BUSINESS IN BRIEF (04/25/99)

BUSINESS IN BRIEF

Kyiv radio station trademark war finally ends

KYIV - The conflict between Lider TV-Radio broadcasting company and Gala Radio for the right to use the Gala Radio trademark, which has been rumbling on for the last three years, has been resolved in accordance with Ukrainian law, said the presidents of Lider, Hlib Maliutyn, and Gala Radio, Joseph Lemire, at a joint press conference on April 15. Mr. Maliutyn stated that, according to the agreement, he has given up his position as shareholder of Gala Radio and abandoned all claims to the Gala Radio trademark. By way of compensation, Lider has received part of Gala's property. Gala Radio, set up in 1994 by Mr. Maliutyn, was one of the first commercial radio stations in Ukraine. Foreign investors from the U.S. were invited on condition that they provide financial and informational assistance. "With time, the partners started to talk different languages," said Mr. Maliutyn, and consequently he broke from Gala to create Lider in 1996. Mr. Maliutyn complained that in the past three years his company and Gala Radio, instead of developing the broadcasting network, have invested a lot of money in lawyers. The conflict has even come to the attention of the Kuchma-Gore Commission. Mr. Maliutyn stated that Lider is currently 100 percent financed by Ukrainian investors. He added, however, that discussions are under way with European companies to further develop Lider's broadcasting network in the regions, and to create a Lider TV channel. Mr. Lemire stated that foreign capital makes up 30 percent of Gala financing, with U.S. investors pumping around $1.5 million (U.S.) into the company. (Eastern Economist)

Caspian oil pipeline is officially opened

TBILISI - The Baku-Supsa pipeline to transport Caspian oil to the Black Sea coast was officially opened on April 17 in Georgia. Ukrainian Transport Minister Ivan Dankevych stated that Caspian oil will most probably be transported from the Supsa terminal to European markets via the Odesa oil terminal, and on through the Odesa-Brody pipeline. Mr. Dankevych added that Ukraine is ready to offer its fleet of oil tankers to help with transportation. At the same time it was announced that the Cabinet of Ministers is preparing to discuss a program for increasing domestic oil and gas extraction. According to preliminary projections, in 2000-2001 domestic oil extraction could increase by 350,000 tons, and gas extraction by 2.18 billion cubic meters, said Ihor Bakai, head of NaftoGaz Ukrainy on April 16. He added that if more finances are provided, by 2005 oil and gas extraction may rise to annual levels of 2.5 million tons and 10.5 billion cubic meters, respectively. While in Tbilisi for the pipeline opening ceremony, Ukrainian President Leonid Kuchma and Georgian President Eduard Shevardnadze signed a bilateral agreement on economic cooperation for 1999-2008. Both countries' defense ministers also signed an agreement on military cooperation. (Eastern Economist)

Three-way space JV planned for 2000

KYIV - The presidents of Ukraine, Russia and Kazakstan have given the go-ahead to set up a joint Ukrainian-Russian-Kazak space industry venture aimed at creating a new powerful rocket carrier, said Eduard Kuznetsov, vice-director of the National Space Agency of Ukraine, on April 14. Mr. Kuznetsov said that in late December a Ukrainian delegation will visit the Baikonur space-launch complex in Kazakstan, where they are expected to discuss setting up the JV. It is too early to talk about the division of shares in this JV as everything will depend on how much each of the parties contribute to it, he added. Tokhtar Aubakirov, an aide to the Kazak president, commented from Astana, the capital of Kazakstan, that the Ukrainian-Russian-Kazak joint venture is likely to be launched in 2000. (Eastern Economist)

Sweden's Scania urges customs review

STOCKHOLM - In a March 24 letter to President Leonid Kuchma, who was then in Sweden on a state visit, Scania managing director Berth Carreman called on the president to change customs legislation to encourage the assembly of trucks in Ukraine. Mr. Carreman explained that Scania is interested in assembling trucks in Ukraine, but that high customs tariffs make assembly unprofitable. "Today, we are ready to assemble 200 high quality truck tractors a year in Ukraine. Ukrainian industry does not produce trucks of this kind. This would mean not only the creation of new jobs and additional investments on our part, but also lower prices for trucks for Ukrainian clients," added Mr. Carreman. Scania's proposed customs regime, comprising tax breaks on component import in conjunction with an increase in import tax on completed trucks, was successfully implemented in Poland in 1993. (Eastern Economist)

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