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The seminar was chaired by Mr. Larry Duffield, Counsellor Trade at the Canadian Embassy. First , there was a welcome for the mission by Ambassador Christoper Westal, followed by introductions of the organizer of the mission: Mr. Gerald Fedchun, CUCC President, Mr. Bohdan Myndiuk, Executive Director, CUCC, and from Smith & Lyons, Mr. Bohdan Onyschuk, relative to raising of a $50 million fund to invest in Ukraine.
This was followed by the Financing Panel: Ukraine Enterprise Corp., Western NIS Enterprise, and International Finance Corporation, outlining the financial possibilities for Canadian companies investing in Ukraine.
Next, Professor Ostap Hawaleshka of the Science and Technology Centre in Ukraine made a forceful presentation on what has happened in the 2 1/2 years of work developing the centre, and now the investment of $12.6 million of grants, paid directly to the scientists and engineers was keeping about 1000 persons employed in useful, peacetime work rather than having them emigrate to continue destructive wartime employment.
Deloitte & Touche followed, discussing factors of accounting; how the inflation rate has been reduced in Ukraine from 1080% in 1994 to 40% in 1996, while the CDP has started to return to its 1994 high from a serious dip in 1995. An outline of the various sectors of the economy was given: Chem./Petroleum 6%, metallurgy 17%, food 20%, machinery 17%, steel 7% of the world total, and urea at 3.5% of the world total.
A listing and ranking of the major banks followed; Prominvest Savings, Bank Ukraine & Foreign Capital, Credit Lyonnaise, First Ukraine, etc. (No Canadian banks are here, although later in the day it was announced that the Royal Bank will be coming.)
This session ended with comments on taxes and brokerage services.
1. to establish business contacts and arrange for individual follow-on meetings,
2. to put the sector round table into the context of the IEC,
3. to introduce and discuss CUBI '97, a follow-on of this meeting, in
Calgary in 1997.
The first session was the Construction Sector from 10:00-12:00, and while this session was going on the "Dream House '96" was officially opened for the duration of October 22-27, 1996 at the National Exhibition Centre.
At 14:30 the Agriculture Sector convened at the Embassy. This as with other sectors, opened with first the Canadians introducing themselves, followed by the Ukrainians. Following the introductions the Ukrainians were invited to speak on their needs wikthin this sector. Unfortunately the introductions took up most of the time, followed by the Ukrainian needs, that by 16:30, the closing time, there was little opportunity to meet with the Ukrainians on a one on one, or a group, meeting to discuss how they may be directly assisted.
Highlights of this session were the efforts of Stanley Malcolm, Director of Agriculture, Ukraine, of The Sussex Admiral Group in successfully farming and expanding into related areas in the Nikolaev area of southern Ukraine. The intent of Gary McInerney, Vice-President and General Manager of Commercial Alcohols Inc. of Brampton, Ontario to establish an alcohol plant using grain and corn . A description of the joys of visiting Canada, in particular, Saskatchewan farms and research establishments by Natalia Valilchenkop, of the MInistry Agriculture and Food of Ukraine.
The evening was taken up by a meeting of Eastern Bridge International Business Club Ukraine. the meeting was held at the Budapest Club as a Canadian reception. Champagne was served. Because of the layout of this club, the music, the many introductions and announcements, the purpose of networking was not readily achieved. The consensus was that this meeting was considered to be a waste of time.
The main factors in the energy discussions were the exploits of Uk-Ran Oil Corporation, with Ed Southern as Chairman, CEO, in developing a joint venture drilling for oil and the success of their efforts along with the need for the local refinaery to be improved and expanded to meet the coming oil flow. The exploits of Northland Power with Victor Pergat, Director Generall, UKraine, in a joint venture to develop electric power.
At 17:15 there was a bus tour of Kyiv.
At 19:45 the reception with the Honourable Minister Lloyd Axworthy was very well attended. The Minister spoke first, followed by the Ukrainian Minister of Foriegn Affairs, His Excellency Hennediy Udovenke. Both were very amusing. It was a good reception.
Mr. Lawrence Decore, Chairman CUBI, made a presentation on extending the impetus started by the current business mission through the CUBI '97 Seminar in Calgary, June 1997. Subsequent presentations, as prearranged, involved:
Northland Power's joint venture with Darnitsa power project, with James Temertej, President, followed by Mr. Victor Pegat, Director General, then by Mr. S. Kuzmenko, Deputy MInister of Energy and Electrification of Ukraine, and then Mr. O. Tomoshenko, Deputy Head of State Property Fund of Ukraine.
Here suggestions were made for simplification of company registrations, currently taking up to 6-7 months. A suggestion of an ombudsman was made to encourage and assist in clearing the way through the red tape, particularly where regulations are found to be contradictory. (Here, it was announced that a new Deputy Minister is to be appointed on Investments for the power sector.)
Ukraine Enterprise Corporation-Venture Capital Fund: 40 million dollar fund + 10 milion dollars put up by the Canadian Government for the development of medium size companies in Ukraine. A win-win endeavour. (Assistance is needed to bring the Accounting System more in line with Western accounting standards) It is expected that the funding being supplied will be 25% of the needed capitalization on a company basis. (It was recognized that the banking and accounting areas needed improvement.)
Commercial Alcohols-Joint Venture proposed in agriculture. The source of raw materials to be grain and corn, with the waste product to be available as a high protein stock feed. Gary McInervey, V.P. & G.M., spoke, while Natalie Valilchenko, Head of Foreign Economic Relations, Agriculture responded slightly negatively, saying a plant smaller than the 50,000 litres, as planned, is needed as there is not enough product available to spare for alcohol.
The offices of the Department of Foreign Affairs were not heated. Now, at the end of October, the meeting (above)of the IEC took place in a long narrow room, where with the number of people present it soon warmed up. However, lunch was served in a very large, almost cavernous room, decorated at one end with large bronze decore as a backdrop to staging at several levels, on which were a group of four Ukrainians in Cossack costumes sang Ukrainian songs to the accompaniment of an accordian. The food was a cold buffetpresented beautifully arranged on a high table with cold Canadian beer and soft dirinks. The difficulty was that the room was at 10oC. One of the serving girls in a scant costume was obviously shaking, and shortly, so were the guests.
The afternoon session followed the pattern of the morning, until the ministers returned and the signing cermonies took place. To quote Mr. Axworthy, "Important Canada-Ukraine initiates in the oil and gas and construction and building materials sectors underline thje success of this mission. Canadians and Ukrainians will benefit for years to come as a result of the investments announced today in Kyiv." The C$600 million figure amounts to just under 30%of all foreign investment Ukraine attracted during the first five years of independence, which totalled US $1.5 billion. It was a very successful business mission.
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