrastructural and political contacts between Ukraine and Hungary.”

Easing of language tensions is seen as key to freeing up Budapest’s long standing offer of a €50 million credit line to improve Zakarpattia’s infrastructure – largely roads and border crossing points. In addition, Hungary is spending €33 million to modernize 64 Hungarian language schools in Zakarpattia and €7 million a year in salary supplements to teachers, doctors, journalists and entertainers providing services in Hungarian. Hungary suffers from a labor shortage and employers often draw on Zakarpattia’s 150,000 Hungarian-speakers to fill the gaps.

Hungary is the largest importer of electricity from Ukraine, reports Ukraine’s State Customs Service. Through August, Hungary bought $92 million worth of electricity through Ukraine – the equivalent of the combined total of the next two countries, Poland and Romania.

After Ukraine’s Foreign Minister and Defense Minister made separate visits to Romania earlier this month, Ukraine’s Prime Minister Denys Shmyhal met in Kyiv with Bulgaria’s Foreign Minister Ekaterina Zaharieva. They agreed to hold a Ukrainian-Bulgarian business forum in Sofia in 2021, and, at the same time, the first meeting in a decade of the Ukrainian-Bulgarian Commission on Economic Cooperation. Both sides agreed to simplify the transfer of rail containers on the ferry link between Chornomorsk and Varna.

UIA plans to resume regular flights between New York and Kyiv Borsypil on Dec. 9. However, the airline plans to use narrow body Boeing 737-900ER jets on the route, necessitating refueling stops midway, in Keflavik, Iceland. This stop is expected to add two hours to what previously was a 9 to 10-hour flight. Flights will be twice a week with a 737, a plane that seats 177. Previously, UIA used on the New York route long haul 767s and 777s, jets with twice the seating capacity.

For a warmer option in the Western Hemisphere, Azur Air Ukraine starts flights Oct. 16 to La Romana, Dominican Republic. Marketed with Anex Tour, the nonstop flights will be four times a week on a long haul Boeing 767-300ER jet.

 

  • Retail Sales Help Pull Economy out of Recession
  • Opening Now: Ukraine’s Largest Mall – Kyiv’s Blockbuster
  • IKEA to Open Store in November
  • Danish, French, Swedish and Swiss Retailers Expand in Ukraine
  • Ducking Corona Controls, Worker Remittances Dip Only Slightly

Retail sales surged over the summer, pulling the year-to-date level up 5.9% yoy in comparable prices. The State Statistics Service has reported these national sales growth figures: June +8.5%; July +8.7%; and August +8.7%. Kyiv was the leader, recording January-August retail sales up 15% yoy. Next were: Zaporizhia region +13.3%; and Chernihiv +11.8%. Last year, retail sales were up 11.6% over the volume of 2018.

Concorde Capital’s Evgeniya Akhtyrko writes: “Ukraine’s retail sales have picked up quickly…The positive trends in trade might serve as the single [biggest] offsetting factor to the economic recession as the other major sectors continue to languish.”

Kyiv’s Blockbuster Mall, Ukraine’s largest mall, started to open this month at the intersection of Stepan Bandera Avenue and Naberezhno-Khreschatytska Street. This fall, 100 stores and the Galaktika entertainment park are opening, filling a gross leasable area of 160,000 square meters. By the end of this year, 80% of the tenants are to move in, according to Vitaliy Boyko, General Director of NAI Ukraine, the developer, tells Interfax-Ukraine.

IKEA plans to open its first Ukraine store in November, a 6,000 square meter space in Blockbuster Mall. IKEA, the world’s largest retailer of furniture and household goods, started online sales in Ukraine in May. The company opened pick-up points in two Kyiv shopping centers — Auchan Rive Gauche and Metro Cash & Carry. This fall it plans to open a third pick up point, in Lavina Mall.

Wildberries, Russia’s biggest online retailer, launched in Ukraine on Monday. The Moscow-based company is offering 3 million goods and 32,000 brands:  clothing, shoes, toys, sporting goods, pet supplies, household and gardening products. Nova Poshta and Meest will deliver orders. Now operating in eight countries, Wildberries is now owned by Tatyana Bakalchuk, listed by Forbes as the richest woman in Russia. In deference to Ukrainian sensibilities, the Wildberries operation in Ukraine will answer to Wildberries Poland and the merchandise for sale here has been purged of images of communism and Putinism.

Dragon Capital plans to build 200,000 square meters of warehouse, factory and office space on a 49-hectare lot on the Kyiv-Zhytomyr highway. Marketed as the E40 Industrial Park, the first phase is to open next year on the E40/M06 highway, near the Kyiv Expo Plaza interchange, 27 km west of Kyiv. Dragon already owns 11 warehouse complexes, largely on the highway approaches to Kyiv, Ukraine’s largest consumer market.

Lithuania-owned Novus is buying Austria-owned Billa supermarkets. Established in 2008, Novus has 46 stores with a total area of 220,000 square meters. Last month, Novus secured a $100 million loan – from the EBRD and commercial banks – to build 30 stores around the nation and a ‘green’ warehouse in Kyiv. Billa was established in Ukraine in 1998 by the Rewe Group. After selling nine stores, largely in eastern Ukraine, Billa now has 35 stores – in Kyiv, Kyiv region and Zhytomyr.

MHP, Ukraine’s largest poultry exporter, plans to open 350 franchise “Myasomarket” (Meatmarket) stores in Kyiv city and region over the next five years. MHP franchise director Dmitry Morozov tells Interfax-Ukraine that the company also plans to open today its first Döner Market shawarma shop and tomorrow its first Chef’s Secrets ‘gastro studio.’

 

Retail highlights:

The largest Intersport store in Ukraine opened last month in Kyiv’s Dream Town 2. The largest of 47 Ukraine stores of the Swiss chain, managed by Epicenter K, the new Intersport Outlet City in Obolon has 7,000 square meters.

Jysk Ukraine, the franchisee of the Danish furniture and home goods chain, opened seven new stores in Ukraine this summer, raising the total to 64. By the end of 2023, Jysk plans to have 100 stores in Ukraine.

France’s Leroy Merlin plans to open a sixth store in Kyiv this year, Cedric Brosset, director general of Leroy Merlin Ukraine, tells reporters. Focusing on Ukraine’s five largest cities – Kyiv, Kharkiv, Dnipro, Lviv and Odesa – Brosset plans to open two new stores a year for the foreseeable future.

Sweden’s H&M, Europe’s second largest clothing store chain, opened its fourth – and largest Ukraine – store in Kyiv Dream Town 1 this summer. H&M entered the Ukraine market two years ago.

By the end of this year, Foxtrot, the Kyiv-based chain of electronic appliance stores, will have renovated and rebranded one quarter of its 162 stores in Ukraine. During the March-May quarantine period, Foxtrot’s online sales tripled, Alexey Zozulya, the company’s executive director, tells reporters. Present in 90 cities in Ukraine, the chain claims it has a database of 10 million customers.

Bolstering retail sales, remittances from Ukrainians working abroad were down only 5.5% through July, compared to the first seven months of last year. Through July, Ukrainians sent home – through banks, money transfer companies and informal channels – almost $6.5 billion dollars, according to the National Bank of Ukraine. Last year, remittances were made at the rate of $1 billion a month.

Due to Poland’s liberalized visa environment and ease of access for Ukrainians, the number of Ukrainians working in Poland is returning to last year’s levels, reports the Polish employment company, Gremi Personal. In face of protests by employers last spring, Poland gave amnesty to visa overstayers. “So far, the flow of Ukrainians to Poland is the most stable due to the most convenient logistics and relatively stable economic situation in Poland,” Gremi notes, contrasting with restrictions at the Czech Republic. “There will be work for Ukrainians through the end of the year.”

With the EU increasingly looking to Ukraine as its reserve labor pool, Deutsche Bahn, Germany’s state railroad, is advertising in its ‘Jobs Ukraine’ section for overhead electricians to expand electrification of rail routes in Germany. Offering the opportunity to see “new regions and [work] in the fresh air,” Deutsche Bahn accepts resumes in Ukrainian or Russian. This year, the railroad is hiring and training 25,000 new employees, part of a drive to take in 100,000 new workers by 2025.

Dangling €1.2 billion in emergency macro-financial aid to Ukraine, Josep Borrell, the EU’s de facto foreign minister, told reporters in Kyiv yesterday that the money will only be released if Ukraine gets back on track with the IMF. The day before, Prime Minister Shmygal called Alfred Kammer, the new head of the IMF’s European Department, and asked him to send a review mission to Ukraine. Under the standby agreement signed in June, a review mission was to come to Kyiv in the summer and a second tranche, of $700 million, was to follow in September. Now, with Western ambassadors complaining that Ukraine is backsliding on anti-corruption commitments, it seems unlikely that Ukraine will get a second tranche of IMF money this year.

 

  • Count the Cranes: Kyiv’s Unit.City is Ukraine’s Biggest Construction Site
  • Restream and Reface Draw Money and Fame to Kyiv IT
  • As Ze Affirms Ukraine’s 5% Income Tax Rate, Belarus It Workers Look South
  • Women Move into Ukraine’s IT Jobs

With five buildings under construction, Kyiv’s Unit.City is the largest building site in Ukraine today, Dominique Piotet, CEO of the tech hub, tells the UBN. Within 18 months, 20,000 square meters are to be completed, doubling the size of the western Kyiv IT park. Financing construction, the European Investment Bank approved last July a €50 million loan. That money is being leveraged to win additional, commercial financing.

Demonstrating the strength of IT in Ukraine, Piotet says that of Unit.City’s 2,500 work spaces, only 21 are available for rent. “We are full,” said Piotet, a French transplant from Silicon Valley. “We sold the first 300 apartments in three weeks.” At present, Unit.City has four R&D labs, 120 companies, 1,000 coding students and 3,000 workers. Inter-company synergy is key, he says, noting: “86% of residents tell us they are doing business with each other.”

Vasyl Khmelnytsky, developer of Unit.City, is expanding the innovation park concept to Ukraine’s two other big IT cities. Unit.City Kharkiv now has 600 students at its 5,000 square meter campus. Another 600 students are at LvivTech.City, an IT park that is to open a residential complex next year.

The amount of new office space occupied in Kyiv during the first half of the year fell by 42%, compared to the first half of last year, CBRE Ukraine says in a new study. New office supply totaled 69,000 square meters, slightly more than double the amount for the first half of 2019. Caught between shrunken demand and a jump in vacancy rates to 12.4%, developers may delay the release of some of the 146,000 new square meters planned for the second half of this year. CBRE writes: “Since most new projects in the early stages of construction have been suspended or canceled, the new supply is likely to decrease significantly between 2023-2024.” IT accounts for 29% of new rentals, the largest sector in Kyiv.

Kyiv startup Restream has attracted $50 million in Series A financing from U.S. investment firms Sapphire Ventures and Insight Partners to accelerate its video streaming business. “Today, live streaming is more important than ever – this pandemic has uprooted every type of in-person event—concerts, conferences, classes,” says Alex Khuda, co-founder & CEO of Restream.  “Today, our community of over 2 million creators broadcasts over 8 million monthly live streams to over 750 million monthly viewers around the world.”

Reface, a separate Kyiv startup, recently became the most popular American app downloaded on iOS, the operating system for Apple mobile devices. The app allows users to use a selfie photo to place their face in a video with stars. On Aug. 26, Reface became the most popular app in the entertainment category in the US and 17 other countries, ahead of TikTok and Netflix. Then, on Aug. 31, it become the most popular app in America overall. “A startup from Ukraine has never been # 1 in the US,” Roman Mogilny, CEO of Reface, tells Interfax-Ukraine. “It’s cool to understand that the application has gone viral and popular not only in America, but also in more than 100 countries around the world.”

Investments in Ukrainian IT startups totaled $510 million last year, according to the annual report of the Ukrainian Venture Capital and Private Equity Association. The sum of 111 deals, this figure was 50% higher than 2018. This year has been slower, but volumes often rise in the fourth quarter.

President Zelenskiy strongly backs the 5% tax rate for ‘autonomous’ IT employees, a fraction of Ukraine’s standard 18% tax rate. “This industry is developing in the country not due to the state support, but due to the intelligence of Ukrainians,” he told IT executives in Lviv on Friday. “One of the steps that the state can take is not to increase the tax burden on this [IT] industry.” He said he sees IT as key to modernizing Ukraine: “Everyone is saying: ‘we need honest customs, honest law enforcement agencies, we need to overcome corruption.’ We all understand that the human factor is very difficult to fix. But digital and IT industry can do it.”

“Tech Workers Flee Belarus as IT Haven Takes Authoritarian Turn,” headlines a Bloomberg story about IT companies starting to move out of Minsk after a month of internet shutoffs and police raids on such IT companies as PandaDoc, Yandex NV, Uber, and Wargaming.net. Since opening 15 years ago on the eastern edge of Minsk, has grown to nearly 700 companies, employing 60,000 people and earning $2 billion annually in exports.

A bus ride to the south, Ukraine offers an easy move for fence-sitting IT workers: a lower income tax, easy work permits, higher average salaries, and a working environment where Russian is widely understood. These advantages are listed in a 112.ua article “Why Belarus IT Specialists Move to Ukraine on Massive Scale.” Ukraine’s IT industry employs 180,000 programmers, three times the number in Belarus. With reports of Belarus IT technicians barred from boarding outbound planes in Minsk, the article says IT workers may choose to leave their options open by quietly coming to Ukraine for extended ‘vacations.’

Ukraine’s IT workers are older, increasingly female and more fluent in JavaScript, according to a new study by GlobalLogic. Compared to five years ago, the female portion of the workforce has grown to 25% today, for 14% in 2015. The average IT specialist is now 28 years old – one year older than five years ago. And 41% are now married. The portion of surveyed engineers using JavaScript is now 18%, ten times the 2010 level of 1.9%. Since 2015, jobs have changed – the share of testers is up 45%, and the share of developers is down 16%. “The second half of this year will be more optimistic for the entire industry,” predicts Andrey Yavorskiy, GlobalLogic’s vice president for strategy and technologies. “Digital transformation creates a demand for developers and testers, new IT specialties.”

The World Bank sets ambitious highspeed wireless internet goals for 2025: 4G coverage for 95% of the population; full 5G coverage along major road and rail routes. If integrated with traffic control and emergency services, the World Bank says smart technology can reduce road deaths by 8-10%, reduce travel time by 15-20%, and speed up the response time of ambulances by 25-30%. The targets are posted on the website of the Digital Transformation Ministry. Today, 5G is only in the testing phase in Ukraine.

 

  • Grain Exports Down 10%, Farm Production Down 10%
  • Drought Delays Winter Wheat Sowing
  • With Climate Changing Government Moves to Revive Irrigation in Southern Ukraine
  • French, American, EBRD Investments in Ukraine Agro
  • Local Elections Look Depressing? Run Away to Zanzibar!

Grain exports are down 10% for the first 10 weeks of the marketing year, the Economy Ministry has reported. Since July 1 which is the start of the marketing year, Ukraine has exported 10.3 million tons of grain. Wheat export volumes are virtually unchanged, at 7 million tons. Corn sales are only one third of last year’s levels, largely due to a late harvest. Overall, the government is forecasting a 16% drop in grain exports this year, largely due to smaller harvests than last year.

China doubled imports of Ukrainian barley this summer, pushing Ukrainian export prices up 20%, reports APK-Inform. “Chinese demand is just off the scale,” reports the Kyiv-based agricultural consultancy. Sharpening buyer worries, Ukraine’s Economy Ministry warned last month that Ukraine’s due to poor barley harvests, Ukraine exports could drop by 35%, to 3.3 million tons.

Ukraine’s farm production was down 10% through August, compared to the first eight months of last year, reports the State Statistics Service. As of September 1st, these harvest declines were registered: wheat harvest down 12%, to 25.1 million tons; barley down 14%, to 7.8 million tons; canola down 8.5%, to 2.6 million tons; and peas down 16%, to 489,000 tons. Overall, the Economy Ministry forecasts a 9.5% drop in the nation’s grain harvest this year, to 68 million tons.

Drought is delaying the mass sowing of winter wheat by two weeks, APK-Inform consultancy says. “The soil layer 0-10 cm was almost dry on 70-80% of the area,” APK-Inform said, citing forecasters. “Mass winter crop sowing in areas with such a low moisture is impractical.” In some areas of central Ukraine, the dry, hard soil represents the worst sowing conditions in 50 years.

Thanks to climate change, Polissia, the northern swath of Ukraine along the Belarus border, has started to grow crops traditionally associated with southern Ukraine, Serhiy Ryzhuk, director of the Polissia Institute of Agriculture, tells Ukrinform. “Due to climate change, uncharacteristic crops came to us in Polissya,” says Ryzhuk, whose institute is part of the National Academy of Agrarian Sciences. “If before flax, hops, potatoes, rye, millet, buckwheat were grown, now corn, soybeans, rapeseed and sunflowers have appeared here.”

Facing drought and the collapse of ageing irrigation systems, the government is drawing up a law to transfer irrigation pumping stations to private hands under public private partnership concessions, Ihor Petrashko, Minister of Economic Development, Trade and Agriculture, said last week on a visit to drought-stricken Kherson. The government’s ‘Big Construction’ program, currently limited to highways and bridges, will be expanded to include restoring Soviet-era irrigation systems.

For Ukraine to harness private capital for irrigation, it would have to borrow from the body of water law developed over the last century in the American West, argues Bate C. Toms, chairman of the British-Ukrainian Chamber of Commerce. The Chamber is developing model pilot irrigation project.

Paris-based SAS Investcompagnie, is expanding its Ukraine farm holdings, buying control of two agro companies, one in Chernihiv and another in Zhytomyr. The company already owns three other farming companies – in Chernihiv, Cherkasy, and Odesa.

Indiana-based Remington Seeds is acquiring the seed plant and farming operations of MAIS, a major Ukrainian seed producer. Called SEED Corp, the new joint venture will combine Remington’s international experience with the farm machinery and 5,000 hectares of irrigated farm land of MAIS.

EBRD is lending €10 million to Ukraine’s Agrofusion, Europe’s third-largest producer of tomato paste. Agrofusion exports 72% of its production, selling to 45 countries. Part of the loan will help Agrofusion produce organic tomato paste, an increasingly popular product in Europe.

Ukraine, the world’s largest sunflower oil exporter, increased its sunoil exports by 10% in the marketing year that ended last month, reports the industry association, Ukroliyaprom. The association says Ukraine exported: 6.7 million tons of sunoil, 335,000 tons of soybean oil, and 184,000 tons of canola oil. In dollar terms, Ukraine’s exports of vegetable oils were up 17%, to $5.3 billion. Ukraine accounts for 55% of internationally traded sunflower oil.

Ukraine was the world’s third largest potato producer last year, reports Potato Business. The ranking was: China – 93 million tons; India – 51 million tons; and Ukraine – 23 million tons. The Economy plans to ban the import of Russian potatoes. Although imports from Russia grew 43-fold last year, they only reached 250,000 tons, barely 1% of Ukrainian production.

A Russia-EU gas line returned to use last weekend after a mysterious explosion Tuesday in a field in Chabany, five kilometers west of Kyiv city. Ukraine’s Gas Transmission Operator said 38 meters of pipe were replaced and welds on the high-pressure line were checked for defects. Police are investigating to see if the 30-year-old pipe self-destructed due to old age, or if the midnight explosion was due to sabotage. Covered extensively in the German media, the explosion took place as German Chancellor Angela Merkel is under heavy pressure to freeze work on the Nord Stream 2 Russia-Germany trans-Baltic gas line.

Ukraine’s economy plunged 11.14% yoy during the second quarter, the April-June period that coincided with the strictest coronavirus controls. This calculation by the State Statistics Service matches preliminary forecasts of an 11% drop made last month by the Economy Ministry and the National Bank of Ukraine. For the entire year, the Ministry predicts the fall will be 4.8%. During the first quarter, affected only slightly by the corona curbs, Ukraine’s economy shrank 1.3% yoy.

Next year’s budget envisages GDP growth of 4.6%. Prime Minster Shmygal said on Ukraine TV Friday night: “4.6% GDP growth is absolutely a real forecast.” He said Ukraine’s economy is already growing in the second half of this year.

In the last six months, 3,000 entrepreneurs have been issued loans totaling $285 million under the “Affordable loans 5-7-9%” program, Finance Minister Serhiy Marchenko said Friday, reports Ukrinform.

Ukrposhta to sign an agreement next month for a €100 million loan to build the first new sorting centers in 40 years and to update 30 existing depots, Igor Smelyansky, CEO of the state postal service, said on the air of KSE Business Transformation Week. Funded by the EBRD and the European Investment Bank, the money would help Ukrposhta compete with Nova Poshta, the private package delivery company which is investing heavily in new sorting centers.

Want to escape the Oct. 25 local elections? Starting Oct. 24, SkyUp offers charter flights from Kyiv Boryspil to Zanzibar. With a refueling stop in Egypt, SkyUp will fly twice a week to Tanzania’s exotic Afro-Arab spice island in the Indian Ocean. Zanzibar does not require results of coronavirus test from Ukrainian visitors. Visas on arrival at Abeid Amani Karume International Airport.

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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