Ukraine no 11_february_17_ 2011


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Ukraine no 11_february_17_ 2011

  1. 1. ”The bi-weekly business report by Bonnier UKRAINE We want to be right in time in Ukraine to occupy our niche. Finn-Flare CEO Ksenia Ryasova PAGE 11| No 11 | 17 February 2011 | Creating transparency in emerging markets since 1991 | |MANUFACTURING Cargill enters animalRussias PharmStandard acquires 55% in nutrition market in UkraineUkrainian Biolik PAGE 2 Cargill, an international food producerFINANCE and marketer, will build an animal feedKardan sells controlling stake in VAB mill in central Ukraine (KirovogradBank PAGE 4 region) in the course of the current year.FOOD & AGRICULTURE PAGE 7Swedish Alpcot Agro expects SEK 322mfor capital expansion PAGE 6 Leading Baltic real estatePROPERTY & CONSTRUCTIONSwissôtel Hotels & Resorts to operate developer enters Ukraine Pro Kapital Group, the leading realnew deluxe hotel in Odesa PAGE 8 Finn Flares strategy in Ukraine foresees opening a representative office to estate developer in the Baltic States,RETAIL & SERVICE be then followed by the launch of flagship store. Picture: Finn-Flare plans to construct Coliseum, a shoppingFinn-Flare and Melon Fashion to enter and entertainment mall in theUkrainian market this year PAGE 10IT & MEDIA Nordic retailers launch expansion on Ukrainian city of Kryvyi Rig, in H1 2013.Austrian Epic ready to acquire fixed-line Ukrainian market PAGE 10monopoly Ukrtelecom PAGE 12 Clothing retailers Finn-Flare and Melon Group share the same Most important updatedTRANSPORT & LOGISTICS key figures in this issue plan: to expand their network of stores in Ukraine to make theUkrainian cabinet to simplify customs best of the promising market. Both have already conquered the Producer price index PAGE 16terms for Viking contrailer train PAGE 14 Consumer price index PAGE 16ENERGY & ENVIRONMENT Russian market and believe that Ukraine is the next logical step to Stocks PAGE 17ABB wins USD20m order to update follow. PAGE 10-12 SEE ALL KEY FIGURES PAGES 16–18Ukraines power net PAGE 14ECONOMY & POLITICSJapanese bank to finance Ukraines Ukrainan agri firm included WSEs performance in 2011 ALSO IN THIS ISSUE: ▶ Agroliga is first Ukrainian com-machinery import PAGE 15 in WSE blue chip index WIG Total closing index in 2011 pany listed on NewConnect PAGE 3 Kernel Holding, one of the largest 49000 ▶ BDO and SBC join efforts to be- 48250 47500 come no1 in Ukraine PAGE 5Bonnier Group/Äripäev publishes similar business reports on Po- Ukrainian vegetable oil producers, will be 46750 ▶ AeroSvit chases off SAS from Co- 46000land, Latvia, Lithuania, Estonia and China. As a subscriber you the first Ukrainian and the second foreign penhagen-Kyiv PAGE 13 3.01.11 14.01.11 25.01.11 5.02.11 16.02.11have access to your country report ten years back through our on- company to be included in the WIG20 indexline archives at Multiple user access available of Warsaw Stock Exchange, comprising the Source: Bloomberg- write or phone +372 667 0251. largest and most traded companies. PAGE 2
  2. 2. 2 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEMANUFACTURING "Bioliks products are successfully and 23% respectively of the 2010 Since 2007, it has also been lead- sold in Russia and we are planning volume. ing in the markets commercial seg- to expand the sales volumes in both Biolik has become the fourth ment, having expanded its shareDRUG PRODUCTION Russia and abroad," Ilya Krylov says. drug manufacturing factory under from 18.9% to 20%.250-km south drift: Russias Founded in 1898, Biolik is one of PharmStandards control.largest drug maker grabs up the oldest drug manufacturers on The other three enterprises are Drug trade in Ukraine: big importer the post-Soviet terrains. Since the geographically dispersed throughoutUkrainian facility the immense Russian territory from Import and export of pharmaceutical products in Ukraine Soviet times, it has been deliveringRussias largest drug producer Kursk in the European Russia (some its medicines to the Ukrainian, Rus- 250000 Export, thsd.USDPharmStandard has acquired a 55% 250 km to the north of Kharkiv) to sian and other post-Soviet markets. 200000 Import, 10 thsd.USDstake in Biolik, a top-20 Ukrainian Ufa in the Ural region to Tomsk in 150000pharmaceutical company based in The range of the products manu- factured by Biolik makes up about Siberia. Additionally, PharmStan- 100000the countrys second largest city of dard has a plant producing medical 50000Kharkiv in eastern Ukraine. 70 items (vaccines, serums, nutrient 0 mediums, diagnostics and blood equipment in the city of Tyumen in PharmStandard reveals that the western Siberia. products, immunobiological, hor- 10 07 05 04 Jan 09 03 06 08 20 20 20 20 ov 20 20 20acquisition has been financed from -N monal, antiviral, antibacterial andits own funds, but does not disclose enzymatic drugs). Fact 1.35bnthe transaction amount. Source: State Statistics As the company has been con- "This is the first production facil- stantly upgrading its production fa-ity acquired by our company in During its IPO in May 2007, cilities up to international standards,Ukraine, which is the second largest PharmStandard placed its shares on it is today the only Ukrainian pro- drug packages is PharmStandardssales market in the region after Rus- the Russian Trade System (RTS) and ducer of certain types of phar- present annual capacity.sia," says Ilya Krylov, PharmStan- GDRs on the London Stock Ex- ” macons.dard investor relations manager, to Having invested more than USD change (LSE).news2biz. 100m in the upgrading and devel- Currently, PharmStandard board opment of its capacities, Pharm- chairman Viktor Kharitonin controls Standard is now capable of manu- (via Augment Investments Limited) facturing 1.35bn drug packages a 54.3% in the company, with the re- Bioliks products are year. maining 45.7% free floated on the successfully sold in Its portfolio includes over 250 LSE (27.6%) and RTS (18.1%). products used in the treatment of We have talked to Russia and we are diabetes, growth hormone defi- Ilya Krylov planning to expand the ciency, cardiovascular diseases, gas- Tel +7 495 970 0030 (switchboard)Biolik is the first drug manufac- sales volumes in both troenterological and neurologicalturer acquired by PharmStandard disorders, infectious diseases, can- STOCK MARKETin Ukraine. Photo: PharmStandard Russia and abroad. cer, etc. PharmStandard investor relations manager Ilya Krylov Following the results of the first Kernel joins WSE blue chips, According to him, Bioliks prod- nine months of 2010, PharmStan- Agroliga NewConnect listucts will diversify PharmStandards Bioliks sales reached about USD dard has become the retail sector The second week of February thisexisting portfolio with vaccines and 17.7m last year, up 23.3% on the leader of the Russian pharmaceutical year has seen already two Ukrainianserums, oncological and immunobi- 2009 level of USD 13.3m. Domestic market with a 5% share. agrarian companies highlighted atological drugs. sales and exports constituted 77% the Warsaw Stock Exchange (WSE).
  3. 3. 3 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINE Thus, on 10 February 2011, the panys market value has grown more Warsaw Stock Exchange tonnes to 40,000 tonnes; to expandPolish stock exchange informed that than fourfold since that time, going and Ukrainian companies its milk production by a factor ofKernel Holding, one of the largest from PLN 1.5bn to 6.1bn. The Warsaw Stock Exchange is four to 4,500 tonnes and increase itsUkrainian producers and exporters "The inclusion of Kernel in the the largest stock market in the herd to 1500 milking cows by 2014.of vegetable oil and grain, would be WIG 20 index is a very important CEE region. To date, six Ukrainian By doing so, the company plansthe first WSE-listed Ukrainian com- step for our company. It is a tribute issuers have chosen WSE as a to increase its turnover to EUR 15mpany incorporated into the WIG20 to the vitality of our business and to platform for financing and secon- by 2014. Its turnover in 2009 wasindex comprising the largest and the significant growth we have dary trading – Agroliga Group, EUR 2.7m.most traded companies. achieved over the three years since Agroton, Astarta Holding, Kernel Besides, Agroliga is planning to Kernel will also be just the sec- we have been listed on the Warsaw Holding, Milkiland and Sadovaya enter the WSE Main List in someond foreign company included in the Stock Exchange," stated Andriy Ver- Group. two-three years.WIG20 index (the first being CEZ, evsky, Kernel Holdings board ▶ Sunflower oil producer andfrom the Czech Republic). The chairman, at the WSE. "Undoubt- "The very fact of the appearance grain trader Kernel (KER PW) willchange will be made at the annual edly, this event brings Kernel and of a small Kharkiv-based company be the first Ukrainian company torevision following the trading ses- Ukraine under the spotlight of the on the Warsaw Stock Exchange is join the WSEs benchmark WIG20sion on 18 March 2011. international investment commu- rather remarkable," says Oleksii Index with a 2.08% weighting. The dynamic expansion of Kernel nity: it will provide a further oppor- Kornilov, business development ex- ▶ Diversified agro holding AstartaHolding, and its promotion to the tunity to highlight the quality of our ecutive of Avantazh Capital, the (AST PW) will join the WIG40 withWSE blue chip index, is seen as an company and the investment oppor- Ukrainian investment group and a 1.65% weighting.example of the business success tunities in the agribusiness of Agroligas financial adviser, to ▶ Agroton (AGT PW) and dairywhich listing on the Warsaw ex- Ukraine." news2biz. "This is not a market gi- producer Milkiland (MLK PW) willchange can bring to Ukrainian issu- ant; this company has just a small Kernel Holdings success has as- join the WIG80 with respectiveers. sured the company a prominent po- vegetable oil refinery, a tiny milk weightings of 1.17% and 1.73%; sition not only on the WSE. In May farm and 5,000 ha of arable land." ▶ Newly listed coal producer Sa- 2010 it became one of the compa- dovaya Group (SGR PW) will be "But what Agroligas story has nies making up the MSCI Emerging added to a new index, the WIG shown is that the stock market is ca- Markets index, which is used by Basic Materials Index. pacious and flexible enough to pro- global investors to analyse the eco- ▶ Agroliga Group will be the first vide even a small business with nec- nomic situation in developing mar- Ukrainian and fourth foreign essary investment resources," he kets. company listed on the WSE alter- says. "On the other hand, Agroliga native stock market, NewCon- itself has made a precedent, which is nect. likely to be followed by other small,Agroliga became the first Ukrain- Agroliga in alternative league but ambitious and goal-seekingian company listed on the WSE al- Agroliga Group became the first Source: Ukrainian businesses."ternative market. Photo: Agroliga Ukrainian and fourth foreign com- pany listed on the WSE alternative Having completed the first Kernel debuted on the WSE on stock market, NewConnect, during Ukrainian small cap agricultural IPO Examples to be followed23 November 2007, raising more the very same February week. The on the NewConnect, the company To date, six Ukrainian issuers havethan PLN 400m from the sale of total number of companies listed on raised EUR 1m by floating 17% of its chosen the Warsaw exchange as anewly issued shares. Thanks to that both the WSE Main List and New- shares. Agroliga plans to use the platform for financing and secon-issue, a good development strategy Connect thus hit 600. proceeds to increase its sunflower oil dary trading: Agroliga Group,and effective management, the com- production by 100% from 20,000 Agroton, Astarta Holding, Kernel
  4. 4. 4 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEHolding, Milkiland and Sadovaya WSE decided that the Eastern direc- WSE-operated public market and of Ukrainian VAB Bank to a group ofGroup. tion would be instrumental for the raising capital here. international investors represented The WSE expects to see more future of Polish capital market, is by Troika Dialog, a leading RussianIPOs from Ukrainian companies, now bringing fruits. Our commit- WSEs performance in 2011 investment bank.both on its regulated market and the ment to the Ukrainian market, sup- WIG Total closing index in 2011 In December 2010, the banksalternative trading floor. It also ported with activities of some bro- shareholders meeting approved itsplans to introduce an index of kerage houses, is generating results," 48500 capital increase of UAH 550m (ap-Ukrainian companies in the first half says Ludwik Sobolewski, the presi- 48000 proximately EUR 53m) to UAH”of 2011. dent of WSE management board in a 47500 1.249bn. press release. 47000 In January 2011, TBIF sold the The Warsaw Stock Exchange is 46500 controlling interest in VAB Bank to the largest stock market in the Cen- 46000 international investors for UAH 3.01.11 7.01.11 15.01.11 11.01.11 19.01.11 23.01.11 27.01.11 31.01.11 4.02.11 8.02.11 12.02.11 16.02.11 tral and Eastern Europe region, and 550m, the amount of the capital in-Agroliga has made a organizes trading on one of the most crease entirely injected by TBIF. rapidly developing capital markets Source: Bloomberg The new shareholders fully shareprecedent to be followed in Europe. VAB Banks development strategy,by other small, but Since 2006 the Warsaw exchange Since the day of its launch, put trust in its international top has been on the forefront of Euro- eleven companies originally listed on management team and are ready toambitious Ukrainian support and develop the bank in the pean markets as regards IPO activity NewConnect made a transition tobusinesses. (in 2010 it took the second place in the WSE Main List (regulated stock future, according to its press release.Avantazh Capital business development executive Oleksii Kornilov terms of both the number and value market). NewConnect is among the of offerings). most dynamically growing alterna- VAB Banks The relations between the War- tive trading platforms in Europe. In Petr Baron:saw bourse and the Ukrainian busi- 2010 a total of 68 companies held We go aheadness community are an important Eastern European giant their IPOs there, which was the larg- and the newpart of the WSEs strategy of growth The WSE hosts a regulated market est number among Europes alterna- shareholdersand reinforcement of its interna- for shares and derivatives, as well as tive markets. will supporttional profile as a leader in Central the NewConnect alternative equity We have talked to our furtherand Eastern Europe. For Ukrainian market for growth companies. The Oleksii Kornilov advance andcompanies, which are leaders in WSE is also developing Catalyst – a Tel +380 57 700 44 14 development.their respective industries, presence market for issuers of corporate and Photo: VAB Bankon the WSE is an opportunity to municipal bonds.raise capital, grow and gain expo- Since 11 December 2010 the "We are grateful to Kardan that FINANCEsure on the international arena by Warsaw exchange has also hosted has been supporting the bank overpotential investors and business the WSE Energy Market, which en- the recent turbulent years for the ables spot trading in electrical en- OWNERSHIP CHANGEpartners. Ukrainian market," says VAB Bank Ukrainian issuers are, on their ergy as well as forward transactions. Kardan sells controlling CEO Petr Baron in a press release.part attracting a great deal of inter- NewConnect was launched on 30 stake in VAB bank "During this period, the bank man-est from investors on the WSE. August 2007. At present, a total of TBIF Financial Services B.V. (TBIF), aged to carry out its internal reor- "Ukrainian businessmen have 204 companies are listed there. an indirect subsidiary of the interna- ganisation, introduce best bankingchosen Warsaw. We are pleased that NewConnect gives smaller compa- tional investment company Kardan technologies and accumulate highour hard work since 2006 when the nies an opportunity of listing on this N.V., has sold a controlling stake in liquidity that allowed it to meet its
  5. 5. 5 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEdebt repayment obligations and take vices and (water) infrastructure. the brand name for both the BDO comment on the deal and share hisan active position in lending." While holding controlling interests entire network and each of its mem- vision of the would-be synergy. "We go ahead and the new in its subdivisions, Kardan is capable ber firms.shareholders will support our further of working out and implementing According to BDO managing ▶ What are the terms of the merger,advance and development," he main- their strategies. partner Sergiy Balchenko, the wouldnt it be more appropriate totains. "Our position remains un- The company is listed on the merger shows his companys strong speak about a take-over rather thanchanged: as before, we remain inno- NYSE Euronext Amsterdam and the intent to extend its presence on the a merger?vators in the market. We will con- Tel-Aviv Stock Exchange. Ukrainian market, and the choice in What has happened is exactly thetinue to offer our customers and As of 30 September 2010, its to- favour of SBC looks pretty natural merger of the two businesses operat-partners flexible and advantageous tal assets amounted to EUR 5.9bn given that both firms render very ing in the field of management con-products. Having strong capitalisa- (compared with EUR 5.6bn as of 31 similar range of services, while SBCs sulting through combining their ex-tion and high liquidity, we will con- December 2009 and EUR 5.5bn as of client base (mainly Ukrainian com- perience, methodology and, what istinue to occupy leading positions in 30 September 2009). The companys panies) ideally replenishes that of most important, highly skilled and”many segments." revenues stood at EUR 489m on the BDO (servicing both domestic and experienced personnel. same date (against EUR 691m as of international clients). 31 December 2009 and EUR 518m ▶ What is the main reason of the as of 30 September 2009). merger? VAB Bank has been operating on What we were after is extending the Ukrainian financial market since the range of the rendered servicesHaving strong 1992. Its regional network comprises and strengthening the BDO Consult-capitalisation and high 150 branches throughout the coun- ings team of highly skilled special-liquidity, we will try. As of 1 July 2010, the banks ists. Now, we are aiming for the regulatory capital and net assets leading role on the Ukrainian marketcontinue to occupy stood at UAH 888.7m and UAH of management consulting.leading positions in 7.1bn, respectively. ▶ What are the near-term plans andmany segments. We have talked to Caroline Vogelzang the overall development strategy ofVAB Bank CEO Petr Baron Tel +31 020 305 0010 Both companies are now operating the merged company? under the BDO Consulting brand. For the next few years we have "As a result of the transaction, planned to become the largest do- MERGER Photo: BDO Consulting in UkraineKardans current exposure to VAB mestic consulting company, whichBank will not be affected," says BDO Consulting, SBC join will also be capable of utilising theCaroline Vogelzang, Kardans inves- efforts, want to become no1 On the other hand, it is believed huge potential of the BDO interna-tor relations director, to news2biz. BDO LLC, the Ukrainian member of that having joined the BDO Consult- tional network. However, based upon the finan- the worlds fifth largest auditing and ing, SBC will be able to significantlycial statements as of 30 September consulting network BDO Consulting, expand its international client base, ▶ What is, in your opinion, the cur-2010, Kardan is expected to realise a has merged with System Business as well as benefit from the interna- rent state of the Ukrainian consult-loss of approximately EUR 30m. Consulting (SBC), a leading Ukrain- tional networks overall methodol- ing market and what are its future The company is active on emerg- ian consulting company. ogy, standards and instruments. prospects?ing markets, primarily in Central As a result of the merger, both news2biz has asked Nikolay The volume of the domestic con-and Eastern Europe and China, fo- companies are now operating under Lysenko, BDO Consulting partner, sulting market has substantiallycusing on real estate, financial ser- the BDO Consulting brand, which is who had formerly managed SBC, to shrunk during the global recession
  6. 6. 6 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEand it is going to take it 1.5-2 years Last year, the aggregate total The point of the cash injection is some 900 hectares of winter recover. revenues of all the BDO firm- both to compensate for the Russian Altogether, including spring plant- Furthermore, the market is likely members stood at USD 5.284bn drought which affected the com- ing, we expect to plant 15,000 hec-to significantly change towards the (EUR 3.893bn), the number of part- panys 188,700 hectares in Russia tares this year," says Katre Saard,practical implementation of the ad- ners and employees reached 46,930 save for the Western Kursk region. head of Alpcot Agros activities invice given. This will result in the less and the number of offices stood at The company now says it plans to Ukraine, to news2biz. "We expect toskilled specialists being screened 1,082 in 119 countries. divest all the agricultural land it has increase our land holding to 20,000-out. BDO LLC has been operating in acquired outside four mega-cluster 30,000 hectares during 2011," she We would very much like to see Ukraine since October 2003. Initially areas where the company plans to adds.our potential clients adopting a established in Dnipropetrovsk, in accumulate 30,000 hectares of farm- "This is quite a large spread, I re-more pragmatic approach, when not 2006 the company opened its Kyiv land. alise, but we are talking to some ma-only choosing consultants, but also office. Currently, the company is In this connection, Alpcot Agro jor players right now in order to ex-utilising received advice. and ana- presented in Ukraine by four divi- has reconsidered its decision to di- pand our holdings, while at thelytical instruments in the course of sions: BDO, BDO Consulting, BDO vest the land in the Kursk and in- same time we are growing organi-”their activity. /---/ Legal and BDO Valuation. stead of selling it will develop it into cally, by speaking to private farmers There are 300 people working in a mega-cluster. The background is, in the areas were we have activities," ” the company, with other consultants as 2010 has shown, that the Kursk Ms Saard explains. attracted when necessary. region has a relatively smaller expo- SBC has also been active since sure to extreme weather conditions. 2003. Since then, the company has Low selling price of the land in theThe domestic consulting carried out more than 30 projects for Kursk region is the other main rea-market has substantially the Ukrainian, Russian and German son for the rights issue. In order to have companies. economy of scale, youshrunk during the Wee have talked torecession and it will take Nikolay Lysenko need to have a certainit 1.5-2 years to recover. Tel +38 050 335 98 26 (mobile) amount of agriculturalBDO LLC partner Nikolay Lysenko land within one area. Alpcot Agros head in Ukraine Katre Saard BDO Consulting international FOOD & AGRICULTUREnetwork was founded in 1963 by At the same time she underlinesmeans of combining efforts of audit- that Alpcot is not just buying all FARMINGing and consulting companies from available land in Ukraine but is fol-the UK, West Germany, the Nether- Alpcot needs more cash, Alpcot Agro intends to keep ex- lowing a strategy of three clusters, inlands, USA and Canada. Ukraine to grow in 2011 panding in Ukraine. Photo: Alpcot Agro Lviv and Ivano-Frankivsk in Western Since then, the global chain has The board of the Swedish based ag- Ukraine and Poltava in Centralbeen providing litigation, investiga- ricultural group Alpcot Agro is re- In Ukraine, the company intends Ukraine where purchases should betion, restructuring and risk advisory solved to ask its shareholder for an to keep expanding, also in light of to major corporations, law additional SEK 322m in capital from the fact that yields in Ukraine were "In order to have economy offirms, insurance companies, finan- a rights issue that will be decided at on par with expectation for 2010. scale, you need to have a certaincial services entities and government an extraordinary shareholders meet- "We have planted some 5,500 amount of agricultural land withinorganisations. ing on March 18. hectares with winter wheat and one area," she explains.
  7. 7. 7 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINE Also, Alpcot is expanding the NEW SEGMENT Established in Ukraine, in a press release. "We aregrain silo complex which it took over Cargill enters animal Ukraine in fortunate to have received stronghalf-finished from Polish Duda in 1991, Cargill ongoing support from both the agri-connection with buying their agri- nutrition market in Ukraine has so far been cultural community and govern-cultural assets in Western Ukraine in Cargill, an international producer active mainly ment. We believe we have a mean-July (see news2biz UKRAINE no 1, and marketer of food, agricultural, ingful role to play in this sector and, in grain andpage 4). The silo, which was financial and industrial products and in the process, help raise rural GDP oilseedsplanned by the Poles to store 50,000 services, is planning to build an and support local farmers incomes." segment.tons, has seen the completion of one animal feed mill in the village of Photo: Cargillphase and now has a capacity of Kutsivka in central Ukraine (Kiro- vograd region) in the course of the Agri output: Kirovohrad vs. Ukraine12,500 tons. current year. Y-o-y indices of agricultural production volume "We will expand the silo at the "In recent years, we have seen a The mill, estimated at USD 7m,pace that is required by the expan- significant increase in meat con- 60% Kirovohrad will have the capacity to produce,sion of our operation in Ukraine. sumption and meat production in 45% Ukraine mix and pellet approximately 50,000These things must go hand in hand," Eastern Europe. This investment will 30% metric tonnes of bagged and bulksays Ms Saard to nesw2biz. enable us to leverage our global ex- animal feeds per year. The new facil- 15% pertise, technology and knowledge ity is expected to employ up to 40 0% to support the growth of this re- full-time positions. -15%Fact newed livestock sector in Ukraine," Cargill has been active in Ukraine30,000 says Francis De Rosa, Cargills media -30% since 1991, is headquartered in Kyiv 2004 2007 2005 2003 2009 2006 2008 2010 2002 relations manager for Europe/Mid- and has now nearly 700 employees dle East/Africa, to news2biz. in the country. However, as the Source: State Statistics Committee in Ukraine Once operational, the mill will company has so far been activeha will be Alpcot Agros land bank distribute feed, under the Purina mainly in Ukraines grain and oil- Founded in 1865, Cargill todaycapacity by the end of this year brand, to local dairy, swine and seeds segment, the new project employs 131,000 people in 66 coun- poultry livestock farmers through a marks the companys entry into the tries. It has 75 businesses organised ” dealer network. Cargill expects this countrys animal nutrition market. around five major segments: Agri- Alpcot Agro has been listed on network to be made up of over 100First North in Stockholm since 2006. dealers in three years time. While culture Services, Food IngredientsThe business idea is to generate an the mill is being built, Cargill in- and Applications, Origination andattractive return by acquiring and tends to explore opportunities to Processing, Risk Management andfarming agricultural land in Russia help meet current local demand for Financial, and Industrial.and other CIS member states. Alpcot In recent years, we have animal feed. As a privately held company, itentered Russia in 2007 and Ukraine seen a significant "With significant operations on runs its fiscal year from June 1in 2008. the ground, we plan to draw on syn- through May 31. In fiscal year 2010, increase in meat ergies from our established grain the company reported net earningsWe have talked to consumption and meat and oilseed business and to leverage of USD 2.6bn on sales and otherKatre Saard valuable contacts and existing rela- revenues of USD 107.9bn. production in EasternTel +44 797 985 55557 (direct) tionships built up by our long-term We have talked to Europe. commitment to Ukraine," says Mal- Francis De Rosa Cargills media relations manager for EMEA Francis De Rosa colm Sayer, general manager of Car- Tel +44-1932-861174 gills animal nutrition business in
  8. 8. 8 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEPROPERTY & Odesa, the hotels promotion materi- Odesa, amongst the top five larg- In June 2010, Swissôtel Hotels & als assert. est cities in Ukraine with more than Resorts signed a managementCONSTRUCTION one million inhabitants, is consid- agreement with another Ukrainian "There has never been a project of this kind in Odesa before," says ered to be one of the main destina- partner, KDD Group, one of theHOTEL MANAGEMENT Meinhard Huck, president of Swissô- tions for business, culture and tour- countrys leading property and in- tel Hotels & Resorts in a press re- ism in the country. vestment companies, for the opera-Swissôtels Ukrainian Due to the presence of a well- tion of a deluxe hotel in the Ukrain- lease.portfolio gets another hotel connected international airport, to- ian capital of Kyiv (see news2bizSwissôtel Hotels & Resorts has this gether with a well-developed rail UKRAINE no 1).month signed a management con- network, the largest sea port intract with the Ukrainian investor In- Ukraine and its outstanding geo- Kyiv deluxe projectterpoint Development for the opera- graphical location by the Black Sea The Swissôtel Kyiv is scheduled totion of Swissôtel Odesa, the new de- coast, Odesa is also a major trans- open in mid-2012 to welcome the ”luxe hotel expected to open in the port and commercial hub. guests of the UEFA Euro 2012 foot-Ukrainian Black Sea city in the ball tournament.spring 2013. The future Swissôtel Kyiv will According to the project devel- form part of the Sky Towers mixed-oper HI-Raise Constructions (a part use development complex to beof Interpoint Development), the 24- The new hotel will overlook the This unique comprised of the twin towers of 34storeyed Swissôtel Odesa will have Black Sea. Photo: Swissôtel Hotels & Resorts multinational and and 47 storeys. Sky Towers will bethe total area of 67,000 sq.m and in- positioned close to the Kyiv city cen-clude 333 modern and contempo- distinctive city is famous tre and the main railway station andrary rooms, varying from the classic "The location of the hotel on the will include hotel facilities, serviced French Boulevard is really superb. for its own traditions,category Swiss Advantage to Presi- residences and class A offices.dential Suites. The hotel is situated close to a park cuisine and humour, Swissôtel Hotels & Resorts is area, right on the coast of the Black leading the trend of The hotel will provide a lobby owned by Fairmont Raffles Hotels Sea, and only 4 km from the citylounge-bar with a library, two res- fashionable resort International, a leading global hotel centre. Interestingly enough, at thetaurants and a brasserie with an ex- company with 91 hotels and resorts end of the 19th century, a summer destination. worldwide under the Raffles, Fair-tensive terrace overlooking the Black cottage situated nearby that used to Swissôtel Hotels president Meinhard HuckSea, separate private dining rooms mont and Swissôtel brands. The belong to a mayor of Odesa, whichfor events and a lounge Skybar on company also owns Fairmont and was named Switzerland," he said. Founded in 2006, Interpoint De-the top floor. Raffles branded Residences, Estates "We are looking forward to a velopment is a part of Ener- and luxury private residence club fruitful partnership with Interpoint goTransInvest Holding, a Ukrainian properties.Exclusive facilities Development and HI-Raise Construc- consortium with large assets in theThe hotel facilities also include spa- tions, as well as the opening of a chemical industry, construction and ONWARD!cious conference and banquet new Swissôtel in Eastern Europe. real estate and agrarian sector.rooms. The Pürovel Spa & Sport This unique multinational and dis- HI-Raise Constructions is Inter- Interview with Swissôtel:complex with fitness facilities, tinctive city is famous for its own point Developments building arm. continued CEE expansiontreatment rooms and indoor and traditions, cuisine and humour, lead- Its revenues shrank by 21.2% to As Swissôtel Hotels & Resorts hasoutdoor pools with direct access to ing the trend of fashionable resort UAH 171.1m in 2009, while the net been proactively cultivating thethe beach will be unrivalled in destination." profit stood at UAH 17.2m. Ukrainian and other Central and
  9. 9. 9 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEEastern European markets (see the Most architects are engaged by environment has a character unique to the mechanical engineering, air-story above), news2biz has asked the owning companies, but we work to its geographical location and as craft industries, light and agricul-Eva-Maria Panzer, the companys closely with hotel owners to realise we work in each destination with tural industries, as well as the statecommunication director, to tell their vision for the future, the out- different architects and interior de- chemical industry.about the global hotel chains pre- come of which is a unique property signers all our hotels look different. The Ukrainian metropolis is alsosent stance and its plans for the fu- featuring energy-efficient solutions But what unites them are solid, one of the most important transportture. throughout. authentic materials synergizing with nodal points in Eastern Europe – an functional, well-designed and smart environment in which superior qual-▶ For how long has Swissôtel Hotels details. Swissôtel Kyiv and Swissôtel ity international hotel chains are still& Resorts been interested in the Odesa are both going to be state-of- in short supply.Ukrainian market? the-art properties in every respect. And Odesa has the huge port and Our development department is an important trade knot. In addi-looks into a wide range of markets, ▶ Which Ukrainian cities, besides tion, it is interesting for travellersbut expanding in any country in Kyiv and Odesa, are you interested seeking relaxation in summer nearEastern Europe has been for a long in? the Black Sea.time one of our focuses – Ukraine There are no plans for furtherhas always been on the list. hotel projects in Ukraine right now, ▶ What is the main difference be- As we have been operating quite so we completely concentrate on the tween Swissôtel hotels and othersuccessfully the Swissôtel Krasnye Kyiv and Odesa projects, which are luxury hotel networks? What are theHolmy in Moscow and the Swissôtel under construction and are sched- main specialities of your hotels inTallinn in Estonia, we wanted to add uled to open in mid-2012 (Kyiv) and Eastern Europe?more properties to our portfolio in in 2013 (Odesa). Swissôtel Hotels & Resorts is athe East as we are convinced that We are looking forward to bring- distinctive group of deluxe hotelsthere is a high potential of customer ing our brand to Ukraine and we which combines contemporary de- ”demand for deluxe hotel properties. want to be open right in time with sign with local character. the Swissôtel Kyiv for the UEFA Euro▶ Which developer companies have Swissôtel Kyiv is scheduled to open 2012, which would be a suitableyou been working with until now, in mid-2012 to welcome guests of event to open our hotel and haverealising new hotel projects? the UEFA Euro 2012. Photo: Swissôtel Hotels guests experiencing our Swiss hospi- For the Swissôtel Kyiv we work tality in the Ukrainian capital.with the KDD Group and for Swissô- Superior quality Our hotel in Tallinn/Estonia fortel Odesa we work with Interpoint example was realised by Meelis ▶ What kind of guests do you international hotelDevelopment/Hi-Raise Constructi- Press from M Pressi Arhitek- mostly expect to receive in your chains are still in shortons. Both companies are well known tuuribüroo in Estonia and our hotel Ukrainian hotels? Business clients?and follow values of reliability, ef- in Moscow by Russian architects of By now we manage nearly 30 ho- supply in the Ukrainianfectiveness and high quality as we TTA, with the participation of the in- tels in 17 countries and in most of as a company with Swiss roots. ternational architect firm Woods our deluxe hotels around 70% of the Swissôtel Hotels communication director Eva-Maria PanzerBoth companies work on the projects Bagot. clients are business travellers andat a high speed and do it 24/7. Generally it is a combination of around 30% of the hotel guests are Our Swissôtel Krasnye Holmy in modern design with some Swiss individual tourists. Moscow for example is known for its▶ Do you engage new architects in touches. Following a simple philoso- Kyiv is home to governmental modern design combined with char-every new project? phy of unity, not uniformity, each ministries and authorities, but also acteristically Swiss touches, which is
  10. 10. 10 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINErecognized as modern, clean, reli- Over the last 15 years, Pro Kapi- Greece, Germany, Russia, Poland,able and practical. The hotels are lo- tal has, according to her, developed Slovenia, Hungary, Tunisia andcated in major destinations and me- an extensive project portfolio: from Egypt.tropolises all over the world, and shopping malls to office facilities tomost are situated in the city centre, hotels and residential buildings in Fact 320,000only a stones throw from the shop- the prime locations in Riga, Tallinn ”ping and business districts and the and Vilnius.local attractions. This is exactly what we are bring- sq.m of space has been built by Proing as a renowned Swiss brand to Ukrainian Coliseum will host office Kapital Group in the Baltic countriesthe future Swissôtel Kyiv and Swis- spaces, a food hypermarket, vari-sôtel Odesa. ety stores, cafes and restaurants, Pro Kapital considers the Its subsidiary Domina VacanzeWe have talked to beauty shops and spa salons, asEva-Maria Panzer Ukrainian real estate has been the leading timeshare holi- well as an entertainment zone. day service provider in Italy forTel +41 44 317 62 28 Photo: Kryvyi Rig city administration market as an interesting more than a decade and is always onNEW MARKET EXPLORATION and challenging invest- the lookout for new hotels and spas. On the other hand, constructionLeading Baltic real estate of the shopping mall in such a large ment environment with In 2009, the revenues of Pro a large growth potential Kapital Group stood at EUR 85mdeveloper enters Ukraine industrial centre as Kryvyi Rig may, in opinion of Pro Kapitals board and the holding firm produced op-Pro Kapital Group, the leading real in the next years. erational loss of EUR developer in the Baltic States chairman Paolo Vittorio Michelozzi, Pro Kapitals spokesperson Iveta Vanagaregistered in Estonia, has announced become a sort of the entrance ticket We have talked toplans to construct Coliseum, a shop- to the Ukrainian market for his com- Iveta Vanaga pany. The company has developed pro- Tel +371 29239064ping and entertainment mall in the jects in prestigious locations on theUkrainian city of Kryvyi Rig, in H1 "Developing a land plot in Kryvyi Rig as a real estate project is the first seashore in Tallinn, in the quiet Art2013. Nouveau districts and on the banks With its total area of 143,000 step that might be followed by other projects in other Ukrainian regions," of the Daugava River in Riga, and in RETAIL & SERVICESsq.m, the Ukrainian Coliseum will the old town of Vilnius. All in all Prohost office spaces of 10,000 sq.m, a says Iveta Vanaga, Pro Kapitals spokesperson, to news2biz. Kapital Group has built more than MARKET INTRUSIONfood hypermarket, variety stores, ca- 320,000 sq.m of space, with total in-fes and restaurants, beauty shops "Pro Kapital Group considers the Finnish Finn-Flare: Russia Ukrainian real estate market as an vestments of EUR 250m.and spa salons, as well as an enter- conquered, off to Ukraine interesting and challenging invest- Having started with the construc-tainment zone. Finn-Flare, the Finnish garments and ment environment with a large tion and reconstruction of individual In January this year, Pro Kapitals footwear retail network with an ex- growth potential in the next years. buildings, Pro Kapital has graduallytop management visited Kryvyi Rig tensive presence in Russia, is set to Entering this market is a logical moved into the development of terri-and was given the green light for the enter the Ukrainian market this year. movement for Pro Kapital Group tories that are as much as severalproject implementation. Once that has an extensive development hectares in size in the prime loca- The company is, according to itslaunched, the new mall will, accord- experience in the Baltic countries tions of the three Baltic capital cities. CEO Ksenia Ryasova (symptomati-ing to the city mayor Yuriy Vilkul, and Russia since 1997," she empha- The company has developed cally, before 2006 she headed Finn-create some 1,200 jobs for the local sises. business facilities and state-of-the- Flares representative office in Mos-people. art hotels in the Baltic States, Italy, cow) planning to start with the
  11. 11. 11 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINEopening of an own office, show- "We are also planning to develop and it is a truly promising and at- Leninkitukku clothing and a retail store in Kyiv. a franchising chain in the country," tractive market." Shortly after its opening, the com- "First, we will open our represen- she reveals. "This is the most inter- Having virtually exhausted the pany claimed the leadership amongtative office in Ukraine, which is esting variant for us, as Ukrainian existing potential of the Russian the domestic clothing manufactur-crucial for providing our regional entrepreneurs have a full picture of capital and looking for new markets, with full-value services. the local market, buying behaviour Finn-Flare first launched its chain in Since 1965, the company hasConcurrently, we are going to open and other specifics." Russias regions and then proceeded been producing its clothing undera large "flagship" store, which will "We put high hopes on the to expand abroad. the Finn-Flare trade mark.not only sell our goods, but also, and Ukrainian market, which is ex- Thus, the companys entire net-mainly, demonstrate how a Finn- tremely interesting for us at the work (under the Finn-Flare and Ap- Fact 140-145Flare company store looks like," she moment. When planning our arrival pleMoon brands) currently com-says to news2biz. in Ukraine, we conducted a series of prises more than 350 outlets, includ- in-depth researches of the local con- ing some 250 franchise stores in sumer market and found out that Russia and a dozen ones in Kazakh- USD million shall reach Finn-Flares the franchising and brand retail stan. revenues this year. trade have been rapidly developing in the country," Ksenia Ryasova goes In 2000, Finn-Flare completely 45% revenue hike expected on. "So far, the competition on the changed its marketing strategy to Ukrainian market is not yet compa- This year, as Finn-Flare is planning give the key priority to the develop- rable with that in Russia, but it will to open 58 new stores (both own ment and manufacturing of casual certainly intensify. That is why we and franchising) in order to increase style clothes. At the same time, the believe that now is the best time to its revenues by 45% to USD 140- company started production of enter the Ukrainian market, the sec- 145m, it sees Ukraine as the most footwear and accessories.Finn-Flare has virtually exhausted ond most attractive one after that of promising market, which is likely to In 2003, the company opened itsthe existing potential of the Rus- ” Russia." be one day followed by Belarus. first store and design office in Mos-sian capital. Photo: Finn-Flare In 2010, Finn-Flare expanded its cow and has since then been devel- revenues volume by 20% to USD oping its franchising projects in Rus- "Since our company is not yetknown on the Ukrainian market, we 97m, having opened 73 new outlets, sia. Today, is a leading player in the including 33 own ones. "average plus" price segment of thehave concluded a partnershipagreement with a large local multi- Finn-Flares franchising pro- Russian clothing market. We want to be right in gramme appears to be rather attrac- Finn-Flare stores are presented inbrand retailer of casual and activewear. As a result, Finn-Flare 30 time on the Ukrainian tive to the company partners, as it the European and Asian capital andclothes will be sold in 30 of the market to occupy our does not require royalty and lump- prominent cities, such as Helsinki,chains 66 stores dispersed through- sum payments, but focuses instead Moscow, Saint Petersburg and As- niche. on the long-term development tana.out Ukraine," Ksenia Ryasova adds."This will definitely contribute to the Finn-Flare CEO Ksenia Ryasova meant to increase the existing turn- The Finnish company Ruveta OYbetter awareness of our brand." over and enhance the brand aware- holds the rights to the Finn-Flare The garments will be delivered to "So we want to be there right in ness with the help of Finn-Flares trade mark.Ukraine straight from China, Viet- time to occupy our niche," she sum- partners. We have talked tonam and Russia, where Finn-Flare marises. "But what is most impor- Finn-Flare was founded in 1960 Ksenia Ryasova office@finn-flare.ruclothes are actually manufactured. tant, is that the social and political in the small Finnish town of Salo Tel 8 906 038 01 55 (switchboard) situation in Ukraine has stabilised and was originally known as Salon