UKRAINEINVEST ISSUES THE BUSINESS WEEK, A FREE ON-LINE PUBLICATION CONTAINING A WEEKLY SUMMARY OF IMPORTANT BUSINESS NEWS IN UKRAINE, FOR 26 MARCH, 2018.
Europe’s largest low-cost airline, Ryanair to begin flights to and from Kyiv and Lviv later this year further cementing Ukrainian ties to European cities
Ryanair signs an airport agreement with Boryspil on Friday March 23, clearing the way for flights later this year. The Dublin-based discount airline held a press conference at Terminal F, the terminal that opened in 2010 to serve discount airlines. The signing comes after a formula was negotiated to lower airport fees for all airlines and to encourage new flights. Referring to Ryanair’s pullout last July, Infrastructure Minister Volodymyr Omelyan told UBJ.am: “There was tremendous resistance from inside the country. Not everybody was pleased to have the cheapest and biggest aviation company come to Ukraine.” A travel website, fly4free, posts what they say is the list of new Ryanair routes from Kyiv Boryspil to: London Stansted, Stockholm Skavsta, Vilnius, Wroclaw, Barcelona, Warsaw Modlin, Gdansk, Krakow, Poznan and Bratislava. From Lviv, the website says, there will be flights to: London Stansted, Warsaw Modlin, Memmingen, Dusseldorf Weeze and Krakow.
Agriculture
- Ukraine plans to start exporting wheat to China and Vietnam this year, according to Volodymyr Lapa, chairman of the State Service on Food Safety and Consumer Protection. To date, Ukraine has supplied only corn, barley, and soybeans to China and Vietnam. In addition, a phytosanitary agreement with Indonesia is to be signed next month, liberalizing wheat exports to Southeast Asia’s most populous nation.
- T.B. Fruit, a Lviv juice producer, increased organic juice production by 20% last year and exported about 3,000 tons of concentrate to the US and Europe. Located 30 km west of Lviv, the company markets its juices in Ukraine under the Galicia brand. “In the concentrated juice industry, we occupy about 60% of the Ukrainian market, 12% of the European market, and 8% of the global market,» Oleg Mochaluk, T.B. Fruit production director, told reporters Thursday at the conference, Organic Ukraine 2018. The number of cows, pigs, sheep and goats decreased in Ukraine last year, the State Statistics Service reports. As of March 1, Ukraine had 2 million cows, 4.5% fewer than one year ago. The number of pigs decreased by 7.7%, to 6 million. Sheep and goats decreased by 4% to 1.4 million. Ukraine’s steady livestock shrinkage is linked to an aging and shrinking rural workforce in a country where bound by traditional, labor intensive animal husbandry techniques.
Automotive
- Mitsubishi Motors’ Ukraine affiliate is opening ‘fast-charging’ stations in the Mitsubishi dealership network - Kyiv, Dnipro and Kharkiv. The stations open on the eve of the Ukraine launch of the Mitsubishi Outlander PHEV, or parallel electric hybrid vehicle.
- With two bills before the Rada, Ukraine seeks to become a major electric vehicle maker and to convert its massive lithium deposits into a major source of batteries for Europe’s growing electric car fleet. For 10 years, imports of electric car components and bodies would be tax free. For 15 years, lithium miners and makers of batteries and electric cars would not pay taxes on profits. Buyers of electric cars would get income tax deductions, and 5% of all parking spaces would have car chargers.
Aviation
- Flown directly from Seattle to Boryspil, a new Boeing 737-800 joined UIA’s fleet last weekend. Within 10 days, a second new Boeing 737-800 is to come from the Boeing plant in Seattle, avianews. com reports. In total this year, Ukraine International Airlines is to receive four Boeing 737-800, four Boeing 777-200ER, and two Embraer 195 from Brazil.
- SkyUP, Ukraine’s new discount airline, has placed a $624 million order for five late generation Boeings of the MAX series. SkyUP takes delivery of the five jets in 2023 and has an option to buy five more. Next month, SkyUP starts flights with six Boeings. The airline is owned by JoinUP, a tour operator owned by Tetyana and Yuri Alba.
Banking & Finance
- Hours after the Rada voted to approve Yakiv Smoliy as governor of Ukraine’s central bank, Smoliy told reporters Thursday afternoon that he would retain the independence and sobriety of the National Bank of Ukraine. «I can assure you that the course of reforms that the National Bank has taken will remain unchanged,” he said. “We will strictly adhere to our mandate to ensure price stability and financial stability in order to promote sustainable economic growth.” Referring to his 10 months as acting governor, he said: “«I want to emphasize that I am not a politician. I am a workaholic, a technocrat.”
- Ukrainian workers in Poland transferred home $3.8 billion last year, 1.5 times the level of 2016. Poland’s Deputy Foreign Minister Bartosz Cichocki tells UNIAN. Poland’s National Bank forecasts about 250,000 additional Ukrainians will go to Poland to work this year.
Business
- Ukraine’s exports to Austria rose by 48% last year, President Poroshenko said Wednesday at a joint press conference with Austrian President Alexander Van der Bellen in Kyiv. Overall, bilateral trade was up 18.5%, to $1.2 billion. On Thursday, Austria’s president met with businessmen in Lviv. Once part of the Austro-Hungarian empire, Lviv has a new Austrian consulate general and direct 90-minute flights to Vienna on Austrian Airlines.
- Workers at ArcelorMittal Kriviy Rih, the nation’s largest mining and metal complex, rallied Thursday for a monthly wage of EUR 1,000, safer working conditions, and an end to “anti-union” policies. In recent days, several unions have threatened to go on strike. Workers have been emboldened by the visa free policy which allows Ukrainians to go to Poland for 90-day stints and earn up to four times their wages here.
Commodities
- Potentially Canada’s largest investment in Ukraine, Black Iron Inc.’s Shymanivske iron ore project in Krivyi Rih is making progress in obtaining rights to three key land parcels for the mine and plant. Noting that the Kryvy Rih City Council is “very supportive,” a company press release from Toronto predicts that land rights will be acquired by the end of this year. This would allow construction to start next year on what could be a $500 million project. The deposit contains an estimated 646 million tons of iron-bearing material.
- Natalia Mykolska, Ukraine’s trade negotiator, has asked the Trump Administration to exempt Ukrainian metal products from the new 25% steel import duty. The new duty starts Friday.
Energy
- The EBRD aims to help finance 10 to 20 bioenergy projects in Ukraine through 2021, Sergey Maslichenko, regional associate director for Energy Efficiency and Climate Change, tells Interfax. After financing wind and solar projects, he said, “now we want to make a greater emphasis on bioenergy projects - biogas, biomass, and production of bioethanol.” He said research shows Ukraine’s potential bioenergy resources -- husks, straw, other agricultural wastes – have the energy equivalent of 30 million tons of oil. Ukraine consumes 8 million tons of oil a year.
- Over 60 solar energy companies – from Belarus, China, Denmark, France, Germany, Ukraine and the United States – have applied for land plots in the Chernobyl exclusion zone to build solar energy stations, Ostap Semerak, Minister of Ecology and Natural Resources, tells a Rada energy committee. On Monday, the Minister will outline a solar park feasibility study to be made by Tractebel Engineering, a French company considered a leader in renewable energy.
Infrastructure
- Ukrzaliznytsia plans to purchase 350 to 500 new grain wagons this year, according to Andriy Ryazantsev, finance director of the state railway. Much of transportation bottlenecks are caused by slow loading of grain, an issue at 63% of 518 grain loading stations. He told reporters at Ukrinform: “The figures show that Ukrzaliznytsia is working efficiently, even despite the growth of harvest volumes. Provocative statements that we destroyed or stopped exports are not justified.»
- With the government’s road building budget doubling this year, to nearly $2 billion, Prime Minister Groysman wants a large-scale audit of the quality of roads constructed last year. This “urgent inspection plan” will lead to requiring contractor to pay for repairing shoddy work, he said at meeting of the Infrastructure Ministry and State Highway Agency. With the road construction season starting next month, major road works are expected at 218 sites across the nation.
