NEWS RELEASES
BUSINESS DEALS IN KYIV STRENGTHEN CANADA-UKRAINE RELATIONS
January 28, 1999 (9:00 a.m. EST) No. 15
BUSINESS DEALS IN KYIV STRENGTHEN
CANADA-UKRAINE RELATIONS
International Trade Minister Sergio Marchi today witnessed the signing of 18 commercial agreements between
Canadian and Ukrainian businesses worth $163 million during a Canadian business development mission to
Ukraine.
"The number and value of the agreements signed today send a strong message that Canada and Ukraine can do
business," said Mr. Marchi. "It is only through a determined path of political and economic reform, however, that
Ukraine can realize its full potential as an economic partner with Canada and other nations."
Today's signings included five contracts worth $10 million, six memorandums of understanding valued at
$21 million, and seven letters of intent worth $132 million. These signings came in a number of sectors, including
agriculture, energy, construction and manufacturing. Nearly 150 Canadian businesses participated in the two-day
business mission to Ukraine.
The business development missions to Ukraine and to Poland from January 25 to 28 led to a total of 56 signings
worth $295 million to Canadian businesses. The missions coincided with the first official visit by Prime Minister
Chrétien to both countries.
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Backgrounders on the business deals and initiatives signed are attached.
For further information, media representatives may contact:
Leslie Swartman
Office of the Minister for International Trade
(613) 992-7332
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca
Backgrounder
LIST OF NEW BUSINESS INITIATIVES ANNOUNCED TODAY
IN KYIV, UKRAINE
4 Square Productions Ltd. of Regina, Saskatchewan, has signed a contract with Novvy Kanal of Kyiv to co-produce two TV documentaries, The Catacomb Church of Markova, which deals with the tragedy and triumph of
the Ukrainian Catholic Church in Canada, Ukraine and the world, and The Fatal Embrace: Ukrainians and Jews,
which explores the history of these two peoples. The total project value is $500 000 and the Canadian content value
is $300 000.
Aurora Pacific Consulting and Development Corporation of Vancouver, British Columbia, and Specialized
Quarry of Ivaniv have signed a contract to form a joint venture to establish Europe's largest abrasive garnet
producing plant. The garnets will be used in Ukraine and exported to Europe for sand paper, sand blasting, high-pressure water jet cutting, and water filtration. The total project value is $6 million with Canadian content value of
$3.2 million.
Central Canadian Structures of Winnipeg, Manitoba, has signed a memorandum of understanding with
Darnitsia Pharmaceutical Company of Kyiv to upgrade and develop Darnitsia's production facilities. The objective
is to improve the company's operating efficiency and increase its market share in the Ukrainian pharmaceutical
industry. The first phase of development is expected to be worth approximately $7.5 million with Canadian content
of $5.3 million.
Central Canadian Structures has also signed an agreement with Olvia Corporation of Dnepropetrovsk, Ukraine,
to supply three energy-efficient houses that utilize the latest Canadian building technology. The project is valued at
$1 million with a Canadian content value of $500 000.
CMS Company Limited of Vancouver, British Columbia, has signed a letter of intent to form a partnership with
Almeta Co. Ltd. of Odessa to export and distribute Canadian-made building materials such as doors, windows and
roofing materials, among others. The partnership will focus on establishing one-stop distribution centres in Odessa,
Kyiv and other centres to target the $3.7 billion new construction and renovation market in Ukraine. Projected sales
for the first year are estimated at $1 million in Canadian content.
Consumers Packaging of Toronto, Ontario, has signed a long-term contract with the MDMT Group of Kyiv to
form a joint venture to provide high-quality bottles for Persha Hildia, Ukraine's most popular vodka. The project is
valued at $5 million over three years, all of which is Canadian content.
Gemite Products Inc. of Mississauga, Ontario, has signed a memorandum of understanding to form a new joint
venture company that will manufacture and market Gemite's advanced construction and building materials and
technologies in Ukraine. The joint venture will be operational in Kyiv later this year and in other regions of Ukraine in
2000. The project is valued at $2 million over the next three years with over $1.5 million in Canadian content.
Geomat International of Montreal, Quebec, and the Main Administration for Geodesy, Cartography and
Cadastre at the Cabinet of Ministers of Ukraine have exchanged letters of intent for the development of a new
project for strengthening the Ukrainian information infrastructure for cartography and cadastre. The project is valued
at $7 million with $4.2 million in Canadian content.
McCain Foods Ltd. of Florenceville, New Brunswick, a diversified frozen food company that produces a wide
range of products from vegetables to juices to meat-based entrées, has undertaken a major feasibility study in
Ukraine to identify possible investment opportunities in one or more of these fields of activities. One such
opportunity is a project in Chernihiv oblast. Today, McCain Foods has signed a preliminary protocol with
Interagrosistema to complete that company's project to build a plant for the production of French fries.
Northland Power Inc. of Toronto, Ontario, and its Ukrainian partners, the State Property Fund and Darnitsia
Workers Collective, have agreed to sign with the European Bank for Reconstruction and Development the financial
term sheet for a $240 million project to rehabilitate the Darnitsia power plant. The two-year reconstruction project
will include the installation of a modern 140 MW combustion turbine and heat-recovery steam generator to repower
the existing plant, reducing pollution emissions, increasing efficiency and doubling peak-mode electricity output.
The Canadian content value of this project is $35 million.
Pharmascience Inc. of Montreal, Quebec, has granted a licence to its subsidiary in Ukraine,
Pharmascience-Ukraine. The licence is for the production of the anti-tuberculosis drug ISONIAZID syrup, which is
very much needed for the treatment of children's tuberculosis. The Ukrainian company will implement a technology
transfer and will organize production of the drug at one of the Ukrainian pharmaceutical plants in 1999-2000. The
value of the agreement is $474 000 and the Canadian content value is $453 000.
The Province of New Brunswick and the Chernihiv oblast have signed a memorandum of understanding
regarding transfer of potato technology. The memorandum outlines an agreement to co-operate in several
technology transfer areas such as variety evaluation, production, storage and agricultural extension services.
Ronsco Inc. of Montreal, Quebec, has signed an agreement to enter into a joint venture with Dneprovsky Iron
and Steel Works to upgrade their plant facility in Dnieprodzerzhinsk. Ronsco is the largest supplier of freight car
and locomotive components in Canada. The deal is valued at about $1.1 million with Canadian content of
$525 000.
Saskatchewan Trade and Export Partnership Inc. (STEP) of Regina, Saskatchewan, has signed a
memorandum of understanding with the Ukrainian Ministry of Agronomics complex to pursue significant
improvements in Ukraine's beef and forage production and practices. The project is valued at $6 million with $3.2
million in Canadian content over four years.
SNC-Lavalin of Montreal, Quebec, and Teron International Building Technologies and Katrides American
Trading of Ottawa, Ontario, have signed a memorandum of understanding and protocol of intent with the L'viv
International Airport Authority to implement the modernization and reconstruction of L'viv's airport. The project is
valued at $91.2 million with $30.4 million of Canadian content.
SNC-Lavalin of Montreal, Quebec, and Teron International Building Technologies and Katrides American
Trading of Ottawa, Ontario, have signed a protocol of intent with the City of L'viv to implement the modernization
and reconstruction of the L'viv City Centre. The project is valued at $228 million with $60 million of Canadian
content.
SNC-Lavalin of Montreal, Quebec, and Teron International Building Technologies of Ottawa, Ontario,
jointly with Katrides American Trading of Ottawa, are signing a memorandum of understanding with Velta
Insurance and Katrides American Trading of Kyiv to develop two deluxe apartment buildings in the downtown area.
The buildings have historic facades that will be restored. The project value is estimated at $22 million with
$6 million of Canadian content.
* All three SNC-Lavalin deals listed above are to be budgeted and are subject to the development in financing of
the project.
The Ukraine Enterprise Corporation of Toronto, Ontario, has signed a memorandum of understanding
concerning the expansion of their coal recovery business. The first section relates to increasing their investment in
their existing Kalininskaya plant to $5.3 million to finance capital improvements. This plant commenced production
in April 1998 and has 80 employees. The memorandum of understanding also outlines plans to develop and
finance as many as 10 further coal recovery projects with a total value of up to $45 million. The Ukraine Enterprise
Corporation is a Canadian company formed to invest in companies in Ukraine.
Announceables
Canada-Ukraine Business Initiative (CUBI) Chamber announces that with the support of the Governments of
Ukraine and Canada, planning is proceeding on CUBI II, a trade and investment program to be held in Ukraine.
Subject to finalizing details on timing, financing and venues, the program will work on attracting Canadian
companies to Ukraine and matching them with Ukrainian companies, especially in the growing entrepreneurial
sectors. Focus will be on agriculture, construction and energy, with other sectors added depending on bilateral
interest.
Northern Telecom of Mississauga, Ontario, has a major project in Ukraine to develop a multimedia corporate
network for the National Bank of Ukraine (NBU). The Nortel network connects all regional departments of the NBU
and satisfies all requirements for voice and data communications between all NBU sites. The network provides
secure and high-speed communications and enables NBU to make significant savings on domestic and long-distance telephone traffic. The existing NBU network is the first step in the creation of an advanced multimedia
telecommunications network for the Ukrainian banking and finance community.
Solanum PEI of Charlottetown, Prince Edward Island, and Monsanto Corporation (Ukraine) have announced a
new potato technology partnership for Eastern Europe. The partnership combines the leading-edge biotechnology
capacity of Monsanto with the potato production systems technology of Prince Edward Island, the second largest
seed potato exporter in the world. The partnership is valued at more than $5 million, which will be invested over the
next two years.
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