Ukraine

Business

Journal

22:38 PM Sunday, January 21, 2018
UBJ.am
UBJ.am - Friday, January 5
Foreign investors repatriate dividends; Dubai’s DP World invests in Yuzhny port; Tax police raid Kyivstar; Lviv airport tops 1 million passengers
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
  • Foreign investors repatriated $1.8 billion in dividends last year, according to Oleg Churiy, deputy governor of the National Bank of Ukraine. For two years, until June 2016, repatriation of dividends was frozen. Today the central bank allows repatriation of $5 million per month. In a radio interview, UNIAN reports, Churiy left the door open to further liberalization this year.
  • Dubai-based DP World Group, one of the world’s largest port operators, is making its first investment in Ukraine. One of its companies, P & O Maritime, has acquired control over Ukrainian tow company LB Shipping. P&O, which has tugboats and mooring vessels, will provide towing services in Yuzhny, Ukraine’s busiest sea port. Yuzhny is undergoing a $150 million expansion, led by Cargill. Two months ago, when President Poroshenko visited the DP headquarters, CEO Sultan Ahmed bin Sulayem reportedly told him that Ukraine can become a key trade hub between Europe, the Middle East and Asia.
  • Cargo turnover in Ukraine’s Black Sea ports increased by 1% to 133 million tons in 2017, reports the Sea Ports Administration. The busiest port continues to be Yuzhny, which handled 42 million tons. The next four were: Odesa: 24 million tons; Mykolaiv 23.5 million tons; and Chornomorsk 17.6 million tons. To stimulate traffic, fees at Black Sea ports were cut 20%, effective Jan. 1.
  • About 40 tax police raided the headquarters of Kyivstar, Ukraine’s largest cellphone company on Thursday, searching for documents in a two-year old battle over what the police say is $85 million in unpaid taxes. Petr Chernyshov, president of the company, later wrote on his Facebook page: "We believe that this case was invented, since the company always regularly and fully transfers all taxes and fees to the budget of the country.” Kyivstar has 26.4 million subscribers, about 80% of Ukraine’s adult population.
  • Electricity exports will increase 15-20% in 2018, to about 5.8 billion kWh, forecasts the Ministry of Energy and Coal Industry. All power will go to the EU or to Moldova. No imports are foreseen. As in 2017, about 60% percent of the power will come from Burshtyn power plant, an ‘island’ disconnected from Ukraine’s grid and synchronized with the EU network.
  • After repairing 2,100km of roads in 2017, the Infrastructure Ministry plans to double that amount this year. The Minister, Vladimir Omelyan, has set a five-year plan of spending 50 billion hryvnia – about $1.8 billion -- a year through 2022. This year’s funding hits 92% of the goal. Much of the repair work will be paid for by new Road Fund, which started Jan.1. It is largely financed by fuel taxes.
  • Iran would be welcome to build an oil refinery in Ukraine, Energy and Coal Industry Minister Ihor Nasalyk said at his year end press conference. Recalling his visit to Tehran in 2016, after international sanctions were lifted, he said of building a refinery and supplying oil: "Iran prepares [to build], to also take part in financing, to fully provide the resource, and with a significant discount.” Nasalyk complained that, of six refineries inherited from Soviet days, only one, Ukrtatnafta’s in Kremenchuk, still operates. He blamed lack of refineries of rising fuel prices in 2017. In hryvnia, A-95 gasoline went up 21% and diesel fuel rose by 25.7%. In 2017, Ukraine’s inflation was 13%. In 2017, the dollar price of Brent oil went up 20 percent.
  • Ukraine’s steel production fell 12% to 21.3 million tons in 2017, Ukrainian steel producers’ union Ukrmetallurgprom reports. Pig iron output fell by 15% to 20 million tons. Rolled steel production was down 14% to 18.4 million tons.
  • President Putin has extended for another six months Russia’s restrictions on the transit of Ukrainian goods to Kazakhstan and Kyrgyzstan. After controls were imposed two years ago, Ukraine’s exports to Central Asia and the Caucasus dropped by 35%. To Kazakhstan, Central Asia’s biggest market, exports fell by 45.5%. Today, most of Ukraine’s exports to the Caucasus -- Armenia, Azerbaijan and Georgia – bypass Russia by leaving Chornomorsk by ferry to Georgia’s ports of Batumi and Poti. Ukraine’s formal complaint to the World Trade Organization has not brought any remediation.
  • Two more state companies are being prepared for privatization this year. Kyivpaservice operates six bus stations in Kyiv, and 19 in Kyiv region. MPO Orion is an Odesa machine building company that once was a leading producer of refrigerator compressors. Controlling shares in both companies are to be put for bid by this summer, Vitaly Trubarov, head of the State Property Fund, posted on Facebook.
  • Science funding will increase by 15% in inflation adjusted terms, to $218 million. The Education and Science Ministry reports that in 2017 the government funded 1,300 fundamental and applied research projects in Ukrainian universities.
  • To harmonize 80% of Ukrainian standards with EU standards, the government is to adopt 1,500 international and European standards by 2021, the Economic Development and Trade Ministry says. Since the 2014 Revolution of Dignity, Ukraine has abolished 14,475 obsolete international standards developed before 1992. In 2017, Ukraine adopted 1,353 international and European, adopted, the ministry said.
  • Kyiv plans to build a 2 km cable car line across the Dnipro River, linking Podol’s Poshtova Square with Trukhaniv Island. Construction will be put up for tender, with the final price estimated in the $21 range, Oleg Mystyuk, general director of the Kyiv Investment Agency, tells Interfax. Starting near the Blue Line Metro stop at Poshtova, the line cross the river to the Left Bank, linking to express bus routes to Bereznyaky and Rusanivka, two neighborhoods with limited mass transit to central Kyiv.
  • Kharkiv, Ukraine’s second largest city, gets direct flights to five new European cities this spring. SkyUP will fly to Barcelona, Larnaca, Cyprus and Rimini, Italy. Wizz Air will fly to Dortmund and Katowice, Poland. According to the airport website, passenger traffic in 2017 jumped by 34% to a record 806,200. This is well over the airport’s historic peak of 605,000 passengers in 2013. At that time, most flights from Ukraine’s easternmost airport went to Russia.
  • Lviv airport’s traffic soared 46.3% in 2017, hitting a record 1,080,000 passengers. More growth is expected in 2018 as scheduled flights start to eight new cities: Batumi (Yanair); Brno (Blue Air); Olsztyn (LOT Polish); Dortmund, Gdansk, Katowice, and London-Luton (Wizz Air); and Odessa (SkyUP). In addition, SkyUP starts charters in the summer to five cities: Antalya, Barcelona, Rimini, Sharm el-Sheikh, and Tivat, Montenegro. Last month, Italy’s Ernest Airlines launched flights between Lviv and Bergamo (Milan), Naples and Venice.
  • Train passenger traffic from Ukraine to Europe increased five fold in 2017, hitting 205,000 passengers through November, Yevhen Kravtsov, acting chairman of the board of Ukrzaliznytsya reports. Ukraine’s state railroad now runs trains to seven EU countries: Hungary, Poland, Slovakia, Bulgaria, Romania, Austria, and Czech. To extend EU travel opportunities to residents of eastern Ukraine, Kravtsov tweeted that the railroad is opening international ticket desks in six cities in government-controlled Donetsk and Luhansk: Mariupol, Kramatorsk, Slavyansk, Pokrovskaya, Rubezhnoye and Lisichansk.
  • Monday Jan. 8, the day after Orthodox Christmas, is a bank holiday in Ukraine. The next issue of UBJ.am will arrive in your email box on Tuesday morning Jan. 9.

UBJ is now free access. Please relay our link to your friends and business partners who want clear, reliable business information about Ukraine. -- www.theubj.com
UBJ a.m. is reported by UBJ Editor in Chief James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow bureau chief. For comments and story tips, Brooke is reachable at james.brooke@theubj.com
We recommend
Smoliy for NBU Governor; Privatisation bill passes...
James Brooke Jan 19, 2018
Naftogaz to import Russian gas; Ukraine’s top gas...
James Brooke Jan 18, 2018
Naftogaz to import Russian gas; Ukraine’s top gas...
James Brooke Jan 18, 2018
--> --> -->