BUSINESS IN BRIEF (06/27/99)

BUSINESS IN BRIEF

Tourism revenue has potential to rise dramatically

YALTA - State Tourism Committee Chair Valerii Tsybukh said on June 14 that tour agencies have the potential to increase twofold or threefold the number of tourist reservations in Crimea. Mr. Tsybukh noted a number of measures, such as simplifying border crossing formalities, modernizing tourist infrastructure and increasing advertising, that will enable agencies to realize their potential. The STC has drawn up state guidelines for tourism development, and Mr. Tsybukh has advocated creating a ministry of tourism and health resorts. According to Mr. Tsybukh, Ukraine will be able to increase international tourist revenues from $6.2 million (U.S.) in 1998 to $8 million (U.S.) in 2000, domestic tourist revenues from $2.2 million to $4 million (U.S.) and tourist services from $3.8 million to $5 million (U.S.). (Eastern Economist)

President Kuchma signs decree on mortgaging

KYIV - President Leonid Kuchma on June 14 signed a decree on mortgaging that allows Ukrainians to mortgage land sites, houses, apartments, summer houses, garages, production facilities and companies. Unless stated otherwise in the contract, house mortgages include the land on which the house is located. The same does not apply to land site mortgages with facilities located on the parcel. In accordance with the decree, only finance and credit institutions may mortgage land sites, which may not include communal, state, national, cultural and historical properties listed in the state register. Mortgage contracts can be terminated by court rulings, if parties fail to meet contractual commitments and when mortgaged property is destroyed. The sale of a mortgaged home or an apartment via auction cannot serve as the basis for eviction, unless stated otherwise in the mortgage contract. A mortgager can lease a mortgaged home or an apartment only with the consent of a mortgagee. (Eastern Economist)

Kommunar launching sixth-generation TV

KHARKIV - The Kharkiv-based electronics plant Kommunar will launch commercial production of a sixth-generation television set with a 54-centimeter screen to be called the Berizka, the plant's director general, Oleksander Asmolov, announced. The model will meet all the current requirements for this class of television receiver. The plant will sell the set for 680 hrv. Kommunar will also produce a sixth-generation 37-centimeter screen set; a 63-centimeter "deluxe" model is already on the drawing board. Mr. Asmolov said that a coherent tax policy and effective solutions to the problems facing producers of electronic devices and television sets could solve the industry's problems. He pointed out that prior to 1991 Kommunar produced 365,000 sets a year. Kommunar's current yearly production is approximately 12,000 sets. (Eastern Economist)

Philip Morris will invest more in Kharkiv

KHARKIV - In the nearest future, the Philip Morris Corp. intends to increase its investments in Kharkiv tobacco factory by about $16 million (U.S.), said George Fara, the factory's managing director. This sum can arrive at the factory as soon as next year. Mr. Fara added that Philip Morris has invested $37 million in the Kharkiv-based tobacco factory. In 1999 the factory plans to manufacture 13 billion cigarettes. (Eastern Economist)

Austrian metals firm opens rep office

KYIV - Voest-Alpine Stahl AG, the Austrian-based steel manufacturer, opened its representative office in Kyiv recently to "cut the gap between the steel products it exports and imports to Ukraine," said Franz Struzl, member of the managing board. For a number of years the Austrian metallurgical giant has been purchasing more than 2 million tons of iron ore and coal from Ukraine. The office will focus on domestic sales of steel for oil and gas pipes. Yet, the possibility of direct investments in Ukraine so far is excluded, said Mr. Struzl. "First Ukraine needs to create special prerequisites for investments, which we still do not see in place," Mr. Struzl explained. (Eastern Economist)

Mykolaiv says no to McDonald's restaurant

MYKOLAIV - Mykolaiv city authorities have refused to permit the construction of a McDonald's restaurant in the city, saying that preference should be given to Ukrainian food. However the decision could be reversed if McDonald's invests $1 million (U.S.) in the city's budget. (Eastern Economist)

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