BUSINESS IN BRIEF (11/19/00)

BUSINESS IN BRIEF

Some U.S. banks sever ties with Ukrainian banks

KYIV - Banking Association Council Chairman Stanislav Arzhevitin said that within the last two weeks about 15 small and medium-size domestic banks received notices from their U.S. corresponding banks about the termination of correspondent relations as of January 1, 2001. U.S. banks explained their decision by the considerable risk they take in Ukraine due to Ukraine's low credit rating. Mr. Arzhevitin alleged, however, that the true reason might be an insignificant volume of transactions on the correspondent accounts and the resulting unprofitability for large American banks to deal with small Ukrainian banks. (Eastern Economist)

Contraband cigarette market growing

KYIV - The volume of the illegal tobacco market in the country is increasing each year, stated the president of the Association for Alcohol and Tobacco Products, Oleksander Sukhomlyn. He added that illegal tobacco products control 33 percent of the market, with 70 percent of that contraband being cigarettes without filters. The wholesale price of contraband non-filter cigarettes is 0.35 hrv, while legal cigarettes cost 0.50 hrv, which is explained by the difference in excise tax. (Eastern Economist)

$30 M auto plant to be built by mid-2001

KYIV - Pivdennoukrainskyi Automobile Plant will be operational by August 2001, producing Russian GAZ automobile models Volga 3110, Gazel, Sobol, the Otaman pick-up, Otaman-Yermak jeep and three Fiat models, said plant executives. KrymAvtoGaz, Russian Gaz and US Haden are cooperating in building the plant. Construction investment is expected to be $30 million and management plans for the plant to break even in three years. About 70 percent of parts to be used by the plant will be Ukrainian-made. Pivdennoukrainskyi capacity in 2001 should be 25,000 automobiles, increasing to 80,000 by 2003. (Eastern Economist)

Hraviton makes new economical electric lamp

CHERNIVTSI - The Chernivtsi-based Hraviton company has launched the serial production of economical compact fluorescent lamps, which have an edge over their Western analogs in that they are cheap, at 30 hrv per unit, and can work under sharp voltage fluctuations as low as 120 volts, said Volodymyr Mamchuk, one of the designers of the new lamp. Mr. Mamchuk pointed out that one compact 18-watt lamp produced by Hraviton yields as much light as an ordinary 90-watt incandescent lamp. If there is a large demand for the lamps, Hraviton can produce up to 10,000 lamps monthly. (Eastern Economist)

Ukraine supplies currency-grade paper

KYIV - Ukraine will supply India with 2,000 tons of currency-grade paper per month worth $600,000 U.S., said the director of the Cash-Monetary Department at the National Bank of Ukraine, Nina Dorofeeva. The deliveries are to be continued until 2003. Ukraine is also participating in a tender for production and supply of coins. (Eastern Economist)

New plant applies oil to rolled steels

KYIV - A plant worth nearly 700,000 hrv for oiling steel strips has been put into operation at Illich Steelworks. The plant, which is the first of its kind in Ukraine and the Commonwealth of Independent States, was built by company engineers at the Lviv bus plant. According to Illich, the new plant is much cheaper than imported versions. It has the added benefit that it can operate with Ukrainian-made oil, while the use of domestic oils in foreign plants increases the costs. This steel strip oiling plant is based on the electrostatic spraying of oil, which improves the quality of cold-rolled metal stock and saves tons of oil. Illich has resumed exporting plate steel to the United States. In July-August the company intends to export over 20,000 tons of metals. The company has also received an order for 1,000 tons of eight-meter-long plate from the Sumy-based Frunze engineering plant. (Eastern Economist)

Eastern enterprises to produce engines

LUHANSK - Eight industrial enterprises in Luhansk and Donetsk Oblasts have set up the Motor-Skhid, or Motor-East, consortium to start production of new internal combustion engines developed by the Donetsk-based Academician Volodymyr Kliosov. The engines will be assembled at the Pervomaisk Engineering Plant. The consortium includes the enterprises Inzhener in Makiivka, Intek in Donetsk, Pernyk in Luhansk, Kirov metal powder goods plant, Pervomaisk Engineering Plant, Severodonetsk Instrument Plant, Azov trade/industrial chamber in Makiivka and Luhansk raw materials company. The government has allocated 4.838 million hrv for the production of the first batch of engines. The new engine will operate both on gasoline and ethyl alcohol. The consortium will start supplying new engines to domestic buyers and later will promote the engine abroad. (Eastern Economist)

| Home Page |