BUSINESS IN BRIEF (04/09/00)

BUSINESS IN BRIEF

Donetsk Oblast to get $519 M in investments

KYIV - Sixty-four investment projects worth a total of $519.5 million (U.S.) will be implemented in the Donetsk Oblast in 2000, stated DerzhZovnishInform, the state monitoring center for foreign markets. Thirty-six projects worth $314.5 million will be implemented in the metallurgy and chemical sectors; 16 projects worth $146.7 million in light and food industries; and five projects worth $10.8 million in agriculture. The projects include the Donetsk Donbas hotel with $20 million in investments, modernization at Styrol - $3.6 million and modernization of production at Novokramatorsk machine plant - 12 million hrv. (Eastern Economist)

Freedom Farm promotes agriculture

CHICAGO - Freedom Farm International Inc. has operated in southern Ukraine for the last nine years and currently has 9,000 acres in production. The company leases land at $10 per acre, and with the new land privatization laws expects to buy land for $90 per acre. Freedom Farm presently reaps a 35 percent return on its investment. The company is planning a farm tour in July 22-28 to familiarize U.S. investors with the agricultural potential of the region. (Eastern Economist)

$259 M in investments expected from Canada

KYIV - No less than $259 million (U.S.) of investments from Canada are expected in 2000, stated DerzhZovnishInform, the state center for monitoring of foreign markets. Ukrainian and Canadian enterprises signed 18 agreements including: a $6 million (U.S.) contract for construction in the Vinnytsia Oblast for production of abrasive granite; a memorandum for Kyiv-based Darnytsia chemical plant worth $47.5 million; and a $5 million contract for production of bottles for Persha Hyldia vodka. Canadians also plan to invest $491.2 million in reconstruction of Lviv's airport, $228 million in the central district of Lviv and $96.4 million in two buildings in Kyiv. Another $45 million is for 10 coal enrichment projects. (Eastern Economist)

10 percent of budgets go for construction

KYIV - An average of 10 percent of all profits of local budgets since the beginning of 1999 were allocated for major construction, said Yevhen Zhovtiak, vice-chairman of the Verkhovna Rada's Committee on Budget Issues. This figure grew 0.6 percent from the previous year. The leaders among oblasts in terms of allocation to major construction, are Zakarpattia with 36 percent of budget profits, followed by Odesa and Kyiv with 22 percent each. (Eastern Economist)

Polish-Ukrainian trade is in decline

KYIV - The volume of trade between Ukraine and Poland for the first nine months of 1999 was $387 million (U.S.), which is half of what it was during the same period in 1998, stated participants of a Ukrainian-Polish conference on international trade. The decline for the most part is explained by the fact that Poland set a customs tax on Ukrainian goods, which is higher than for European goods. (Eastern Economist)

Ukrainian-Chinese JV to produce transformers

ZAPORIZHIA - ZaporizhTransformator and a Transformer Plant from China are creating a joint venture in China for the production of transformers. Agreements are currently being reviewed by the Chinese government. The share of the Ukrainian side in the authorized capital of the JV will be more than 20 percent, which will mostly consist of know-how, equipment and some monetary injections. The Chinese side will contribute premises and equipment to the authorized capital. In addition, the Chinese government has allocated $12 million (U.S.) in credit to the JV for the purchase of technology. (Eastern Economist)

Unilever will buy into Donetsk company

DONETSK - The deputy director of ZAT Marg-Vest in Donetsk, Viktor Azarov, reported that Unilever Foods Ukraine is ready to invest $36.5 million (U.S.) in the acquisition of the corporate rights of Marg-Vest, a company specializing in the production of mayonnaise and margarine, the reconstruction of its plant and the purchase of raw materials. The investment project was reviewed at a recent meeting of the Donetsk Oblast Council on special zones and investments. The general manager of Unilever in Ukraine, Chris Key, said that "the proposed agreement is a fantastic opportunity for Unilever and Marg-Vest alike," and promises the shareholders a healthy amount in the buyout of Marg-Vest. A protocol of intent has been signed by the two companies for the buyout of 75 percent plus 1 or 100 percent of Marg-Vest's share. (Eastern Economist)

Tractors delivered to South Korea

KHARKIV - The Kharkiv Tractor Plant shipped 34 HTZ-121 tractors to South Korea. The shipment is the last of 60 tractors built for South Korea, the largest contract - worth $1 million (U.S.) - for the plant in 1999, said the director of the plant, Dmytro Serhienko. Continued cooperation will depend on the results of the adaptation of Ukrainian tractors to South Korean agricultural technology. (Eastern Economist)

New Dnipro tractor is introduced

DNIPROPETROVSK - PivdenMash has assembled the new Dnipro tractor, which features an improved design and universal technical characteristics. The new tractor is able to perform any mechanical operations in the field due to its diverse system of connecting attachments. Dnipro's front axle was designed in cooperation with the Italian company Cararro, while the engine was the joint work of the Italian Iveco company and Zaporizhia Motor-Sich. The tractor's capacity is 80 hp and 100 hp. It also has a hermetically sealed cabin and an air conditioner. The Dnipro tractor will cost about $15,000 (U.S.). (Eastern Economist)

Commodity deal made with Uzbekistan

KYIV - The Cabinet of Ministers of Ukraine has authorized the closed joint stock company Ukraine-Uzbekistan Trading House to ensure commodity supplies in an agreement signed by the governments of the two countries. Under this agreement Ukraine will get cotton from Uzbekistan and pay for it with industrial goods. The government regulation allows other companies to supply goods to Uzbekistan as well, but such companies must first sign corresponding agreements with the Ukraine-Uzbekistan Trading House. The State Customs Service is tasked with ensuring that the goods supplied within the inter-governmental agreement clear customs, as they are delivered to Nikopol spinning mill's and IllichivskZovnishTrans company's bonded warehouses. The Ministry of Foreign Economic Relations and Trade must take stock of the goods supplied on the basis of the Ukrainian-Uzbek agreement, and the Transport Ministry must give priority to this deal and provide an ample number of railroad cars and containers. (Eastern Economist)

Zhytomyr could be rich in diamonds

ZHYTOMYR - The Zhytomyr region has potential for the exploration of diamond mines, said the director of the ZhytomyrBudRozviduvannia, Mykola Shvydkyi. Referring to the results of research and exploration, as well as materials from the international practical science conference called "Prospecting and Search for Diamond Mines in Ukraine," Mr. Shvydkyi observed that the Berdychiv-Shepetivka and Novohrad-Volynskyi-Bilokorovytsi regions have good prospects. Investing minimal sums in prospecting and searching for diamonds in the oblast could turn the Zhytomyr region into one of the richest in Ukraine, emphasized Mr. Shvydkyi. The crystal deposit field within the oblast almost reaches the surface, so when the diamond mines are discovered, extraction will be least costly in Ukraine. Mr. Shvydkyi said that only 400,000 to 500,000 hrv are required for the start-up, which is 10 times less than traditionally needed for extraction. Reduced expenses are due to a new device that allows for a perfect scan at a depth of 5 kilometers within three to five minutes; there are no similar devices anywhere else in the world. (Eastern Economist)

Dairy farm shows its true colors

VINNYTSIA - The Illints Dairy in the Vinnytsia Oblast recently launched production of colored milk. Children like the new product because they can choose from among blue, violet or brown milk. The various colors are the result of chocolate additives. The dairy also offers skim milk with 0.5 percent fat content. (Eastern Economist)

Food exports to Russia rose in 1999

KYIV - The volume of exports of food and agricultural products to Russia in January through September 1999 increased by 23.3 percent, compared to the same period in 1998, according to a statement by the Foreign Relations and Trade Ministry. The exports of machine-building and chemical products are also increasing. In January through October 1999 the trade volume between Ukraine and Russia was $8.258 billion (U.S.), which is 37.5 percent of Ukraine's net exports. A total 68.4 percent of Ukraine's imports from Russia are energy products. (Eastern Economist)

Mitsubishi dealer opens new showroom

KYIV - A new automobile showroom called Niko-Ukraina, the official distributor of Mitsubishi Motors in Ukraine, was opened on January 13 in Kyiv. The facility includes a service center and a bar-restaurant. (Eastern Economist)

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