BUSINESS IN BRIEF (10/31/99)

BUSINESS IN BRIEF

Volume of Ukraine's foreign trade shrinks

KYIV - The volume of Ukraine's foreign trade from January to August shrank by 23.8 percent to $14.4 billion (U.S.), compared with the same period last year, according to the State Statistics Committee. Exports fell by 16.7 percent to $7.2 billion and imports by 29.8 percent to $7.1 billion. The foreign trade balance was a positive one of $109 million (U.S.). Imports arrived mostly from Russia, 47.6 percent; Germany, 7.7 percent; Turkmenistan, 6.7 percent; and Belarus, 2.9 percent. The share of mineral fuel, oil and petroleum products in the imports total rose from 39 percent to 44.3 percent, while the share of machinery and equipment fell from 11 percent to 8 percent. Ukraine traded with 174 nations and exported goods mostly to the following countries: Russia, 19.6 percent of total export volume; China, 7.3 percent; Turkey, 6.18 percent; Germany, 5.2 percent; Italy, 4 percent; and the United States, 3.6 percent. The share of crops, including grain, rose form 4.4 percent to 6.3 percent of Ukraine's exports, as compared to the same period last year; and the share of mineral fuel, oil and petroleum products from 3.7 percent to 6.1 percent. The percentage of ferrous metal products fell from 5.3 percent to 3.5 percent, machines and equipment from 6.5 percent to 5.18 percent, and ferrous metals from 34.7 percent to 33.2 percent. The share of barter operations in the total volume of Ukrainian exports was 4.3 percent and imports 3.6 percent, as compared with 7.7 percent and 6.5 percent in January-August 1998. (Eastern Economist)

Kuchma witnesses AN-140 test flight

KHARKIV - Testing of the first serial production AN-140 plane took place in Kharkiv on October 11. This plane was created to replace the AN-24 and YAK-40 on internal medium-range transportation lines. According to President Leonid Kuchma, who was present at the test flight, over 1,000 such planes are currently needed. (Eastern Economist)

1999 Ukrainian wine production up 15 percent

KYIV - Export of Ukrainian grape wine has risen 15 percent since the beginning of 1999 and totaled 101,000 decaliters, although exports of champagne wines fell 15 percent. Ukraine produces 240 kinds of grape wines, with an average of 16 to 18 liters of wine per capita. (Eastern Economist)

U.S. firm to help open vehicle paint shop

SYMFEROPOL - KrymAvtoGaz, a subsidiary of GAZ recently signed a contract for $15 million (U.S.) with the U.S. firm Haden to produce and fit the equipment necessary for the construction of paint shop for cars. KrymAvtoGaz assembles Volga cars, Sobol minibuses and Gazel light-weight trucks from parts, including car bodies, constructed by GAZ in Nizhnii Novgorod. Some 40 percent of car bodies the plant receives require repainting after they are transported from Russia. (Eastern Economist)

Russia pressures Ukraine on Iranian N plant

KYIV - According to a source at the presidential administration, Ukraine is facing Russian pressure to reconsider its decision not to participate in the construction of the Bushehr nuclear power station in Iran after Russia expressed its readiness to place orders with Ukrainian enterprises for the manufacture of equipment to be installed in India. The only condition is that Ukraine take part in the Bushehr project. In March 1998, Ukraine yielded to U.S. pressure and withdrew from the project as the United States believed that the project could help Iran to obtain materials for the manufacture of nuclear bombs. In order to compensate Ukraine for losses incurred by Kharkiv-based Turboatom and other firms, the Israeli-supported Kharkiv Initiative Project was launched, aimed at implementing a number of economic initiatives to stimulate the operation of enterprises in the region. Analysts think the participation of domestic companies in foreign contracts is necessary in order to uphold Ukraine's image as a reliable supplier of power generating equipment because Russia wants to force Ukraine out of this market. According to the source, Russia has turned down a Ukrainian bid to participate in power plant construction in China and India. UkrInterEnergo is lobbying the presidential administration to reconsider the Bushehr decision. (Eastern Economist)

Ohio firm signs KharkivOblEnergo deal

AKRON - Through a grant from the U.S. Agency for International Development, the United States Energy Association (USEA) has selected FirstEnergy Corp. of Akron, Ohio, as a best-practice utility partner for KharkivOblEnergo, the electric distribution company for Kharkiv Oblast. During an exchange visit to FirstEnergy, the two electric utilities and USEA signed a partnership agreement calling for senior management to travel between Akron and Kharkiv to assist KharkivOblEnergo as it restructures its operations in accordance with a more commercial operating environment, announced USEA October 4. H. Peter Burg, president and chief executive officer of FEC, said "we hope that by doing this we can work to improve the quality of life of the people we serve. We look forward to a constructive partnership that will mutually benefit both companies." KharkivOblEnergo Chairman Vladimir Krivitsky noted the importance of the partnership to his company. "I believe that we now have a unique experience in making this transition from a totalitarian economy to a democratic market economy. It is extremely opportune for us to learn from FirstEnergy to assist us in making this transition a success." (Eastern Economist)

Leading travel company establishes presence in Ukraine

KYIV - Business Travel International, the world's leading travel management company, has appointed its first partner in the Ukraine, Sky Travel. David Radcliffe, chief executive of Business Travel International, said Ukraine is rapidly becoming a sophisticated business travel market and it was careful to select a partner capable of meeting the highest expectations and demands of BTI clients. Valerie Luyk, managing director of ST, admitted that becoming part of a global organization through BTI opens up windows of opportunity, because instead of being a solo operation in Ukraine, ST is now part of a large organization with a global reach. (Eastern Economist)

Business graduates record income growth

KYIV - According to George Gamota, director of the Business Incubator Development Program launched in Ukraine in 1997 by Loyola College, some 265 small businesses have received consultancy, most of which have recorded income growth after graduating from the program. BID assists firms in their acquisition of loans of $ 5,000 to $50,000 (U.S.). (Eastern Economist)

Radio station to cover entire country

KYIV - Two national radio stations, Dovira, which broadcasts in Central and Eastern Ukraine, and Niko in western Ukraine, merged under a single name Dovira-Niko FM. This station is to become the first privately owned radio station to cover the entire country. (Eastern Economist)

Czech fighters to use Sich engines

KYIV - Ukraine is to supply engines for Czech tactical fighter planes L-159, stated Czech Defense Minister Vladimir Vethi on September 2. The engines are to be produced at Zaporizhia-based MotorSich plant. Mr. Vethi stated that Czech Republic needs at least 36 planes. He also mentioned that Ukraine will not participate in the modernization of Czech T-72 tanks, adding that Czech experts have already carried out all research and details of modernization. Ukraine will be losing out on approximately US $100 million (U.S.). (Eastern Economist)

Government cuts supplies to farmers

KYIV - Ukraine's government ordered the Agriculture Ministry and the State Committee for Material Reserves to stop supplies of inputs and fertilizers to farmers who had failed to repay their earlier commodity loans. As of September 1, only 1.6 million tons of grain was received in loan redemption, or 28 percent of the total due. (Eastern Economist)

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