BUSINESS IN BRIEF (10/29/00)

BUSINESS IN BRIEF

U.S. is the biggest foreign investor

KYIV - The volume of foreign investments into Ukraine in the first half of 2000 increased by 58.6 percent compared to first half of 1999 and made up $420.1 million (U.S.), stated the State Statistics Committee. The Commonwealth of Independent States and Baltic countries invested $5.3 million (U.S.), with the remainder coming from other countries. The largest investments since independence were made by U.S. non-residents at $629 million; Cyprus, $337.9 million; the Netherlands, $329.9 million; Russia, $284.2 million; Great Britain, $271.9 million; Germany, $226.8 million; South Korea, $171.2 million; Switzerland, $151.7 million; Virgin Islands, $151.5 million. The most investment attractive sector was food processing with $727.9 million in investment; internal trade, $673.4 million; machine-building and metal processing, $337.5 million; finance, credit and insurance, $227.4 million; and the fuel industry, $198 million. (Eastern Economist)

Kyiv, Tashkent push bilateral free trade

TASHKENT - In the first quarter of 2001 Ukraine and Uzbekistan will start to increase the number of goods included under the Free Trade Zone agreement, said Vice Minister of the Economy Andrii Honcharuk. Currently, the FTZ goods are leather, livestock, gold and metal scrap from the Ukrainian side; wool and pharmaceuticals from the Uzbek side. In 1999 Ukraine had a trade surplus with Uzbekistan while trade between the countries was $252.7 million (U.S.). In the first half of 2000 trade was $152.6 million. Trade between the countries before 1998 was over $400 million, before falling sharply. The countries have signed a protocol on prolonging the agreement on bilateral trade until the end of 2001. (Eastern Economist)

Mobile communications to increase twofold

ODESA - By year's end there will be up to 750,000 mobile communication services users, said UMC head Oleksander Skliarov. He added that currently Ukraine has about 500,000 such users, 82 percent of whom subscribe to UMC (56 percent) and Kyivstar GSM (26 percent). Mobile communication is the most dynamic sector of communication and brings in 16.4 percent of the sector's $685 million (U.S.) in profits. Mr. Skliarov added that investments into telecommunications are nearing $300 million (U.S.), and are the biggest in the sector. (Eastern Economist)

Ukraine is seventh in weapons export

KYIV - Ukraine is the world's seventh largest weapons exporter, according to research on weapons trade in 1999 by the Stockholm International Peace Research Institute. Last year Ukraine sold weapons worth over US $429 million (U.S.) or $178 million less than in 1998, when weapons exports were at $607 million. The United States remains the world's largest weapons exporter, having sold weapons for $10.442 billion in 1999. Russia is second at US $3.125 billion, followed by France which sold military hardware worth $1.078 billion. (Eastern Economist)

Agreement signed with Polish Business Club

KYIV - The Ukrainian Union of Industrialists and Entrepreneurs signed an agreement of cooperation with the Polish Business Club. The agreement will assist the implementation of intergovernmental treaties on trade and economic activity between Ukraine and Poland. The agreement provides for the creation of joint ventures, coordination of the efforts of both organizations on foreign markets and participation in international agreements. (Eastern Economist)

Antonov's Mria cargo plane to be redesigned

KYIV - The world's largest cargo airplane, the AN-225 Mria, developed and built at the Antonov Construction Bureau will be redesigned for commercial exploitation, said Antonov Airlines President Kostiantyn Lushkov. He said redesigning the plane to carry 250 tons of cargo is scheduled for the second half of 2001. Motor-Sich has agreed to finance part of the works and will supply six new engines. Remodeling is estimated to cost $20 million (U.S.). (Eastern Economist)

Ukrainian aviation alliance created

KYIV - A memorandum to create an aviation association, Ukrainian Aviation Alliance, was signed by the representatives of five airlines, including National Airlines of Ukraine, Odesa Airlines, Luhansk Airlines, Lviv Airlines, Kharkiv Airlines and the biggest air ticket distributor in Ukraine, KyivAvia. The organization was created to handle the airlines' common problems, including the lack of proper state regulation of the air transportation market, airport tariff policies, and aeronavigation services. (Eastern Economist)

Obolon continues production increases

KYIV - The Obolon Brewery increased its production volumes in the first half of 2000 by 43.5 percent. The increase was mainly due to a 58.5 percent growth in beer production, while the increase in low alcohol drinks was 43.8 percent; mineral waters, 35.3 percent; and soft drinks, 25.5 percent. There has been no drop in production since the enterprise was privatized in 1992. Since then the production increased by 5.4 times and payments to the budget grew by 9.7 times. Over 70 percent of the profits are spent on modernization. (Eastern Economist)

Israeli company to build 40-story complex

KYIV - The Israel-based Zeevi Group will build a 40-story business and retail complex at centrally located Besarabska Ploscha in Kyiv, announced Serhiy Babushkin, the city's chief architect. The complex in downtown Kyiv will cost $150 million (U.S.), and have a total area of 200,000 square m including underground parking, malls, offices and apartments. "The building construction will hopefully start in October-November," said Tamir Winterstein, Zeevi's vice-president. He stated the complex will be up and running by the end of 2002. "We did not ask for any investment guarantees from the municipality or the government," Mr. Winterstein said. He added the company used its own resources for the project, as well as bank loans. Eight local design bureaus are working in conjunction with the Kyiv Architect's Office on details of the building. Communico, a Ukrainian company with foreign investments, will participate in the building construction and release an announcement for the construction tender. In the first stage, 1,000 to 1,200 workers will be employed on the site. Explaining why Zeevi decided to commit such substantial resources to Ukraine, Volodymyr Tokarev said "Kyiv has a good investment climate. And the investors trust the municipal authorities." Mr. Tokarev expects the repayment period will be at least 15 years. The Korea-based Daewoo Corp. was planning to build a similar complex on Besarabska Ploscha but failed to meet its obligations due to financial problems at its Korean headquarters. (Eastern Economist)

Dnipropetrovsk produces electric locomotives

DNIPROPETROVSK - The Dnipropetrovsk electric locomotive plant has launched production of a pilot series of 12 new freight two-section DC electric locomotives of its own design. The power of the locomotives is 6,250 kilowatts and they have a speed of 100 kilometers per hour. The first two prototypes of the electric locomotive have already passed tests on the Prydniprovska railway line. The project is financed by the state innovation fund and UkrZaliznytsia. The Dnipropetrovsk plant has also signed a contract with Germany's Siemens for the production of one pilot electric locomotive with an induction motor drive. Siemens will contribute equipment for the locomotive. (Eastern Economist)

| Home Page |