BUSINESS IN BRIEF (04/18/99)

BUSINESS IN BRIEF

Antonov planes in demand

MOSCOW - German Air Force aviation technology expert Gen. Herman Hagen said on April 3 that he highly rates the Ukrainian military-transport plane AN-70, currently competing in a tender to supply NATO countries. Gen. Hagen said the price of the AN-70 will be approximately 63-73 million euros. The market demand is 410 units. Meanwhile, Britain and the U.S. are studying a Ukrainian and Russian proposal to work together in plane construction. Developments of military and commercial versions of the AN-124-210 Ruslan and a number of other planes are planned, stated Antonov construction bureau officials on April 2. The proposal would call on the U.K. and the U.S. to provide engines, electronics and brakes, with the joint Ukrainian-Russian side required to carry out research, construction and personnel training, and to service the planes. A new version of the AN-124-210 Ruslan, equipped with Rolls-Royce engines, is planned to be leased to the British Defense Ministry, with a further new model of this plane currently being developed featuring American-made General Electric engines. The new versions of Ruslan are far ahead of the main competitor in a British tender, the American-made C-17, outperforming the Americans with a price tag that is half the cost of a C-17. (Eastern Economist)

Rocket launch goes off without hitches

KYIV - The Sea Launch project celebrated the successful launch of a three-stage rocket on March 28. The rocket, including two stages manufactured by the Dnipropetrovsk company PivdenMash, was launched from a converted oil rig in the equatorial region of the Pacific Ocean. The launch was the first of its kind, and should go some way to repairing confidence in the Ukrainian space industry following last September's disastrous Zenit rocket crash that destroyed $190 million (U.S.) worth of Globalstar communication satellites. The remote launch site avoids many of the associated risks of launches in populated areas, and the equatorial location benefits from the earth's higher rotational speed at the equator, allowing the rocket to take aboard heavier loads. (Eastern Economist)

Broadcasters announce agreement to merge

KYIV - Studio 1+1's parent company, Central European Media Enterprises, and SBS Broadcasting SA have announced they have entered into an agreement for the $615 million (U.S.) merger of CME into SBS. The combined company, which will retain the name SBS Broadcasting SA, will own interests in a diversified mix of television and radio broadcasting assets in Europe's fastest growing markets. In addition to 1+1, the enlarged SBS will own a number of major TV stations across Europe and a group of Scandinavian radio stations. Harry Sloan will remain co-chairman and chief executive officer of the expanded SBS and Ronald Lauder, the chairman of Central European Media, will take on the role of co-chairman at SBS. CME will own approximately 33 percent of the combined company. The merger is expected to close in 90 days. Studio 1+1, a Ukrainian-German-American company, started broadcasting in 1995 on UT-1, providing this state television channel with self-produced and acquired programs. In November 1996 1+1 won a tender for a 10-year license to broadcast on the second channel UT-2. 1+1 is currently entitled to 15 hours of broadcast time per day. (Eastern Economist)

P&G boss in court over certification

KYIV - Kyiv's Moskovskyi District Court passed a guilty verdict on April 8 on former P&G Ukraine GM Kesser Sharif on charges of selling non-certified products on the domestic market using P&G trademarks. P&G Ukraine PR head Vitalii Prokopenko responded: "The company is disappointed with the court's decision and has begun work on our appeal." Mr. Prokopenko said that Mr. Sharif had faced similar accusations last year from the Moskovskyi District Court which were later dropped. P&G has faced a number of certification problems in Ukraine. The State Standardization Committee in March 1998 revoked several certificates for some P&G products produced by the company's plants in Turkey, Romania, the Czech Republic, Poland and the U.S. P&G appealed to the court of arbitration and the ruling was eventually reversed. (Eastern Economist)

McDonald's opens new railway restaurant

KYIV - McDonald's opened its 20th restaurant in Ukraine on March 30 at the Kyiv railway station. The restaurant is located in a newly constructed two-story building in the square opposite the station's main terminal. It is the first of 16 planned new restaurants in Ukraine in 1999. McDonald's investments for 1999 for construction and development of local supply infrastructure should exceed $15 million (U.S.). (Eastern Economist)

Volvo eyeing Ukrainian market

STOCKHOLM - The Swedish firm Volvo signed a contract on March 25 to supply 1,000 diesel engines that will be mounted on Ukrainian-built farming machines. The engines will be supplied over two years. Announcement of the contract came during President Leonid Kuchma's state visit to Sweden. Volvo also signed a protocol of intention with the Orlan transport company, which is going to buy 200 Volvo trucks. Volvo Trucks has plans to increase its presence in Ukraine by setting up a dealership network and strengthening its servicing stations network. So far, Volvo has sold 350 trucks in Ukraine, which amounts to 40 percent of total number of trucks imported. Volvo chief executive director Leif Johansson said Volvo Bus is currently studying the Ukrainian market to expand its operations and holding talks with Zhytomyr authorities to build a bus assembly plant, similar to its plant in Omsk, Russia. (Eastern Economist)

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