BUSINESS IN BRIEF (01/28/01)

BUSINESS IN BRIEF

Antonov's expects certification of Mria

KYIV - Antonov Aviation expects that the new AN-225 Mria will receive its certification in May. The newest model from Antonov Aviation will have a cargo capacity of 250 tons, and is to be finished this month. So far, six new Motor-Sich engines have been mounted onto the aircraft. The new plane has been constructed using $20 million (U.S.) in financial resources from Motor-Sich and Antonov Aviation. The Mria (Dream) should debut at the Le Bourget airshow in France in June. Plant executives hope their company's aircraft will be used commercially by the second half of 2001. Mria was first created in 1988, when it was envisioned as an air-starting platform for the space shuttle Buran. (Eastern Economist)

AN-124's capacity to be increased to 150 tons

KYIV - Antonov Aviation will begin modernizing the AN-124 Ruslan, which was seized in 1999 in Holland for debts and purchased by British Air Foyle. Modernization of the craft will entail increasing its capacity to 150 tons, thereby raising its efficiency by 10-15 percent. The AN-124 Ruslan is the world's largest operational cargo aircraft and is able to transport 130 tons of cargo. (Eastern Economist)

French interested in Odesa water works

ODESA - The French company Suez Lyonnaise des Eaux announced its participation in a tender for reconstructing the Odesa water supply system. The aim of the reconstruction is to eliminate losses in the city's water supply network, which can reach as high as 45 percent. Other possible participants in the tender have not yet been announced. (Eastern Economist)

Disarmament contract awarded to DC group

KYIV - The U.S. firm Washington Group International Inc., or WNG, received an $87 million contract from the U.S. Defense Department for liquidating Ukraine's nuclear weapons. WNG, as the main contractor, is responsible for extracting solid fuel from 46 ICBMs in launch silos and another 10 at plants. All the missiles are to be de-mounted and disarmed by spring 2005. (Eastern Economist)

EU, Ukraine agree to open up markets

KYIV - The European Union and Ukraine have agreed to open its textile and clothing trade markets. According to the agreement signed in Brussels, Ukraine will lower its tariffs for the export of textile from EU countries to European levels, while the EU will increase quotas for Ukrainian textiles being exported to the EU. (Eastern Economist)

Ukrainian CD producers unite to protest

KYIV - Ukrainian producers of compact disks, representatives of audio-recording companies and scientists have united to protest against the threat of their industry being destroyed. "Ukraine is a real competitor for Western companies, in high-tech and quality products," said academician Viacheslav Petrov. He stressed that the U.S. government has launched a campaign to destroy a very prospective and scientific sector of the Ukrainian economy. Dr. Petrov said that under the motto of fighting piracy in the intellectual property sector, everything is done not to give Ukrainian producers access to international markets. According to the scientists, the potential of Ukrainian CD market is around 10 CDs per person per year. The pressure from America was provoked by European customers who were satisfied with the price and quality of Ukrainian CDs. The production capacity of Ukrainian CD producers is around 24 million CDs per annum, with internal consumption making up around 90 percent of this amount. Some 2.8 million CDs were exported this year. According to U.S. data, losses incurred by U.S. CD producers from Ukrainian pirated CDs are $210 million. (Eastern Economist)

Ukraine to host Tourism Day in 2002

KYIV - World Tourism Day in the framework of the World Tourism Organization will be hosted in Ukraine in 2002, said the vice-chairman of the State Committee for Youth, Sport and Tourism, Valeriy Tsibukh. He also informed that the World Tourism Organization's General Secretary Francesco Frangialli will attend Ukraine next year and will give a set of lectures at the Kyiv Tourism, Economics and Law Institute. Mr. Tsibukh noted that tourism ranks fifth in industry sector export potential. (Eastern Economist)

SSEC registers Ukraine's seventh exchange

KYIV - The State Securities and Exchange Commission registered the new Ukrainian International Stock Exchange to become the seventh stock exchange in Ukraine. The SSEC registered the UISE in executing a decision by the Higher Arbitration Court of Ukraine in response to a suit filed by the exchange against the SSEC for refusal to register the exchange in October. The newly registered exchange joins the six already functioning, which include the Ukrainian Stock Exchange, the International Stock Exchange, the Ukrainian Inter-bank Currency Exchange, the Donetsk Stock Exchange, the Prydniprovsk Stock Exchange and the Crimean Stock Exchange. (Eastern Economist)

Brewery is to increase its market share

KYIV - The Slavutych brewery and beverage plant in Zaporizhia plans to increase its market share in Ukraine from the current 15-16 percent, according to the plant's director, Petro Peretiatko, who spoke at the celebratory opening of a new PET plastic bottle bottling line. The production capacity of the automated German-made KHS line is 18,000 one-liter bottles per hour. The bottling process is fully automated and requires only five trained people to maintain. (Eastern Economist)

Kazak Oil plans major works in Ukraine

KYIV - Modernization and increasing capacities at the Kherson Oil Refinery and developing gasoline retail networks, are Kazak Oil priorities for the near future, said the company's first vice-president, Galiaysat Keshubaev. He added that priority in developing a retail network will be given to the Kherson, Mykolaiv, Zaporizhia, Kirovohrad and Dnipropetrovsk oblasts and Crimea. Kazak Oil's subsidiary, UkrNaftoProduct, purchased a 60-percent stake at the refinery in November 2000. Kazakstan is interested in oil transport routes and has an interest in the Odesa-Brody oil pipeline, said Mr. Keshubaev. Moreover, he said that Kazak Oil is also interested in purchasing the Halychyna Oil and NaftoKhimik Prykarpattia refineries, but such purchases are not yet possible due to legal action against these refineries. (Eastern Economist)

EBRD to provide loan for Chop-Kyiv highway

KYIV - Finance Minister Ihor Mitiukov and EBRD Group Infrastructure Director Johan Bastin signed an agreement on allocating a 75 million euro loan to Ukraine for reconstructing the Chop-Kyiv highway and for reforming the country's auto road system. Over 300 kilometers of the Chop-Kyiv highway is in need of repairs, the cost of which is estimated to be 115 million euros. The EBRD loan will be paid via state budget expenditures and is to be directed at developing the road sector. A sum of 20.5 million euros will be allocated by Ukraine and another 16.1 million euros will come from TACIS - 1.5 million euros of which will cover the cost of preparing documents and holding tenders. Mr. Bastin said that after the agreement is signed, Ukraine will be moved to the first league of borrowers, "which means that the EBRD is confident in successful reforms in the country." (Eastern Economist)

STA testing Internet tax filing program

KYIV - The State Tax Administration (STA) of Ukraine will implement an automated system that will allow taxpayers to file income tax declarations via the Internet, according to STA Vice-Chair Volodymyr Rosolovskyi. He said the STA is currently conducting a pilot test of the system in Dnipropetrovsk with the participation of around 500 enterprises. Once the pilot test is completed successfully, the system will be applied across all of Ukraine. (Eastern Economist)

Kharkiv to upgrade telephone network

KHARKIV - Kharkiv's telecommunications network will soon be modernized, according to the Kharkiv Investment Council. Over $5 million (U.S.) is to be invested into a modernization project. The project will be managed by Welton Telecom Kharkiv, which will use up-to-date equipment produced by the French company Alcatel that will allow the network to expand by 17,000 numbers, provide high-quality digital communication and allow additional services via telephone. (Eastern Economist)

Antonov to work with Shanghai

KYIV - The Kyiv-based Antonov design and construction enterprise announced that it had signed a contract with Shanghai aviation university on joint research for producing a turbo-jet airplane. The aircraft will be able to carry 50 to 60 passengers. However, the details of the contract were not disclosed. (Eastern Economist)

Train marks start of railway reform

KYIV - Ukraine's first world-standard express-electric train, the Slavutych, has started running between Vinnytsia and Kyiv. Now passengers can choose a luxurious first class car complete with TV and video, armchairs and tables, or a cheaper second- or third-class car, both of which are also quite comfortable. The new faster train saves 1.5 hours on the trip. According to UkrZaliznytsia management, the appearance of Slavutych heralds the beginning of long-promised railroad reforms. The next such electric train is to appear on the South-West line to Odesa. (Eastern Economist)

STA uncovers 3,800 fictitious firms

KYIV - The State Tax Administration (STA) held a press-conference in late November 2000 at which the reasons and conditions fomenting the existence of criminal activity in the banking sphere were analyzed. The head of the tax militia's investigative department, Gen. Lt. Sviatoslav Piskun, said that for the 10 months of the current year the STA has uncovered 3,800 fictitious firms and 50 currency conversion centers, resulting in the freezing of 82 million hrv in accounts; 38.8 million hrv of this sum has already been transferred to the budget. "As a rule, [fictitious firms] were hosted by commercial banks," Gen. Lt. Piskun said adding, "We are not in a war with banks, we are for the normal functioning of the banking system." (Eastern Economist)

Unemployment continues to grow

KYIV - Ukraine has a higher than average unemployment rate than Europe or transitional countries, said the Verkhovna Rada's human rights representative, Nina Karpachov. In 1998 the registered unemployment rate was 3.7 percent; it rose to 4.3 percent in 1999. In 2000 it approached the 7 percent mark, with no sign of slowing down or reversing. Of 22 million people working in Ukraine, nearly half work part-time. Major problems are seen in the employment of women with children, and youths under age 28. (Eastern Economist)

NBU approves first online bank services

KYIV - International Commerce Bank, in cooperation with S&T, has established the first online banking service in Ukraine. The system was approved by the National Bank of Ukraine's Department of Information. Online banking allows clients to control their accounts and make payments via the Internet. According to Serhii Kryvenko, information technology manager at ICB, this service is the first step to implementing smart-cards in Ukraine. (Eastern Economist)

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