BUSINESS IN BRIEF (03/21/99)

BUSINESS IN BRIEF

Polish trade and JV links agreed upon

KYIV - Following the February 24 meeting of the Ukrainian-Polish Commission on Trade, a number of protocols have been signed stating the intention of both parties to create joint ventures and cooperate in the development of a railroad, motorway and the Odesa-Brody-Gdansk oil pipeline. Probably most significant was the agreement on cooperation in the construction of the Odesa-Brody-Gdansk oil pipeline. Prime Minister Jerzy Buzek of Poland, in Ukraine on a two-day official visit, said, "Poland considers this project to be very promising," adding "the transportation of Caspian oil to European markets via this pipeline should bring about an oil price drop of $20-30 (U.S.) per ton." Mr. Buzek and his Ukrainian counterpart, Valerii Pustovoitenko, confirmed that agreement has been reached to create JVs for the production of road-building machinery, cranes and farm equipment. In the energy sector, Ukraine and Poland agreed to jointly modernize power units at the Ukrainian Burshtyn and Dobrotvir thermal power plants, and to complete the Khmelnytskyi to Rzeszow electricity power line. The commission also reiterated the intention to continue joint construction of the Yahotyn-Dorohusk motorway crossing and construction of a west European-standard railway linking Peremyshl in Poland with Lviv, as well as to simplify mutual certification and recognition of standards for medicines. Ukraine and Poland also agreed to create systems for direct bank payments and insurance of investment projects. (Eastern Economist)

Experts dismiss chances of EU membership

KYIV - Peter Goven, a professor from the University of North London, said on January 19 that Ukraine can't expect to be accepted into the European Union in the near future due to two factors: the poverty of the country and the slow pace of development toward a Western economy. Speaking during a roundtable titled "The European Union: Status and Perspectives," Mr. Goven said he also regards Ukraine's unregulated migration as a potential threat to the EU. Vadym Hrechanynov, president of the Atlantic Council of Ukraine, an international cooperation organization, also dismissed the possibility of Ukraine's EU membership in the immediate future. He argued that Ukraine is not yet ready, and currently possesses only vague declarations on the strategic worth of membership in both the EU and NATO. (Eastern Economist)

Kremenchuk auto plant to increase production

KYIV - The Kremenchuk Automobile Plant (AvtoKraz) will increase heavy-duty truck production to 3,000 per year in 1999, compared to only 1,300 in 1998, the Transport Ministry announced on March 3. AvtoKraz will increase the production of all types of trucks, equipping them with Russian engines assembled in Yaroslavl. The company plans large exports to Egypt, India, Turkmenistan and Russia in 1999. The Ukrainian-Italian JV IVECO, based at the same plant, plans to double the production of small-class Turbo automobiles in 1999 to 1,200 cars per year. (Eastern Economist)

Military ship-building sector looks good

KYIV - Ukrainian Ship-Building Research and Design Center Director Yevhen Borysov announced on March 1 that Ukraine will soon be demonstrating a new military frigate at an international military exhibition, and will be looking for potential buyers in the Near East and among Southeast Asian countries. Mr. Borysov said, "in June of the current year all documents concerning the ship will be sent to NATO." Mr. Borysov stressed that interest among foreign customers towards Ukrainian ships had recently increased, pointing to a recent tender victory for military ship supplies to the Bangladeshi navy. (Eastern Economist)

Saskatchewan business comes to Ukraine

KYIV - Firms from the Canadian province of Saskatchewan have concluded three commercial agreements with Ukrainian companies, Foreign Affairs Ministry officials announced on February 12. In a $4 million (Canadian) deal, Minds Eye Pictures and SCNi will assist in finding additional sources of financing for the Dovzhenko movie studio and will produce movies with the studio. A second agreement with Squire Productions will see joint production of two documentaries to be shot in Ukraine and Canada. Meanwhile, publishing company Cocoa Books signed an agreement with the Ukrainian children's publisher Veselka to publish several books in English and Ukrainian by 2000. (Eastern Economist)

New fabrics company gets green light

KYIV -The State Anti-Monopoly Committee has sanctioned the creation of the joint venture Cheksil-Ariadna, whose founders are Cheksil, a Chernihiv-based textile company, and U.S.-based Unicom Up Chemical Corp. The new JV will be engaged in manufacturing finished wool and velour fabric, as well as fabric with elastic fiber. (Eastern Economist)

Shipping company plans to expand the fleet

ODESA - The Ukrainian Danube shipping company plans to construct 10 ocean-going passenger ships and two riverboats in the next five years. The work is to be 80 percent financed by the European Bank for Reconstruction and Development or other foreign banks, with the rest coming from domestic sources. (Eastern Economist)

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