Ukraine

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15:21 PM Thursday, September 21, 2017
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UBJ AM Sept. 12, 2017
James Brooke
SBU freezes Chinese buy of Motor Sich; Energoatom sees nuclear independence from Russia in 2019; Kerch bridge squeezes ships to Ukraine ports in Sea of Azov
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

• A Kyiv court has frozen 41% of shares in PJSC Motor-Sich, the Zaporizhia-based manufacturer of aviation engines. The State Security Serviice, SBU suspects that past and present officials of Motor Sich are gradually selling off the company, a ‘strategic asset,’ to a Chinese company, Beijing Skyrizon Aviation Industry Investment Co., Ltd . Sales would need the permission of Ukraine’s Antimonopoly Committee as a sale of the company to a Chinese buyer raise the “possibility of weakening Ukraine as a state."

Energoatom's President Yury Nedashkovsky says that within two years Ukraine will stop exporting spent nuclear fuel to Russia from the last three nuclear power plants that depend on Russia for reprocessing spent nuclear fuel. While on a visit to the US, Nedashkovsky noted that Ukraine’s only spent fuel storage facility is in the Zaporizhzhya region. Starting in 2019, there is to be a storage facility in the Chernobyl zone. This is to be built by a consortium that includes the American company Westinghouse Electric.

• "Azovstal" increased output of rolled steel by 13.1%, during the first eight months of this year, the company reports from its headquarters in Mariupol. The company also said it resumed imports of pig iron through the Kerch Strait. For several days in August, the strait was closed while Russian contractors put in place the central arch of the new Kerch bridge. Azovstal officials say the arch is too low to allow Panamax ships to enter the Sea of Azov. Sailors of the first ship to pass under the bridge, the pig iron bulk carrier Copan, were forced to cut the ship’s metal mast to get the ship under the new arch.

• The net profit of KSG Agro, one of Ukraine’s largest agro holdings, grew by 54% in the first half of this year.

• Kauno Tiltai, Lithuania’s largest highway construction company, wants to build roads in the Mykolaiv region. Valentin Gaidarzi, deputy head of Mykolaiv’s Regional Administration, said his region has special interest in re-building with concrete a 180 km section of N-14, which connects Kropyvnytsky, a grain growing center with Mykolaiv port. Aldas Rusevičius, general director of the company said it has wide experience with concrete in the Baltics. Kauno Tiltai opened its Ukraine office earlier this year.

• Trade between Ukraine and France grew by 15% during the first half of this year, reaching $1.1 billion. Ukrainian exports to France are agricultural: animal and vegetable fats and oils, oleaginous seeds and fruits, clothing and textiles. French imports to Ukraine include chemical products, pharmaceuticals, nuclear reactors, boilers and cars. France ranks eighth for foreign direct investment in Ukraine, for a total of $1.3 billion.

• Ukraine might lose its second largest wheat export market, Egypt, due to new wheat import requirements that favor Russia, Maksym Martyniuk, Ukraine's acting agriculture minister tells Reuters. Ukraine exported around 2.5 million tons of wheat to Egypt in the 2016/17 season, or about 14 percent of the country's total wheat exports of 17.5 million tons, according to consultancy UkrAgroConsult. This spring, Egypt, the world's largest wheat buyer, imposed new requirements for imported wheat, raising the protein content to 12.5 percent from 11.5 percent for wheat bought from Ukraine and Russia. Martyniuk said the move could help Russian suppliers: "There is an opinion that this is being done to increase the supply of Russian grain. And if the buyer intends to buy Russian grain, then we are unlikely to be able to change anything."

• Agrarian Fund, a public company, is negotiating a EUR 4.5 million loan from Turkey’s Eximbank to buy flour milling equipment from Turkey's Alapala Group. Agrarian Fund's share of Ukraine’s flour market is 12%, but it does not have its own mills. The new mill would have a capacity of grinding 150 tons of grain a day. Ukraine only has 20 industrial mills, those with capacities of over 100 tons of grain a day.

• Germany’s Fresenius Medical Care, the manufacturer of products and services for patients with impaired kidneys, is mulling resuming a EUR 30 million investment program to build a chain of hemodialysis centers. A key factor will be the Rada’s approval this fall of healthcare reform, Fresenius Ukraine Director Volodymyr Podvorny told Interfax. Fresenius built two of 10 planned hemodialysis centers, then froze the program in 2009. Podvorny predicted said passage of the government bills “will significantly increase investment in the health sector.”

• Addressing Ukraine’s neglected rivers, Prime Minister Volodymyr Groysman believes the country can increase river cargo 10-fold. At a press briefing with Prime Minister of Moldova Pavel Filip in Odesa last week, he said: "We see a large potential of developing river transport.” Referring to ongoing projects to build modern bridges and border crossings with Moldova, he said: "Ukraine and Moldova can become a reliable transit bridge between Asia and Europe.”

• President Poroshenko has asked the Rada to approve bills to start a farm land market as soon as possible. Free trading of farm land will be “the fastest and most hopeful way to attract a decent amount of foreign investment in Ukraine,” he told the parliament in his annual address last week. Approving initial legislation, he said, “would at least remove the phobias” in society about a farm land market. Zenon Zawada of Concorde Capital analyzes: “We don’t see the political will being present in parliament to approve the legislation, given how deep public opposition is to creating the farm land market.”

• A farm land market in Ukraine would increase land costs and cut Ukraine’s advantage over American wheat farmers, Andrew Swenson, a North Dakota State University Extension Service farm specialist, told Forum News Service. "What's been coming out is: the Black Sea region of Ukraine and the black earth region of Russia are becoming more competitive. They have some real advantages in land costs, labor costs…In both Ukraine and Russia, their land came from these large collective farms. That market has not been privatized ... if it is privatized, that value will be bid up.”


For comments and story ideas, please email UBJ Editor in Chief James Brooke at: james.brooke@theubj.com

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