BUSINESS IN BRIEF (02/14/99)

BUSINESS IN BRIEF

AN-7X goes into plane tender as planned

KYIV - The Ukrainian-Russian consortium on the AN-70 cargo plane submitted all necessary documents to participate in the tender on supplies of military-transport planes to the European countries, said Vice Minister of Industrial Policies Valerii Kazakov on February 1. He explained that Germany is most interested in promoting the AN-70 project, which will be renamed the AN-7X. Proposals for cooperation were sent to four countries: Germany, France, Italy and Spain. Mr. Kazakov stressed that promotion of the AN-70 plane on European markets is one of the most significant international projects involving Ukrainian companies. He underlined that no other country is capable of producing a plane similar to the AN-70. The joint Ukrainian-Russian project had received a boost on January 25 with confirmation of participation from seven German firms. The German companies, including BMW, Rolls-Royce, FairChild Dornier, VDO-L and BGT, have maintained a long-standing interest in the project. The AN-70 plane, initially developed five years ago jointly by the Antonov Aircraft Design Bureau and several Russian airplane manufacturers, is designed to fill the gap left by the U.S. designed Hercules military cargo aircraft. (Eastern Economist)

Aircraft industry performing globally

KYIV - The Ukrainian AN-32P plane is participating in a tender in Greece on February 2, announced Vice Minister of Industrial Policies Valerii Kazakov. Greek officials have expressed an interest in Ukrainian aviation equipment in general, and specifically this version of the AN-32 plane, which is used to fight fires. Mr. Kazakov also said that after successful demonstration of Ukrainian planes at the international Fidai exhibition in Chile last year, a number of Latin American countries also expressed interest in the AN-32P. Another tender is now under way to supply planes to Brazil, with Bolivia also keen to stock up on Ukrainian planes. (Eastern Economist)

Coca-Cola continues to invest in Ukraine

KYIV- Coca-Cola officially opened its second Ukrainian production plant, located 50 kilometers from Kyiv on February 2. It is one of the largest such plants in Europe, and the biggest in the former Soviet Union. President Leonid Kuchma, who attended the ceremony, called it a "good example for all others who hesitate over entering the Ukrainian market." He added, "Ukraine will continue to support strategic foreign investors," and thanked Coca-Cola for its courage. According to the president, since independence Ukraine has received a total of $960 million (U.S.) in foreign investment, $270 million that from Coca-Cola. The plant has been constructed in about two years. Coca-Cola also has a plant in Lviv. (Eastern Economist)

Kyiv has world's largest billboard

KYIV - The world's largest billboard was unveiled on February 3 in Kyiv. The advertisement for Unilever's Organics shampoo adorns the front of the Ukraina department store building, looking onto Victory Square, and is 126 meters wide and 17 meters high. MTT of Holland produced the giant billboard, working with the advertising agency Ark J. Walter Thompson, which came up with the idea, and the Vinnytsia company Alptekhnolohiya, which installed the billboard. All must now await an independent surveyor's confirmation of a new world record before they can claim their entry in the Guinness Book of Records. Explaining why Ukraine was selected for this distinction, Unilever Ukraine Director Chris Key said Ukraine, with its population of 50 million, "has great potential." He added that the project "was very expensive," but no greater than the price of setting up 105 standard-size billboards. (Eastern Economist)

Koreans to fund new language center

KYIV - Following a meeting with Korean Ambassador Kang Keun Taik, Pechersk Administration Head Anatolii Kovalenko on February 3 announced that the Korean Agency for International Cooperation will contribute $400,000 (U.S.) toward reconstruction of the Klovskyi Lyceum of foreign languages. He said a total of $1.3 million is needed to reconstruct the lyceum. The English, German, French and Korean languages will be the lyceum's specialties. Reconstruction is scheduled for completion by autumn. (Eastern Economist)

BP shows interest in Ukrainian oil route

KYIV - British Petroleum/Amoco is considering the feasibility of exporting Caspian oil from Baku via Ukraine's Odesa-Brody pipeline as an alternative to the proposed Baku-Ceyhan route, Interfax reported on February 2, quoting Vladislav Tarashevsky, chairman of the Ukrainian State Committee for Oil and Gas. Interfax also quoted the oil company's vice president, Richard Nilton, as saying that the company is considering alternatives in view of the "political pressure" to opt for the Baku-Ceyhan route. The U.S. government is actively lobbying in favor of that route. (RFE/RL Newsline)

Hilton to run Kyiv's first five-star hotel

KYIV - The planned Teatralna Hotel will be the first five-star hotel in Ukraine. Finnish company Skanska Oy will carry out reconstruction work, expected to last a year, beginning March 1. Upon completion of reconstruction, Hilton International will take over management of the hotel as its major investor. This announcement follows negotiations during a visit by a Hilton International delegation, headed by company Vice-President Clive Hiller, to the Kyiv State Administration. Kyiv Deputy Mayor Volodymyr Yalovyi said that the city had also invested 12 million hrv in construction works and is expecting a return in the near future. Mr. Hiller said his company will invest more than $23 million (U.S.) in reconstruction of the hotel in the form of direct crediting. A joint venture called Teatralna was created to conduct reconstruction and management of the hotel, with 75 percent of the shares belonging to Hilton and 20 percent to the city of Kyiv. (Eastern Economist)

Ships auctioned at bargain prices

ODESA - The passenger ship Taras Shevchenko was sold at auction in Odesa on January 22 for $2.3 million (U.S.), although its value had been put as at least $11 million. The ship belonged to UkrPasFlot and the name of the buyer has not been made public. The ship's price was low because only two bidders showed up for the auction, and the auctioneer was forced to repeatedly lower the price before he received any bids. Last year, the Taras Shevchenko was twice arrested in foreign ports because of debts owed by the Black Sea Shipping Co. During the same auction, another ship, the Odesa-San, was sold for only $80,000 (U.S.). UkrPasFlot admitted that it made mistakes in the auction and asked the Justice Ministry to annul the auction. (Eastern Economist)

1+1 and CME forge closer ties

HAMILTON, Bermuda - Central European Media Enterprises announced on January 8 that it had purchased an additional 10 percent stake in the Studio 1+1 group of companies for $5 million (U.S.), bringing CME's total interest to a controlling 60 percent stake. Michel Delloye, president and CEO of CME, said, "The increase in CME's equity stake in the Studio 1+1 group is a reflection of CME's long-term commitment to studio 1+1 and the Ukrainian television market and CME's confidence in Oleksander Rodnianskyi, Studio 1+1's skillful leader." 1+1 is Ukraine's most watched TV channel with an average broadcast share of over 33 percent. (Eastern Economist)

Russians order Ukrainian space phones

KYIV - The electronics company KyivPrybor on January 15 announced plans on to work with Russia's space industry to produce four on-board programmed command radio lines for the Ikar craft to provide for communication with earth, said factory director Oleh Lebedev. Eighty-five percent of KyivPrybor's orders come from Russia. (Eastern Economist)

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