- New Trains and Planes to Poland
- Ukraine Tops Russia in Black Sea Container Cargo
- Ukraine’s Danube: Ferry to Romania, Austrian Tourists and LNG
- Next Month: European Cruise Ships Return to Odesa, Come to Kyiv
- Cell Phones: More Internet, Less Talk
- No More Corporate Jets to Moscow
- NATO Pressures for Shipping Freedom in Azov
- Berry Exports Jump 5X
- With Flights to 38 Cities, Lviv is Western Ukraine Air Hub
- China Extends $1 billion Cover For Naftogaz to Buy Chinese Equipment
- Ukraine Cuts Gas Imports
- US Incubator for Tech Startups
- Turkish, Norwegian Investors Study Hydro
- Wages up 11%
- Ukrainians With Cash Go Cashless
- Saudi’s SALIC Buys $51M of Farm Machinery
- Grain Exports to be Up 25%
- TurkStream to Bring Russian Gas thru Bulgaria to Central Europe
- Solar, Wind Projects Up 5X in Q1
- Worker Remittances up 17.5%, Russia Lags
- Boryspil Cuts Crowding by Opening 2nd Terminal
- New Flights to France
Starting tonight, customs and passport controls for Kyiv-Warsaw trains will be conducted on the train, at Kyiv’s Central Station. Eliminating the border stop at Yagodyn Station, Volyn, is the latest step to streamline travel between Ukraine and Poland. Passengers are asked to board the 19:13 train by 18:45 to have their passports and bags checked on board.
Poland and Ukraine plan to launch a Lviv-Lublin train this summer. Initially, passengers will ride in a Ukrzaliznytsia train to the Lviv border town of Rava-Ruska, and then change to a European gauge Polish train. For most of the 20th century, trains plied the 225 km route, connecting Lviv, the largest city of Western Ukraine, with Lublin, the second largest city of Lesser Poland.
On June 30, Wizz Air starts twice a week, Kyiv Sikorsky-Lublin flight. Today, Wizz Air starts a Kyiv-Kraków flight. With these two new routes, Wizz Air will fly from Kyiv to seven Polish cities.
Ukrzaliznytsya is launching a weekly, 1,400 km, east-west container train from Dnipropetrovsk to Sławków, Poland. The freight train takes advantage of Poland’s longest broad gauge track, a 1970s-era line that reaches 400 km into southern Poland to Sławków, 50 km west of Kraków. In Nizhnedneprovsk, the train will collect containers from Ukraine’s eastern industrial cities of Zaporizhia, Mariupol and Nikopol. The train will cut travel time in half, to 40 hours, says Yevhen Kravtsov, chairman of Ukraine’s state railroad. The line is the railroad’s 19th container train, a fast-growing service.
Dedicated container trains cut train travel times by 70%, Igor Tkachuk, Odesa port chief, tells the Center for Transportation Strategies. From Odesa, port of entry of two-thirds of containers handled by Ukraine’s Black Sea ports, container trains now fan out to Dnipro, Ivano Frankivsk, Kharkiv and Kyiv.
“Ukraine ports eye larger share of Asia cargo” headlines The Journal of Commerce, the New York-based shipping and logistics news site. Focusing on competition between Ukraine’s Black Sea ports and Russia’s port of Novorossiysk, reporter Eugene Gerden writes that since 2017 Ukraine has cuts its container clearing times and fees to half those of Russia. Topping Novorossiysk for the first time, Ukraine’s container traffic jumped by 19% last year, to 846,485 TEU. Novorossiysk’s container traffic increased by 2.5%, to 754,890 TEU.
Starting April 16, Euro Marine Logistics NV plans to start a twice a month roll on roll off cargo service between Piraeus, Greece and Chornomorsk. Served by an EML vessel, the City of Amsterdam, the route is designed to facilitate the export of new and used cars from the EU to Ukraine. The ship will follow a triangular route around the Black Sea: Piraeus-Chornomorsk-Novorossisk. Based in Belgium, EML is jointly owned by Norway’s Höegh Autoliners and Japan’s Mitsui O.S.K. Lines.
Cross-Danube ferry service is to start this summer, linking Isaccea, Romania and Orlivka, Ukraine. It will create Odesa region’s first border checkpoint with the EU. The 500-meter ferry crossing will replace a 100 km road detour through Moldova’s southern tip. On both banks, the roll on roll off facilities are built to handle 250 cars and 1,000 trucks a day. After 20 years of government discussions, a private Ukrainian company built Ukraine’s ferry terminal and customs control buildings. On the Romanian bank, Navrom SA Galati built the terminal at a cost of €12 million, reports Romania Libera. To promote trade, local residents are to be allowed to cross without passports and circulate freely within 30 km of the ferry docks.
Reni, Ukraine’s northernmost port on the Danube, is planning to build an LNG terminal and floating berth for bunkering, or fueling, river ships, reports the local branch of the Sea Ports Authority. To cut emissions by riverboats, the EU encourages natural gas-powered vessels. Reni is five kilometers south of the Moldovan border, and about 150 kilometers upriver from the Black Sea. By 2025, ExxonMobil and other multinationals plan to double Romania’s annual gas production — to 20 billion cubic meters — by developing gas fields on the continental shelf of the Black Sea. Ukraine’s Sea Ports Authority is looking for investors to build the LNG terminal by 2025.
Ukraine’s Danube River cruise season opened this week with the docking of the Victoria on Monday in Ust-Dinaisk, Vylkove, a Danube delta city of canals sometimes called ‘Ukraine’s Venice.’ The local port authority reports: “There are 140 tourists on board who arrived in the Ukrainian Venice from Austria.” This season, 40 Danube cruise ships are expected to call at Ust-Dunaisk, an increase over 2018. Last year, cruise ship visitors hit 5,338, an 18% rise over 2017.
After dropping to zero last year, two European cruise ships return to Odesa this summer. On May 10, the Maltese-flag Aegean Odyssey is to call at Odesa, bringing 380 passengers. This fall, on Oct. 30, the Bahamian-flag Amera is to call with 800 passengers. In 2013, the modern peak, 106 cruise ships called at Odesa. Russia’s attacks on Ukraine killed the business, followed by sanctions rendering off limits the two cruise ports of call in Crimea – Yalta and Sevastopol.
A turnaround is coming with nine cruise ships booked for 2020, Igor Tkachuk, Odesa port director, tells the Center for Transportation Strategies. His boss, Infrastructure Minister Volodymyr Omelyan tells Black Sea News: “I recently returned from negotiations with large Arab companies [in the UAE]. They are interested in investing in Ukraine. They see the seaport in Odessa not just as a port, but as a convenient place for a marina, where it will be possible to create a wonderful public space, and all the amenities for cruise liners.”
Viking River Cruises returns to the Dnipro on May 27 with 11 cruises between Odesa and Kyiv through Sept. 24. With prices for the 11-day cruises ranging from $3,700 to $10,000, most of the staterooms priced under $5,000 are sold out through June. Based in Basel, Viking beckons: “Cruise the Dnieper River to the Black Sea, an ancient and splendid trade route lined with rich cultural treasures, onion-domed churches and rural folkways that recall the days of Vikings, Tatars and Cossacks. Visit Kiev’s Cave Monasteries. Marvel at the riding skill of Cossack horsemen. And trace the footsteps of history at Odessa’s Potemkin Steps.”
Boosting foreign direct investment from the current level of 2% of GDP should be a core task for Ukraine’s next president, Andy Hunder, president of the American Chamber of Commerce in Ukraine, writes on the Atlantic Council Ukraine blog site. “Whoever wins, either Poroshenko or newcomer Volodymyr Zelenskiy, he will need to focus on attracting FDI,” Hunder writes. “Since both candidates are successful businessmen, the next president should watch closely that investors are welcomed and treated well.” At a meeting with business leaders two weeks ago, he says: “Zelenskiy focused on assuring us that his views and intentions are aligned with the business community’s priorities, specifically on rule of law, macroeconomic growth, and fighting corruption.”
In a reversal, Ukraine’s mobile phone operators now earn more money from the Internet than from voice. Last year, the nation’s cell phone companies earned 46% of their revenue from the Internet –$600 million. Voice accounted for 42% or $550 million. By contrast, in 2016, operators earned three times as much from voice as from the Internet, according to the National Commission for the State Regulation of Communications and Informatisation.
The government is banning business jet flights between Ukraine and Russia. Commercial flights were banned in Nov. 2015. On Wednesday, Cabinet of Ministers extended the ban to private planes in response to a March 22 flight to Moscow by two pro-Russian politicians – Yury Boiko and Viktor Medvedchuk. The expanded ban does not apply to flights by such international organizations as the Red Cross, the United Nations and the Organization for Security and Cooperation in Europe, or OSCE. Prime Minister Groysman vowed the ban would only be lifted when Russia “ceases to be an aggressor country and turns into a civilized state.”
In response, Rosaviatsiya, Russia’s federal air transport agency, told Interfax: “We propose to conduct negotiations and resume air traffic on a regular and charter basis between Russia and Ukraine in full…We are confident that such a decision is in the interests of our peoples and air passengers.” Traffic on ‘sanctions-busting’ flights through Minsk is increasing. On Monday, Motor Sich resumed daily flights between Minsk and Zaporizhia, the busiest airport in Ukraine’s heavily Russian speaking southeast. Belavia now has direct flights from Minsk to Ukraine’s seven busiest airports: Dnipro, Kharkiv, Lviv, Odesa, Zaporizhia and Kyiv’s two airports.
Since 2014, Ukraine’s berry exports have increased five-fold, to 23,500 tons, Olga Trofimtseva, acting agriculture minister, said Wednesday at an industry conference in Kyiv organized by Berries of Ukraine. She said: “Ukrainian fresh berries are exported to Belarus, Poland, Moldova, the United Kingdom and the Netherlands. The largest consumers of frozen berries have become EU countries.” Ukraine’s top harvests are: strawberries – 62,300 tons; raspberries – 35, 600 tons; and currants – 29,600 tons.
Almost $1 billion was invested last year in food processing in Ukraine, Prime Minister Groysman said at a recent agricultural fair, Agroport West Lviv. Noting that this accounted for about 28% of the $3.3 billion invested in farming last year, he said: “Our task is to change this structure…We must increase the in-depth processing of Ukrainian products.”
Consolidating its role as Western Ukraine’s air hub, Lviv airport saw its passenger flow jump by 53.5% during the first quarter of this year compared to last year. Growing faster than last year’s rate of 48%, Lviv could handle 2.5 million passengers this year, more than triple’s the city’s population. Boosting to 38 the number of cities with direct, scheduled flights to Lviv, the city added in the last month: Wizz Air to Copenhagen; Motor Sich to Uzhgorod; and airBaltic to Riga.
To help Western Ukraine residents use the airport, Lviv started on Monday an hourly bus to the airport from Lviv’s Main Railroad Station, the second busiest rail station in Ukraine, after Kyiv Central Station. To cash in on the tourist flow, the city also started on Monday a tourist tax, with rates up to 0.5% of hotel bills.
In a big switch, China’s state export credit agency is extending $1 billion of insurance cover to allow Naftogaz to get low-cost credit to buy high tech Chinese equipment. Known as Sinosure, the Beijing-based agency covers political risk such as currency devaluations and war. Only two years ago, Beijing discouraged state companies from investing in Ukraine, citing the war with Russia in Ukraine’s southeast corner.
The first $160 million will allow Naftogaz to get cheap financing for 13 drilling rigs bought last year from Honghua International Co., Ltd. Ukrgazvydobuvannya, the Naftogaz gas production unit, bought the rigs with a five-year payment delay. Ukrinform reports that the use of the other $840 million to cover purchases of Chinese equipment “will be agreed in the near future with the Chinese side.”
Russian gas flowing through Ukraine’s pipelines to Europe increased by 5.3% during the first quarter of this year, compared to last year, reports Ukrtransgaz, the pipeline system operator. Interfax-Ukraine calculates that Russia sent 20 billion cubic meters through Ukraine. One year from now, Russia plans to open two bypass gas lines around Ukraine – Nord Stream 2 through the Baltic Sea and TurkStream through the Black Sea. With these new lines, Russia says it will not need Ukraine’s pipelines.
Ukraine cut gas imports for domestic use by 15% during the first quarter, compared to the same period last year. Tilting toward Poland, which imports liquefied natural gas from the US, Ukraine increased Polish imports by one quarter. Imports from Slovakia dropped 24% and imports from Hungary dropped by 9%. Most gas from Slovakia and Hungary originally comes from Russia. Ukraine stopped direct gas purchases from Russia in Nov. 2015. Due to the conservation and substitution of fuels, Ukraine cut gas imports last year by one quarter, to 10.6 billion cubic meters.
Norway’s international law firm Wikborg Rein Advokatfirma AS has signed a €14 million contract with Naftogaz to continue Ukrainian state oil company’s litigation with Russia’s Gazprom. In 2014, Wikborg Rein and Naftogaz signed a €50 million contract to pursue Naftogaz claims in the Arbitration Institute of the Stockholm Chamber of Commerce. As a result of this arbitration, Gazprom was ordered to pay Naftogaz a net $2.6 billion.
Israel’s Perion Network is buying Ukrainian startup Septa Communications for $3.75 million. Better known as Captain Growth, Septa has developed ‘Value Unlock,’ a patented artificial intelligence platform for analyzing advertising. The company was founded two years ago by Dmitry Bilash and Dmitry Pleshakov.
A US-funded Business Incubator project launches across Ukraine this week with the goal of providing intensive business training to 60 to 90 Ukrainian startups a year. Executives of selected startups and SMEs will go through four-month training sessions, learning business fundamentals, idea shaping and fundraising from mentors, largely Americans from the IT sector. Funded by USAID through the end of 2022, the program is directed by Charles K. Whitehead, a business law professor at Cornell Law School. Open to tech-based businesses, the program will be offered in Dnipro, Kharkiv, Kyiv, Lviv, and Odesa. Companies interested in the first session should apply by May 3 through: www.eo.in.ua.
Turkey’s Özaltın Holding is in talks with Ukrhydroenergo on completing two Soviet-era hydroelectric projects on the Dnipro. Near Kaniv dam, in Cherkasy, there are plans to resume construction of a 2,500 MW project. Further downstream, at Kakhovka, there is a plan to build a second power generating facility, the seventh and last on the Dnipro. Funding has not been obtained.
Norway’s AICE Hydro A.S. plans to bid in the first privatization of a small hydro plant in Ukraine, the State Property Fund reports. Next week an appraiser is to be chosen for the 2 MW hydro plant across the Southern Bug in Pervomaisk, Mykolaiv region. Soon after the appraisal, the 90-year-old plant will be put up for auction on ProZorro.Sale, promises Vitaliy Trubarov, head of the State Property Fund. Arne Jakobsen, CEO of AICE, says foreign investment can renew Ukraine’s small scale hydro production. Norway is Europe’s largest hydropower producer, drawing 98% of its electricity from hydro.
Real wages were up 11% y-o-y in February, reports the State Statistics Service. Nationwide, the average monthly nominal wage was UAH 9,429, or $350. The average wage in Kyiv city was 50% higher, or $530. And Kyiv wages, the highest in the nation, were twice as high as the lowest in Ukraine, $266 in Chernivtsi.
Horizon Capital, the U.S. private-equity firm specializing in Ukraine, is investing $10 million in Ajax Systems, a Kyiv-based producer of wireless security systems. A competitor to Amazon’s Ring, another Kyiv-based security system designer, Ajax makes sensors that detect intruders, fire, and flooding and remote controls for household appliances, locks, and lighting. Founded in 2011, Ajax employs 500 people in Ukraine and largely sells to the European Union.
The founders of Monobank, Ukraine’s mobile bank, are investing $1 million to bring a British version, Koto, to the UK market by September, Dmytro Dubilet, one of the founders, tells Novoe Vremya magazine. “We are trying to launch a project in England now,” says Dubilet who founded Monobank in 2017 with Oleg Gorohovsky and Mykhailo Rogalskiy, all former managers at PrivatBank. “The alpha version is ready. We are engaged in internal testing. I am already paying for purchases with a Koto card.” Less than two years after founding, Monobank has 826,000 clients in Ukraine.
Ukrainians are among Europe’s fastest adopters of mobile device payment systems and other non-cash transactions, Maria Babenko, regional director for Visa Inc., tells Focus magazine. “Of course, if we compare Ukraine with Europe in terms of the amount of money flowing through non-cash channels, we are still an emerging market,” says Babenko who handles CIS and Southeastern Europe. “But if we look at Ukraine in terms of adaptation of innovations, then I would say that we are seen as a leader in this direction…Apple Pay and Google Pay, which work in Ukraine, have not yet entered all European markets…contactless transactions in many countries are far less common than in Ukraine because of the unwillingness of retailers to receive such payments.”
Google Ukraine launches this week the Google Pay online payment service, a streamlined system that does away with re-entering payment card data with each online purchase. About 6,500 Ukraine-based online stores have adopted this option. About 200,000 physical stores now accept Google Pay.
The Ukraine offices of three international search firms – Odgers Berndtson, Pedersen & Partners and Ward Howell – have won mandates to identify candidates for six independent board members of Eximbank, Oschadbank and PrivatBank, Finance Minister Oksana Markarova writes on Facebook.
Saudi Arabia’s SALIC UK Ltd is investing $51 million this year in farm machinery to cultivate its 195,000 hectares of Western Ukraine farmland, split between two companies, MRIYA Agro Holding and Continental Farmers Group. According to Georg von Nolcken, the new chief operating officer of the combined companies, SALIC is buying almost 300 pieces of machinery, including tractors, combines, self-propelled sprayers, and transport trailers.
Corn was king according to the final breakdown of Ukraine’s record 2018 harvest of 70 million tons, 13% bigger than the year before. The State Statistics Service reports: Corn – 35.8 million tons; Wheat — 24.6 million tons; Sunflower seeds – 14.2 million tons; and Soybeans – 4.5 million tons.
Grain exports should hit 49 million tons this marketing year, up by almost one quarter from the comparable July 2017/June 2018 period. So far grain exports have hit 37 million tons, up 23% from the same period last year, according to the Agriculture Ministry.
In ‘test mode,’ the new Cargill-MV Cargo grain terminal has exported 1 million tons of grain since last summer. “In test mode, we handle 20,000, sometimes 30,000 tons a day!” Andrei Stavnitser, co-owner of the terminal writes on his Facebook page. Located in Yuzhne, Ukraine’s busiest Black Sea port, the $100 million terminal and 16-meter deep berth are designed to handle 10% of all of Ukraine’s annual grain exports.
Preparing for a cutoff of Russian gas through Ukraine next year, Naftogaz is expanding its storage reservoirs and looking for international financial aid to buy the gas to fill them, Andriy Kobolyev, CEO of Ukraine’s state oil and gas company told an energy meeting in Brussels on Friday. Asked what Naftogaz will do if talks with Gazprom collapse this on a new transit contract, he responded: “The short answer is: more storage and more liquefied natural gas.” Asked about last Wednesday’s request by the Danish Energy Agency for another environmental review of the Nord Stream 2 gas line, he said: “This is definitely not a ban. But it is another big delay.”
Arkad, an Arab-Italian consortium, submitted the lowest bid — €1.1 billion – to build a pipeline to take Russian gas across Bulgaria, from Turkey to Serbia, reports Novinite, a Sofia-based news service. Vladimir Malinov, executive director of Bulgartransgaz, said Friday the tender winner will be announced in April. The winner will have 250 days, about eight months, to build the gas line. Running under the Black Sea from Anapa, Russia, TurkStream made landfall last week on the Turkish coast near Kıyıköy. Gas is to start flowing on Jan. 1. Of the 15.8 billion cubic meters arriving at the Bulgarian-Turkish border, deliveries are to be: 11 bcm to the Serbian border, 9 bcm to the Hungarian border, and 4.3 bcm to Slovakia.
Hungary and Azerbaijan agreed Friday to work out a route for delivering Azeri gas to Hungary next year without going Ukraine. Noting that the Russia-Ukraine gas transit contract expires at the end of this year, Hungary’s Foreign Minister Péter Szijjártó said in Baku: “This is a particularly serious challenge for Hungary in view of the fact that more than half of Russian gas imports to Hungary go through Ukraine.”
Racing a Dec. 31 expiry deadline for the green tariffs, Ukraine commissioned 861 MW of renewable energy facilities in Q1 – five times the amount during the same period last year. Of the total, 172 MW were wind and almost 700 MW were solar, according to figures released Friday by the National Commission for Energy, Housing and Utilities Services Regulation. In the coming weeks, the Rada is to vote on an auction system that would replace the green tariffs, some of the highest in Europe.
Remittances by Ukrainian working abroad jumped by 17.5% last year to $11 billion, reports the National Bank of Ukraine. Russia traditionally the top destination for Ukrainian workers is fast being eclipsed by Western nations. Remittances from Poland increased by 16.4% to $3.6 billion, almost four times the level of Russia – $948 million. While remittances from Russia were down by 27%, money sent from the US increased by 28%, to $870 million. Money sent from the Czech Republic jumped by 50%, to $846 million. Italy was in fifth place, with $492 million, a 10% increase over 2017.
To cut crowding at Kyiv Boryspil, the airport re-opened Terminal F yesterday for discount and charter passengers. Refurbished after five years and newly equipped with passport control booths, Terminal F is for passengers prepared to walk to their planes. The terminal now handles Bravo, Lauda, Ryanair, SkyUp, Windrose and Yan Air. Soon, it will handle Aigle Azur, Bukovyna and FANair.
SkyUp, Ukraine’s new discount airline, is to receive three more Boeing 737s in April, part of a planned tripling of its all-Boeing fleet to 12 by the end of this year. Breaking with UIA’s Boryspil hub strategy, SkyUp is launching direct flights this spring from regional airports: Chernivtsi, Dnipro, Kharkiv, Kherson, Lviv, Mykolaiv, Odesa, Poltava, and Zaporizhia. The flights, largely to vacation destinations, are a mix of charters and regular flights, Dmitry Seroukhov, CEO of JoinUp! travel agency, told reporters Friday.
France will benefit from Ukraine’s low-cost air travel revolution as SkyUp negotiates launch dates for Kharkiv’s first flights to Paris, for Kyiv’s first regular flights to Nice and for a Kyiv-Boryspil-Paris flight. Stemming from a France-Ukraine partial air liberalization negotiated last winter, SkyUp won permission on Friday to perform the three routes. As part of a reciprocal deal, a second French carrier, Aigle Azur, starts Kyiv Boryspil – Paris Orly flights on April 18. Aigle Azur is adding the Ukrainian language to its website. For years, France-Ukraine flights were a monopoly of UIA and Air France.
UIA, Ryanair and Wizz Air are being investigated for possible collusion over new restrictions on carryon hand luggage, the Antimonoply Committee tells the Kyiv Post. Wizz Air and Ryanair announced stricter carryon rules on Nov. 1. UIA followed suit on Jan. 15.
Private passenger railroads are knocking-knocking on Ukraine’s western door. Czech’s RegioJet has “a great interest in going to Mukachevo,” Alexander Krasnoshtan, Ukrzalyznitsya’s director of long distance passenger service, tells the Center for Transportation Strategies. The train would travel between Košice, Slovakia and Mukachevo, Zakapattia. Tomorrow, UZ plans to test this European gauge route with Slovak rolling stock. For the last year, RegioJet has bused passengers from Mukachevo and Uzhgorod to Košice, where they board RegioJet trains heading west.
Separately, LeoExpress, another Czech private train operator, is applying to Polish Railway Transport Administration to run a train from Prague to Krakow to Medyka, on the Polish border. With Ukrainian permission, the train would then cross into Ukraine, traveling 20 km east, stopping at Mostyska-1, the eastern terminus of European gauge tracks in Lviv. UZ looks favorably on both proposals, Krasnoshtan told the Center for Transportation Strategies.
With ridership on trains to Russia falling by 20% a year, Ukrzaliznytsia has cut frequencies and may drop the Kyiv-St. Petersburg train entirely, Krasnoshtan says in the same interview. By contrast, west bound trains to Poland and Austria have high occupancies and are money makers. The new ‘Four Capitals’ train to Belarus and the Baltics is running at 40% occupancy, but UZ has hopes for more riders this summer.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.