BUSINESS IN BRIEF (02/20/00)

BUSINESS IN BRIEF

Golden Telecom to buy 99 percent of Internet provider

KYIV - Ukraine's Anti-Monopoly Committee gave its go-ahead for the purchase by the Kyiv-based Golden Telecom Ltd. of a 99 percent stake in the Sovam Teleport Kyiv subsidiary, one of Ukraine's largest Internet providers. Golden Telecom, a subsidiary of Global Telesystems Inc., is a communications holding company operating on the communications market in the Commonwealth of Independent States. Golden Telecom shareholders include the European Bank for Reconstruction and Development, ING Barings Bank and a number of other companies. (Eastern Economist)

Internet licensing needed in Ukraine

KYIV - Oleh Prozhyvalskyi, president of the Ukrainian Association of Communication Operators, said on January 18 that licensing is a necessary step in the development of data transmission services in Ukraine. Most of the Internet providers on the Ukrainian market are not licensed, which allows them to shirk their responsibility and makes it almost impossible to protect a consumer's rights, Mr. Prozhyvalskyi said. He also claimed that the government should grant official data transmission status to Internet provider telephony, which is gaining its popularity in Ukraine. Among other problems, Mr. Prozhyvalskyi alluded to state monopoly on primary networks. "State monopoly on primary networks slows the development of modern communication networks and makes usage costs prohibitive," he claimed. (Eastern Economist)

Slavutych merges with Lviv brewery

ZAPORIZHIA - When the Zaporizhia-based Slavutych Brewery, which also produces non-alcoholic drinks, completes the process of merging with Kolos Brewery of Lviv, the new amalgamation will be in second place in terms of output of beer on the Ukrainian market, said Petro Peretiatko, Slavutych director general at a press conference in mid-January. He added that last year Slavutych brands accounted for 13 percent of the total amount of beer produced in Ukraine, the third highest figure behind the Kharkiv-based Rohan brewery and Obolon. The latter accounted for 22 percent in 1999. Slavutych and Kolos were united by their investor, the Swedish company BBH, which bought controlling stakes in both breweries. Their first joint product will be the Zolotyi Lev brand. (Eastern Economist)

Ukrainian grain crop hits record low

KYIV - According to a preliminary report of the Ministry of Statistics of Ukraine, the total grain crop in 1999 was 24.37 million tons after processing - the lowest since 1946, according to a statement issued by the Ukrainian Agrarian Exchange (UAE). The actual crop figure tallies with the 24 million estimate by the UAE and is almost 2 million tons lower than the 26.4 million tons forecast made by the Agrarian Policy Ministry. Total grain crop in 1999 is down by 8 percent, or by 2.1 million tons compared to the 1998 crop of 26.47 million tons. According to the UAE report, the 1999 wheat crop was 13.5 million tons versus 14.9 million tons in 1998, while the barley crop was 6.4 million tons, compared with 5.87 million tons in 1998. According to the statement, the main reasons for decreasing grain production are farmers' lack of funds to buy inputs, low quality of agricultural management and lack of effective channels for selling grain which makes sales unprofitable for farmers. (Eastern Economist)

Ikar airlines is first to buy new AN-140

KYIV - The Kyiv-based Ikar Airline company became the first owner of the new Ukrainian-Russian AN-140 aircraft. The company's director, Viktor Vershyhoryi, stated that the company acquired the first serial AN-140, assembled at the end of last year by a Kharkiv-based state aviation manufacturer on the conditions of financial leasing for 10 years. The Ikar Airline, an international air carrier, was founded in 1993 and conducts regular flights on 16 routes in Ukraine and the Commonwealth of Independent States, as well as charter flights to Turkey, Syria, Hungary, Yugoslavia and Italy. The AN-140 has a capacity of 52 passengers, flies at a speed of 520-575 kilometers per hour, has a maximum commercial freight capacity of 4.9 tons and a flight distance of 2,000 to 2,550 kilometers. The plane is worth nearly $7 million (U.S.). (Eastern Economist)

Chinese to invest in Lviv region

LVIV - The Chinese State Corporation signed an agreement with the Lviv Oblast Administration to invest $3 million (U.S.) into the production of agricultural goods in the Yavorivsk free economic zone (FEZ), stated the head of the Lviv Oblast administration Stepan Senchuk. He added that during a meeting with heads of 20 Chinese companies, both sides agreed on joint development projects in the Yavorivsk FEZ, including the wood-processing industry, service station construction and production of electronic goods, such as mobile phones and TV sets. (Eastern Economist)

D.C. conference focuses on business in Ukraine

WASHINGTON - The first business conference on Ukraine in over a year, called "Ukraine: A Matter of Perspective" was held January 10 in the U.S. capital, attracting 75 representatives of private and public interests from across the United States and Canada, as well as from the United Kingdom and Ukraine. Presentations by legal and investment specialists on Ukraine considered changes in the tax and legal environment, sources of financing and business development. Organized for the first time by Eastern Economist, the conference concluded with an open discussion on practical steps toward change, chaired by World Bank economist John Hansen. Keynote speakers were writer Anne Williamson and Ross Wilson, a State Department specialist on the new independent states. The Ukrainian government was represented by its embassy's trade and economic mission chief, Dr. Yaroslav Voitko. (Eastern Economist)

Swedish JV will produce paper packaging

KYIV - Ukraine's Anti-Monopoly Committee gave the go-ahead for the creation of a Ukrainian-Swedish joint venture called Korsnas Oriana Ukraina, which was founded by the Oriana chemical company and Sweden's Korsnas. The new JV will produce paper sacks and paper packaging. (Eastern Economist)

Ukraine increases tariffs on Russian cars

KYIV - The Ukrainian government has increased import tariffs for Russian automobiles in response to Russia's increase of export tariffs for crude oil. The tariffs do not apply to automobile parts, which are imported for assembly in Ukraine. (Eastern Economist)

Bronetekhnika concern gets green light

KYIV - Ukraine's Anti-Monopoly Committee has allowed 34 Ukrainian companies to set up Bronetekhnika Ukrainy, an armored machinery concern. These 34 companies are involved in design, manufacturing and sale of armored machinery and complex science-intensive military items. The Kharkiv-based concern's main purpose will be to enter world markets. The co-founders are the Malyshev Plant and the Morozov Design Office, both from Kharkiv, Kyiv's Arsenal Plant, the Kharkiv-based Proton Central Design Office and the FED Electric Equipment and Engineering Plant, the Sumy-based Humotekhnika Rubber Machinery Plant and the Frunze Engineering Scientific Production Works, the Quant and Vector Scientific Research Institutes from Kyiv, the technical carbon plants in Stakhanov and Feodosiia, the Mariupol-based Azov joint stock company and thermal plant, and others. (Eastern Economist)

Ukrainian/British wine JV created

ODESA - The Odesa-based Nyva Research Institute of vine-growing and wine-making and two local vineyards in the Saratsk Raion of the Odesa Oblast have created a joint venture with the Premium Brand Corp. of the United Kingdom. PBC President David Broadbent told Infobank that PBC will invest $2 million (U.S.) in the JV. The money will go toward modernizing equipment, raising fertility of vines and planting of new vine plantations. PBC owns a 51 percent stake in the OdeskiVyna JV. Production is expected to start in one year. PBC was founded in 1991 and supplies wines from Serbia, Moldova and Ukraine to Western Europe. PBC has been cooperating with Nyva for three years, buying such wines as Odesa's Steppe and Potiomkin Bay for their British clients. (Eastern Economist)

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