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Tuesday, 17 September 06:59 (GMT -05:00)



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Ukraine’s 50 Achievements in September 2016


Both Ukrainian citizens and representatives of the international community have been monitoring the economic and political situation in Ukraine for a couple of years. The Ukrainian economy is gradually reviving and coming out of the crisis it has been in for many years. Even international organizations specializing in economy have been witnessing positive changes in the economy of Ukraine. They are making reassuring forecasts for the future of Ukraine’s national economy despite the fact that people don’t always agree with those forecasts. For a number of reasons most Ukrainians don’t trust in a brighter economic future of their motherland. Even though they don’t know the true state of affairs in the national economy, those people can be understood since they have been living in a country with a depressing economy for years and all those positive changes are hard to see and feel in everyday life of an average Ukrainian.

 

 

 

 

That’s why Market Leader decided to inform the audience about the latest positive changes and achievements made by the Ukrainian economy in September 2016.

 

In Q2 2016, Ukraine’s real GDP grew by 1,4%. This is confirmed by the National Bank of Ukraine. At the same time, excluding seasonality, the GDP gained 0,6% relative to Q1 2016. It should be noted that the result turned out to be lower than expected by the Ukrainian central bank (1,6%). This discrepancy is explained by transportation issues in the Eastern part of the country in late Q2 2016.

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After implementing the administrative services reform, Ukraine advanced by more than 40 points in the Doing Business rating. This achievement has to do with the new rules of registering a business and residential property in Ukraine. The new rules are approved by the parliament.

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At the same time, the World Bank has made a positive forecast for the near-term future of the Ukrainian economy. To be more specific, the experts predict that the Ukrainian GDP will grow by 3-4% a year in mid-term perspective. As for the previous GDP forecasts, they remain unchanged. This year, the GDP is expected to gain 1%. Next year, this is expected to be a 2% increase.

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Some other forecasts associated with the Ukrainian economy were revised and improved by the World Bank. To be more specific, they improved the inflation forecast for Ukraine. This year, the rate of inflation is expected to be 13% against the previous forecast of 15%.
 
At the same time, the revised forecast for the next year says that the World Bank expects the rate of inflation to cut down to 8,5% and 6,5% in 2017 and 2018 respectively. The previous forecasts predicted 11% and 9% respectively.
 

 

On top of that, the experts anticipate an 2,7% increase in the local export in 2017. The year of 2018 is expected to be even more pleasant for the Ukrainian export, with 5,4% growth expected. The local import is expected to grow by 2,6% and 6,1% in 2017 and 2018 respectively. This year, both the export and import are expected to decline.

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As promised, the European Union provided Ukraine with extra trade preferences not so long ago. The decision was approved by the European Commission. To be more specific, the Euro Commission expanded the access to European markets for a number of Ukrainian products. This decision is going to complement the free trade zone between Ukraine and the EU for the next 3 years.
 

 

At the same time, the European Bank for Reconstruction and Development (EBRD) has even been more positive about Ukraine’s economic prospects. The predict that the Ukrainian economy is likely to gain 2% per year starting this year. The bank may well revise the forecast to make it even more positive if the situation improves. They say that the economic success has a lot to do with the degree of success in reforming and restructuring the Ukrainian economy rather than some statistics. The EBDR pays special attention to the process of privatizing and its transparency. If there are positive changes, the growth may accelerate. They also say that direct foreign investments can be seen as the key stimulus. 

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Over the first half of the year, electronic payments have increased by 60%. In absolute terms, Ukrainians spent 1,8 billion UAH making electronic payments over the reporting period. 12 months ago, it was just 1,1 billion UAH.

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In August 2016, the arears of wages dropped by 7% as opposed to July 2016. As of September 1st, the amount was equal to 1,9 billion UAH. In case with active companies, the arears of wages declined by 9% all the way down to 1,24 billion UAH.
 

 

The biggest share of delayed wages (72%) comes from industrial companies. Transportation and agricultural companies account for 10% of the debt. The biggest debts are seen in the war-torn East of Ukraine.

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The amount of savings attracted as bank deposits keeps on growing. This is confirmed by the recent report published by the National Bank of Ukraine. To be more specific, the total amount of savings in the national currency attracted by Ukrainian banks as deposits increased 0.3% up to 120,96 billion UAH over the reporting period. USD-denominated deposit increased by 0,4% or 6,76 billion UAH over the same reporting period.

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The National Bank of Ukraine says that the tendency has had a positive impact on the national banking system by making it more liquid, which creates a solid foundation for reviving bank loans. The good news is that the bank deposits have been growing both in USD and UAH.
 
That’s why the National Bank of Ukraine expects that Ukrainians will trust more to their banks amid the existing positive tendencies.
 
More of those positive news is coming from the startup niche. To be more specific, international investors invested collectively over $2,35 million in a Ukrainian startup named Allset. Metamorphic Ventures as well as the legendary Andreessen Horowitz are on the list of investors.
 

 

The Allset app was launched back in 2015. This became a nugget for those people who lack spare time but do not want to have a lunch in the office. The free app makes it possible to reserve a table in a local café or restaurant nearby, which is fairly convenient. 

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Industrial Production and Transportation
 
According to the recent stats, Ukraine’s industrial production regained growth in September 2016. Against the same period 12 months ago, the production volume increased by 3,4%. It’s interesting to note that a month before, there was a 0.2% drop.
 

 

As for month-over-month figures, they increased by 0,8% over the same reporting period. Since the start of the year, the industrial production boosted by 2% in September 2016.

 

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They are also planning to build a manure utilization facility in the Ivano-Frankovsk region. Experts say that this facility may attract foreign investments to the amount of around $17 million. They predict that it will pay for itself in 6-7 years.

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At the same time, the local company named Karpaty is planning to create 1000 of new jobs until the end of the year. The facility has been increasing its production capacities, which requires new jobs. For now, we know that since early 2015, the company has already hired around 2500 employees.

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A new garbage recycling facility is going to be built in the Lvov region. The new facility is expected to resolve the issue with domestic waste. The construction works are expected to start in 2017. At the same time, the facility is going to recycle household appliances and electronics.

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A Danish furniture company has been busy expanding its factory in the Lvov region by building an extra facility. This facility is expected to be around 7200 square meters. The holding is planning to export the furniture to European markets.
 

 

At this point, it is reported that the company has already invested over 2 million dollars in the construction process. The construction process is planned to be over in November. At the same time, the new facility will require new jobs, which means the company will hire new employees, thereby improving the employment situation in the region. At this point, the factory employs over 60 people. After the expansion, the personnel is expected to be expanded all the way up to 200 employees.

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Ukraine and Greece are going to be connected by means of a ferryboat. This decision came as a part of the agreement between the two countries in September 2016. The next round of the bilateral talks is planned from 2017.
 
Market experts rate it as a promising project. In particular, they say that the cost of going by ferryboat is going to be cheaper than going by car, which means that the demand is going to be high.

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Google used a rocket driven by a Ukrainian engine to launch its satellite. The launch took place on September 16th. Aon the launch day, Google made a Facebook post to announce a successful launch of a European rocket carrying a Peruvian satellite – PerúSAT-1 – and several spacecraft belonging to Google’s Terra Bella.
 
At the same time, it is reported that Ukrainian Railways are expected to get vehicles from Siemens and Pesa. This was announced after the representatives of the Ukrainian railways network signed an agreement with Siemens and Pesa during InnoTrans 2016 in Berlin.
 

 

 

Moreover,Ukrainian Railways are planning to expand the amount of foreign partners and upgrade the entire infrastructure, including locomotives and rolling stock. Thanks to the existing and future foreign partners, Ukrainian Railways are planning to improve the quality of services based on European standards. 

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Not so long ago, Ukraine and Turkmenistan signed an agreement aimed at cooperating in the industrial production field. Thanks to this agreement both Ukraine and Turkmenistan are trying to create a mutually beneficial environment within the scope of the 2 industrial markets. The agreement implies coordinating efforts when creating better opportunities.
 

On top of that, the 2 sides are planning to coordinate the key direction in which they are going to develop. Ukraine and Turkmenistan are also going to cooperate in the field of innovative industry

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Ukraine is also planning to finish the construction of subway in Dnepr over the next 5 years. This information was confirmed by the Vice-Prime Minister of Ukraine. He told the reporters that the construction had been financed at the expense of loans provided by the European Bank for Reconstruction and Development and the European Investment Bank. All in all, the Ukrainian authorities are planning to spend over 300 million dollars on it. The contractor is a Turkish construction company named Limak. The initial project implies building 3 subway stations in the central part of the city. The line is going to be 4 kilometers long.

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Over the course of January through July 2016, the amount of imported automobiles increased by as much as 24%. To be more specific, Ukraine’s official statistics agency reports that all in all, there were imported 40995 autos over the reporting period, which is 24% more than 12 months before.
 

 

It is also interesting to note that the total cost of those automobiles is over $730 million, which is 68% more than last year. At the same time, the export of passenger cars crashed by as much as 50% over the same reporting period. The total amount exported is 99 units. The total cost is 2,2 million dollars.

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Saturn, which is a world-famous brand producing kitchen equipment, is now busy building a new manufacturing facility in Cherkasy, Ukraine. The new facility is going to be producing famous refrigerators for export.
 

 

The next manufacturing facility is going to employ 500 new jobs, which is another great step towards improving the national economy of Ukraine and reducing the rate of unemployment in the country. The facility occupies over 50000 square meters. 

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Another foreign company has entered Ukraine. This time, Ukraine welcomed an Israeli company named Shapir. For those of you how don’t know, this is the biggest construction company in Israel. As for Ukraine, the company is planning to participate in various tenders on the repair and construction of Ukrainian roads.
 

 

The bilateral talks last for nearly 2 months and ended successfully after the representatives of the Israeli companies got familiar with the specifics and potential of the Ukrainian market. At the same time, Ukraine expect more foreign companies to enter the industry. As for Shapir, the company is famous for constructing an Israeli airport and a dam.

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Over the course of the first 8 months of 2016, the pace of construction growth in the Kiev region increased by nearly 15% as opposed to the same period 12 months before. This is also confirmed by the recent report published by Ukraine’s official statistics agency.
 

 

All in all, local construction companies built residential property to the amount of 497,2 million UAH. The entire construction volume is estimated at 2 billion 499 million UAH.

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Antonov Airlines is a Ukrainian airline, is now reported to have been approved for conducting free cargo charter flights to the USA, which is a big achievement for the company. Now the company doesn’t have to get a new permission each time a new cargo charter is planned. The corresponding agreement was signed between Kiev and Washington in July 2015 and took effect in January 2016. The company is also about to get the same license for the flights back from the USA

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A famous Ukrainian grain trading company named NIBULON is planning to increase their investments in the Kherson region and build a new grain hub in Henichesk. This is a huge and very promising project for the region since the company is planning to invest in it 1,5 billion UAH. The facilities are going to be built in a matter of months.

For those of you who don’t know, the company built a similar hub in 3 months. The construction is said to be employing 1500 workers. This facility will employ around 100 people. Creating 100 new jobs is a great achievement for the region. Later on, NIBULON is planning to build one more hub in the region.

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The NKMZ is going to export is machinery products to Indonesia for the first time. The factory got a contract for manufacturing metallurgical equipment. This equipment is going to be used in an Indonesian metallurgical factory. The contract is going to be implemented in May 2017.

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A Ukrainian company named Unik Yachts is currently busy working on a drone patrol-boat for the Ukrainian coastguard. The drone is expected to be able to perform a wide range of tasks in the sea, bays, and sea ports. 

Since the drone is relatively light and small in size, such drones can easily be stored onboard coastguard ships and used when necessary. Those drones can and will be used to patrol the country’s sea border, spot see objects, and control the level of pollution in the sea environment.

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Agriculture and Trade
 
Ukrainian agricultural companies set a new 9-year record in terms of flax exports. The government reports that the flax manufacturers exported nearly 42 000 tons of flax over the last 12 months as of September 2016. This is 65% higher than seen over the previous reporting period. Also, these are the highest export figures seen over the last 9 seasons.
 
During the 2015-2016 agricultural season, Ukraine shipped the biggest share of the flax export to Vietnam , 51% of the total export to be more exact. Egypt and Turkey were the next biggest importers of the Ukrainian flax, with 13% and 9% of the total export respectively. It is also interesting to note that the leaders in the previous agricultural season were Vietnam , Poland, and Egypt, with 31%, 15%, and 9% of the total export respectively.
 

 

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At the same time, Ukrainian auto retailers reported a considerable increase in car sales, by as much as 48% over the reporting period. The Ukrainian transportation department confirms this information.
 

 

To be more specific, since early 2016, the Ukrainians have purchased 39 389 passenger cars. The list of the most popular auto brands includes Toyota (4,300 units), Renault (3,500 units), and Volkswagen (3,300 units). The most popular model is Volkswagen Jetta with 1,500 units.

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Since early 2016, the retail sales in Ukraine increased by 3,1% in September 2016. To be more specific, the total turnover made by all the Ukrainian retailers over the reported period is equal to 731,6 billion UAH. This information is confirmed by the country’s official statistics agency.
 

 

The report says that the Lvov and Kiev regions turned out to be the leaders in terms of the mention turnover growth. In those regions, the local retailers were 7,7% and 7,3% more active respectively. For obvious reasons, the Donetsk region happened to be the biggest loser in terms of turnover, where the retail turnover dropped by as much as 5,9% over the same reporting period.

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Indian entrepreneurs got interested in Ukrainianlentil. This information was confirmed by the Indian ambassador to Ukraine. The diplomatic official said that Indian is mostly populated by vegetarians, who get most of the consumed protein from lentil.
 

 

He also mentioned that in 2015, 500 000 tons of lentil was imported from Canada. However, the Ukrainian lentil turns out to be cheaper, which is why India decided to export it from Ukraine. They assume that the Ukrainian lentil will also be sold good. 

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On the main street of Kiev, they opened the world’s biggest store selling domestic products.This is called «Всі.Свої». The store was opened on September 22nd, 2016. At this point, you can by the products made by over 150 Ukrainian manufacturers, including clothes, footwear, accessories and so much more.
 

 

It’s also interesting to note that the store is loyal to foreign customers as well. The thing is that many of the local sales people speak fluent English and can assist any English-speaking person as well.

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This year, ED&F Man is planning to double its sugar production. This is the world’s biggest sugar company. For now, it’s planning to increase its production capacities all the way up to 50000 tons of sugar, which is twice as much as now.
 
A Ukrainian representative of the company confirmed this information, as well as the fact that the production growth has to do with wider areas under sugar beet crops. Around 30% of the sugar beet used by the company is purchased with other agricultural companies.
 

 

At this point, ED&F Man owns 12 000 hectares of sown areas in Ukraine. Yet, the company is going to expand its land assets in the near future, which is also an achievement for the Ukrainian economy. 

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Another elevator system was built and opened in the Ivano-Frankovsk region. This facility is said to be cooperating with a German brand named «RIELA». Its capacity is claimed to be as much as 85 000 tons.
 

 

The project was launched back in 2011. The construction started in 2013. At this point, the facility is working at 100% of its capacity. Still, the management says they still need more of those highly-skilled employees, which means more vacancies and higher employment in the region.

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Allseeds, a Ukrainian company, is going to get its project financed by a French company named Saipol, France’s biggest producer of refined vegetable oils. Most of those investments are said to come to the refining sector of Allseeds’ business. This cooperation emerged as the result of a long-term agreement signed by the companies.

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At the same time, the Agroliga holding is planning to launch another oil-extracting facility in the Kharkov region. The facility’s capacity is expected to be around 10 000 tons of raw material a month. The total investment in the project is estimated at 9 million dollars. 6,7 million dollars of the mentioned sum are invested by external investors, not the company itself. 

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Also, a new meat-refining facility is going to be built in the Lvov region. «КА-ЭКО-ПЛЮС» is the contractor that’s going to build the facility, which is going to occupy 0,1366 hectares. 

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Since the beginning of the year, Ukraine’s agricultural sector has increased the sales. To be more specific, the export increased by 2,9% over the reporting period. It reached 9,1 billion dollars. The import increased by 11% up to 2,5 billion dollars.
 

 

The recent report shows that the export increased mainly at the expense of vegetable food, especially vegetable oil. To be more specific, the sales of vegetable oil increase by as much as 21% all the way up to 2,35 billion dollars.

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A new production line was opened in the local battery farm in Ternopol. After increasing the production capacity, the farm can produce 10-12 million eggs a month. This information was confirmed by the local authorities.
 

 

As you have probably guessed, the fam specializes in the wholesale trade of eggs. This is a product of high quality and is fairly competitive both in domestic and foreign markets. To be more specific, the products are exported to Iraq and Africa. The farm is also planning to expand the list of outlets in the Middle East.

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Energy Sector
 
Chinese investors are planning to privatize mine Novovolynskaya №10. One of the biggest companies from the mining sector got interested in this prolonged construction project.
 

 

The Ukrainian Minister of Energy confirmed this information but refused to name the Chinese company in question. For now, we know that the Chinese investor is ready to allocate over 10 million dollars to sponsor the project, and is even interested in building an enrichment plant in the Western part of Ukraine.

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For the first time in history, Ukraine got liquified gas through a sea port. The shipment was ordered by Gastron Ukraine, which is a part of ILT Group. To be more specific, on September 18th, some 2,5 thousand tons of liquified gas was shipped to Ukraine from Egypt (Ras Shukheir) by sea. The gas was delivered by a Singaporean LPG tanker named Epic St. Thomas.
 

 

Without any doubt, this is not the last shipment of liquefied gas to Ukraine as the country is trying to gain more energy independence from Russia, a major gas producer and exporter. 

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Also, as a part of the plan aimed at gaining more energy independence, Ukraine is planning to build a solar power plant in the Chernovitsk region. The plant’s capacity is estimated at MegaWatt. Actually, the construction process is already underway. 

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Another solar power plant is going to be built in Zakarpatye. The project is estimated at 3,2 million dollars. The contractor is Aquanova Hydroresource. The construction is sponsored by Urkgasbank, which is a beneficiary of the Ukrainian Department of Justice. 

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Over the reporting period, Ukraine increased its energy production by 1,6% as opposed to the same reporting period 12 months before. In September 2016, the amount of the energy generated in Ukraine amounted to 12,2 billion kWt/h. This is confirmed by the recent report released by Gosstat, the country’s official statistics agency. All in all, since the start of 2016 and up to September 2016, Ukraine produced 105,6 billion kWt/h.
 

 

Another interesting thing to keep in mind is that the share of the energy generated by thermal power-stations. The share increased by 15% relative to the same period in 2015.

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At the same time «Укргаздобыча» (Ukrgasdobycha) started producing new diesel fuel – Euro 4. This means that the fuel complies with European standards of quality and ecological compatibility. This is a part of a bigger plan aimed at upgrading the facility and making the products more competitive in the foreign outlets.

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Also, Ukraine is going to transit crude oil from Iran to Western Europe. At this point, UrkTransNafta is considering the possibility of sending Iranian oil to Europe through the Odessa-Brody pipeline.
 

 

At this point, the parties are discussing the technical side of the matter. Also, the crude oil is expected to go both to Europe as well as Belarusian refineries. The process is technically possible. 

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Dewoo, a South Korean company, seems to be interested in working with Ukrainian partners. To be more specific, Posco Daewoo Corporation is on the tender list opened by Ukrenergo. The tender is for delivering 9 units of transformer equipment for a Ukrainian plant. The information is confirmed by ProZorro. The estimated cost of the equipment is 304,6 million UAH, excluding the VAT. The auction is planned for November, 2nd

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The first Ukrainian wind turbine is assembled in Kramatorks. The turbine is assembled at the local Fuhrlander Wind Technology plant. 

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