Ukraine no 11_february_17_ 2011

The bi-weekly business report by Bonnier

UKRAINE

| No 11 | 17 February 2011 | Creating transparency in emerging markets since 1991 | www.news2biz.com |

Finn Flare's strategy in Ukraine foresees opening a representative office to be then followed by the launch of flagship store. Picture: Finn-Flare

Nordic retailers launch expansion on Ukrainian market Clothing retailers Finn-Flare and Melon Group share the same plan: to expand their network of stores in Ukraine to make the best of the promising market. Both have already conquered the Russian market and believe that Ukraine is the next logical step to follow. PAGE 10-12

Ukrainan agri firm included in WSE blue chip index Kernel Holding, one of the largest Ukrainian vegetable oil producers, will be the first Ukrainian and the second foreign company to be included in the WIG20 index of Warsaw Stock Exchange, comprising the largest and most traded companies. PAGE 2

”We want to be right in time in Ukraine to occupy our niche. Finn-Flare CEO Ksenia Ryasova PAGE 11

MANUFACTURINGRussia's PharmStandard acquires 55% in Ukrainian Biolik PAGE 2 FINANCE Kardan sells controlling stake in VAB Bank PAGE 4

FOOD & AGRICULTURE Swedish Alpcot Agro expects SEK 322m for capital expansion PAGE 6 PROPERTY & CONSTRUCTION Swissôtel Hotels & Resorts to operate new deluxe hotel in Odesa PAGE 8 RETAIL & SERVICE Finn-Flare and Melon Fashion to enter Ukrainian market this year PAGE 10 IT & MEDIA Austrian Epic ready to acquire fixed-line monopoly Ukrtelecom PAGE 12 TRANSPORT & LOGISTICS Ukrainian cabinet to simplify customs terms for Viking contrailer train PAGE 14 ENERGY & ENVIRONMENT ABB wins USD20m order to update Ukraine's power net PAGE 14 ECONOMY & POLITICS Japanese bank to finance Ukraine's machinery import PAGE 15

Cargill enters animal nutrition market in Ukraine Cargill, an international food producer and marketer, will build an animal feed mill in central Ukraine (Kirovograd region) in the course of the current year. PAGE 7

Leading Baltic real estate developer enters Ukraine Pro Kapital Group, the leading real estate developer in the Baltic States, plans to construct Coliseum, a shopping and entertainment mall in the Ukrainian city of Kryvyi Rig, in H1 2013. PAGE 10

Most important updated key figures in this issue Producer price index PAGE 16 Consumer price index PAGE 16 Stocks PAGE 17 SEE ALL KEY FIGURES PAGES 16–18

ALSO IN THIS ISSUE: ▶ Agroliga is first Ukrainian com-pany listed on NewConnect PAGE 3 ▶ BDO and SBC join efforts to be-come no1 in Ukraine PAGE 5 ▶ AeroSvit chases off SAS from Co-penhagen-Kyiv PAGE 13

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WSE's performance in 2011WIG Total closing index in 2011

46000467504750048250

49000

3.01.1

1

14.0

1.11

25.0

1.11

5.02.1

1

16.0

2.11

Source: Bloomberg

2 | No 11 | 17 February 2011 | © Bonnier Group/Äripäev | UKRAINE

MANUFACTURING

DRUG PRODUCTION 250-km south drift: Russia's largest drug maker grabs up Ukrainian facility Russia's largest drug producer PharmStandard has acquired a 55% stake in Biolik, a top-20 Ukrainian pharmaceutical company based in the country's second largest city of Kharkiv in eastern Ukraine.

PharmStandard reveals that the acquisition has been financed from its own funds, but does not disclose the transaction amount.

"This is the first production facil-ity acquired by our company in Ukraine, which is the second largest sales market in the region after Rus-sia," says Ilya Krylov, PharmStan-dard investor relations manager, to news2biz.

Biolik is the first drug manufac-turer acquired by PharmStandard in Ukraine. Photo: PharmStandard

According to him, Biolik's prod-

ucts will diversify PharmStandard's existing portfolio with vaccines and serums, oncological and immunobi-ological drugs.

"Biolik's products are successfully sold in Russia and we are planning to expand the sales volumes in both Russia and abroad," Ilya Krylov says.

Founded in 1898, Biolik is one of the oldest drug manufacturers on the post-Soviet terrains. Since the Soviet times, it has been delivering its medicines to the Ukrainian, Rus-sian and other post-Soviet markets.

The range of the products manu-factured by Biolik makes up about 70 items (vaccines, serums, nutrient mediums, diagnostics and blood products, immunobiological, hor-monal, antiviral, antibacterial and enzymatic drugs).

As the company has been con-stantly upgrading its production fa-cilities up to international standards, it is today the only Ukrainian pro-ducer of certain types of phar-macons.

” Biolik's products are successfully sold in Russia and we are planning to expand the sales volumes in both Russia and abroad. PharmStandard investor relations manager Ilya Krylov

Biolik's sales reached about USD

17.7m last year, up 23.3% on the 2009 level of USD 13.3m. Domestic sales and exports constituted 77%

and 23% respectively of the 2010 volume.

Biolik has become the fourth drug manufacturing factory under PharmStandard's control.

The other three enterprises are geographically dispersed throughout the immense Russian territory from Kursk in the European Russia (some 250 km to the north of Kharkiv) to Ufa in the Ural region to Tomsk in Siberia. Additionally, PharmStan-dard has a plant producing medical equipment in the city of Tyumen in western Siberia.

Fact

1.35bn drug packages is PharmStandard's present annual capacity.

Having invested more than USD

100m in the upgrading and devel-opment of its capacities, Pharm-Standard is now capable of manu-facturing 1.35bn drug packages a year.

Its portfolio includes over 250 products used in the treatment of diabetes, growth hormone defi-ciency, cardiovascular diseases, gas-troenterological and neurological disorders, infectious diseases, can-cer, etc.

Following the results of the first nine months of 2010, PharmStan-dard has become the retail sector leader of the Russian pharmaceutical market with a 5% share.

Since 2007, it has also been lead-ing in the market's commercial seg-ment, having expanded its share from 18.9% to 20%.

Drug trade in Ukraine: big importer Import and export of pharmaceutical products in Ukraine

050000

100000150000

200000250000

2003200420052006200720082009

Jan-Nov 10

Export, thsd.USDImport, 10 thsd.USD

Source: State Statistics During its IPO in May 2007,

PharmStandard placed its shares on the Russian Trade System (RTS) and GDRs on the London Stock Ex-change (LSE).

Currently, PharmStandard board chairman Viktor Kharitonin controls (via Augment Investments Limited) 54.3% in the company, with the re-maining 45.7% free floated on the LSE (27.6%) and RTS (18.1%). We have talked to

Ilya Krylov [email protected]

Tel +7 495 970 0030 (switchboard)

STOCK MARKET Kernel joins WSE blue chips, Agroliga NewConnect list The second week of February this year has seen already two Ukrainian agrarian companies highlighted at the Warsaw Stock Exchange (WSE).


Thus, on 10 February 2011, the

Polish stock exchange informed that Kernel Holding, one of the largest Ukrainian producers and exporters of vegetable oil and grain, would be the first WSE-listed Ukrainian com-pany incorporated into the WIG20 index comprising the largest and most traded companies.

Kernel will also be just the sec-ond foreign company included in the WIG20 index (the first being CEZ, from the Czech Republic). The change will be made at the annual revision following the trading ses-sion on 18 March 2011.

The dynamic expansion of Kernel Holding, and its promotion to the WSE blue chip index, is seen as an example of the business success which listing on the Warsaw ex-change can bring to Ukrainian issu-ers.

Agroliga became the first Ukrain-ian company listed on the WSE al-ternative market. Photo: Agroliga

Kernel debuted on the WSE on

23 November 2007, raising more than PLN 400m from the sale of newly issued shares. Thanks to that issue, a good development strategy and effective management, the com-

pany's market value has grown more than fourfold since that time, going from PLN 1.5bn to 6.1bn.

"The inclusion of Kernel in the WIG 20 index is a very important step for our company. It is a tribute to the vitality of our business and to the significant growth we have achieved over the three years since we have been listed on the Warsaw Stock Exchange," stated Andriy Ver-evsky, Kernel Holding's board chairman, at the WSE. "Undoubt-edly, this event brings Kernel and Ukraine under the spotlight of the international investment commu-nity: it will provide a further oppor-tunity to highlight the quality of our company and the investment oppor-tunities in the agribusiness of Ukraine."

Kernel Holding's success has as-sured the company a prominent po-sition not only on the WSE. In May 2010 it became one of the compa-nies making up the MSCI Emerging Markets index, which is used by global investors to analyse the eco-nomic situation in developing mar-kets. Agroliga in alternative league Agroliga Group became the first Ukrainian and fourth foreign com-pany listed on the WSE alternative stock market, NewConnect, during the very same February week. The total number of companies listed on both the WSE Main List and New-Connect thus hit 600.

Warsaw Stock Exchange and Ukrainian companies

The Warsaw Stock Exchange is the largest stock market in the CEE region. To date, six Ukrainian issuers have chosen WSE as a platform for financing and secon-dary trading – Agroliga Group, Agroton, Astarta Holding, Kernel Holding, Milkiland and Sadovaya Group. ▶ Sunflower oil producer and grain trader Kernel (KER PW) will be the first Ukrainian company to join the WSE's benchmark WIG20 Index with a 2.08% weighting. ▶ Diversified agro holding Astarta (AST PW) will join the WIG40 with a 1.65% weighting. ▶ Agroton (AGT PW) and dairy producer Milkiland (MLK PW) will join the WIG80 with respective weightings of 1.17% and 1.73%; ▶ Newly listed coal producer Sa-dovaya Group (SGR PW) will be added to a new index, the WIG Basic Materials Index. ▶ Agroliga Group will be the first Ukrainian and fourth foreign company listed on the WSE alter-native stock market, NewCon-nect.

Source: bgcapital.ge

Having completed the first

Ukrainian small cap agricultural IPO on the NewConnect, the company raised EUR 1m by floating 17% of its shares. Agroliga plans to use the proceeds to increase its sunflower oil production by 100% from 20,000

tonnes to 40,000 tonnes; to expand its milk production by a factor of four to 4,500 tonnes and increase its herd to 1500 milking cows by 2014.

By doing so, the company plans to increase its turnover to EUR 15m by 2014. Its turnover in 2009 was EUR 2.7m.

Besides, Agroliga is planning to enter the WSE Main List in some two-three years.

"The very fact of the appearance of a small Kharkiv-based company on the Warsaw Stock Exchange is rather remarkable," says Oleksii Kornilov, business development ex-ecutive of Avantazh Capital, the Ukrainian investment group and Agroliga's financial adviser, to news2biz. "This is not a market gi-ant; this company has just a small vegetable oil refinery, a tiny milk farm and 5,000 ha of arable land."

"But what Agroliga's story has shown is that the stock market is ca-pacious and flexible enough to pro-vide even a small business with nec-essary investment resources," he says. "On the other hand, Agroliga itself has made a precedent, which is likely to be followed by other small, but ambitious and goal-seeking Ukrainian businesses."

Examples to be followed To date, six Ukrainian issuers have chosen the Warsaw exchange as a platform for financing and secon-dary trading: Agroliga Group, Agroton, Astarta Holding, Kernel


Holding, Milkiland and Sadovaya Group.

The WSE expects to see more IPOs from Ukrainian companies, both on its regulated market and the alternative trading floor. It also plans to introduce an index of Ukrainian companies in the first half of 2011.

” Agroliga has made a precedent to be followed by other small, but ambitious Ukrainian businesses. Avantazh Capital business development executive Oleksii Kornilov

The relations between the War-

saw bourse and the Ukrainian busi-ness community are an important part of the WSE's strategy of growth and reinforcement of its interna-tional profile as a leader in Central and Eastern Europe. For Ukrainian companies, which are leaders in their respective industries, presence on the WSE is an opportunity to raise capital, grow and gain expo-sure on the international arena by potential investors and business partners.

Ukrainian issuers are, on their part attracting a great deal of inter-est from investors on the WSE.

"Ukrainian businessmen have chosen Warsaw. We are pleased that our hard work since 2006 when the

WSE decided that the Eastern direc-tion would be instrumental for the future of Polish capital market, is now bringing fruits. Our commit-ment to the Ukrainian market, sup-ported with activities of some bro-kerage houses, is generating results," says Ludwik Sobolewski, the presi-dent of WSE management board in a press release.

The Warsaw Stock Exchange is the largest stock market in the Cen-tral and Eastern Europe region, and organizes trading on one of the most rapidly developing capital markets in Europe.

Since 2006 the Warsaw exchange has been on the forefront of Euro-pean markets as regards IPO activity (in 2010 it took the second place in terms of both the number and value of offerings).

Eastern European giant The WSE hosts a regulated market for shares and derivatives, as well as the NewConnect alternative equity market for growth companies. The WSE is also developing Catalyst – a market for issuers of corporate and municipal bonds.

Since 11 December 2010 the Warsaw exchange has also hosted the WSE Energy Market, which en-ables spot trading in electrical en-ergy as well as forward transactions.

NewConnect was launched on 30 August 2007. At present, a total of 204 companies are listed there. NewConnect gives smaller compa-nies an opportunity of listing on this

WSE-operated public market and of raising capital here.

WSE's performance in 2011 WIG Total closing index in 2011

46000465004700047500

4800048500

3.01.1

17.0

1.11

11.01

.1115.

01.11

19.0

1.11

23.0

1.11

27.0

1.11

31.01

.114.0

2.11

8.02.1

112.

02.11

16.0

2.11

Source: Bloomberg Since the day of its launch,

eleven companies originally listed on NewConnect made a transition to the WSE Main List (regulated stock market). NewConnect is among the most dynamically growing alterna-tive trading platforms in Europe. In 2010 a total of 68 companies held their IPOs there, which was the larg-est number among Europe's alterna-tive markets. We have talked to

Oleksii Kornilov [email protected]

Tel +380 57 700 44 14

FINANCE

OWNERSHIP CHANGE Kardan sells controlling stake in VAB bank TBIF Financial Services B.V. (TBIF), an indirect subsidiary of the interna-tional investment company Kardan N.V., has sold a controlling stake in

Ukrainian VAB Bank to a group of international investors represented by Troika Dialog, a leading Russian investment bank.

In December 2010, the bank's shareholders meeting approved its capital increase of UAH 550m (ap-proximately EUR 53m) to UAH 1.249bn.

In January 2011, TBIF sold the controlling interest in VAB Bank to international investors for UAH 550m, the amount of the capital in-crease entirely injected by TBIF.

The new shareholders fully share VAB Bank's development strategy, put trust in its international top management team and are ready to support and develop the bank in the future, according to its press release.

VAB Bank's Petr Baron: We go ahead and the new shareholders will support our further advance and development. Photo: VAB Bank

"We are grateful to Kardan that

has been supporting the bank over the recent turbulent years for the Ukrainian market," says VAB Bank CEO Petr Baron in a press release. "During this period, the bank man-aged to carry out its internal reor-ganisation, introduce best banking technologies and accumulate high liquidity that allowed it to meet its


debt repayment obligations and take an active position in lending."

"We go ahead and the new shareholders will support our further advance and development," he main-tains. "Our position remains un-changed: as before, we remain inno-vators in the market. We will con-tinue to offer our customers and partners flexible and advantageous products. Having strong capitalisa-tion and high liquidity, we will con-tinue to occupy leading positions in many segments."

” Having strong capitalisation and high liquidity, we will continue to occupy leading positions in many segments. VAB Bank CEO Petr Baron

"As a result of the transaction,

Kardan's current exposure to VAB Bank will not be affected," says Caroline Vogelzang, Kardan's inves-tor relations director, to news2biz.

However, based upon the finan-cial statements as of 30 September 2010, Kardan is expected to realise a loss of approximately EUR 30m.

The company is active on emerg-ing markets, primarily in Central and Eastern Europe and China, fo-cusing on real estate, financial ser-

vices and (water) infrastructure. While holding controlling interests in its subdivisions, Kardan is capable of working out and implementing their strategies.

The company is listed on the NYSE Euronext Amsterdam and the Tel-Aviv Stock Exchange.

As of 30 September 2010, its to-tal assets amounted to EUR 5.9bn (compared with EUR 5.6bn as of 31 December 2009 and EUR 5.5bn as of 30 September 2009). The company's revenues stood at EUR 489m on the same date (against EUR 691m as of 31 December 2009 and EUR 518m as of 30 September 2009).

VAB Bank has been operating on the Ukrainian financial market since 1992. Its regional network comprises 150 branches throughout the coun-try. As of 1 July 2010, the bank's regulatory capital and net assets stood at UAH 888.7m and UAH 7.1bn, respectively. We have talked to

Caroline Vogelzang [email protected]

Tel +31 020 305 0010

MERGER BDO Consulting, SBC join efforts, want to become no1 BDO LLC, the Ukrainian member of the world's fifth largest auditing and consulting network BDO Consulting, has merged with System Business Consulting (SBC), a leading Ukrain-ian consulting company.

As a result of the merger, both companies are now operating under the BDO Consulting brand, which is

the brand name for both the BDO entire network and each of its mem-ber firms.

According to BDO managing partner Sergiy Balchenko, the merger shows his company's strong intent to extend its presence on the Ukrainian market, and the choice in favour of SBC looks pretty natural given that both firms render very similar range of services, while SBC's client base (mainly Ukrainian com-panies) ideally replenishes that of BDO (servicing both domestic and international clients).

Both companies are now operating under the BDO Consulting brand. Photo: BDO Consulting in Ukraine

On the other hand, it is believed

that having joined the BDO Consult-ing, SBC will be able to significantly expand its international client base, as well as benefit from the interna-tional network's overall methodol-ogy, standards and instruments.

news2biz has asked Nikolay Lysenko, BDO Consulting partner, who had formerly managed SBC, to

comment on the deal and share his vision of the would-be synergy.

▶ What are the terms of the merger, wouldn't it be more appropriate to speak about a take-over rather than a merger?

What has happened is exactly the merger of the two businesses operat-ing in the field of management con-sulting through combining their ex-perience, methodology and, what is most important, highly skilled and experienced personnel.

▶ What is the main reason of the merger?

What we were after is extending the range of the rendered services and strengthening the BDO Consult-ing's team of highly skilled special-ists. Now, we are aiming for the leading role on the Ukrainian market of management consulting.

▶ What are the near-term plans and the overall development strategy of the merged company?

For the next few years we have planned to become the largest do-mestic consulting company, which will also be capable of utilising the huge potential of the BDO interna-tional network.

▶ What is, in your opinion, the cur-rent state of the Ukrainian consult-ing market and what are its future prospects?

The volume of the domestic con-sulting market has substantially shrunk during the global recession


and it is going to take it 1.5-2 years to recover.

Furthermore, the market is likely to significantly change towards the practical implementation of the ad-vice given. This will result in the less skilled specialists being screened out.

We would very much like to see our potential clients adopting a more pragmatic approach, when not only choosing consultants, but also utilising received advice. and ana-lytical instruments in the course of their activity. /---/

” The domestic consulting market has substantially shrunk during the recession and it will take it 1.5-2 years to recover. BDO LLC partner Nikolay Lysenko

BDO Consulting international

network was founded in 1963 by means of combining efforts of audit-ing and consulting companies from the UK, West Germany, the Nether-lands, USA and Canada.

Since then, the global chain has been providing litigation, investiga-tion, restructuring and risk advisory services to major corporations, law firms, insurance companies, finan-cial services entities and government organisations.

Last year, the aggregate total revenues of all the BDO firm-members stood at USD 5.284bn (EUR 3.893bn), the number of part-ners and employees reached 46,930 and the number of offices stood at 1,082 in 119 countries.

BDO LLC has been operating in Ukraine since October 2003. Initially established in Dnipropetrovsk, in 2006 the company opened its Kyiv office. Currently, the company is presented in Ukraine by four divi-sions: BDO, BDO Consulting, BDO Legal and BDO Valuation.

There are 300 people working in the company, with other consultants attracted when necessary.

SBC has also been active since 2003. Since then, the company has carried out more than 30 projects for the Ukrainian, Russian and German companies. Wee have talked to

Nikolay Lysenko [email protected]

Tel +38 050 335 98 26 (mobile)

FOOD & AGRICULTURE

FARMING Alpcot needs more cash, Ukraine to grow in 2011 The board of the Swedish based ag-ricultural group Alpcot Agro is re-solved to ask its shareholder for an additional SEK 322m in capital from a rights issue that will be decided at an extraordinary shareholders' meet-ing on March 18.

The point of the cash injection is both to compensate for the Russian drought which affected the com-pany's 188,700 hectares in Russia save for the Western Kursk region. The company now says it plans to divest all the agricultural land it has acquired outside four mega-cluster areas where the company plans to accumulate 30,000 hectares of farm-land.

In this connection, Alpcot Agro has reconsidered its decision to di-vest the land in the Kursk and in-stead of selling it will develop it into a mega-cluster. The background is, as 2010 has shown, that the Kursk region has a relatively smaller expo-sure to extreme weather conditions. Low selling price of the land in the Kursk region is the other main rea-son for the rights issue.

Alpcot Agro intends to keep ex-panding in Ukraine. Photo: Alpcot Agro

In Ukraine, the company intends

to keep expanding, also in light of the fact that yields in Ukraine were on par with expectation for 2010.

"We have planted some 5,500 hectares with winter wheat and

some 900 hectares of winter rape. Altogether, including spring plant-ing, we expect to plant 15,000 hec-tares this year," says Katre Saard, head of Alpcot Agro's activities in Ukraine, to news2biz. "We expect to increase our land holding to 20,000-30,000 hectares during 2011," she adds.

"This is quite a large spread, I re-alise, but we are talking to some ma-jor players right now in order to ex-pand our holdings, while at the same time we are growing organi-cally, by speaking to private farmers in the areas were we have activities," Ms Saard explains.

” In order to have economy of scale, you need to have a certain amount of agricultural land within one area. Alpcot Agro's head in Ukraine Katre Saard

At the same time she underlines

that Alpcot is not just buying all available land in Ukraine but is fol-lowing a strategy of three clusters, in Lviv and Ivano-Frankivsk in Western Ukraine and Poltava in Central Ukraine where purchases should be concentrated.

"In order to have economy of scale, you need to have a certain amount of agricultural land within one area," she explains.


Also, Alpcot is expanding the

grain silo complex which it took over half-finished from Polish Duda in connection with buying their agri-cultural assets in Western Ukraine in July (see news2biz UKRAINE no 1, page 4). The silo, which was planned by the Poles to store 50,000 tons, has seen the completion of one phase and now has a capacity of 12,500 tons.

"We will expand the silo at the pace that is required by the expan-sion of our operation in Ukraine. These things must go hand in hand," says Ms Saard to nesw2biz.

Fact

30,000 ha will be Alpcot Agro's land bank capacity by the end of this year

Alpcot Agro has been listed on First North in Stockholm since 2006. The business idea is to generate an attractive return by acquiring and farming agricultural land in Russia and other CIS member states. Alpcot entered Russia in 2007 and Ukraine in 2008.

We have talked to

Katre Saard [email protected]

Tel +44 797 985 55557 (direct)

NEW SEGMENT Cargill enters animal nutrition market in Ukraine Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services, is planning to build an animal feed mill in the village of Kutsivka in central Ukraine (Kiro-vograd region) in the course of the current year.

The mill, estimated at USD 7m, will have the capacity to produce, mix and pellet approximately 50,000 metric tonnes of bagged and bulk animal feeds per year. The new facil-ity is expected to employ up to 40 full-time positions.

Cargill has been active in Ukraine since 1991, is headquartered in Kyiv and has now nearly 700 employees in the country. However, as the company has so far been active mainly in Ukraine's grain and oil-seeds segment, the new project marks the company's entry into the country's animal nutrition market.

” In recent years, we have seen a significant increase in meat consumption and meat production in Eastern Europe. Cargill's media relations manager for EMEA Francis De Rosa

Established in Ukraine in 1991, Cargill has so far been active mainly in grain and oilseeds segment. Photo: Cargill

"In recent years, we have seen a significant increase in meat con-sumption and meat production in Eastern Europe. This investment will enable us to leverage our global ex-pertise, technology and knowledge to support the growth of this re-newed livestock sector in Ukraine," says Francis De Rosa, Cargill's media relations manager for Europe/Mid-dle East/Africa, to news2biz.

Once operational, the mill will distribute feed, under the Purina brand, to local dairy, swine and poultry livestock farmers through a dealer network. Cargill expects this network to be made up of over 100 dealers in three years' time. While the mill is being built, Cargill in-tends to explore opportunities to help meet current local demand for animal feed.

"With significant operations on the ground, we plan to draw on syn-ergies from our established grain and oilseed business and to leverage valuable contacts and existing rela-tionships built up by our long-term commitment to Ukraine," says Mal-colm Sayer, general manager of Car-gill's animal nutrition business in

Ukraine, in a press release. "We are fortunate to have received strong ongoing support from both the agri-cultural community and govern-ment. We believe we have a mean-ingful role to play in this sector and, in the process, help raise rural GDP and support local farmers' incomes."

Agri output: Kirovohrad vs. Ukraine Y-o-y indices of agricultural production volume

-30%

-15%

0%

15%

30%

45%

60%

2002

2003

2004

2005

2006

2007

2008

2009

2010

Kirovohrad Ukraine

Source: State Statistics Committee in Ukraine Founded in 1865, Cargill today

employs 131,000 people in 66 coun-tries. It has 75 businesses organised around five major segments: Agri-culture Services, Food Ingredients and Applications, Origination and Processing, Risk Management and Financial, and Industrial.

As a privately held company, it runs its fiscal year from June 1 through May 31. In fiscal year 2010, the company reported net earnings of USD 2.6bn on sales and other revenues of USD 107.9bn. We have talked to

Francis De Rosa [email protected]

Tel +44-1932-861174


PROPERTY &

CONSTRUCTION

HOTEL MANAGEMENT

Swissôtel's Ukrainian portfolio gets another hotel Swissôtel Hotels & Resorts has this month signed a management con-tract with the Ukrainian investor In-terpoint Development for the opera-tion of Swissôtel Odesa, the new de-luxe hotel expected to open in the Ukrainian Black Sea city in the spring 2013.

According to the project devel-oper HI-Raise Constructions (a part of Interpoint Development), the 24-storeyed Swissôtel Odesa will have the total area of 67,000 sq.m and in-clude 333 modern and contempo-rary rooms, varying from the classic category Swiss Advantage to Presi-dential Suites.

The hotel will provide a lobby lounge-bar with a library, two res-taurants and a brasserie with an ex-tensive terrace overlooking the Black Sea, separate private dining rooms for events and a lounge Skybar on the top floor.

Exclusive facilities The hotel facilities also include spa-cious conference and banquet rooms. The Pürovel Spa & Sport complex with fitness facilities, treatment rooms and indoor and outdoor pools with direct access to the beach will be unrivalled in

Odesa, the hotel's promotion materi-als assert.

"There has never been a project of this kind in Odesa before," says Meinhard Huck, president of Swissô-tel Hotels & Resorts in a press re-lease.

The new hotel will overlook the Black Sea. Photo: Swissôtel Hotels & Resorts

"The location of the hotel on the French Boulevard is really superb. The hotel is situated close to a park area, right on the coast of the Black Sea, and only 4 km from the city centre. Interestingly enough, at the end of the 19th century, a summer cottage situated nearby that used to belong to a mayor of Odesa, which was named Switzerland," he said.

"We are looking forward to a fruitful partnership with Interpoint Development and HI-Raise Construc-tions, as well as the opening of a new Swissôtel in Eastern Europe. This unique multinational and dis-tinctive city is famous for its own traditions, cuisine and humour, lead-ing the trend of fashionable resort destination."

Odesa, amongst the top five larg-est cities in Ukraine with more than one million inhabitants, is consid-ered to be one of the main destina-tions for business, culture and tour-ism in the country.

Due to the presence of a well-connected international airport, to-gether with a well-developed rail network, the largest sea port in Ukraine and its outstanding geo-graphical location by the Black Sea coast, Odesa is also a major trans-port and commercial hub.

” This unique multinational and distinctive city is famous for its own traditions, cuisine and humour, leading the trend of fashionable resort destination. Swissôtel Hotels president Meinhard Huck

Founded in 2006, Interpoint De-

velopment is a part of Ener-goTransInvest Holding, a Ukrainian consortium with large assets in the chemical industry, construction and real estate and agrarian sector.

HI-Raise Constructions is Inter-point Development's building arm. Its revenues shrank by 21.2% to UAH 171.1m in 2009, while the net profit stood at UAH 17.2m.

In June 2010, Swissôtel Hotels & Resorts signed a management agreement with another Ukrainian partner, KDD Group, one of the country's leading property and in-vestment companies, for the opera-tion of a deluxe hotel in the Ukrain-ian capital of Kyiv (see news2biz UKRAINE no 1). Kyiv deluxe project The Swissôtel Kyiv is scheduled to open in mid-2012 to welcome the guests of the UEFA Euro 2012 foot-ball tournament.

The future Swissôtel Kyiv will form part of the Sky Towers mixed-use development complex to be comprised of the twin towers of 34 and 47 storeys. Sky Towers will be positioned close to the Kyiv city cen-tre and the main railway station and will include hotel facilities, serviced residences and class A offices.

Swissôtel Hotels & Resorts is owned by Fairmont Raffles Hotels International, a leading global hotel company with 91 hotels and resorts worldwide under the Raffles, Fair-mont and Swissôtel brands. The company also owns Fairmont and Raffles branded Residences, Estates and luxury private residence club properties.

ONWARD! Interview with Swissôtel: continued CEE expansion As Swissôtel Hotels & Resorts has been proactively cultivating the Ukrainian and other Central and


Eastern European markets (see the story above), news2biz has asked Eva-Maria Panzer, the company's communication director, to tell about the global hotel chain's pre-sent stance and its plans for the fu-ture.

▶ For how long has Swissôtel Hotels & Resorts been interested in the Ukrainian market?

Our development department looks into a wide range of markets, but expanding in any country in Eastern Europe has been for a long time one of our focuses – Ukraine has always been on the list.

As we have been operating quite successfully the Swissôtel Krasnye Holmy in Moscow and the Swissôtel Tallinn in Estonia, we wanted to add more properties to our portfolio in the East as we are convinced that there is a high potential of customer demand for deluxe hotel properties.

▶ Which developer companies have you been working with until now, realising new hotel projects?

For the Swissôtel Kyiv we work with the KDD Group and for Swissô-tel Odesa we work with Interpoint Development/Hi-Raise Constructi-ons. Both companies are well known and follow values of reliability, ef-fectiveness and high quality as we do as a company with Swiss roots. Both companies work on the projects at a high speed and do it 24/7.

▶ Do you engage new architects in every new project?

Most architects are engaged by the owning companies, but we work closely with hotel owners to realise their vision for the future, the out-come of which is a unique property featuring energy-efficient solutions throughout.

Swissôtel Kyiv is scheduled to open in mid-2012 to welcome guests of the UEFA Euro 2012. Photo: Swissôtel Hotels

Our hotel in Tallinn/Estonia for example was realised by Meelis Press from M Pressi Arhitek-tuuribüroo in Estonia and our hotel in Moscow by Russian architects of TTA, with the participation of the in-ternational architect firm Woods Bagot.

Generally it is a combination of modern design with some Swiss touches. Following a simple philoso-phy of unity, not uniformity, each

environment has a character unique to its geographical location and as we work in each destination with different architects and interior de-signers all our hotels look different.

But what unites them are solid, authentic materials synergizing with functional, well-designed and smart details. Swissôtel Kyiv and Swissôtel Odesa are both going to be state-of-the-art properties in every respect.

▶ Which Ukrainian cities, besides Kyiv and Odesa, are you interested in?

There are no plans for further hotel projects in Ukraine right now, so we completely concentrate on the Kyiv and Odesa projects, which are under construction and are sched-uled to open in mid-2012 (Kyiv) and in 2013 (Odesa).

We are looking forward to bring-ing our brand to Ukraine and we want to be open right in time with the Swissôtel Kyiv for the UEFA Euro 2012, which would be a suitable event to open our hotel and have guests experiencing our Swiss hospi-tality in the Ukrainian capital.

▶ What kind of guests do you mostly expect to receive in your Ukrainian hotels? Business clients?

By now we manage nearly 30 ho-tels in 17 countries and in most of our deluxe hotels around 70% of the clients are business travellers and around 30% of the hotel guests are individual tourists.

Kyiv is home to governmental ministries and authorities, but also

to the mechanical engineering, air-craft industries, light and agricul-tural industries, as well as the state chemical industry.

The Ukrainian metropolis is also one of the most important transport nodal points in Eastern Europe – an environment in which superior qual-ity international hotel chains are still in short supply.

And Odesa has the huge port and is an important trade knot. In addi-tion, it is interesting for travellers seeking relaxation in summer near the Black Sea.

▶ What is the main difference be-tween Swissôtel hotels and other luxury hotel networks? What are the main specialities of your hotels in Eastern Europe?

Swissôtel Hotels & Resorts is a distinctive group of deluxe hotels which combines contemporary de-sign with local character.

” Superior quality international hotel chains are still in short supply in the Ukrainian capital. Swissôtel Hotels communication director Eva-Maria Panzer

Our Swissôtel Krasnye Holmy in

Moscow for example is known for its modern design combined with char-acteristically Swiss touches, which is


recognized as modern, clean, reli-able and practical. The hotels are lo-cated in major destinations and me-tropolises all over the world, and most are situated in the city centre, only a stone's throw from the shop-ping and business districts and the local attractions.

This is exactly what we are bring-ing as a renowned Swiss brand to the future Swissôtel Kyiv and Swis-sôtel Odesa. We have talked to

Eva-Maria Panzer [email protected]

Tel +41 44 317 62 28

NEW MARKET EXPLORATION Leading Baltic real estate developer enters Ukraine Pro Kapital Group, the leading real estate developer in the Baltic States registered in Estonia, has announced plans to construct Coliseum, a shop-ping and entertainment mall in the Ukrainian city of Kryvyi Rig, in H1 2013.

With its total area of 143,000 sq.m, the Ukrainian Coliseum will host office spaces of 10,000 sq.m, a food hypermarket, variety stores, ca-fes and restaurants, beauty shops and spa salons, as well as an enter-tainment zone.

In January this year, Pro Kapital's top management visited Kryvyi Rig and was given the green light for the project implementation. Once launched, the new mall will, accord-ing to the city mayor Yuriy Vilkul, create some 1,200 jobs for the local people.

Ukrainian Coliseum will host office spaces, a food hypermarket, vari-ety stores, cafes and restaurants, beauty shops and spa salons, as well as an entertainment zone. Photo: Kryvyi Rig city administration

On the other hand, construction

of the shopping mall in such a large industrial centre as Kryvyi Rig may, in opinion of Pro Kapital's board chairman Paolo Vittorio Michelozzi, become a sort of the entrance ticket to the Ukrainian market for his com-pany.

"Developing a land plot in Kryvyi Rig as a real estate project is the first step that might be followed by other projects in other Ukrainian regions," says Iveta Vanaga, Pro Kapital's spokesperson, to news2biz.

"Pro Kapital Group considers the Ukrainian real estate market as an interesting and challenging invest-ment environment with a large growth potential in the next years. Entering this market is a logical movement for Pro Kapital Group that has an extensive development experience in the Baltic countries and Russia since 1997," she empha-sises.

Over the last 15 years, Pro Kapi-tal has, according to her, developed an extensive project portfolio: from shopping malls to office facilities to hotels and residential buildings in the prime locations in Riga, Tallinn and Vilnius.

” Pro Kapital considers the Ukrainian real estate market as an interesting and challenging invest-ment environment with a large growth potential in the next years. Pro Kapital's spokesperson Iveta Vanaga

The company has developed pro-

jects in prestigious locations on the seashore in Tallinn, in the quiet Art Nouveau districts and on the banks of the Daugava River in Riga, and in the old town of Vilnius. All in all Pro Kapital Group has built more than 320,000 sq.m of space, with total in-vestments of EUR 250m.

Having started with the construc-tion and reconstruction of individual buildings, Pro Kapital has gradually moved into the development of terri-tories that are as much as several hectares in size in the prime loca-tions of the three Baltic capital cities.

The company has developed business facilities and state-of-the-art hotels in the Baltic States, Italy,

Greece, Germany, Russia, Poland, Slovenia, Hungary, Tunisia and Egypt.

Fact

320,000 sq.m of space has been built by Pro Kapital Group in the Baltic countries

Its subsidiary Domina Vacanze

has been the leading timeshare holi-day service provider in Italy for more than a decade and is always on the lookout for new hotels and spas.

In 2009, the revenues of Pro Kapital Group stood at EUR 85m and the holding firm produced op-erational loss of EUR 21m. We have talked to

Iveta Vanaga [email protected]

Tel +371 29239064

RETAIL & SERVICES

MARKET INTRUSION Finnish Finn-Flare: Russia conquered, off to Ukraine Finn-Flare, the Finnish garments and footwear retail network with an ex-tensive presence in Russia, is set to enter the Ukrainian market this year.

The company is, according to its CEO Ksenia Ryasova (symptomati-cally, before 2006 she headed Finn-Flare's representative office in Mos-cow) planning to start with the


opening of an own office, show- room and a retail store in Kyiv.

"First, we will open our represen-tative office in Ukraine, which is crucial for providing our regional partners with full-value services. Concurrently, we are going to open a large "flagship" store, which will not only sell our goods, but also, and mainly, demonstrate how a Finn- Flare company store looks like," she says to news2biz.

Finn-Flare has virtually exhausted the existing potential of the Rus-sian capital. Photo: Finn-Flare

"Since our company is not yet

known on the Ukrainian market, we have concluded a partnership agreement with a large local multi-brand retailer of casual and active wear. As a result, Finn-Flare 30 clothes will be sold in 30 of the chain's 66 stores dispersed through-out Ukraine," Ksenia Ryasova adds. "This will definitely contribute to the better awareness of our brand."

The garments will be delivered to Ukraine straight from China, Viet-nam and Russia, where Finn-Flare clothes are actually manufactured.

"We are also planning to develop a franchising chain in the country," she reveals. "This is the most inter-esting variant for us, as Ukrainian entrepreneurs have a full picture of the local market, buying behaviour and other specifics."

"We put high hopes on the Ukrainian market, which is ex-tremely interesting for us at the moment. When planning our arrival in Ukraine, we conducted a series of in-depth researches of the local con-sumer market and found out that the franchising and brand retail trade have been rapidly developing in the country," Ksenia Ryasova goes on. "So far, the competition on the Ukrainian market is not yet compa-rable with that in Russia, but it will certainly intensify. That is why we believe that now is the best time to enter the Ukrainian market, the sec-ond most attractive one after that of Russia."

” We want to be right in time on the Ukrainian market to occupy our niche. Finn-Flare CEO Ksenia Ryasova

"So we want to be there right in

time to occupy our niche," she sum-marises. "But what is most impor-tant, is that the social and political situation in Ukraine has stabilised

and it is a truly promising and at-tractive market."

Having virtually exhausted the existing potential of the Russian capital and looking for new markets, Finn-Flare first launched its chain in Russia's regions and then proceeded to expand abroad.

Thus, the company's entire net-work (under the Finn-Flare and Ap-pleMoon brands) currently com-prises more than 350 outlets, includ-ing some 250 franchise stores in Russia and a dozen ones in Kazakh-stan.

45% revenue hike expected This year, as Finn-Flare is planning to open 58 new stores (both own and franchising) in order to increase its revenues by 45% to USD 140-145m, it sees Ukraine as the most promising market, which is likely to be one day followed by Belarus.

In 2010, Finn-Flare expanded its revenues volume by 20% to USD 97m, having opened 73 new outlets, including 33 own ones.

Finn-Flare's franchising pro-gramme appears to be rather attrac-tive to the company partner's, as it does not require royalty and lump-sum payments, but focuses instead on the long-term development meant to increase the existing turn-over and enhance the brand aware-ness with the help of Finn-Flare's partners.

Finn-Flare was founded in 1960 in the small Finnish town of Salo and was originally known as Salon

Leninkitukku clothing factory. Shortly after its opening, the com-pany claimed the leadership among the domestic clothing manufactur-ers.

Since 1965, the company has been producing its clothing under the Finn-Flare trade mark.

Fact

140-145 USD million shall reach Finn-Flare's revenues this year.

In 2000, Finn-Flare completely

changed its marketing strategy to give the key priority to the develop-ment and manufacturing of casual style clothes. At the same time, the company started production of footwear and accessories.

In 2003, the company opened its first store and design office in Mos-cow and has since then been devel-oping its franchising projects in Rus-sia. Today, is a leading player in the "average plus" price segment of the Russian clothing market.

Finn-Flare stores are presented in the European and Asian capital and prominent cities, such as Helsinki, Moscow, Saint Petersburg and As-tana.

The Finnish company Ruveta OY holds the rights to the Finn-Flare trade mark. We have talked to

Ksenia Ryasova [email protected]

Tel 8 906 038 01 55 (switchboard)


PLANNED EXPANSION Scandinavian-owned Melon Fashion Group to open 154 stores in Ukraine by 2014 Melon Fashion Group, the Saint Pe-tersburg based womenswear manu-facturer and retailer principally owned by Scandinavian investors (see the share capital structure be-low), is about to launch a large-scale expansion campaign in Ukraine.

So far, the company runs a net-work of 500 stores in both Russia and Ukraine. With its Ukrainian chain numbering "just" 46 outlets (40 own and six franchising) as of 1 February 2011, Melon Fashion is set to invest around USD 15m of own funds to expand it to 200 shops by 2014.

Mikhail Urzhumtsev: We are ready to open stores everywhere where it is appropriate. Photo: Melon Fashion Group

In 2011 alone, the company

plans to open around 40 own and 10 franchise stores in Ukraine to reach the annual turnover of about USD

50m, according to Melon Fashion di-rector general Mikhail Urzhumtsev.

"We are currently negotiating the opening of our outlets in the al-ready operating and yet abuilding shopping malls," he says to news2biz. "We are ready to open stores everywhere we think it would be appropriate for us."

"The Ukrainian market is strate-gically important for us and we can see a big potential for the develop-ment of retail trade in that country in general and our business in par-ticular," Mikhail Urzhumtsev says. "That is why we are prepared to both develop our own chain and open franchise stores in Ukraine."

” The Ukrainian market is strategically important for us and we can see a big potential for the development of retail trade in that country. Melon Fashion director general Mikhail Urzhumtsev

"There are certainly some diffi-

culties in the local regulatory frame-work and the general economic situation in the country, but still we are seeing the ongoing positive trends, which will favour the effec-tive development of our business in Ukraine," he believes.

According to him, Melon Fashion arrived on the Ukrainian market in June 2010 and has since then mar-keted locally five out of its six brands: befree (teenage apparel), LOVE REPUBLIC (stylish girl gar-ment), Women'Secret (lingerie), CO&Beauty (accessories) and SPRINGFIELD (men's and ladies' clothes). The latter three are the Spanish brands run by the company under a franchising agreement since May 2010.

This year, the Saint Petersburg based retailer is going to market its sixth brand in Ukraine. Widely known as ZARINA (stylish women-swear) in Russia, it will be promoted as Ci Mi in Ukraine so as to avoid as-sociations with the locally operating Zarina jewelry network.

The first Ci Mi store is scheduled to open already in Q1 2011 in Kyiv. On the whole, Melon Fashion plans to develop its Ukrainian network throughout the country's entire terri-tory with a special emphasis on its more urbanised eastern and south-ern regions, which offer high-quality trade floors in higher numbers.

Fact

50 USD million will be Melon Fashion's turnover in Ukraine this year.

Operating as a womenswear fac-

tory since 1926, Melon Fashion Group was set up in 2005. In 2008,

the company started its pro-active expansion into the Russian regions.

With its Russian chain presently reaching 454 stores (355 own and 99 franchise ones), the company is about to open some 80-100 more outlets in the country this year.

Melon Fashion: Nordic owners Melon Fashion's share capital structure as of 08.02.2009 Scandinavian Manufactrust ApS (SMAPS) 32.0% East Capital Group 28.3% Individuals 20.6% Swedfund International AB 14.8% Inkeda ApS 3.4% Source: Melon Fashion Group

In 2010, Melon Fashion Group's

turnover totalled around USD 160m (both in Russia and Ukraine), up 55% on 2009. We have talked to

Mikhail Urzhumtsev [email protected]

Tel +7 (812 326-63-616 (switchboard)

IT & MEDIA

ACQUISITION OF DECADE Epic story of Ukrtelecom: Austrians prepared to buy A decade-long epic depicting nu-merous attempts of numerous Ukrainian cabinets to sell the state-run telecom monopoly is just a foot-step away from its logical end.

Epic (what a symbolic name!), the Vienna-based investment house, which is the parent company of the


Ukrainian registered ESU, the only bidder for the long-suffering Uk-rtelecom, has reportedly accepted the offer of the Ukrainian State Property Fund and is prepared to pay USD 1.3bn (EUR 960m) for a 93% stake in the state-owned tele-com group.

According to Peter Goldscheider, Epic's managing partner, the Austri-ans hope to close the acquisition of Ukrtelecom in March this year after talks with banks to finance the pur-chase.

Ukrtelecom still controls about 80% of the Ukrainian fixed-line market. Photo: Ukrtelecom

"It’s a full price and the banks are

giving it a very hard look," Peter Goldscheider is quoted as saying by Bloomberg. "This is by far the largest challenge we’ve ever had."

In the meantime, the government offer values Ukrtelecom at just USD 10m more than the USD 1.3bn start-ing price that was set in the privati-

sation tender last December and domestic investment banks argue the government could have gener-ated up to USD 1.8bn for the coun-try's budget through a competitive sale. The government initially planned to sell the phone company in a 28 December 2010 auction (see news2biz UKRAINE no. 3, page 11), but since ESU/Epic was the only bidder, Ukraine hired an independ-ent company to value Ukrtelecom.

Controversial deal The deal has been widely seen as controversial after many top Euro-pean telecom groups that had ex-pressed interest in Ukrtelecom – in-cluding Deutsche Telekom and Nor-way's Telenor – were excluded from the privatisation tender because they are more than 25% government-owned.

A second tender condition pre-vented bidding by telecom groups that had more than a 25% share on the Ukrainian market. At the same time, Epic is reported to be close to Ukraine's top political officials and businessmen, a notion decisively de-nied by the company itself.

Thus Peter Goldscheider denies "market suspicions" that his com-pany has been acting as a front for domestic oligarchs and insists that the tender is fair.

According to him, the Ukrtele-com takeover would amount to "a landmark deal" for the group, which currently employs around 3,000 people in Eastern Europe. He admits

though that Epic can use its vast telecoms advising experience to re-structure Ukrtelecom and then list or sell shares in the Ukrainian network operator with 82,000 employees to another investor.

The sale of Ukrtelecom will be the largest state asset deal since 2005, when the biggest Ukrainian steel mill was sold to ArcelorMittal for USD 4.8bn.

Ukrtelekom has been repeatedly slated for privatisation throughout the past decade, but every time the sale was delayed due to political wrangling and infighting. Not the first try Early last year, the Ukrainian cabi-net, which urgently needed money to cut the budget deficit and pay off loans, finally announced its readi-ness to take out the long-shelved privatisation plan, but the formal selloff decision was taken only on 28 September 2010.

"To make Ukrtelecom competi-tive on the market, it is necessary to attract private capital," said the then transport and communication minis-ter Kostiantyn Yefymenko. "The pri-vatisation of the enterprise is the only possible way of doing it and I can see no alternative."

A highly bureaucratic and mis-managed corporate dinosaur, Uk-rtelecom has indeed lost much of its value in the past decade, falling years behind European peers in terms of introducing new telecom technologies.

Ukrtelecom earned just USD 6m in the first half of last year. Corpo-rate and private clients have increas-ingly turned to better quality ser-vices provided by privately owned mobile and fixed-line operators.

” This is by far the largest challenge we’ve ever had. EPIC Managing partner Peter Goldscheider

Nevertheless, the company still

controls about 80% of the fixed-line market in Ukraine, and the acquisi-tion of this monster will allow the buyer to form Ukraine's largest sub-scriber base.

Furthermore, Ukrtelecom holds the country's sole 3G licence and is expanding into Ukraine's fast-growing mobile business.

TRANSPORT & LOGISTICS

AVIATION AeroSvit chases off SAS from Copenhagen-Kyiv Last fall, the Ukrainian airliner AeroSvit started flying on the Co-penhagen-Kyiv route and already as of March 25, SAS will stop its flights on the route where SAS has so far operated an MD80.


AreoSvit, which today has five

weekly return flights on Copenha-gen-Kyiv, will from the end of March in-crease its flight schedule to one daily flight.

AreoSvit has five weekly return flights on Copenhagen-Kyiv and upgrades its schedule to one daily flight. Photo: AeroSvit

The Danish travel industry news

bulletin Check-in.dk writes that the occupancy rates on the flight have been too low.

Spokesperson Pernille Christel Andersen from SAS Danmark says to news2biz that the company never comments occupancy rates on par-ticular routes, but adds: "It is always our objective to increase our capac-ity and be present on the markets where SAS has the best opportunity to make money. We always try to improve our traffic program and ad-just capacity so that it matches sup-ply and demand." We have talked to

Pernille Christel Andersen [email protected]

Tel +45 32 32 52 54 (direct)

LAND BRIDGE PROJECTS Ukrainian government to promote Viking project The Ukrainian cabinet is going to noticeably simplify customs proce-dures for the international contrailer train Viking in order to enhance utilisation of the service covering the 1733 km distance between the Ukrainian Black Sea port of Odesa and the Lithuanian Klaipeda.

According to the Ukrainian prime minister Mykola Azarov, the gov-ernment is interested in the full-capacity operation of the Viking route and is prepared to introduce joint Ukrainian-Lithuanian customs stations.

Last year, Viking transported 41,804 TEU, up 10% on 2009, in-cluding 21,846 TEU towards Odesa and 19,958 TEU towards Klaipeda. Still the train's potential is by far higher.

Thus the three Ukrainian har-bours, Odesa, Illichivsk and Mariu-pol handled a total of 659,600 TEU in 2010, up 27.6% on 2009. Klaipeda handled 294,000 TEU dur-ing the same year.

The Viking service was conceived by the Lithuanian, Belarusian and Ukrainian railway operators, as well as the Klaipeda and Odesa harbours, and launched in 2003.

The Viking train runs through Lithuania, Belarus and Ukraine and links a network of the Baltic region's sea container and overland con-trailer lines with those of the Black Sea, Mediterranean and Caspian re-

gions. In 2009, the European Com-mission named the Viking concept the best cargo transportation project of the past decade.

Turkey, Lebanon and Syria have shown their interest in the project.

ENERGY &

ENVIRONMENT

POWER PRODUCTS ABB wins USD20m order to update Ukraine's power net ABB, a Swiss-based company with Swedish roots, the world's leading power and automation technology group, has won an order worth USD 20m from NPC Ukrenergo, Ukraine's national power grid operator, to supply 44 sets of SF6 (sulphur-hexafluoride gas) circuit breakers rated at 800kV (kilovolts) to be in-stalled in five 750kV transmission substations around the country.

The breakers will be made at ABB's plant in Ludvika in Sweden.

These modern circuit breakers will replace outdated air blast-type circuit breakers that have been in operation for nearly four decades. ABB will supply the equipment and provide technical training. The cir-cuit breakers will be replaced in four phases, starting in 2011 and ending in 2014.

"Our equipment also has a pro-jected life time of 40-50 years," ex-plains ABB's Senior Vice President High Voltage Breakers, Anders P.

Hultberg, to news2biz. "The Soviet equipment, which is still used in Ukraine, has had great problems in living up to its own life-time expec-tancy and it has, so to say, been maintaining itself to death," says Mr Hultberg.

Ukraine is one of a few countries in the world with a 750kV network. Photo: ABB

ABB's state-of-the-art ultra-high

voltage 800kV SF6 circuit breaker has innovative features that include a single operating mechanism per pole, replacing the two found in conventional 800kV breakers. This provides greater reliability, reduced initial costs and considerable reduc-tions in maintenance costs. The shift from air blast technology also elimi-nates the need for air compression facilities.

ABB will also supply control cabinets with bay control devices for the circuit breakers, along with an on-line condition monitoring system built on ABB's substation automation technology.

"This means that they can ob-serve directly where the fault is and


direct the maintenance to this point," explains Mr Hultberg.

Ukraine is one of a few countries in the world with a 750kV network. This project is part of the country's efforts to modernize and upgrade its power transmission network, which includes the refurbishment of 220kV, 330kV and 750kV substa-tions.

"You only see 800kV nets in nice countries in the world, usually where there is huge physical dis-tance from generation to consump-tion of power. The operating voltage is 750kV but the net has a max ca-pacity of 800kV. In Sweden for ex-ample, we have a 400kV net, so the dimensions are really big," says Mr Hultberg.

” The Soviet equipment, which is still used in Ukraine, has been maintaining itself to death. Anders P. Hultberg,

ABB's Senior Vice President High Voltage Breakers

In 2008, the country received a USD 200m loan from the Interna-tional Bank for Reconstruction and Development under the World Bank, which will help fund this project.

The ABB Group operates in around 100 countries and employs about 124,000 people. ABB turned

over 31.8bn USD in 2009, down from USD 38.3bn in 2008, but the EBIT margin stayed at app 13% for both years, which meant a net profit of USD 4.1bn in 2009. We have talked to [email protected]

Tel +46 21 32 5000 (switchboard)

ECONOMY & POLITICS

Japan's JBIC to finance Ukraine's machinery import The Japan Bank for International Cooperation (JBIC) has opened the second credit line in the amount of JPY 8bn. (around USD 96.6m) for the State Export-Import Bank of Ukraine (Ukreximbank).

According to the loan agreement signed by the parties, the credit line was co-financed with the Bank of Tokyo-Mitsubishi UFJ, Ltd. and Su-mitomo Mitsui Banking Corporation (SMBC).

The signing ceremony took place in Tokyo in January this year in the course of the state visit of the Ukrainian president Viktor Yanuko-vych to Japan.

The credit line offered to Ukreximbank will provide medium- and long-term funds in yen or US dollars to finance the import of ma-chinery, equipment and services by Ukrainian firms from Japanese ex-porters.

Ukraine suffered a significant de-cline in GDP in 2009, impacted by the global financial crisis in the sec-

ond half of 2008. However, since 2010, its economy has been back on the recovery path, driven largely by steel exports, with an upturn in ex-ternal demand.

Under these circumstances, this credit line will support the country's sustainable growth by developing in-frastructure, improving the envi-ronment and creating business op-portunities contributing to the pro-motion of industrial development.

The loan agreement was signed during the Ukrainian president's visit to Japan. Photo: Ukrainian president's official

website

Since 1997, JBIC has collabo-rated with the World Bank and pro-vided knowledge assistance to Ukreximbank on overall banking op-erations, including appraisal capac-ity building and improvement in the efficiency of its business process.

JBIC extended its first export credit line to Ukreximbank in 2005. The funds were successfully utilised specifically for the development of the Kyiv International Airport, the country's key air gateway.

In collaboration with Ukrexim-bank, a government financial institu-tion that is supporting business ac-tivities associated with the trade transactions of Ukrainian firms, JBIC intends to support greater business opportunities for Japanese firms in the country.

In particular, by supporting ex-ports related to renewable energy and the natural resource sector, JBIC is pursuing the expansion of over-seas markets in the infrastructure sector and strengthening the inter-national competitiveness of Japanese firms.

JBIC was established on 1 Octo-ber 1999 through the reorganisation of the Export-Import Bank of Japan. On 1 October 2008, JBIC became the international arm of Japan Fi-nancial Corporation (JFC), which was officially set up on the same day. The bank's mission is to pro-mote sustainable and balanced de-velopment of the Japanese and global economy through interna-tional financial transactions.

Ukreximbank was set up on 3 January 1992 at the dawn of Ukraine's independence. Today it is an open corporation, whose 100% stake is owned by the state. The lender has the country's largest net-work of correspondent banks (more than 800 financial institutions throughout the world).

In Ukraine, Ukreximbank has the Kyiv-based headquarters and 29 re-gional branches and 93 offices (as of 01.01.2010) covering virtually all the country's territory.


KEY FIGURES

CONSUMER PRICE INDEXcolumn A: 100 = current 12 months; column B: 100 = previous month

Oct '10 Nov '10 Dec '10 Jan '11

Sector A B A B A B A B

Food, non-alcohol 113.0 100.5 111.4 100.1 110.6 101.0 108.6 101.3

Alcohol, tobacco 122.1 101.6 122.1 101.1 122.1 100.8 121.9 100.5

Clothing, footwear 102.6 100.7 102.3 100.4 102.2 100.2 102.0 99.9

Housing, water, fuels 114.1 100.4 113.7 100.5 113.7 100.3 115.0 101.4

Transport 103.4 100.0 103.3 100.7 106.6 101.6 107.3 102.4

Communications 91.1 99.6 91.1 99.9 91.1 99.9 91.2 100.0

Gross CPI 110.1 100.5 109.2 100.3 109.1 100.8 108.2 101.0

Source: State Statistics Committee of Ukraine

PRODUCER PRICE INDEXOn monthly basis Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10 Jan '11

100 = previous month 99.8 100.9 100.1 102.4 99.7 100.9 101.3

100 = same month prev year 124.4 123.3 119.2 119.8 118.9 118.7 101.3

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 INDEXOn monthly basis Jun '10 Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10

100 = previous month 101.3 101.8 100.7 100.9 103.2 101.1 101.3


Year 2004 2005 2006 2007 2008 2009 2010

100 = previous year 120.2 125.6 123.5 123.1 135.3 111.3 115.8

Market volume in current prices, UAH m New residential buildings in 1,000 m2

1000

2000

3000

4000

5000

6000

7000

Apr

10

Jun 1

0

Aug

10

Oct

10

Dec

10

600100014001800220026003000340038004200

Q4 '0

9

Q1 '10

Q2 '10

Q3 '10

Q4 '10


REAL ESTATE PRICESNew flats, average price in Kyiv, UAH/m2

12000

12500

13000

13500

14000

14500

15000

May

09

Sep 0

9

Jan 10

May

10

Sep 1

0

Jan 1

1

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 TRADEat current prices Oct 2010 Nov 2010 Dec 2010 Jan 2011

Turnover in UAH m 51,682 47,744 53,603 41,117

Index 100 = previous month 102.2 97.5 111.6 75.5

Index 100 = same month prev year 110.7 117.8 114.7 111.1

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 INDICATORSConsumer confidence index

020406080

100120

May

09

Jul 0

9Se

p 09

Nov 0

9Ja

n 10

Mar

10M

ay 10

Jul 1

0Se

p 10

Nov 1

0

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 7 - 14 Feb 2011

Centre

- office 22.45

- retail space 38.09

Right coast (without centre)

- office 15.21


Left coast

- office 13.33


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 78.1 111.2


GROSS WAGEScolumn 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%

Dec

08

Feb

09

Apr

09

Jun

09

Aug

09

Oct

09

Dec

09

Feb

10

Apr

10

Jun

10

Aug

10

Oct

10

Dec

10

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-Aug 2010 in USD bn

EXPORT IMPORT

No Country Jan-Nov

2010Share 2009 Share No Country

Jan-Nov

2010Share 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 17 February 2011, change 03 Feb

100 USD 794,1700 ↓

100 EUR 1072,9237 ↓

100 GBP 1274,4075 ↓

100 DKK 143,8949 ↓

100 SEK 122,8656 ↓

100 NOK 137,0711 ↓

1,000 JPY 94,8483 ↓

100 LVL 1521,2302 ↓

100 LTL 310,7402 ↓

10 RUB 2,7129 ↑

100 USD/EUR against UAH

900,00

1000,00

1100,00

1200,00

1300,00

04 Fe

b25

Mar

13 M

ay01

Jul

19 A

ug07

Oct

25 N

ov17

Feb

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 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10

- to private companies 462.21 453.58 463.28 488.24 500.96

- to households 241.31 229.34 221.32 218.76 209.61

- to others 15.25 14.76 13.48 14.65 14.82

Total 718.77 697.68 698.08 721.65 725.39


INTEREST RATESAverage weighted annual interest rates on credits Recipient, currency Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10

Companies, UAH 13.90% 12.95% 13.62% 13.84% 13.20% 15.02%

Companies, USD 10.43% 9.71% 10.33% 9.58% 10.11% 10.84%

Households, UAH 24.61% 28.10% 27.48% 26.63% 25.93% 26.24%

Households, USD 11.39% 13.77% 10.69% 9.90% 11.17% 13.65%

Kyiv Inter Bank Offered Rate (KYIVPrime) as of 16 February 2011

Overnight 1 week 1 month 3 months

1.29% 2.24% 3.92% 5.29%

Source: National Bank of Ukraine, Bloomberg

STOCK EXCHANGEPFTS Ukraine Stock Exchange main list

in alphabetic order

Price

17 Feb

Change

02 Feb

Change

end of '09

↓ Alchevskiy Metalurg. Kom 0,24 - 4% + 71%

↓ Azovstal 3,04 - 5% + 13%

→ Avdievsky Koksochim Zav 16,63 0% + 39%

↑ Centrenergo 18,55 + 2% + 96%

Dniproenergo - - -

Donbasenergo - - -

↓ Enakiyvckiy Metalyrginiy Zav 176,28 - 7% + 5%

↓ Interpipe Nizhnodniprovsky 8,22 - 2% -11%

↑ JSCB Ukrsotsbank 0,67 + 6% + 91%

→ Krukivsky Carriage Works 38,87 0% -

↑ Mariupol Heavy Machineb. 11,18 + 9% -

↑ Motor Sich Jsc 3689 + 11% + 124%

→ Poltava Gok 46,59 0 + 69%

↑ Raiffeisen Bank Aval 0,45 + 5% + 80%

Stirol Concern - - -

Sumske Nvo Im. Frunze - - -

Zakhidenergo - - -

↑ Ukrnafta 775,41 + 15% + 360%

↓ Ukrtelecom 0,56 - 3% + 22%

↓ Yasynivskiy Koksohimichniy Z 5,1 - 1% + 52%

Note: PFTS index 100= 1 October 1997

Source: PFTS

PFTS index

1132.46 Change 02 Feb + 4% ↑

Change end of '09 + 98% ↑

PFTS closing index

the last three months

750800850900950

1000105011001150

17 No

v

17 De

c

16 Ja

n

15 Fe

b

MONEY SUPPLYin UAH m Aug '10 Sep '10 Oct '10 Nov '10 Dec '10

Monetary base 220,384 216,727 221,581 215,713 225,692

M1 271,303 275,424 277,682 276,374 289,894

Currency outside banks 175,103 174,814 175,226 173,332 182,990

M2 555,327 567,747 574,946 572,660 596,841

- Time deposits 284,025 292,323 297,264 296,286 306,947

M3 556,176 568,810 576,046 574,070 597,872

- Net foreign assets EUR bn 90,010 114,789 107,673 105,972 115,732

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 DATAOutput

Jan-Dec 2010 */ Jan 2011

Monthly wages (UAH)

Jan-Dec 2010**

Unemployment

Jan-Sep 2010***

New dwellings

2009

Ukraine's regions

Industry Agriculture Amount Index* in '000 % ‘000 m2 % to ‘08

Autonomous Republic of Crimea 110.5 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

UNEMPLOYMENTRegistered unemployed (ILO), in ‘000 and % of population in working age

1000

1300

1600

1900

2200

2500

Q1 0

8

Q2 0

8

Q3 0

8

Q4 0

8

Q1 0

9

Q2 0

9

Q3 0

9

Q4 0

9

Q1 10

Q2 10

Q3 10

0

3

6

9

12

15 number (left) % (right)


GENERAL INFORMATIONPopulation: 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 RATINGAgency 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


Investor Relations

Ukraine no 11_february_17_ 2011