Malaysian investors get Ukraine invite

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Ihor Humennyi

KUALA LUMPUR: Ukraine, keen to consolidate bilateral commercial linkages with Malaysia, welcomes local businessmen to do business and invest in the former Soviet state, particularly in the oil and gas, energy, agriculture and aviation sectors.

Its ambassador to Malaysia, Ihor Humennyi said two-way trade between both countries would be expected to reach RM2.087 billion (about US$700 million) this year from RM1.49 billion in 2010, based on the impressive January-May performance where trade jumped 76.6 per cent from the same period last year.

For the first five months, bilateral trade rose to RM925.38 million, with Malaysian exports to Ukraine contributing RM496.94 million to overall trade while imports from that country amounted to RM428.44 million.

“In principle, economic relations between Ukraine and Malaysia are developing rather well this year with imports and exports having risen substantially,” he told Bernama in an interview.

Ukraine’s real gross domestic product (GDP) grew by 5.2 per cent in the first quarter of this year compared with 4.2 per cent in the same period last year.

Humennyi said Ukraine, with a population of 46 million people, was also the largest importer of Malaysian palm oil in central and eastern Europe, while main exports from Ukraine to Malaysia would be chemicals, fertiliser, iron and steel .

He said this year’s target would also surpass last year’s trade of RM1.49 billion (US$500 million).

However, he said the amount was relatively still low and that there should be a huge room for improvement, especially among Malaysians investing in Ukraine.

Humennyi lamented that Malaysian investments in his country were close to zero, “but hopefully there will be investments in some projects,” he said.

He based his optimism on Ukraine having invited Malaysia’s national oil company, Petroliam Nasional Bhd (Petronas) to form a joint venture with its national oil company to explore its deepwater oil and gas fields.

Previously, Ukraine had forged business ties with Petronas through third countries such as Kazakhstan, Uzbekistan and Turkmenistan where it supplied the company with equipment for oil and gas plants.

“We are talking about Petronas establishing its presence directly in Ukraine and (collaborating) with our national oil company in operating deepwater drilling in the Black Sea,” he said.

 

 

However, he said the proposal was still in the preliminary stage as Petronas would need to undertake more studies in areas such as the cost of drilling, which could reach US$200 million (RM596 million) per drill and the success rate, which could only be 50:50 before actual drilling could be considered.

To date, Ukraine’s oil and gas reserves are estimated at 2.3 billion barrels, with natural gas contributing 87 per cent of the total, accounting for 0.6 per cent of total world’s proven gas reserves and 0.2 per cent of oil reserves.

Humennyi said the country was also a producer of energy equipment such as turbines, generators and transformers.

“Malaysia can leverage on Ukraine’s expertise, especially in developing the Sarawak Corridor of Renewable Energy as well as in constructing other power plant in this country,” he said.

He invited Malaysian investors to tap the potentials of the agriculture and aviation sectors in Ukraine.

Humennyi said agriculture had always been an important economic sector in Ukraine, offering very promising opportunities.

“Regarded as the ‘bread basket’ of the former Soviet Union, the country accounts for 60 per cent of the world’s black soil – considered the best soil  for agriculture,” he said.

He said investing in agriculture would be a smart move as the global demand for food would increase rapidly in the next two decades, according to the United Nations’ Food and Agriculture Organisation.

Ukraine’s agricultural expertise lies in wheat and wheat products as well as sunflower oil widely used in Western Europe.

As for the aviation sector, he said the country had a well-developed aircraft building industry and was home to the world’s largest aircraft, the AN-225 ‘Mriya’ as well as the popular transport aircraft, the AN-124 ‘Ruslan’.

Humennyi also stressed the importance of setting up a business chamber to promote and facilitate the development of trade and investment between both countries.

“Setting up a chamber of commerce is important because it opens more opportunities to businessmen as it will enable them to obtain information about trade and investment opportunities in both countries,” he said. — Bernama