Business

Saturday July 28, 2012

Ukraine eyes stronger trade relationship with Malaysia

By PAUL GABRIEL
paulnews@thestar.com.my


FRESH from its success in co-hosting the Euro 2012 football tournament, Ukraine is setting its sights on Malaysia for a stronger trade relationship.

Topping the agenda is a visit by President Viktor Yanukovych which is expected to take place early next year.

This will be the maiden visit of a Ukrainian president to Malaysia. Tun Dr Mahathir Mohamad was the last Malaysian Prime Minister to visit Ukraine in 2003.

The republic's Ambassador to Malaysia Ihor Humennyi says President Yanukovych will be accompanied by a business entourage. Bilateral trade with Ukraine, Europe's second largest country with a population of 46 million, totalled about US$600mil (RM1.86bil) last year, up from RM1.49bil in 2010.

Ukraine is a land of wide, fertile agricultural plains, with large pockets of heavy industry in the east.

Chemicals, fertiliser, iron and steel are its main exports to Malaysia, with electronic items as the core imports. Ukraine is also Europe's second largest buyer of Malaysian palm oil.

Humennyi says although economic relations are developing with Malaysia with links in the chemical, steel and agricultural industries strengthening, there remains vast untapped potential.

“There are good perspectives for the implementation of the bilateral projects in shipbuilding and aviation, as well as in the energy sector. Ukraine is one of the very few countries that can design and manufacture not only its own satellites but also rocket launchers. Two Malaysian satellites “TiungSAT-1” and “MEASAT-1” were launched by Ukrainian rockets,'' he points out, citing the oil and gas, energy, agriculture and aviation sectors as the “trump cards” of his country.

At the 25th World Gas Conference (WGC2012) held in Kuala Lumpur in June, Ukraine's oil companies established contacts here and also held negotiations with Petronas. He says Ukraine has invited Petronas to form a joint venture with Ukraine's national oil company to explore deep water drilling in the Black Sea, and also the supply of LNG.

“We are talking about Petronas establishing its presence directly in Ukraine and (collaborating) with our national oil company,'' he adds.

Previously, Ukraine had forged business ties with Petronas but this was done through third countries such as Kazakhstan, Uzbekistan and Turkmenistan.

Ukraine's oil and gas reserves are estimated at 2.3 billion barrels, with natural gas contributing 87% of the total, accounting for 0.6% of total world proven gas reserves and 0.2% of oil reserves.

“Ukraine has a well-developed aircraft building industry and is home to the world's largest aircraft, the AN-225 Mriya as well as the popular transport aircraft, the AN-124 Ruslan,'' he adds.

Humennyi says Ukraine is also a capable producer of energy equipment such as turbines, generators and transformers and is working to supply Malaysia with these equipment. Ukraine's agricultural expertise lies in wheat, wheat products and sunflower oil.

“We produce about 50 million tonnes of grain annually and there is a great demand here in Malaysia.

“We are tops in meat products and processed food. From Malaysia, we are interested to buy fish,'' the envoy says, adding that Ukraine is also interested in timber from Sabah and Sarawak.

Humennyi also wants air links between Kiev and Kuala Lumpur. Only about 3,000 Ukrainians visit Malaysia each year and this is not enough. To pave the way for tourism growth, Humennyi says his government has offered visa exemption to Malaysian tourists and letters of invitation are no longer required.

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