Ukrainian story of Stora Enso: heard first hand

The bi-weekly business report by Bonnier
UKRAINE
| No 10 | 3 February 2011 | Creating transparency in emerging markets since 1991 | www.news2biz.com |
”Empty market niches
allow new players to
avoid competition.
Svitlana Zhgun, Novus marketing director PAGE 7
MANUFACTURING
Turkey's Boydak buys furniture factories
from Poles in Ukraine and Russia PAGE 3
FINANCE
Austria's Erste Group creates central hub
for real estate services PAGE 4
FOOD & AGRICULTURE
Mriya Agro Holding gets USD 25m loan
from EBRD to buy land PAGE 5
PROPERTY & CONSTRUCTION
US Wyndham chain has discovered the
need for 3-star hotels in Ukraine PAGE 6
RETAIL & SERVICE
McDonald's launches McCafé chain,
regions to follow Kyiv opening PAGE 8
IT & MEDIA
Fast-expanding Estonian SmartAD
looking at Ukrainian market PAGE 9
TRANSPORT & LOGISTICS
Austrian Airlines increases interest in
Ukraine International Airlines PAGE 11
ENERGY & ENVIRONMENT
Swedish Capital Oil sells off Ukrainian
daugther company PAGE 13
ECONOMY & POLITICS
Ukraine and Belarus waging a beer war:
Belarus forces price hike PAGE 14
Meet only Nordic woman
entrepreneur in Ukraine
Clara Bodin is the only Nordic woman
entrepreneur who has set up her own
business in Ukraine. Having moved to
Ukraine in 2002, she is now offering an
innovative service that allows SMEs to
hire and pay Ukrainian stuff via her
company which takes care of all the
bureaucracy. PAGE 9
Lithuanian BT Invest to
expand food retail chain
Lithuania's BT Invest is planning to open
five new food supermarkets this year,
expanding its Novus Ukraine grocery
retail chain to 21 stores. Novus is looking
to expand its turnover by 70-80% this
year. PAGE 7
Most important updated
key figures in this issue
Real estate, wages PAGE 16
Trade, stocks PAGE 17
Current account, regions PAGE 18
SEE ALL KEY FIGURES PAGES 16–18
EVENTS PAGE 15
▶ INTERAGRO 2011
▶ Agro Animal Show 2011
▶ Prospects for Swiss SMEs
▶ Real estate, construction summit
▶ Logistics Innovation Forum
▶ Food Industry Forum
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Stora Enso to realise
that huge potential of
Ukrainian market
Since Ukrainian per capita
consumption of paper is still only
one sixth of that in Western
Europe, the development potential
of the Ukraine's paper market is
immense, says Elena
Marinovskaya, head of the
Ukrainian unit of Stora Enso, a
global manufacturer of paper
products. PAGE 2
Elena Marinovskaya: 2012 will be a peak
year for paper consumption. Photo: Stora Enso
Ukrainian coal output
grows, good year coming
The Ukrainian mines expanded their coal
production by 4.1% last year to over 75m
tonnes. It is the private sector that has
increased its output most over the past
years, while state-run collieries are showing
lower productivity. This year, experts expect
coal output to increase further. PAGE 12
Coal output up again
Annual output of coal available and
coke of coking coal in Ukraine, in m/t
60
70
80
90
2003
2004
2005
2006
2007
2008
2009
2010
Source: State Statistics Committee

2 | No 10 | 3 February 2011 | © Bonnier Group/Äripäev | UKRAINE
MANUFACTURING
PAPER PRODUCTION
Ukrainian story of Stora
Enso: heard first hand
Stora Enso, a global manufacturer of
paper, packaging and wood prod-
ucts, has been officially present in
Ukraine since 2004.
Having experienced the eco-
nomic boom enjoyed by the country
in 2006-2007 and the severe reces-
sion, which hit Ukraine in 2008-
2009, the company's Ukrainian rep-
resentation has, according to its
head Elena Marinovskaya, become
stronger and looks forward to 2012
as a new peak of business activity –
and thus paper consumption – in
Ukraine, one of the two host coun-
tries of the UEFA Euro 2012.
news2biz has asked Elena Mari-
novskaya to tell about Stora Enso's
operations in Ukraine and its poten-
tial to capture the immense Ukrain-
ian market.
Arrival
"Stora Enso started promoting its
key products, such as newsprint and
book paper, magazine paper, fine
paper, consumer board, industrial
packaging and wood products, right
upon the launch of its office," she
says.
"Since the development of any
sector is closely connected with the
overall economic situation in the
country, we have long been monitor-
ing both the Ukrainian paper market
and the nation's entire economic de-
velopment."
Market
"Ukraine is a very attractive market
for the European paper and card-
board manufacturers, as imports ac-
count for 70% of the paper and
board consumed in the country.
Elena Marinovskaya: 50% of
Ukraine's demand is filled by Rus-
sia and Finland, its largest suppli-
ers. Photo: Stora Enso
"When Ukraine gained its inde-
pendence in 1991, it had virtually no
own facilities for newsprint produc-
tion and very limited capacities for
offset paper production, as all the
largest Soviet paper mills and almost
the entire raw material base re-
mained in Russia."
"Now, some 50% of Ukraine's
demand is filled by Russia and
Finland, its largest suppliers, with
the remaining half covered by Po-
land, Germany, Sweden, Austria,
China and other countries."
Partners and competitors
"Stora Enso is a traditional supplier
of the globally renowned consumer
board producers, tobacco manufac-
turers and confectioneries also oper-
ating in Ukraine. Meanwhile, fine
and magazine paper has been tradi-
tionally supplied to Ukraine via
wholesale traders."
”The immense potential
of the Ukrainian market
impels its players to
increase their sales.
Elena Marinovskaya, head of Stora Enso representative office in
Ukraine
"We are a global leader in paper
production, so our arrival on this
market was natural and awaited for
by both Stora Enso and the local pa-
per producers. They do not see us as
their competitors, as our goods have
virtually no analogues in this coun-
try."
"We guarantee high quality of
our products, render information
and technical assistance and intro-
duce centuries-old traditions and
values of the Finnish paper manufac-
turing to the young Ukrainian mar-
ket.
"This is one of the reasons for the
permanent demand for Stora Enso's
products, which remained rather
high in Ukraine even amid the se-
vere crisis."
Crisis
"The global recession has brought
down demand for paper both glob-
ally and locally. This has been espe-
cially the case with the glossy maga-
zines, the least essential thing for
the crisis-ridden society."
Fact
30-33kg is the annual per capita con-
sumption of paper products in
Ukraine
"On the other hand, the down-
turn has urged people's demand for
relevant and useful information, so
the newspaper segment has man-
aged to maintain its position."
"As far as the packaging paper
and board is concerned, steady or-
ders have been secured by the de-
mand from Ukraine's leading to-
bacco producers and confection-
aries."
Potential
"Ukraine is a big country and con-
sumes a total of around 1.4m-1.6m

tonnes of paper, cardboard and pa-
per products a year. Still the nation's
annual per capita consumption re-
mains very low, just 30-33 kg, com-
pared with 40-45 kg in Russia, 100
kg in Poland and up to 200 kg in
Western Europe, the USA and Ja-
pan."
"So the development potential of
the Ukrainian market is immense
and this impels its key players to
continuously increase their sales."
Group
With the two companies' roots
traced back many centuries, Swe-
den's Stora and Finland's Enso
merged in December 1998 to form
the world's second-largest forest
products manufacturer in terms of
capacity.
Its annual production capacity is
12.7m tonnes of paper and board,
1.5bn sq.m of corrugated packaging
and 6.9m cub.m of sawn wood
products, including 3.1m cub.m of
value-added products.
Stora Enso’s key figures:
▶Sales totalled EUR 8.9bn in 2009
▶Total paper and board annual
capacity 12.7m tonnes and 6.9m
cub.m of sawn wood products
▶Some 27,000 employees
▶Strong global marketing network
▶Listed on NASDAQ OMX Helsinki
and Stockholm
The company's sales in 2009
were EUR 8.9bn, with an operating
profit excluding non-recurring items
and fair valuations of EUR 320.5m.
Steady climb by Stora Enso's stock
Stock price of Stora Enso, NASDAQ OMX Helsinki, in EUR
8,54
0
2
4
6
8
10
Feb10
Mar10
Apr10
May10
Jun10
Jul10
Aug10
Sep10
Oct10
Nov10
Dec10
Jan11
Feb11
Source: Bloomberg
The group has some 27,000 em-
ployees and 88 production facilities
in more than 35 countries world-
wide, and is a publicly traded com-
pany listed in Helsinki and Stock-
holm. Its customers include publish-
ers, printing houses and paper mer-
chants, as well as the packaging,
joinery and construction industries.
We have talked to
Elena Marinovskaya Elena.Marinovskaya@storaenso.com
Tel + 380 44 494 44 77
REGIONAL EXPANSION
Turkey's Boydak buys
furniture factories in
Ukraine and Russia
Turley's Boydak Holding is about to
acquire 100% shareholdings in Forte
Ukraine and Forte Russia, the furni-
ture factories based in the cities of
Artemivsk (Donetsk region, eastern
Ukraine) and Vladimir (near Mos-
cow, central Russia) respectively,
from their current owner, Forte, one
of the leading Polish manufacturers
and exporters of furniture.
The two parties signed a letter of
intent in December 2010 and expect
to finalise the deal in late February
this year after receiving regulatory
approvals.
"The process of this issue is still
continuing and we will inform you
about related topic after the process
has finished," says Ulas Ozturk, the
chief of Boydak's organisation and
decision services department, to
news2biz.
In the meantime, the Antimo-
nopoly Committee of Ukraine has al-
ready given the green light to the
deal, while Forte explained its sale
motives.
According to the information re-
vealed by the Polish company, the
sale of its Ukrainian and Russian fac-
tories would improve its consoli-
dated balance sheet. The value of
the two factories stood at PLN
49.593m (around USD 16.32m) as
of late November 2010.
The sale of its Ukrainian and Rus-
sian furniture factories would im-
prove Forte's consolidated balance
sheet. Photo: Forte
Forte Ukraine was established in
2001. In February 2002, the com-
pany started producing furniture.
Currently the factory produces over
300 types of furniture. The factory
receives timber from the Lviv, Ivano-
Frankivsk and Kharkiv regions, with
auxiliary materials (glass, mirrors,
packages, etc.) supplied locally from
the Donetsk region.
Forte Ukraine's net profit came to
UAH 2.307m (USD 289,890) in
2009 compared to the net loss of
UAH 433,000 in 2008. The company
generated revenues of UAH 11.829m
in 2009.
Fact
16.3mUSD was the value of Forte's Ukrain-
ian and Russian assets as of late
November 2010.
Polish Forte was founded in
1992. Apart from its Ukrainian and
Russian assets, it has four furniture
factories and a number of trade
companies in Poland.
Registered in 1957, Boydak
Holding today manages 27 compa-
nies in eight economic sectors, in-
cluding furniture manufacturing. It
has more than 11,000 employees
and 2,000 distributors.
We have talked to
Ulas Ozturk Ulas.OZTURK@boydak.com
Tel +90 (352) 207 18 00 (switchboard)

FINANCE
STRUCTURE CONSOLIDATION
Austria's Erste Group
creates central unit for all
real estate services
Erste Group Immorent AG (EGI) is
the new umbrella organisation for
all of the real estate services of Im-
morent AG, Erste Group Bank AG
and their respective subsidiaries in
CEE/SEE.
The new unit provides its clients
with a "one-stop-shop", covering the
full real estate value chain for com-
mercial and residential projects,
which particularly in Ukraine in-
clude lending, leasing, project de-
velopment, as well as construction
services.
The new structure allows to access
a comprehensive range of real es-
tate services from one central hub.
Photo: Erste Group
The new structure allows project
developers and businesses to access
a comprehensive range of real estate
services and local experts from one
central hub. The new management
structure of Erste Group Immorent is
effective as of 1 January 2011.
The same logic of restructuring
has been followed in the Ukrainian
unit.
Starting with January, the EGI
Ukraine management team consists
of Mikhail Merkulov (former CEO of
Immorent Ukraine) and Sergiy Kry-
shuk (former board member of Im-
morent Ukraine) as well as Yulia
Galchun (head of real estate busi-
ness in Erste Bank Ukraine).
Mr. Merkulov and Mr. Kryshuk
will continue in their positions as
CEO and board member of Erste
Group Immorent Ukraine, while
Yulia Galchun will cover significant
business areas within the new orga-
nisational setup.
Additionally, Mr. Merkulov will
act as regional director within the
EGI-Group, providing strategic busi-
ness development support for a
number of subsidiaries of Erste
Group Immorent within CEE/SEE.
"By combining real estate busi-
ness activities of Immorent and Erste
Group, we maximize the synergies of
our companies for our customers.
This will enable us to offer both
strong expertise, targeted to clients’
needs, and an efficient product mix
for real estate finance from a single
source," Mikhail Merkulov is quoted
as saying by the bank's press release.
Erste Group Immorent Ukraine
(EGI Ukraine) focuses on commer-
cial real estate, including prime
business centres and retail proper-
ties, as well as hotels. In 2011 EGI
Ukraine plans to increase its portfo-
lio by EUR 40m.
Central unit’s features:
▶Unit formed from Immorent AG,
Erste Group Bank AG and their re-
spective subsidiaries in CEE/SEE
▶New unit is a central hub of real
estate services and expertise
▶Erste Group Immorent ranks
among top three lending and
leasing portfolios in CEE/SEE
Erste Group Immorent AG has a
workforce of 866 people in 12 coun-
tries in SEE/CEE and manages a
leasing and lending portfolio of EUR
13bn (as of 30 September 2010).
Erste Group Immorent AG is pre-
sent in Austria, the Czech Republic,
Slovakia, Hungary, Croatia, Slove-
nia, Serbia, Bulgaria, Romania,
Ukraine, Montenegro and Poland.
The new management board for
Erste Group Immorent AG comprises
Peter Tichatschek (as
CFO/COO/CRO), Richard Wilkinson
(responsible for lending and leasing)
and Gerald Antonitsch (responsible
for project development and infra-
structure).
SEGMENT EXPANSION
Rinat Akhmetov’s SCM
pumps up its banking arm
Following the merger of the First
Ukrainian International Bank (FUIB)
and Dongorbank in November last
year (see news2biz UKRAINE no.6,
page 3), System Capital Manage-
ment (SCM) of Ukraine's richest
man Rinat Akhmetov, which is the
owner of both lenders, has taken a
new step towards forming an own
banking empire.
The Donetsk-based SCM has
bought a 100% stake in Renaissance
Capital, a small retail bank (no. 104
in terms of assets among the 176
lenders operating in Ukraine) oper-
ating in the segment of consumer fi-
nance under the Renaissance Credit
brand, from Russia's Renaissance
Group.
SCM's banking business in Ukraine
is presented by FUIB, Dongorbank
and, now, Renaissance Capital.
Photo: SCM
The transaction fully complies
with SCM's banking development
strategy, according to its press secre-
tary Anna Terekhova, and aims at
consolidation and yield increase.
"For SCM banking is the top pri-
ority, so we are interested in ex-
panding this area and entering new
financial market segments, in par-
ticular retail and POS-lending," she
says to news2biz explaining that
Renaissance Capital is a retail bank
with a strong growth potential and

impressive track record in the
Ukrainian market's consumer lend-
ing before the downturn.
"It has a well established con-
sumer finance infrastructure and a
professional team," Anna Terekhova
continues. "Its integration into SCM's
banking business will allow us to
expand the Group's portfolio in fi-
nance sector, enter a new market
segment, improve the growth poten-
tial of our business and make it
more diversified.”
”Renaissance Capital's
integration into SCM's
banking business will
allow us to expand the
Group's portfolio in
finance sector, enter a
new market segment,
improve our business's
growth potential and
make it more diversified.
SCM press secretary Anna Terekhova
While looking for investment op-
portunities, SCM had, according to
her, considered various options but
preferred Renaissance Capital be-
cause of its efficient retail lending
model.
"We are acquiring an established
business including the client base
and a credit portfolio," she empha-
sises adding that SCM has all the
necessary resources and expertise to
develop this area now, with the first
signs of economic recovery.
Renaissance Capital has a spe-
cialised retail network, a product
line, risk management system and a
professional team," Anna Terekhova
says pointing out that it will remain
a separate legal entity operating
within the SCM Group's banking
business.
SCM is 100% owned by Rinat
Akhmetov and owns and controls as-
sets in mining and metals, power
generation and distribution, tele-
communications, banking, insur-
ance, media, as well as in retail and
real estate.
SCM Group includes Metinvest
Holding, DTEK, VegaTelecom
Group, Segodnya Multimedia, TRK
Ukraina, ESTA Holding, Ukrainsky
Retail and other assets.
The Group's banking business in
Ukraine is presented by FUIB,
Dongorbank and, now, Renaissance
Capital.
Renaissance Group unites in-
vestment and financial service com-
panies focused on high-opportunity
emerging markets. Renaissance
Credit is the Group's retail business
established in 2003. It is presently
one of the 100 biggest banks in Rus-
sia and serves more than 4m clients
in the country.
In Ukraine, Renaissance Capital
started operations in 2005, when
Renaissance Group purchased
Leader Bank. Today the lender's re-
gional network spans Ukraine's 17
regions including the Crimea and
consists of 31 branches. The bank
has shown positive results in 2010,
posting UAH 4.432m in profits over
January-September 2010.
We have talked to
Anna Terekhova press@scm.com.ua
Tel: +380 62 381 50 37
FOOD & AGRICULTURE
WORKING CAPITAL FACILITY
Mriya Agro Holding gets
EBRD's USD 25m credit
Mriya Agro Holding, a Frankfurt-
listed major Ukrainian agricultural
producer operating in the country's
western part, has received a working
capital facility worth USD 25m from
the European Bank for Reconstruc-
tion and Development (EBRD).
The project will provide financ-
ing for inputs needed for agricultural
production, as well as crops stored
at certified warehouses.
"With the help of the EBRD's
loan, we will be able to sustain the
growth of our operations, ensure our
market expansion and competitive-
ness by bringing new land into pro-
duction and increasing the crop
yields," says Olena Glemba, Mriya
head of investor relations, to
news2biz.
Many primary agricultural pro-
ducers experience problems with the
availability of even simple working
capital financing, according to EBRD
director for agribusiness Gilles Met-
tetal. The main reason for this is the
lack of credible security.
Mriya plans to expand its land
bank from 220,000 ha to 650,000
ha by the end of 2013. Photo: Mriya
To tackle this issue, the EBRD
and the International Finance Cor-
poration (IFC, the World Bank
Group) are launching a new initia-
tive to develop Crop Receipts, which
will allow farmers to use the crop in
the ground as security and which is
based on legislation successfully
used in Brazil. This instrument, if
implemented, should enable more
lending to primary agriculture, a
sub-sector which currently receives
extremely limited debt financing.
Long-term stratregy
Mriya was founded in 1992 as a
family-owned farm with around 50
ha of land. Now, the company is
Ukraine's seventh-largest primary
agricultural producer growing
wheat, barley, sugar beet, rapeseed,
potatoes, and other crops on the
220,000 ha of land spread across
Ternopil, Khmelnytsky, Chernivtsi
and Ivano-Frankivsk regions.

Last year, Mriya was about to is-
sue Eurobonds for a total of USD
300m, but postponed the emission
due to the "poor debt market condi-
tions".
The same year, IFC announced
its intention to invest USD 75m (a
working capital facility of USD 25m,
a subordinated credit of USD 25m
and a warrant acquisition for the
same amount) in Mriya in order to
increase the company's grain pro-
duction, land bank and staff.
Back then, Mriya declared its
ambitions to build three grain eleva-
tors, purchase new machinery and
expand the available land bank.
Having received the borrowed
funds now, Mriya will most likely
earmark them for achieving the lat-
ter goal – to expand the land bank to
650,000 ha by the end of 2013, as
well as to refinance its debts totaling
some USD 75m.
Largest investor
The EBRD is the largest financial in-
vestor in Ukraine. As of 31 Decem-
ber 2011, it had committed over
EUR 6bn through 264 projects. In
the agribusiness sector alone, the
EBRD has directly committed more
than EUR 6bn in over 400 projects
across Central and Eastern Europe
(CEE) and the Commonwealth of
Independent States (CIS) since
1991.
The EBRD, owned by 61 coun-
tries and two intergovernmental in-
stitutions, is supporting the devel-
opment of market economies and
democracies in countries from Cen-
tral Europe to Central Asia.
We have talked to
Olena Glemba glemba@mriya.net
Tel +380 44 220 13 70 (switchboard)
PROPERTY &
CONSTRUCTION
HOTEL MANAGEMENT
Gone with the Wyndham:
US chain to operate 3-star
hotels in Kyiv, other cities
The Ukrainian HoReCa (Hotel, Res-
taurant and Catering) sector has
seen the arrival of a new interna-
tional player in the run-up to the
UEFA Euro 2012 football tourna-
ment.
The US-based Wyndham Hotel
Group, one of the world's largest
hospitality companies, and the
Ukrainian developer DeVision have
signed a 15-year franchise contract
for the operation of a new three-star
hotel under Wyndham's Ramada En-
core brand within DeVision's Domos-
fera mixed-use complex to be
erected at Kyiv's southern gateway.
The franchising model is widely
used by Wyndham Hotel Group out-
side the US market and thus it is
planning to eventually open its Ra-
mada Encore hotels also in other
Ukrainian cities, such as Donetsk,
Odesa and Lviv, according to Wynd-
ham Hotel Group International vice-
president for Central and Eastern
Europe Christian Michel.
In the meantime, the Kyiv-based
Ramada Encore hotel is likely to
start operations already next year, as
Domosfera's 23-floored edifice that
the hotel will share with a class B of-
fice centre is due to be completed in
Q4 2011.
With its 264 standard rooms and
61 service apartments, the new hotel
will have a gross built area (GBA) of
26,350 sq.m, a little larger than that
of the office centre (24,600 sq.m).
In addition, Domosfera will com-
prise a mega-mall occupying three
interconnected buildings (GBA of
66,570 sq.m and the gross leasable
area (GLA) of 33,876 sq.m) and a
1,100 slot parking, which will be
fully launched in Q2 2012.
Domosfera: a multi-use complex at
Kyiv's southern gateway
Total area 117,520 sq.m
Hotel 26,350 sq.m
Office centre 24,600 sq.m
Mega Mall 66,570 sq.m
Parking 1,100 slots
Opening 2012
Source: DeVision
The mixed-use complex has been
developed on a 12.77 ha plot of land
since 2007.
DeVision plans to invest around
USD 120m in the project, with 80%
of the funds to be covered by a bank
loan.
"Initially, in the environment of a
buoyant economy and growing de-
mand for office facilities in Kyiv's
outskirts, the development concept
of Domosfera's phase four envisaged
the class В+ business centre to
stand alone," says Ekaterina Starun-
skaya, Domosfera's marketing direc-
tor, to news2biz.
"However, taking into account
the project's particulars, its location
and changed market conditions, it
was decided in 2009 to update the
concept so as to build a facility,
which would combine the office and
hotel zones and also feature restau-
rants, conference halls and an un-
derground parking for 60 cars."
Domosfera's concept was updated
in 2009 so as to combine the office
and hotel zones. Photo: DeVision
"An experienced developer our-
selves, we realised the necessity to
attract an experienced partner, pref-
erably an international operator, to
give the project a new turn," she
goes on.
"Having scrutinised the market's
new trends and capacity, we noticed
the saturation of the high-class lodg-
ing niche and the low supply of well-
furnished three-star hotels," she
points out.
"Many Ukraine's and Kyiv's newly
constructed midscale segment hotels

are rather small, with the remaining
capacities being obsolete," Ekaterina
Starunskaya claims. "At the same
time, there are virtually no three-
plus-star hotels capable of accom-
modating a large number of visi-
tors."
According to her, the bulk of
Kyiv's three- and four-star hotels are
actually of a lower international
level today, so it is a globally re-
nowned brand that can guarantee a
hotel's true standard.
"We believe that the involvement
of Wyndham Hotel Group has made
our project even more attractive and
contributed to its future success,"
she asserted.
”We noticed saturation of
the high-class lodging
niche and low supply of
three-star hotels.
Ekaterina Starunskaya, Domosfera's marketing director
DeVision entered Kyiv's real es-
tate and development market in the
early 2000s as First Ukrainian De-
velopment. Since December 2008,
the company has been operating un-
der its present name.
As of today, DeVision has a
unique portfolio of real estate pro-
jects with the total area of more
than 1m sq.m estimated at over USD
1.3bn.
The company is set to expand its
hotel segment and plans to build a
Riverside Plaza hotel and office cen-
tre (GBA of 43,158 sq.m) in down-
town Kyiv by 2012. The project en-
visages the construction of a four-
plus- star Sheraton hotel with 239
rooms and 80 service apartments,
office and trade spaces, as well as a
parking for 147 cars.
Wyndham producing stable revenues
Quarterly revenues of Wyndham Worldwide Corporation,
in m USD
1065
0
200
400
600
800
1000
1200
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
Source: Wyndham quarterly earnings releases
Wyndham Hotel Group, one of
three principal components of
Wyndham Worldwide, encompasses
nearly 6,500 hotels and 541,000 ho-
tel rooms on six continents. All ho-
tels are either independently owned
franchises or managed by a Wynd-
ham Hotel Group subsidiary.
Ramada Worldwide offers nearly
900 hotels and 105,000 rooms in
over 45 countries.
We have talked to
Ekaterina Starunskaya starunskaya@v-d.com.ua
Tel +380 44 220 01 56, +380 67 328 27 05 (mobile)
RETAIL & SERVICES
NETWORK EXPANSION
Lithuania's BT Invest to
channel EUR 50m in food
retail expansion in Ukraine
Lithuania's BT Invest is planning to
open five new food supermarkets
this year in Ukraine to expand its
Novus Ukraine grocery retail chain
to 21 stores.
The chain's 17th supermarket
with the floor space of 3,500 sq.m is
scheduled to open on 12 February
2011 in Boryspil, the Ukrainian capi-
tal's suburb mostly known as the
place of the Kyiv international air-
port.
So the new Novus store will be a
part of the AeroMall shopping and
leisure centre with the GBA of
20,509 sq.m and GLA of 15,295
sq.m.
With Novus format varying from
the neighbourhood stores to the
hypermarkets, that of the super-
markets prevails. Photo: Novus
In addition, two stores will open
in Kyiv and two in Ternopil, western
Ukraine, and Sevastopol, the Cri-
mea, respectively.
To finance the announced expan-
sion, the company is going to raise
up to EUR 50m within the next two
years. So far, the chain has been de-
veloped organically, according to
Svitlana Zhgun, its marketing direc-
tor.
Today, BT Invest has six outlets
in Sevastopol, four in Kyiv and the
rest in the cities and towns of central
and western Ukraine.
The chain's 16th store opened on
28 January this year on Kyiv's left
bank. With its GBA and net floor
space of of 8,400 sq.m and 4,600
sq.m respectively, this is the largest
Novus hypermarket. It has 30 pay
desks and features the range of
goods exceeding 80,000 items. In-
vestment in its construction made up
around USD 10m.
”Since the market
capacity is low, it has a
lot of empty niches
allowing new players to
avoid competition.
Svitlana Zhgun, Novus marketing director
Although Novus format varies
from the so-called neighbourhood
stores (from 800 sq.m) to the
hypermarkets (up to 7,000 sq.m),
that of the supermarkets (3,000
sq.m) dominates the chain.

Still, as Ukraine has been in-
creasingly globalising, according to
Svitlana Zhgun, the neighbourhood
stores will be giving way to super-
markets, those to hypermarkets and
the latter to shopping malls.
"Furthermore, the Ukrainian cus-
tomers tend to lodge increasingly
higher demands on the quality of the
offered goods and services," she says
to news2biz. "But we are set to meet
all the requirements by applying
European trading standards and us-
ing broad experience of our Lithua-
nian top managers."
"By opening the new stores and
improving operations of the existing
ones this year, we want to increase
the network's annual turnover by 70-
80% on 2010 to UAH 850-900m,"
Svitlana Zhgun states.
"The Ukrainian food retail mar-
ket is far from saturation now, which
allows its players to intensively de-
velop their chains," she says. "Since
the market capacity is still low, it
has a lot of empty niches allowing
the new players to avoid direct com-
petition with rivals."
Fact
70-80%is Novus' expected turnover growth
this year.
BT Invest was founded in 2007
by Raimondas Tumenas and late
Igor Bezzub, the former sharehold-
ers of Sandora, the Ukrainian juice
producer which has been sold to
Pepsi.
The new Ukrainian company
started its activity in February 2008
with the acquisition of Raytsentr, a
small retail chain in Western
Ukraine. That was followed by the
purchase of Alen, Sevastopol's larg-
est network of food stores with the
total area of around 27,000 sq.m.
Apart from Novus, BT Invest also
develops real estate projects in both
Ukraine and Lithuania.
We have talked to
Svitlana Zhgun svitlana.zhgun@novus.com.ua
+380 44 585 41 70, + 380 50 417 72 88
NEW MARKET FORMAT
McDonald's launches
McCafé chain in Ukraine
On 14 February 2011, McDonald's
Ukraine will open its first McCafé
coffee shop in the country. The new
chain development will start in Kyiv
to be followed by regional expansion
into the largest Ukrainian cities.
Although McCafé's format does
not call for separate premises for the
newly opened coffee shops and
lodges them within the existing
McDonald's restaurants instead, this
does not mean that McCafé will just
automatically spread over the avail-
able McDonald's chain.
"We are not going to open the
new coffee shops everywhere, as it is
the restaurants' location and visitors
that will be taken into account first
of all," says McDonald's Ukraine's PR
director Mikhail Shuranov to
news2biz.
McCafé's format does not call for
separate premises for the newly
opened coffee shops. Photo: McDonald's
By launching the new format, the
company is, according to him, ex-
pecting to attract those people, who
had not visited McDonald's before
proffering traditional coffee houses.
Still McCafé will differ from the
traditional cafés, as the former en-
visages self-service, lack of strong
drinks and a rather short selection of
coffee sorts (up to 10) and pastry
items (up to 20).
Spreading concept
"The area of a coffee shop will be
chosen individually for each outlet,
but the reference point is around 30
sq.m," Mikhail Shuranov says.
McCafé's first ever shop was
opened in 1993 in Australia. Since
then, McCafé network has spread
out globally with its number of
shops exceeding 1,200 in Europe
alone. In the USA, McCafé is respon-
sible for 6% of the Golden Arches'
total revenues.
Globally, McDonald's generated
USD 24.08 bn (plus 5.7% on 2009)
in revenues and USD 4.9bn (plus
8.6% on 2009) in net profits last
year.
”We are not going to
open the new coffee
shops everywhere, as it
is the restaurants'
location and visitors
that will be taken into
account first of all.
McDonald's Ukraine's PR director Mikhail Shuranov
In Ukraine, McDonald's opened
its first restaurant back in May 1997,
being the first international fast-food
operator to have appreciated the
huge potential of the almost 50-
million European market (see
new2biz UKRAINE no.1, page 8).
Since then, the company has in-
vested more than USD 100m in own
funds in the development of its na-
tion-wide network and indisputable
dominance on the Ukrainian fast
food market.
McDonald's advance brought the
fast-food culture into Ukraine and
catalysed the birth of a handful of
locally-owned fast-food chains.
However, the global downturn
screened out the least professional
players, while McDonald's was
forced to change its tactics after
2008 and shifted emphasis from

launching new sites onto revamping
existing ones.
In late December last year,
McDonald's opened its 70th restau-
rant in the country (see new2biz
UKRAINE no.8, page 8).
We have talked to
Mikhail Shuranov Mikhail.Shuranov@ua.mcd.com
Tel: + 380 44 230 09 22
IT & MEDIA
INTERNET ADVERTISING
Estonian SmartAD network
eyes Ukraine following
Baltic expansion
The Internet advertising network
SmartAD, operated by the Estonian
marketing company Against All
Odds, is planning to enter the
Ukrainian and Belarusian markets
once its Baltic expansion is over.
This year, a year after establish-
ing its subsidiary in Latvia, the com-
pany is set to win a foothold on the
Lithuanian market, but is not going
to stop there.
"Lithuania was a logical step in
our development, as we are now
present in both Estonia and Latvia,
and want to cover all the Baltics
with our services," says Dag Ainsoo,
member of the board of Against All
Odds, to news2biz.
"We need to have offices in all
the three countries in order to help
our customers to run coordinated
pan-Baltic campaigns."
SEB's student loan campaign ban-
ner distributed via SmartAD net-
work. Picture: SmartAD
However, "Lithuania is not the
final stop for us – we also look at the
markets of Ukraine and Belarus," he
states.
"The further expansion will be
unlikely to take place this year, as
we are currently too busy with the
Lithuanian office," Dag Ainsoo ad-
mits. "One country per year is a
manageable speed of expansion."
SmartAd's office in Lithuania is
expected to be functional in the next
few months.
"For the current year, our plans
are modest, but in longer perspec-
tive we want to claim 10% of the lo-
cal Internet advertising market," says
Ainsoo.
SmartAD already claims to be the
largest Internet advertising network
in Estonia.
The Latvian SmartAd unit is 80%
owned by Against All Odds, and the
Lithuanian one 100% owned.
"We included one Estonian inves-
tor while expanding to Latvia; the
original 50:50 ownership has now
changed to 80:20," says Ainsoo.
"We want to include outside capi-
tal also in Lithuania, and have a pre-
liminary agreement with an interna-
tional investment fund regarding in-
vestment," he reveals.
”Lithuania is not the final
stop – we also look at
Ukraine and Belarus.
Dag Ainsoo, Against All Odds' board member
SmartAD is a result-oriented
Internet advertising network, estab-
lished by three Estonians in 2008.
By analysing the characteristics
of websites and using SmartAD
software, the ads will be placed in a
way that results in better reach to
target audience of the marketing
campaign, while also increasing the
revenue of websites.
The consolidated turnover of
Against All Odds reached EUR
0.32m in 2009. For 2010, Dag Ain-
soo expects the company's turnover
to reach EUR 0.45-0.48m.
We have talked to
Dag Ainsoo dag.ainsoo@smartad.ee
Tel +372 5661 7127 (mobile)
RECRUITMENT & CULTURE
Clarus Eastern Europe
refocused after crisis
Clara Bodin is Swedish, she is from
Värmland in the eastern part of
Sweden. In Kyiv, her home since
2002, she is a woman of firsts – she
is the youngest member of the
Swedish Business Community and
she is also the only Nordic woman
entrepreneur who has set up her
own business in Ukraine.
Her business is Clarus Eastern
Europe, a company that now has a
staff of eleven including Ms Bodin,
who is CEO, and her 50/50 partner,
expat Dutchman Joop Allers, who is
the financial manager.
Finding right people
"Following the Orange revolution in
late 2004 and early 2005, there was
a lot of focus on Ukraine and foreign
companies started setting up shop
here in significant numbers," ex-
plains Ms Bodin to news2biz.
"I knew from previous experience
that companies would be ready to
pay for recruitment services, so our
first focus was to help businesses
that were starting up to find the
right people for the job," she contin-
ues.
This reporter has written about
Nordic businesses setting up shop in
Eastern Europe since 1996 and the
most common explanation for a suc-
cess story is that "we found the right
person for the job" – just as the most
frequent explanation offered when
something is not a success is that

"we did not find the right person to
shoulder the job." So, no doubt that
Ms Bodin's services are at the centre
of expanding Nordic en-
trepreneurship to Ukraine.
Crisis meant SME focus
"But then the financial crisis came,
companies simply stopped coming to
Ukraine. I think we have had two
new arrivals in Ukraine since 2008,
one Dutch and one Polish, where be-
fore the crisis we had 4 start-ups per
month. So we had to refocus," Ms
Bodin recalls, adding that the
drought in foreign companies setting
up shop in Ukraine still has not sub-
sided.
Ms Bodin's background in recruit-
ment is somewhat arbitrary,
whereas her interest in the CIS is
not. Photo: Clarus Eastern Europe
Clarus has founded two dedi-
cated subsidiaries, one that focuses
on student recruitment and em-
ployer branding and the other focus-
ing on HR-Audit, outstaffing and
payroll outsourcing.
"We are focussing on SMEs that
do not have the resources to imme-
diately establish a subsidiary in
Ukraine. We help them find and re-
cruit typically one or two staff and
they are put on our payroll – we pay
the salaries, take care of formal em-
ployment and all the bureaucracy
while at the same time they work
representing our client exclusively,
whom we then bill on a regular ba-
sis. This is a service for which we
have high hopes," says Ms Bodin.
”Following the Orange
revolution, foreign
companies started
setting up shop here in
significant numbers…
But then the financial
crisis came, companies
simply stopped coming
to Ukraine.
Clarus Eastern Europe's Clara Bodin
At the same time, Clarus Eastern
Europe still provides the classic re-
cruitment services like vacancy fill-
ing, executive search and headhunt-
ing.
Ms Bodin's background in re-
cruit-ment is somewhat arbitrary
whereas her interest in the CIS is
not. While at high school in Karlstad
in Värm-land at age 17 in 1994, she
felt that she wanted to do something
that no other Swedish high school
student did and wanted to learn a
language out of the ordinary. So she
spent a year as a high school student
in a Russian high school near Mos-
cow.
From Karlstad to Kyiv
In 2002 she graduated from Uppsala
University where she studied inter-
national economics focussing on
Eastern Europe and Russian lan-
guage.
Already before graduating she
got a job offer to work at the Swed-
ish Trade Council in Kyiv. It was
only after finishing her tenure there
in late 2003 that she got into re-
cruitment, because she was hired by
the Swedish network installer and
service provider Relacom for their
start-up in Ukraine.
"They needed someone to help
them with local recruitment and I
was a Swede who understood the
language so I was just told to get
started," Ms Bodin recalls.
When she finished her contract
with Relacom she knew that she
wanted to start her own business
and she knew that companies are
ready to pay for re-cruitment ser-
vices.
The clash of cultures
She has lived in Ukraine since 2002
and likes it there, which she thinks
has something to do with her com-
ing to Russia and Ukraine al-ready
in her formative years.
She describes the experience in
Ukraine for many expat Swedes and
Nordic people in general as a clash
of cultures.
"You cannot expect people who
have lived all their life here to be
like people are in Sweden. I have
worked with some of my staff for
over three years before I had man-
aged to develop them enough so
they take own decisions, think for
themselves and stand out, but this is
a long process," she says.
Ukraine is not cheap
Also, Ms Bodin challenges the fixed
idea that working in Ukraine should
be cheap.
"A CFO in Sweden gets SEK
60,000-70,000 per month. So, when
Swedes go to Ukraine they think
that everything is much cheaper
here and they want to pay a CFO
SEK 20,000. But the truth is that a
CFO will require almost the same as
in Sweden, because the supply of fi-
nancially capable people with inter-
national experience and the com-
mand of English is so low that this is
just the going rate," she says.
"And you should never forget
that you get what you pay for."
In Ukraine, it takes time
Also another factor, which Nordic
companies tend to be irritated by, is
that in Ukraine everything takes
time.

"Even trivial matters like setting
up a bank account take a very long
time here – there is always another
set of forms to be filled out and
signed and stamped. The bureauc-
racy is overwhelming and it just
takes time in the start up phase and
it takes time in the everyday busi-
ness. That is the way it is."
Living more than eight years in
Kyiv, she also notes that Ukrainians
and Western Europeans are getting
similar in many ways. One such as-
pect is appearance.
”Even trivial matters like
setting up a bank
account take a very long
time here – there is
always another set of
forms to be filled out and
signed and stamped.
Clarus Eastern Europe's Clara Bodin
"When I started, we had to teach
people how to dress at job inter-
views with Western executives. And
it wasn't just that women had to
dress less flamboyantly in order to
be taken seriously, it was also that
the men had to wash up and get out
of the dirty work clothes," she ex-
plains.
But Ms Bodin underlines that this
has changed a lot for the better. She
attributes this to the fact that the
experience from the Soviet days
when you could get nothing in the
shops is becoming more distant, but
also to more hands-on facts like the
spread of fashion retailers like Zara
and Marks & Spencer (which means
that Westerners and Ukrainians are
basi-cally wearing the same clothes)
as well as the spread of whitegoods
re-tailers from 2006-2007 which had
made the automatic washing ma-
chine available to growing numbers
of Ukrainians.
You have to live in Ukraine to
make these connections.
We have talked to
Clara Bodin cb@claruskiev.com
Tel +380 67 967 33 36 (mobile)
TRANSPORT & LOGISTICS
AIR ALLIANCES
Austrian Airlines increases
interest in UIA, remainder
being eyed by competitors
Austrian Airlines has expanded its
shareholding in Ukraine Interna-
tional Airlines (UIA or MAU, to give
it its Ukrainian acronym) to 32.45%,
having bought a 9.93% stake in the
Kyiv-based air carrier from the
European Bank for Reconstruction
and Development (EBRD).
"The EBRD sold its stake in the
Ukrainian airline at the end of last
year," Anton Usov, EBRD principal
adviser, says to news2biz. "It was
sold to Austrian Airlines, because the
Austrian company held an option for
the acquisition of that interest."
Austrian Airlines held an option to
buy 9.93% in UAI. Photo: Austrian Airlines
UIA's principal stockholder re-
mains the Ukrainian government,
who has, through the country's State
Property Fund, been seeking to sell
the airline's 61.58% stake for at least
UAH 250m (about USD 31.3m) to
one of its current shareholders.
In the meantime, the Ukrainian
Aviation Group (UAG), which con-
solidated three formally independent
Ukrainian airlines in September last
year (see news2biz UKRAINE no. 3
page 12,), is reportedly prepared to
pay twice more, UAH 516.84m (USD
65m) for the state-run stake in UAI.
The birth of monopoly
After the last year's consolidation,
UAG, which is associated with the
financial and industrial group of
Dnipropetrovsk-based oligarchs Igor
Kolomoisky and Gennadiy Bo-
goliubov (conventionally called Pri-
vat), has allegedly concentrated 60%
of the domestic airlines market and
the only thing which seems to be
able to stop its expansion is Privat's
own fear of being found the market
monopolist.
Sooner or later the 61.58% stake
in UIA will be acquired though, ei-
ther by UAG or another alliance.
Inevitable consolidation
On the global scale, the past couple
of years (2008-2010) have seen per-
haps the highest number of alliance
agreements closed by the interna-
tional air carriers throughout the en-
tire history of aviation.
Even the global players, such as
Air France and KLM, British Airways
and Iberia, have realised that joining
efforts amid the global recession and
severe competition would help them
reduce their fares, widen their offer
ranges and maintain their market
positions.
According to local and interna-
tional experts, Ukraine is bound to
follow the same path and the last
year's alliance, which has reportedly
improved its members' overall per-
formance results, is just the first sign
of the trend.
Fact
65USD million is the price UAG is ready
to pay for 61.58% in UIA.
As a matter of fact, there are just
three players remaining on the
Ukrainian market now: UAG, UIA
and the Hungarian low-cost carrier

WizzAir. The latter two companies
will hardly be able to fight the con-
stantly growing competition on their
own and will most likely be taken
over by larger players.
Largest connection network
Established in 1992, right after
Ukraine gained independence, today
UIA offers more European direct
services from Ukraine than any other
airline, operating 300 scheduled
flights per week with onward con-
nections across the globe.
Through its partner network UIA
serves over 3,000 destinations offer-
ing the best same-day connections.
UIA has more than 40 representative
offices in Ukraine and abroad; its
commercial network covers 70 coun-
tries.
We have talked to
Anton Usov usova@ebrd.com
Tel +380 44 277 11 00 (switchboard)
FORWARDING
Sweden's Ukraine forwarder
Ytrans waiting for break
Y for Ukraine you could say, refer-
ring to the Cyrillic spelling of the
country's name.
You could also say Y for Ystad, a
town in Southern Sweden with a
large port and one that is of the ut-
most importance for the country's
connection to Poland and Ukraine
and the rest of Eastern and Central
Europe due to the Ystad-Swinoujscie
ferry connection.
You should definitely say Y for
Ytrans, a forwarding company
founded in 1985, which is situated
in Ystad and for which transports to
and from Ukraine provide the better
part of the turnover.
Despite its massive experience in
Ukraine, Ytrans and its head Inge-
mar Andersson are still waiting for
a new birth. Photo: Ytrans
The first offices of Scandinavian
companies in Eastern and Central
Europe started appearing in the
countries in the late 1980s, together
with the political changes, and the
big wave came in the mid- and late
nineties.
But by then Ytrans was already a
veteran in Ukraine. The company
started its office in Kyiv already in
1985, the same year that Mikhail
Gorbachev became general secretary
of the Communist Party of the Soviet
Union.
Still despite the massive experi-
ence in the country, Ytrans is still
waiting for a new birth.
"We have an office with two staff
in Kyiv, but we are still waiting for a
return to the levels of business that
we saw before the Orange revolution
in 2004/2005," says Ytrans head In-
gemar Andersson to news2biz.
He took over Ytrans in 2007 and
runs it in parallel with his other Ys-
tad-based forwarding company In-
tertranspedia that both focus on
transports to Eastern and Central
Europe – with Poland as the largest
total market.
"Ytrans today turns over app.
SEK 55m annually, and of this SEK
30-35m stem from transports to and
from Ukraine. You could say that
this is fair enough, but volumes be-
fore 2004/05 were much higher and
we are still waiting for them to re-
turn to that, but as of yet there is no
indication that they will," says Mr
Andersson.
”Volumes before 2004/05
were much higher and
we are still waiting for
them to return to that
level.
Ytrans head Ingemar Andersson
The reduced volume has also
meant that Ytrans Ukraine now only
is present in Kyiv, whereas before
the company also had a presence on
the Polish-Ukrainian border at
Dorohusk-Jagodin.
Ytrans has also closed its Polish
office in Swinoujscie in 2008 be-
cause the practical need for an office
so relatively close to home disap-
peared following Poland's EU acces-
sion and the increased usage of the
internet in the company.
Mr Andersson founded Inter-
transpedia on 1 January 2000 to-
gether with colleagues from a large
Swed-ish forwarder that has now
been taken over by Danish DSV.
"It used to be a family business
and now they have something like
21,000 employees. We wanted to
have a company where individual
em-ployees could still make a differ-
ence and provide the personal ser-
vice that used to be the focus in the
business," says Mr Andersson.
Intertranspedia has an annual
turnover of app. SEK 125m.
We have talked to
Ingemar Andersson ingemar.andersson@intertranspedia.se
Tel +46 411 298 51 (direct)
ENERGY &
ENVIRONMENT
COAL PRODUCTION
Ukraine enjoys expanded
annual output, expects
faster growth this year
The Ukrainian mines expanded their
aggregate 2010 coal production by
4.1% on 2009 to 75.231m tonnes,
according to the country's ministry
of power engineering and coal in-
dustry.
In terms of individual coal pro-
duction, coking coal output shrank
by 6.2% year-on-year to 24.182m
tonnes, while that of thermal coal

grew by 9.9% y/y to 51.049m ton-
nes last year.
As far as the producers' affiliation
is concerned, the state-run collieries
of the coal ministry managed to in-
crease their output by just 0.2% to
38.45m tones.
Specifically they produced
7.458m tonnes of coking coal (down
17.8% on 2009) and 30.995m tones
of thermal coal (up 5.8% y/y).
Coal output expands slightly in '10
Annual output of coal available and coke of coking coal in Ukraine,
in million tonnes
60
70
80
90
2003
2004
2005
2006
2007
2008
2009
2010
Source: State Statistics Committee of Ukraine
In 2009, Ukraine's overall coal
production dropped down by 7% on
2008 to 72.219m tones. That year,
all the 140 state-run Ukrainian col-
lieries produced 38.440m tonnes of
coal (down 15.3% on 2008), while
the 20 private ones mined out
33.863m tonnes of the product.
As a result, the private sector in-
creased its share in the total domes-
tic output from 43% to almost 47%.
The only plausible excuse for the
state-owned mines' lower productiv-
ity is that the industry's best enter-
prises have long ago found them-
selves in the private hands.
This year, as the Ukrainian steel
production volume is expected to
expand by 14.5% y/y to 37.4m ton-
nes, according to the sector analysts,
this is likely to result in the growing
coal output.
OIL
Capital Oil sells off
Ukrainian daughter firm
The Swedish First North listed oil
prospecting and production com-
pany Capital Oil has sold off its
Ukrainian daughter company LLC
Capital Oil Ukraine to Ukrainian Ai-
kon LLC.
The Ukrainians will pay 0.5m
EUR for the Capital Oil Ukraine, less
than the announced minimum of
SEK 5m. The payment will take
place in rates during 2011 and the
sum will be paid in full by the end of
2011.
Aikon has ceded its rights to
Capital Oil Ukraine to a company
called Ollreidco Enterprises Limited.
news2biz has asked Capital Oil
CEO Leif Larsson what kind of a
company this is and what the impli-
cations are from this, but he declines
to comment.
Still in the talks
"The focus still is to complete the
negotiations regarding production
cooperation with Ukrainian inter-
ested parties to provide future prof-
itability and positive cash flow for
Swedish Capital Oil," Mr Larsson
says in a statement.
He adds to news2biz that the in-
terested parties remain the same and
the negotiations are ongoing.
Capital Oil has cooperated with the
Ukrainian companies regarding
exploration in Western Ukraine.
CEO Leif Larsson focusses on nego-
tiations. Photo: Capital Oil
Capital Oil has cooperated with
the state and municipal Ukrainian
companies Bogorodchanynaftogas
and Zakhidukrgeologia regarding
exploration in license blocks Kubash-
Lukva, Maydan and Gorodok near
Ivano-Frankivsk in Western Ukraine.
However, already in connection
with Capital Oil's 2009 report, the
investments in Ukraine and the two
projecting licences in Western
Ukraine were written down to 0 be-
cause Capital Oil did not have the
capital to develop them into a pro-
duction phase.
In July-August 2010, a directed
share issue took place whereby the
Swedish registered company Misen
Enterprises, which represents Ukra-
inian interest, took over 22% of the
share capital in Capital Oil and be-
came its main owner. In December,
at an extraordinary AGM, it was de-
cided not to liquidate Capital Oil.
”The focus is to complete
the negotiations to
provide future
profitability for Capital
Oil.
Capital Oil's Leif Larsson
The idea, it seems, is that Ukrain-
ian interested parties, like the inves-
tors behind Misen, should have an
interest in gaining access to a West-
ern stock listing (which Capital Oil
has) against them moving oil and
gas production into Capital Oil.
Whether this is a viable way out
for Capital Oil remains to be seen.
The basin near Ivano-Frankivsk
was one of the first oil deposits to be
exploited in Europe, as early as the
middle of the 19th century. Deposits
as shallow as 1,000 metres were ex-
ploited. From 1960s the focus of the
Soviet oil and gas industry moved to
Siberia and the Ukrainian oilfields
were ignored. Still, the basin has a
very good oil potential and interest
has grown as of late.
We have talked to
Leif Larsson leif@capitaloil.se
Tel +46 708 40 82 71 (mobile)

ECONOMY & POLITICS
TRADE WARS
Ukrainian-Belarusian beer
war: SUN InBev and Obolon
surrender, Carlsberg
manoeuvres
On 27 January 2011, SUN InBev
Ukraine, one of the largest players
on the Ukrainian beer market, re-
sumed its exports to neighbouring
Belarus, which were suspended on 1
January same year as a result of the
restrictions imposed by the Belaru-
sian authorities on the Ukrainian
beer import.
Baltic Beverages Holding AB (ВВН),
part of the Carlsberg Group, in-
creased its ownership in Olivaria,
the third largest Belarusian brew-
ery, to 67.8%. Photo: Carlsberg
The export deliveries resumed af-
ter SUN InBev Ukraine signed an
agreement with Belgospischeprom,
the state-run Belarusian food indus-
try concern authorised to determine
the minimum prices of the beer im-
ported to Belarus, said Denis
Khrenov, SUN InBev Ukraine's di-
rector for legal issues and corpora-
tive relations, at a new conference in
Kyiv.
According to him, the beer
manufacturer was forced to come to
terms with the Belarusian side, as
otherwise it could have lost that
market. He did not reveal details of
the signed agreement, but in the
course of the negotiations preceding
the bargain the Belarusian "partners"
called for a 64% hike in the price for
the Ukrainian-made beer sold in
Belarus.
”Ex-works price of the
Ukrainian beer should be
equal to that of
Belarusian.
Belarusian officials
Thus SUN InBev Ukraine became
the first, but not the last Ukrainian
beer producer to have succumbed to
the Belarusian pressure.
Just days after the signing of the
"historic agreement", Ukraine's larg-
est beer exporter Obolon followed
SUN InBev's example and struck its
own deal. According to Viktoria Ali-
mova, Obolon vice-president for de-
velopment, the company appeared
to be more persistent in fighting its
interests and agreed to increase its
beer prices by "just" 49%.
The Belarusian authorities had
long been attempting to put a bar-
rier on the way of the Ukrainian
beer to their market. In April 2010,
they began an anti-dumping investi-
gation aimed to expose the allegedly
unfair competition from the Ukrain-
ian breweries.
By licences only
Having failed to prove anything and
dismissed the case, the Belarusian
side announced the introduction of
import licences for the Ukrainian
beer imports.
The licences are effective from 1
January 2011 to 31 December 2012
and may be granted only to those
Ukrainian producers, who are pre-
pared to increase minimum prices
for their products.
The Ukrainian beer manufactur-
ers, from their side, blamed their
opponents for having adopted a dis-
criminating stance towards solely
Ukrainian producers, as the beer im-
ports from other countries were not
subject to any sort of restrictions.
On 20 December 2010, Belgos-
pischeprom demanded the Ukrainian
manufacturers to increase their fac-
tory prices by 30%, but on 6 January
2011, when the Ukrainian breweries
were forced to halt their deliveries
to Belarus and entered into negotia-
tions, the Belarusian state body re-
vealed the new "price tag" – 64%.
Production costs differ
At the same time, Belgospischeprom
declared its determination to reduce
the share of imported beer in Bela-
rus from the present 30% to 5% by
2015.
"Ex-works price of the Ukrainian
beer should be equal to that of Bela-
rusian", maintain Belarusian offi-
cials.
"But the beer production is
cheaper in Ukraine, as the local in-
gredients such as barley and malt
are cheaper than those in Belarus,
where their prices are fixed by the
government," strike back Ukrainian
brewers.
"In addition, the beer produced
at large Ukrainian factories, such as
Obolon, which is one of the largest
in Europe, will always be cheaper
that that made at much smaller Bel-
arusian breweries just because of the
scale economy," they added.
”The beer produced at the
large Ukrainian factories
will always be cheaper
that that made at much
smaller Belarusian
breweries just because
of the scale economy.
Ukrainian brewers
According to Galina Korenkova,
head of the association of the
Ukrainian brewers UrkPyvo, the
main reason behind the Belarusian
stance is the plans of the country's
government to soon increase pur-

chasing prices for barley by 41%. If
this is so, this will inevitably result
in higher prices for both malt and
the final product, beer. In such a
case, the demand to make the
Ukrainian beer more expensive is a
sort of preparation to the coming
price hike.
Carlsberg's manoeuvre
"We are ready to increase our prices
by 10-15%, but not by 60% or more
as demanded by the Belarusian
side," said a source at Slavutich, one
of the breweries controlled by Carls-
berg Group in Ukraine, in the first
half of January 2010. "We believe
that the 60% price increase would
mean a 70% sales drop on the mar-
ket."
On 17 January 2011, Baltic Bev-
erages Holding AB (ВВН), which
also belongs to the Carlsberg Group,
officially announced the increase of
its ownership in Olivaria, the third
largest Belarusian brewery, to
67.8%.
Buying into local brewery
Earlier, in the summer of 2010, BBH
increased its holdings in Olivaria
from 30% to 47%. The second major
shareholder of Olivaria Brewery is
the European Bank for Reconstruc-
tion and Development (EBRD), with
the remaining shares owned by indi-
viduals.
As a result of the transaction,
Olivaria has become "a full member
of the Group and can obtain further
access to the international expertise
within sales and marketing as well
as brewing technologies."
Ukraine is one of the largest players
on the Belarusian beer market. Ac-
cording to both Belarusian sources
and UkrPyvo, Ukrainian breweries
exported 43m litres of beer (esti-
mated at around USD 17m) to Bela-
rus from January to November 2010,
or almost a third of the country's to-
tal beer import of 131m litres during
the same period.
Fact
43mlitres of beer was exported from
Ukraine to Belarus from January to
November 2010.
Ukraine's overall beer production
in 2010 grew by 3.3% on 2009 to
some 3.1bn litres, according to the
preliminary data. The volume is still
3.1% lower than that of 2008
(3.2bn).
This year, the Ukrainian beer
market can grow by 5-10% com-
pared with 2010 and reach the re-
cord volume of the pre-crisis 2007,
according to SUN InBev Ukraine's
marketing director Kostiantyn Kly-
menko.
EVENTS
INTERAGRO 2011
7th International specialised exhibition
of the remunerative highly effective agri-
culture.
Date: 2 – 4 February 2011
Venue: KyivExpoPlaza exhibition center,
2-B, Saliutna Str., Kyiv
General organiser: Kyiv International
Contract Fair
Co-organisers: German associations of
producers of agricultural machinery,
VDMA, French agency of international
development of enterprises UBIFrance.
Contacts: agro@kmkya.kiev.ua,
Tel: +380 44 490 6469
http://interagro.in.ua/
Agro Animal Show 2011
International exhibition of the effective
animal husbandry and poultry
Date: 2-4 February 2011
Venue: KyivExpoPlaza exhibition center,
2-B, Saliutna Str., Kyiv
Organiser: Kyiv International Contract
Fair
Co-organisers: IFWexpo Heidelberg
GmbH, French Agency for International
Development of Enterprises (UBI-
FRANCE).
Contacts: info@kmkya.kiev.ua
Tel: +380 44 490 6469
www.animal-
show.kiev.ua/index.php?lang=en
Ukraine: Investment and
Export Opportunities for
Swiss SMEs
Free Trade Agreement Switzerland –
Ukraine: New Prospects?
Seminar
Date: 10 February
Venue: Osec, Stampfenbachstrasse 85,
8006 Zürich
Tel. 044 365 51 51, welcome@osec.ch,
www.osec.ch
Organiser: Osec
Contact: Eva Gasser welcome@osec.ch
Tel. +41 44 365 52 17,
Registration deadline: Monday, 7th Feb-
ruary 2011
Ukrainian Real Estate &
Construction Summit 2011
(URECS-2011)
Date: 15 – 17 February (URECS-2011).
Venue: Hotel Intercontinental, Kyiv
Organiser: Adam Smith Conferences
Contacts: Lyudmyla Durneva
Lyudmyla@adamsmithconferences.com,
Tel: +44 20 7017 7444,
Logistics Innovation Forum
2011
Date: 16 February 2011
Venue: Hospitalna, 4, Hotel Rus, Kyiv,
Organiser: Business Summit
Contacts: info@summitbiz.com.ua
Tel.: +38 (044) 362-82-64, 383-56-43
www.summitbiz.com.ua
Food Industry Forum
The fourth annual international confer-
ence
Date: 17.02.2011
Venue: Hospitalna, 4, Hotel Rus, Kyiv,
Organiser: Meeting Point Ukraine
Contacts: Olesya Kreminskaya
o.kreminskaya@meetingpoint.com.ua

KEY FIGURES
CONSUMER PRICE INDEX
column A: 100 = current 12 months; column B: 100 = previous month
Sep '10 Oct '10 Nov '10 Dec '10
Sector A B A B A B A B
Food, non-alcohol 113.2 104.4 113.0 100.5 111.4 100.1 110.6 101.0
Alcohol, tobacco 121.8 105.5 122.1 101.6 122.1 101.1 122.1 100.8
Clothing, footwear 103.1 100.4 102.6 100.7 102.3 100.4 102.2 100.2
Housing, water, fuels 116.6 100.2 114.1 100.4 113.7 100.5 113.7 100.3
Transport 103.1 99.6 103.4 100.0 103.3 100.7 106.6 101.6
Communications 91.4 99.8 91.1 99.6 91.1 99.9 91.1 99.9
Gross CPI 110.5 102.9 110.1 100.5 109.2 100.3 109.1 100.8
PRODUCER PRICE INDEX
On monthly basis Jun '10 Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10
100 = previous month 99.5 99.8 100.9 100.1 102.4 99.7 100.9
100 = same month prev year 125.5 124.4 123.3 119.2 119.8 118.9 118.7
Year 2004 2005 2006 2007 2008 2009 2010
100 = previous year 120.5 116.7 109.6 119.5 135.5 106.5 120.9
Note: Producer prices are prices of industrial goods excluding VAT and other taxes.
CONSTRUCTION PRICE INDEX
On monthly basis May '10 Jun '10 Jul '10 Aug '10 Sep '10 Oct '10 Nov '10
100 = previous month 101.9 101.3 101.8 100.7 100.9 103.2 101.1
Year 2003 2004 2005 2006 2007 2008 2009
100 = previous year - 120.2 125.6 123.5 123.1 135.3 111.3
Market volume in current prices, UAH m New residential buildings in 1,000 m2
2000
3000
4000
5000
6000
7000
Mar10
May10
Jul10
Sep10
Nov10
600
1000
1400
1800
2200
2600
3000
3400
Q3'09
Q4'09
Q1'10
Q2'10
Q3'10
REAL ESTATE PRICES
New flats, average price in Kyiv, UAH/m2
12000
12500
13000
13500
14000
14500
15000
May09
Sep09
Jan10
May10
Sep10
Jan11
Number of transactions on secondary market
Mar '10 Apr '10 May '10 Jun '10 Jul '10 Aug '10 Sep '10 Oct '10
Kyiv 345 350 378 321 376 390 407 389
Source: realt.ua, Blagovest Real Estate Agency
RETAIL TRADE
at current prices Sep 2010 Oct 2010 Nov 2010 Dec 2010
Turnover in UAH m 47,110 51,682 47,744 53,603
Index 100 = previous month 96.6 109.7 92.4 112.3
Index 100 = same month prev year 102.4 102.1 107.5 96.8
Year 2007 2008 2009 2010
Turnover in UAH m 318,725 449,308 442,793 529,883
Index 100 = previous year - 141.0 98.6 119.7
SENTIMENT INDICATORS
Consumer confidence index
0
20
40
60
80
100
120
May09
Jul09
Sep09
Nov09
Jan10
Mar10
May10
Jul10
Sep10
Nov10
Note: threshold of optimism = 100. Source: GfK
Ukraine, International Centre for Policy Studies.
Business outlook index
Q4 2010 120.0
Q3 2010 115.4
Q2 2010 121.8
Q1 2010 115.6
Q4 2009 104.4
Note: National Bank of Ukraine has con-
ducted a business outlook survey for a
longer period of time, but publishes the
index only since the end of 2009.
Source: National Bank of Ukraine
Commercial, average rent price in Kyiv,
USD/m2
; period 24-31 Jan 2011
Centre
- office 21.69
- retail space 38.25
Right coast (without centre)
- office 14.94
Left coast
- office 12.57
INDUSTRIAL OUTPUT INDEX
On monthly basis Jun '10 Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10
100 = previous month 99.5 102.9 101.5 102.9 104.8 97.8 104.7
Year 2004 2005 2006 2007 2008 2009 2010
100 = previous year 112.5 103.1 106.2 107.6 94.8 78.1 111.0
GROSS WAGES
column A: average monthly wages in UAH; column B: indexed average wages, 100=2005
Q2 2010 Q3 2010 Q4 2010
Sector A B A B A B
Industrial production 2,519 313 2,682 333 2,823 350
Finance 4,545 564 4,727 586 5,006 621
Construction 1,689 210 1,915 238 ,2061 256
Public administration 2,707 336 2,975 369 3,016 374
Real estate activities 2,367 294 2,525 313 2,740 340
Hotels and restaurants 1,460 181 1,518 188 1,546 192
Transport, communications 2,661 330 2,889 358 2,855 354
National average 2,227 276 2,332 289 2,435 302
Note: Wage accruals per pay-roll; Source: State Statistics Committee of Ukraine
INFLATION
-5%
0%
5%
10%
15%
20%
25%
Dec08
Feb09
Apr09
Jun09
Aug09
Oct09
Dec09
Feb10
Apr10
Jun10
Aug10
Oct10
Dec10
Year-on-year Month-on-month

TRADE
Ukrainian exports and imports according to commodity groups
EXPORTS in USD bn IMPORTS in USD bn
Jan-Nov 2010 Share Jan-Nov 2009 Share 2009 Share Jan-Nov 2010 Share Jan-Nov 2009 Share 2009 Share
Non-precious metals, metal products 15,776 34,2 11,678 32,8 12.824 32.3% 3,678 6,8 2,425 6,0 2.681 5.9%
Mineral products 6,135 13,3 3,382 9,5 3.891 9.8% 18,877 34,9 13,904 34,4 15.675 34.5%
Machinery 5,074 11,0 4,450 12,5 5.003 12.6% 7,248 13,4 5,537 13,7 6.270 13.8%
Agricultural food products 8,626 18,7 8,509 23,9 9.529 24.0% 5,030 9,3 4,365 10,8 4.952 10.9%
Chemical products 3,091 6,7 2,279 6,4 2.501 6.3% 5,679 10,5 4,729 11,7 5.316 11.7%
Light industry products 0,923 2,0 0,961 2,7 1.032 2.6% 2,380 4,4 1,698 4,2 1.817 4%
Wood, wood products 1,615 3,5 1,353 3,8 1.469 3.7% 1,839 3,4 1,455 3,6 1.636 3.6%
Other goods 4,890 10,6 2,991 8,4 3.454 8.7% 9,357 17,3 6,305 15,6 7.088 15.6%
TOTAL 46.1 100% 35.6 100% 39.7 100% 54.1 100% 40.4 100% 45.4 100%
Ukraine's eight largest markets for trade of goods, ranked according to Jan-Nov 2010 in USD bn
EXPORT IMPORT
No Country
Jan-Nov
2010
Share 2009 Share No Country
Jan-Nov
2010
Share 2009 Share
1 Russia 12,132 26,3 8.495 21.4% 1 Russia 19,742 36,5 13.236 29.1%
2 Turkey 2,629 5,7 2.127 5.4% 2 China 4,165 7,7 2.734 6.0%
3 Italy 2,168 4,7 1.228 3.1% 3 Germany 4,111 7,6 3.852 8.5%
4 Belarus 1,661 3,6 1.259 3.2% 4 Poland 2,542 4,7 2.170 4.8%
5 Poland 1,615 3,5 1.213 3.1% 5 Belarus 2,272 4,2 1.693 3.7%
6 Germany 1,384 3,0 1.248 3.1% 6 USA 1,569 2,9 1.286 2.8%
7 India 1,199 2,6 1.152 2.9% 7 Italy 1,244 2,3 1.140 2.5%
8 China 1,199 2,6 1.434 3.6% 8 Hungary 1,136 2,1 0.678 1.5%
CURRENCY
National Bank average rates
as of 03 February 2011, change 20 Jan
100 USD 794,1700 ↓
100 EUR 1096,1929 ↑
100 GBP 1286,7624 ↑
100 DKK 147,0433 ↑
100 SEK 123,7029 ↑
100 NOK 139,0402 ↑
1,000 JPY 97,5695 ↑
100 LVL 1562,6413 ↑
100 LTL 317,4794 ↑
10 RUB 2,6992 ↑
100 USD/EUR against UAH
900,00
1000,00
1100,00
1200,00
1300,00
28Jan
18Mar
06May
24Jun
12Aug
30Sep
18Nov
03Feb
700
750
800
850
900EUR (left)
USD (right)
CREDIT
The banks' net lending in UAH bn, loan stock by the end of period
Type of loan Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10
- to private companies 457.52 462.21 453.58 463.28 488.24
- to households 252.33 241.31 229.34 221.32 218.76
- to others 15.76 15.25 14.76 13.48 14.65
Total 725.61 718.77 697.68 698.08 721.65
INTEREST RATES
Average weighted annual interest rates on credits
Recipient, currency Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10
Companies, UAH 14.82% 13.90% 12.95% 13.62% 13.84% 13.20%
Companies, USD 11.26% 10.43% 9.71% 10.33% 9.58% 10.11%
Households, UAH 25.30% 24.61% 28.10% 27.48% 26.63% 25.93%
Households, USD 13.59% 11.39% 13.77% 10.69% 9.90% 11.17%
Kyiv Inter Bank Offered Rate (KYIVPrime) as of 3 January 2011
Overnight 1 week 1 month 3 months
1.65% 2.57% 4.01% 5.35%
Source: National Bank of Ukraine, Bloomberg
STOCK EXCHANGE
PFTS Ukraine Stock Exchange
main list
in alphabetic order
Price
02 Feb
Change
19 Jan
Change
end of '09
↑ Alchevskiy Metalurg. Kom 0,25 + 4% + 79%
↓ Azovstal 3,21 - 4% + 20%
→ Avdievsky Koksochim Zav 16,69 0% + 39%
↓ Centrenergo 18,24 - 2% + 92%
Dniproenergo - - -
Donbasenergo - - -
↓ Enakiyvckiy Metalyrginiy Zav 190,5 - 4% + 13%
↑ Interpipe Nizhnodniprovsky 8,4 + 3% - 9%
→ JSCB Ukrsotsbank 0,63 0% + 80%
↑ Krukivsky Carriage Works 38,73 + 6% -
↑ Mariupol Heavy Machineb. 10,27 + 8% -
↑ Motor Sich Jsc 3338 + 11% + 103%
↑ Poltava Gok 46,57 + 1% + 69%
↓ Raiffeisen Bank Aval 0,43 - 2% + 72%
Stirol Concern - - -
Sumske Nvo Im. Frunze - - -
Zakhidenergo - - -
↑ Ukrnafta 673,6 + 12% + 300%
↑ Ukrtelecom 0,58 + 7% + 26%
→ Yasynivskiy Koksohimichniy Z 5,14 0% + 53%
Note: PFTS index 100= 1 October 1997
Source: PFTS
PFTS index
1051.55
Change 19 Jan + 4% ↑
Change end of '09 + 91% ↑
PFTS closing index
the last three months
700
750
800
850
900
950
1000
1050
1100
3Nov
3Dec
2Jan
1Feb
MONEY SUPPLY
in UAH m Jul '10 Aug '10 Sep '10 Oct '10 Nov '10
Monetary base 223,819 220,384 216,727 221,581 215,713
M1 269,281 271,303 275,424 277,682 276,374
Currency outside banks 175,080 175,103 174,814 175,226 173,332
M2 550,096 555,327 567,747 574,946 572,660
- Time deposits 280,815 284,025 292,323 297,264 296,286
M3 550,941 556,176 568,810 576,046 574,070
- Net foreign assets EUR bn 78,438 90,010 114,789 107,673 105,972
Monetary base: Ukrainian currency emitted by the central bank and money on accounts held
with it. M1= currency outside banks + demand deposits M2= M1+ time deposits (lnc in foreign cur-
rencies) Source: National Bank of Ukraine

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GDP
at current prices
Period Real growth
year on year
GDP in UAH m
current prices
GDP per capita
in UAH
Current account
in % of GDP
Q3 2010 3.4% 303,705 - -
Q2 2010 5.9% 262,365 - 1.3%
Q1 2010 4.9% 218,125 - - 0.7%
Q4 2009 - 6.8% 261,730 - -
Q3 2009 - 16.0% 251,263 - -
2009 - 15.1% 914,720 19,862 - 1.5%
2008 2.3% 948,056 20,495 - 7.0%
Source: State Statistics Committee of Ukraine, National Bank of Ukraine
CURRENT ACCOUNT
in USD m 2008 2009 2010 Nov 2010 Dec 2010
Trade balance - 16,091 - 4,655 - 8,397 - 1,003 - 1,205
Services, net 1,741 2,633 4,709 324 345
Direct investments, net 9,903 4,654 5,684 726 905
Current account balance - 12,763 1,801 - 2,558 - 559 - 815
KEY ECONOMIC DATA FORECAST
2010 2011 2012
Indicator
IMF Swedbank IMF Swedbank Swedbank
GDP change 3.7% 4.0% 4.5% 4.3% 4.8%
Consumer prices (inflation) 9.8% 11.7% 10.8% 10.0% 8.5%
CA balance, % of GDP - 0.4% - 1.0% - 1.3% - 2.0% - 3.0%
Sources: IMF, Swedbank
REGIONAL DATA
Output
Jan-Dec 2010 *
Monthly wages (UAH)
Jan-Dec 2010**
Unemployment
Jan-Sep 2010***
New dwellings
2009Ukraine's regions
Industry Agriculture Amount Index* in '000 % ‘000 m2
% to ‘08
Autonomous Republic of Crimea 110.6 98.5 1991 116.6 59.1 6.7 387.3 93.2
Cherkasy 117.1 105.0 1835 119.8 62.9 11.0 144.8 88.7
Chernigiv 99.8 86.9 1711 116.8 54.5 12.0 104.8 51.5
Chernivtsi 111.8 103.4 1772 116.3 35.2 9.9 164.8 45.2
Dnipropetrovsk 116.1 101.0 2369 120.7 116.6 7.5 170.4 38.9
Donetsk 114.8 101.6 2549 120.5 188.5 9.3 173.0 39.6
Ivano-Frankivsk 100.2 100.4 1927 118.4 47.4 8.7 380.6 73.7
Kharkiv 105.8 87.1 2060 114.2 96.4 7.6 427.5 192.0
Kherson 100.5 102.9 1726 116.5 47.5 9.6 75.2 32.7
Khmelnytsky 104.9 100.1 1786 117.4 54.1 9.4 266.1 86.3
Kirovograd 112.8 102.0 1815 118.1 43.5 10.0 66.5 51.8
Kyiv (Kiev) 107.9 100.1 2295 115.5 59.2 7.9 680.1 58.4
Lugansk 107.1 91.8 2271 121.2 78.0 7.7 35.1 14.1
Lviv 100.9 96.9 1942 116.5 92.2 8.3 391.6 50.2
Mykolayiv 110.3 101.0 2122 117.5 48.4 9.0 86.2 53.6
Odesa 102.8 108.7 2046 114.5 65.0 6.3 537.2 63.4
Poltava 112.6 91.8 2102 121.3 68.6 10.0 155.5 59.5
Rivne 129.6 102.0 1960 121.4 60.5 12.0 98.3 56.9
Sumy 93.5 91.7 1866 117.1 58.2 12.0 138.6 69.7
Ternopil 102.5 94.8 1659 117.5 50.8 11.0 146.2 48.0
Vinnytsia 106.5 102.8 1782 117.9 76.4 11.0 171.5 47.4
Volyn 126.7 101.5 1692 118.6 40.1 9.1 138.7 71.1
Zakarpattia 142.6 96.2 1846 118.2 52.5 9.5 169.2 43.0
Zaporizhzhia 107.8 101.9 2187 118.7 64.7 7.9 101.2 46.6
Zhytomyr 108.2 100.2 1785 119.6 60.8 11.0 88.8 35.9
National average 111.0 99.0 2239 117.5 1,772.3 8.7 6,399.6 61.0
* Index 100 = same period of the previous year. ** Data refer to enterprises with 10 and more employees; preliminary data.
*** ILO, working age
UNEMPLOYMENT
Registered unemployed (ILO), in ‘000 and % of population in working age
1000
1300
1600
1900
2200
2500
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
0
3
6
9
12
15number (left) % (right)
GENERAL INFORMATION
Population: 45,700,395
Currency: Hryvnia (UAH)
In power: President Viktor Yanukovych. Most
seats in parliament Party of Regions (34%, PM
Mykola Azarov), Block of Y. Tymoshenko (31%).
Elections: 2012 parliamentary, 2015 presidential
Most important tax rates
Income tax: individual 15%, corporate 25%
VAT: 20%
Social tax: up to 35%
COUNTRY RATING
Agency rating outlook
Fitch Ratings B stable
Standard & Poor's B+ stable
Moody's Investor Service B1 stable
Source: Investment agencies
FOREIGN DIRECT INVESTMENT
in USD m
On quaterly basis Q2 '09 Q3 '09 Q4 '10 Q1 '10 Q2 '10 Q3 '10
in Ukraine 1,439.1 625.9 1,435.2 - 19.4 394.7 2,109.8
Ukrainian DI abroad 1.8 - 35.6 32.1 569.9 - 29.0 87.1
Year 2004 2005 2006 2007 2008 2009
in Ukraine 2,252.6 7,843.0 4,717.3 7,935.4 6,073.7 4,410.4
Ukrainian DI abroad 32.6 20.9 23.8 5,953.3 6.5 20.2

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