BUSINESS IN BRIEF (03/28/99)

BUSINESS IN BRIEF

Tractor-producing JV in the works

KYIV - President Leonid Kuchma met March 16 with U.S.-based Case Corp. President Jean-Pierre Rosso. During the meeting Mr. Rosso confirmed his intention to invest approximately $30 million into a joint venture to be based at PivdenMash, specializing in tractor production. Mr. Rosso also announced that the Case Corp. is ready to invest $10 million into creation of a joint leasing company. President Kuchma said he hopes that Case's investments provide a working model for other foreign investors. (Eastern Economist)

Volvo seeks ministerial cooperation

KYIV - Representatives of Sweden's Volvo-Penta company in Ukraine proposed on March 17 that the Industrial Policy Ministry discuss possible cooperation on designing innovative gas engines. Industry Policy Ministry representatives announced that, in their letter to the ministry, Volvo officials mentioned the company had already created a special working group including representatives of Volvo Truck, Volvo Bus and Volvo Penta to participate in discussions. The group also intends to search for potential partners in another countries. (Eastern Economist)

Regional wine production up in 1998

KHERSON - Despite falls in grapevine production at most Kherson Oblast vineyards, 1998 wine production grew 44.4 percent over 1997 figures, thanks to the agricultural firm Sepro, which, working mostly with raw material from other regions, provided 64 percent of oblast production. In the 1980s 40 percent of Kherson Oblast budget incomes came from the sale of grape and wine products, but winter crop damage and a lack of funds have badly hit the industry. (Eastern Economist)

Nestlé invests in Lviv confectioner

LVIV - Svitoch head Andrii Tavpash on February 10 announced details of the company's cooperation with Nestlé. The planned investment of approximately $40 million (U.S.) should guarantee Svitoch's dominance of the domestic confectionery market. (Eastern Economist)

Investment figures show big shortfall

KYIV - State Statistics Committee figures show a huge shortfall in investment in Ukraine. Figures show demand for investment outstripping supply by 16 to 1. In 1998 Ukraine received $718.1 million (U.S.) in direct foreign investments, up from $615.6 million in 1997. Since independence, Ukraine has attracted just $2.78 billion (U.S.) in investment from abroad. The biggest single investment, a total of $92.1 million, came from Coca Cola Amatil Ukraine. The majority of investments came from the United States, the Netherlands, Britain, Germany, Korea, Russia and Cyprus. The regions that received most investments are: Kyiv, Zaporizhia, Odesa, Dnipropetrovsk, Cherkasy, Donetsk and Crimea. Speaking at a February 16 roundtable titled "Investment in Ukraine: Realities and Perspectives," the chairman of the National Agency for Development and European Integration, Roman Shpek, said the government and the Verkhovna Rada had failed to create favorable conditions for investors, to improve tax legislation and to stabilize the microeconomic situation. He called investment figures "insignificant." (Eastern Economist)

Odesa attracts bulk of foreign interest

ODESA - Recently released figures show that foreign businessmen have invested $167.3 million (U.S.) in the Odesa Oblast's economy, making that oblast second after Kyiv in terms of direct foreign investment volumes. Foreign businessmen from 81 countries worldwide are registered as co-founders of over 1,800 companies in Odesa Oblast. (Eastern Economist)

French motor giant opens showroom

KYIV - Renault Dealer KiyAuto has opened a showroom in Kyiv. "The new salon showcases two models, the Renault 19 and Renault Megane," stated Renault's sales manager, Didier Iver. He said that in 1998 only 400 Renaults were sold in Ukraine. KiyAuto director Oleh Tkachenko said that the dealer network in Ukraine will be broadened and new centers in Odesa, Lviv, Zaporizhia and Kryvyi Rih will be set up. (Eastern Economist)

Plane project is finally off the ground

MOSCOW - The first test flight of the Russian-Ukrainian TU-334 passenger plane took place successfully on February 8. Development of the plane, designed by Russian and Ukrainian experts, was initially stalled due to a lack of cash. Once testing is completed, the plane will be manufactured at plants in Ukraine and Russia. Twenty-four airlines have placed advance orders with the Ukrainian Aviant plane-building plant for more than 200 TU-334s. Ukrainian, Russian and Slovak companies were among those placing orders. China and Iran have already expressed an interest in purchasing TU-334s. (Eastern Economist)

Farming sector assesses 1998 production

KYIV - The Agriculture Ministry has announced that meat production in the cattle-breeding industry was up in 1998 by more than 2 percent in comparison with 1997, registering the first increase in five years. Meanwhile in the crop-growing sector, output dropped by 14 percent. Specialists forecast a 10 percent rise in output of the main agricultural crops in 1999. (Eastern Economist)

UAE delegation meets Donetsk administration officials

DONETSK - Questions of trade and economic cooperation between the Donetsk Oblast and the United Arab Emirates were discussed during a February 26 meeting between Donetsk City Administration heads and representatives of UAE business circles. Donetsk Administration Deputy Head Viktor Khamuliak commented after discussions: "The perspective has emerged of a new market for the domestic piping industry, which will help compensate for the diminished Russian market." Speaking on other export projects, Mr. Khamuliak added, "we are currently discussing producing pipes at the Khartsyz Piping plant for a pipeline in Iran." (Eastern Economist)

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