Avtovaz to stop making Lada Riva AKA the Semyorka

Russia’s biggest car-maker plans to stop making the classic Lada Riva, after demand fell by 76 percent compared to last year.
“It’s all going according to plan,” Avtovaz communications director Igor Burenkov was quoted as saying. “Demand for the classics fell significantly. It is time to say goodbye.”
The car-maker did not say when the last Lada 2107 will roll off the conveyor belt, but added that newer models Lada Kalina, Lada Priora and Lada Granta had become more popular.
The Izhavto plant in Udmurtia will be reorganized to make the newer models instead of the Riva. Work on taking it off the production line will begin next week.
Lada Riva was exported into Western European markets, and became a target of numerous jokes for its poor quality.

Ukraine Oligarch Pulls Development Plan After Protests

KIEV, Ukraine -- Ukraine's richest man, Rinat Akhmetov, has been forced to scrap plans to build a glitzy business centre at a historic tourist site in Kiev after a public outcry in which he was accused of "spitting on the soul" of the capital.
Protests by several hundred people brought a rare dose of bad publicity for the 45-year-old steel and coal tycoon who normally shuns the public limelight but is one of the most influential political players in the ex-Soviet republic.

Several hundred protesters, alerted by the social networking site Facebook, turned out to rally on Wednesday night against plans by the billionaire's System Capital Management (SCM) company to build a multi-storey business centre on "Andriyivsky Descent", a picturesque cobbled street and one of Ukraine's best-known tourist spots.

But the protests came too late to stop bulldozers from destroying at least one 19th century building and wrecking another built 40 years ago in mock 19th century style, cultural officials said.

Chanting "(Put) Akhmetov down a mine shaft !" and "Get Akhmetov out of town", several protesters dumped building material near SCM headquarters to signify their disgust.

"They have come here and brutally turned things into a pig-sty," said Olexander Serhiyenko, a member of a Kiev civic organization.

"They have spat on the soul of Kiev with their 'Andriyivsky Plaza'", he said.

"The ESTA company (a subsidiary of SCM), having examined the opinions of Kiev people, decided back in March to cancel the construction of the business centre," said Akhmetov in a statement issued by his press service.

"Unfortunately, after this decision, there were two bad errors. Firstly, the actions of the company were not coordinated. Secondly, they were not explained to the public," Akhmetov said.

Akhmetov, whose net worth Forbes puts at $16 billion, added:

"I promise that SCM will return the original look to the destroyed facades. We will also help the town restore Andriyivsky Descent."

Akhmetov, whose power base is in the eastern city of Donetsk, made his fortune in steel and coal in the 1990s after a turbulent period in post-Soviet history marked by gangland-style shootings and bombings.
A big soccer enthusiast, he is the owner of Shakhtar Donetsk, one of Ukraine's most successful football clubs, and also has interests in construction, banking, media and property.

According to British media, he bought a penthouse at One Hyde Park in London a year ago for a price of about $220 million.

KING-MAKER

As a financial backer of President Viktor Yanukovich's election campaign in 2009 he is seen as a 'king-maker' in politics, but he is notoriously publicity-shy and rarely meets journalists.

In his power base of Donetsk he is revered as a benefactor and his critics say the protests in Kiev have clearly shaken him.

"They called the Berkut (Ukrainian special forces) to their headquarters as soon as they heard about the protest. They were afraid of a peaceful protest. But without this protest they would have just gone ahead with their plans," said Anna Putova, an archivist at Ukraine's national archives.

"I don't believe a word of his promises. I don't believe him and I don't think anyone in Kiev believes him," she said.

Andriyivsky Descent, a half-mile winding drop down from the administrative centre of Kiev to a riverside quarter, is a top tourist spot in season, with chic restaurants, street-side arts and crafts studios and souvenir stalls.

With Ukraine co-hosting the Euro-2012 soccer championships in June, the street would normally be heaving with traders preparing for a busy season ahead.

But eve-of-Euro reconstruction work to install new drainage and upgrade the quarter's infrastructure has reduced the cobbled street to a sea of building sand, bricks, mud and heavy machinery.

Most traders are sitting things out, hoping city authorities will complete the work by the target day of May 27

National Bank of Ukraine Invests In IBM's Smarter Computing Approach To IT

KIEV, Ukraine -- IBM announced today that the National Bank of Ukraine has adopted IBM's smarter computing approach to IT to help simplify the management and protection of billions of financial records across Ukraine.
As part of the agreement, IBM will help the financial institution store, back up and process more than 16 terabytes (TB) of information.

As the Ukrainian financial services industry expands, the need for fast, secure and reliable banking is growing ever more critical.

Currently the National Bank of Ukraine is providing financial guidance to more than 176 banks, representing more than 125 million personal and corporate financial accounts.

To address this rapid growth and the increasing need to provide fluid, uninterrupted transaction flow throughout the country's entire banking system, the National Bank of Ukraine decided to start at the heart of the matter, where the data resides – storage.

"We realized that if we wanted to dramatically reduce the potential impact of an IT disaster, while fulfilling international banking regulations, keeping our clients happy and our expenses under control, we had to start innovating at the heart of the process – where the financial data was being stored," said Oleksii Bilash, head of the IT department at the National Bank of Ukraine.

"That is why we opted for a system capable to handle the growing flow of incoming data in a fast, reliable and secure way. The IBM solution outperformed other offerings in four key criteria: performance, fault tolerance, quick recovery and total cost of ownership."

Under the agreement signed let year, IBM and its Business Partner Integrity Vision LLC installed 16 TB of new storage disk space and server virtualization.

A comprehensive storage platform based on two connected IBM System Storage DS8800 systems was established.

IBM System Storage DS8800 capabilities, such as the IBM System Storage Easy Tier technology, help optimize system efficiency by automatically placing data at the most strategic storage level.

For example, more commonly used data is automatically and dynamically placed on solid state drives (SSD) for fast access, while less frequently accessed data is placed on more cost-effective storage systems – all without disruption to applications.
With the new solution in place, performance has improved, costs have lowered, and the bank's window for full backups has decreased twofold.

"IBM relies on the best teams, deep industry insight and first-hand experience in implementing financial solutions and improving IT security and compliance for organizations worldwide," said Penko Dinev, Country General Manager, IBM Ukraine.

"The new storage platform for the National Bank of Ukraine is scalable and can easily accommodate the bank's future needs in terms of data storage or implementing new analytical approaches that will help the bank turn the stored data into financial insight."

The agreement between IBM and The National Bank of Ukraine is the latest in a string of smarter computing adoptions from financial institutions across Central and Eastern Europe (CEE), the Middle East and Africa, as banks look to improve operational efficiency and benefit from recent advances in enterprise and cloud technologies.

Eutelsat Cuts Satellite Deal With Ukraine, Buys Access To Brazilian Slot

Even as it struggles to resolve orbital-access issues at 26 degrees east longitude with Saudi Arabia and Iran, satellite fleet operator Eutelsat has reached an agreement with Ukraine to develop the 48 degrees east slot and is confident of finding an equitable compromise on a separate Iranian satellite system at 34 degrees east, Eutelsat Chief Executive Michel de Rosen said.
The Paris-based operator is expanding westward as well.

Eutelsat has won an auction sponsored by Brazil’s Anatel telecommunications authority for the rights to a Brazilian orbital position.

Industry officials said the Brazilian slot is at 65 degrees west and that Eutelsat plans to develop it for Ka-band broadband applications.

In a briefing with reporters March 14 here at the Satellite 2012 conference, de Rosen declined to discuss the auction beyond saying Eutelsat won it for “quite an attractive price.”

“We are not ready, today, to tell you how we plan to use this,” de Rosen said of the Brazilian slot.

Eutelsat, which is the world’s third-biggest satellite fleet operator measured by revenue, had been negotiating with the government of Ukraine over access to frequencies around 36 degrees east.

Ukraine had proposed to put its first telecommunications satellite, called Lybid, near that position.

Eutelsat protested that its two spacecraft already at 36 degrees east had regulatory priority.

Ukraine’s national space agency, which is managing the Lybid project, was forced to suspend its $254 million contract with MDA Corp. of Canada for the satellite’s development.

MDA Corp. officials told investors Feb. 28 that the Lybid contract, which was financed in part by Canada’s export-credit agency, Export Development Canada, is now back on track following a resolution of the frequency coordination issues.

De Rosen said Eutelsat and Ukraine will cooperate in the development of the 48 degrees east orbital position.

Eutelsat has two spacecraft at that slot now, one in inclined orbit and nearing retirement, the other a small satellite that suffered a partial failure of its power system and has never generated much revenue for Eutelsat.
We learned one day that Ukraine had this satellite program and that they had underestimated that the program might cause problems for us at 36 degrees,” de Rosen said.

“It could have become a lose-lose situation. We have now discussed with them and it will be a win-win situation.”

Eutelsat Chief Commercial Officer Andrew Wallace said during the briefing that the compromise with Ukraine “will ensure that what we do with Russia at 36 degrees will be clear for Russia and for the large Russian-speaking population of Ukraine, and it gives extra momentum to the development of 48 degrees.”

Eutelsat’s issue with Iran over the 34 degrees east slot, meanwhile, stems from the recent decision by international frequency regulators attending the World Radiocommunication Conference (WRC) to reinstate Iran’s Zohreh-1 satellite system into a global registry of approved satellite networks.

In what several WRC delegates admitted was a contradiction, the recently concluded meeting also endorsed an earlier decision by the International Telecommunication Union (ITU) to expel Zohreh-1 from the list because it had missed deadlines for starting service.

If Iran places a Zohreh-1 satellite at its designed slot at 34 degrees east, it will be close enough to a Eutelsat spacecraft to force the two sides into close coordination discussions to avoid frequency interference.

“We believe that the WRC decision was more a political position than one based on technical aspects,” de Rosen said.

“We will now need the help of the ITU to make sure that the presence of an Iranian satellite there does not cause interference. I believe that, with an enormous amount of goodwill on all sides, we can achieve this result.”

SABMiller brewing more beer in Ukraine as finances improve

Miller Brands Ukraine, a large domestic beer producer and subsidiary of international brewing giant SABMiller, sharply cut its losses in Ukraine last year while boosting output by 51.4 percent to 16.4 million deciliters of beer.

Citing figures provided by the National Securities and Stock Market Commission, Interfax-Ukraine reported that the Donetsk-based brewer’s net loss fell by 35.7 percent in 2011 to Hr 120.9 million ($15 million).

The news comes ahead of a planned transfer of SABMiller's Ukrainian and Russian assets to Turkish beer maker Anadolu Efes in exchange for a 24 percent stake in the latter.

The strategic alliance, to be completed in the near future, will focus on synergies in the East European, Turkish, and Central Asian markets.

SABMiller jumped into Ukraine’s highly competitive beer market a few years ago, following in the footsteps of other multinational beer groups who had invested into the nation’s top Soviet-built breweries.

In 2008, it acquired a nearly 100 percent stake in the Donetsk-based brewing business, earlier known as Sarmat and owned by Ukraine’s richest man, Rinat Akhmetov.

The company sells beer under the Sarmat, Zhygulivske, Zolotaya Bochka, Velkopopovicky Kozel and Amsterdam Mariner brands.

SABMiller accounts for less than 5 percent of Ukraine's $4 billion beer market, which is dominated by multinational brewing companies, such as Carlsberg and SUNInBev.

Consumer rights watchdog targets McDonald’s

A consumer rights watchdog wants McDonald’s to list the contents of its hamburgers and it has gone to court to see that the fast-food chain does so.
The Consumer Rights Protection Society filed a lawsuit against the fast-food empire demanding it disclose all its ingredients information to customers, especially since it enjoys a lower tax rate applicable to stores and not the usual tax for restaurants.
“The McDonald’s restaurant chain deliberately violates the Russian consumer rights legislation, profiting twice from the privileged situation created by Moscow’s Arbitration Court decision,” an announcement on the organization’s website read.
McDonald’s milkshakes shouldn’t mention milk in their name, since a considerable amount of vegetable oil was contained in the product, a CRPS-backed investigation claimed.
If the court finds CRPS’ claims justified, the fast food chain will have to provide full information on ingredients, product weight and the standards it was made in accordance with.
And the list of requirement should be the same as for regular store-bought food, since McDonald’s has been “recognized as a grocery chain” by courts, the watchdog claims.
After an arbitration court’s ruling from July 2011, some of McDonald’s products are being sold as regular food commodities, which allows the company to pay VAT at the rate of 10 percent. The regular VAT rate for restaurants is 18 percent.
The McDonald’s says the lower tax rate applies only to certain products listed in respective government documents, according to a press-release published on its official website.
However, there is little chance that the corporation will lose the case. The tax scheme is absolutely legal – it is not widely used only because smaller food chains don’t have the resources to implement it given the modest revenue it will bring given their turnover, Yelena Perepelitsina, director general at consulting company Restcon, told Kommersant. And lawyer Alina Toporina from law firm Yukov, Khrenov i Partnyory believes that CRPS might have difficulties proving that one the world’s most famous chains operates entirely as a grocery store.
Back in 2007, the CRPS tried to force McDonald’s to change its take-outs scheme but courts took the side of the company.
McDonald’s representatives said they didn’t receive any notification of the lawsuit and it was also absent in the court’s database, according to an official statement sent to The Moscow News. A staff member of the Tverskoi court, where the CRPS said the lawsuit had been submitted, confirmed to Vedomosti that the document has been filed.
The company also added that information on their products’ energy and nutrition value is provided and only high quality ingredients are used. And the milkshakes frowned upon by the CRPS are produced according to a technology certified by the Russian branch of Europe’s biggest milk product manufacturer Ehrmann.

Billionaire Mikhail Prokhorov

Billionaire Mikhail Prokhorov is close to getting into the presidential race after announcing that his campaign has gathered the necessary 2 million signatures to register with the Central Election Commission. Yet in spite of getting more campaign donations than Putin, his political prospects remain unclear.
The lanky businessman towered over supporters and journalists who crowded into his reception office Friday hoping for a chance to talk, but some people came away hoping for more certainty – did the oligarch even stand a chance against the far more popular Prime Minister Vladimir Putin, who has effectively been running the country since 2000?
“Prokhorov doesn’t have enough faith in himself,” Adam Kungayev, a pensioner who had signed up to support of Prokhorov’s campaign, told The Moscow News. “If he did, he could win the presidential race.”
Just 3 percent of respondents said they would vote for Prokhorov in a presidential election according to the latest Levada poll released Jan. 12, where Putin led with 42 percent.
But Prokhorov – who has a predominantly business-oriented middle-class support base and has even called for a longer working week in the past – can boast one area where he’s well ahead of Putin: Campaign donations.
In that arena, the billionaire beats the Prime Minister four to one – with over 400 million rubles ($13.3 million) collected against Putin’s 102.5 million ($3.4 million), Vedomosti reported Friday. If Prokhorov were campaigning in the U.S., that would give him a key edge. But in Russia, where state-owned television has been accused of leaning toward coverage of Putin and his United Russia party, that’s just not the case.
Prokhorov’s campaign managers dismissed the achievement. “That’s an exceedingly small sum for a campaign,” Anton Krasovsky, the TV anchor who heads Prokhorov’s campaign staff, said during Friday’s meeting.
Prokhorov was ousted as leader of the pro-business Right Cause party by pro-Kremlin forces in September, after just three months in the job, and is now determined to forge a successful party for Russia’s burgeoning middle class. Prokhorov, who accused other opposition leaders of being longtime “Kremlin agents” in a Monday article for RBC Daily, pledged to create an independent party when announcing his presidential bid on Dec. 12.
He may have some help from longtime Putin ally and former Finance Minister Alexei Kudrin, who posted on his Twitter page Friday that he was holding “consultations on joining democratic and liberal forces and creating a new party.”
Prokhorov’s staff confirmed that talks with Kudrin were taking place.“Especially since the raid on Right Cause, it is crucial to create a party that’s not run from Staraya Ploshchad,” Krasovsky said, referring to the address of the presidential administration and underlining the need for full independence
But so far Prokhorov, who is widely seen as having the Kremlin’s blessing to run, has avoided open criticism of his opponent, Vladimir Putin.
“I think the slogan ‘Fire Putin’ is too radical,” Prokhorov told Radio Liberty on Friday.
Last week, Prokhorov called for evolution rather revolution in a column in The Guardian. Commenting that the age of managed democracy was “over,” he vowed to make free elections a priority.
To accusers who claim that his campaign is a Kremlin project, Prokhorov cheekily replied that that the Kremlin is his project instead. “I believe I have two opponents, Putin and [Communist Party head Gennady] Zyuganov. I will fight for second place – and for a second round of elections,” he was quoted by Radio Liberty as saying Friday.
Asked about the negotiations with Kudrin, and Kudrin’s de facto status as a mediator between the government and the opposition, Krasovsky, Prokhorov’s campaign manager, suggested that Kudrin’s connections could only be an asset.
“Why should [Kudrin’s closeness to Putin] be a bad thing? I’m for continuity,” Krasovsky said.

Irish bank foiled in attempt to recoup Ukraina mall for debt

Kyiv’s lucrative Ukraina shopping mall is on the verge of forever falling out of the reach of foreign shareholders following a court ruling on Dec. 23 that could render it bankrupt.

An Irish bank’s attempt to collect on debts by taking control of Kyiv’s landmark Ukraina shopping mall is being frustrated at every turn by a mysterious company whose representatives evidently wield strong influence in Ukraine.

On Dec. 23, a Kyiv court granted a $45.2 million claim filed by a British Virign Islands-registered firm against the property, putting the shopping mall on the verge of bankruptcy.

The ruling was just the latest move in a grueling battle over control of the 45,000 square-meter property.

One player is the Irish Bank Resolution Corporation, a state-owned Irish financial institution which had lent money with the mall used as collateral. Some say that another group involved is Irish citizen Sean Quinn and his family, the former beneficiary owners of the estimated $50 million shopping center, who seem to be attempting to halt the transfer of properties to the lender.

Their legal duel is being fought in Ukraine’s notoriously corrupt judicial system, among other places.

Quinn and his family had borrowed heavily from IBRC – formerly known as Anglo Irish Bank – to amass a global business empire that included concrete factories, hotels, wind farms and the Ukraina department store, as well as other international properties.

Just under four years ago, Forbes magazine ranked Quinn as Ireland’s richest man with a fortune estimated at $6 billion. But his riches dissipated in the wake of the 2009 global economic recession.

And when Quinn’s conglomerate collapsed, his banker, IBRC, began collecting what remained of his assets.

Yet IBRC’s global fishing expedition has largely come up short in trying to recover Quinn’s $675 million worth of far-flung properties in India, Russia, Cyprus and Ukraine.

Quinn’s bankers suspect he and his family are still in control of these assets and are keeping them beyond their reach, including the Ukraina shopping mall.

Altogether, IBRC is trying to recoup $4 billion in alleged losses from Quinn Group, now in bankruptcy receivership, the holding company once controlled by Quinn and his family.

On Jan. 10 a Northern Ireland court denied Quinn's recent bankruptcy application.

Thus far, it appears IBRC has the weaker position, at least in its attempt to seize and access the estimated $10 million annual rent roll of the Kyiv property.


Just days before the New Year, Kyiv Commercial Court Judge Maria Litvinova granted a $42.5 million claim against Ukraina by a mysterious company named Lyndhurst Development Trading, which is based in the British Virgin Islands,

The amount is remarkably close to the estimated market value of Ukraina, which was built in 1963 and refurbished in 2003.


The shopping mall has more than 50 shops and an entertainment complex that includes bowling, a nightclub, cafes and movie theaters.

IBRC called the ruling “legalized robbery” and an unprecedented “cynical deprivation of property.”

A spokeswoman for Quinn Group denied any involvement in the dispute, which was even raised during talks between President Viktor Yanukovych and Irish Prime Minister Enda Kenny when the two met in Warsaw on Sept. 29.

However, The Irish Times reported that Quinn’s 30-year old daughter, Aoife, has said in an affidavit that the family is seeking to protect its international properties from being seized by IBRC and that the family disputes the bank’s right to the properties.

Since April, Ukraina’s former Quinn-backed management launched at least seven court cases in Kyiv courts, all of which have successfully thwarted IBRC from seizing the shopping mall. The mortgage loan’s validity is in dispute.

The 92.75 percent shares in Ukraina that belong to a Quinn Group subsidiary in Sweden have been frozen, and successive court injunctions have delayed the installment of a new company director, amid additional litigation.

To add a bizarre twist to an already complicated court fight in Ukraine, the shopping mall was represented in the Dec. 23 hearing by Larysa Yanez Puga, the director who had been ousted earlier by a newly appointed supervisory board.

The newly appointed director, Rostyslav Levinzon, was barred from participating in the legal proceeding.

In addition, the ousted supervisory board members -- on which Sean Sr. and Peter Quinn sat – miraculously reinstated Puga as director on Dec. 19 with the government registrar. Peter Quinn’s signature, as head of the former supervisory board appears in the registration file, a lawyer with Magisters, which is representing the Irish bank, told the Kyiv Post.

IBRC now expects the Quinn-backed manager of the Ukraina shopping mile to file a bankruptcy application that would deny the state-owned financial institution money owed to it.

The Irish bank’s efforts to claim and manage other foreign properties that formerly belonged to the Quinn family have also been met with stiff resistance.



The scope of the effort involves a portfolio that stretches over 70 companies in 14 countries. IBRC has so far failed to gain control of a $5 million site for a hotel in India, according to a recent news report. A court injunction there blocked the bank and the company behind the move is based in the United Arab Emirates, where registered corporate directors are kept confidential.

In another strikingly similar scenario, the $180 million Kutuzoff Tower in Moscow has also been kept out of the hands of IBRC. It has an estimated rent roll of $19 million. Courts in Moscow recently recognized a debt claim worth $100 million against Finansstroy, the company that operates Kutuzoff. The company behind the debt claim is registered in Belize.

The Irish Times recently uncovered an apparent link between the Belize and British Virgin Islands companies with Quinn’s nephew and son-in-law.
“We have no idea who the brain is,” Robert Dix, director of Quinn Holdings, Sweden told the New York Times.

His company is the nearly 93 percent shareholder in Ukraina. It was established by Quinn in order to minimize taxes and enable his five adult children to control his global portfolio. “But it has to be somebody very clever because it’s very consistent,” Dix told the newspaper.

After the court hearing in Ukraine on Dec. 23, IBRC swiftly moved to counter-attack. The High Court in Belfast has barred the debt claim against the Ukraina shopping mall and Kutuzoff Tower in Moscow. IBRC also secured mirror orders from the courts in the British Virgin Islands and Belize, a person with knowledge of the case said.

The Irish bank has also launched a public campaign and has called on Prime Minister Mykola Azarov to look into the situation.

According to The Irish Times, the court injunctions prohibit the Belize and British Virgin Island offshore companies from spending any money remitted to them as a result of the loan agreements.

IBRC has also threatened to disclose evidence of fraud as part of its efforts to seize the Kyiv and Moscow properties. The bank has already secured a court order in Belize to uncover the beneficiary owners of the company there and is seeking a similar order in the British Virgin Islands

Ukraine Asks For $9 Billion Gas Discount From Russia To Form Joint Transit Consortium

NOVO-OGARYOVO, Russia -- Kiev is seeking a $9 billion annual gas discount to reach agreement with Moscow on operating the Ukrainian gas transportation system, Russian gas export monopoly Gazprom CEO Alexei Miller said on Friday.
At their ongoing gas price talks, Moscow and Kiev have been recently discussing the possibility of creating a joint venture to operate the Ukrainian gas transportation system, a core transit route for Russian natural gas supplies to Europe.

"Our Ukrainian counterparts raised the question of a discount for gas prices during the talks. If we calculate a volume of 40 billion cubic meters, the volume which Ukraine has to buy as part of the terms of the current contract, the discount may be about $9 billion annually," Miller told Prime Minister Vladimir Putin.

Ukraine has long been seeking to alter the terms of the 2009 gas deal it signed with Russia.

The deal ties the price of gas to oil prices, which have risen strongly since 2009, boosting Ukraine's gas bill. Kiev insists on reducing both the price and the volume of gas imports.

Miller also said Ukraine estimated the value of its gas transportation system at $20 billion.

"Our Ukrainian friends mentioned the that they value their gas transportation system at $20 billion. It is a big sum taking into account that we will have to spend large amounts on its modernization," Gazprom CEO said, adding that the upgrade might cost from two to eight billion euros.

Putin told Miller the talks to form the consortium should be continued as gas supplies through the Ukrainian gas transportation system will be in demand amid rising gas consumption in Europe.

Moscow initiated the South Stream gas pipeline project to diversify Russian gas routes away from transit countries such as Ukraine.

Russia plans to launch South Stream, intended to carry Russian natural gas to Europe along the Black Sea bed, in 2015.

The pipeline will transport up to 63 billion cubic meters of gas to central and southern Europe.

Putin also ordered faster construction of the pipeline and the start of its underwater section by the end of 2012, not in 2013 as previously planned.

Gazprom: No New Year's Gifts For Ukraine

BRUSSELS, Belgium -- Ukraine has long been seeking to alter the terms of the 2009 gas deal it signed with Russia.

The deal ties the price of gas to oil prices, which have risen strongly since 2009, boosting Ukraine's gas bill.

The contract says Ukraine must import no less than 33 billion cubic metres of gas from Russia, but Kiev is insisting on reducing both the price and the volume of gas imports.

Ukrainian Premier Mykola Azarov has stated that Kiev is ready to pay $400 per 1,000 cubic metres of gas if it fails to agree with Moscow on better terms for gas supplies.

"If we have to pay $400 for gas, we will pay it – we have no other choice," Azarov told reporters in Kiev on 13 December.

The government cannot delay the drafting of the 2012 national budget any longer, because it has to be adopted by the New Year, he said.

Azarov added that Ukraine-Russia negotiations had been going on in Moscow for two days.

Gazprom CEO Alexei Miller announced earlier last week, however, that "no New Year's presents" should be expected in bilateral talks on the reduction of the price for Russian natural gas.

Kommersant reported on 13 December that Gazprom might lower the gas price for Ukraine to $210-220 per 1,000 cubic metres if Kiev sold part of its gas transportation system to Moscow.

A similar scheme was adopted by the gas monopolist in early December, when it announced that it took control of Beltransgaz as part of a revised energy deal with Belarus.

The Ukraine- Russia deal would exclude European participation.

Miller met Ukrainian Energy Minister Yury Boiko on 12 December, Gazprom said in a statement.

Joint control of the transit pipelines, which carry Russian gas to Europe through the territory of the former Soviet republic, is seen as a way to preclude their use as a bargaining chip in price conflicts between Russia and Ukraine, which depends on Russia for almost all of its gas.

Direct European participation in a pipeline deal had appeared possible.

Azarov said earlier that they had discussed a 40-40 division of control between Russia and Ukraine, with a European entity as a third party.

Russia annually pumps around 100 billion cubic metres of gas to European countries via Ukraine, which makes up 80% of its total gas supplies to Europe.

Meanwhile, Naftogaz Deputy CEO Vadym Chuprun was quoted as saying by the press that Ukraine needs guarantees from Russia and the EU regarding gas transit across Ukrainian territory.

"It is impossible to preserve and maintain our gas transport system without Russian gas. Our national property - Ukraine's gas transport system - must be preserved, so it needs guaranteed volumes of gas. We need guarantees from Russia and from the European Union," Chuprun said, adding that it was possible to use the Ukrainian gas transport system in full with the trilateral participation of Ukraine, Russia and Europe.

"It can be used only at the trilateral level, with Russia being a supplier, Ukraine a transit country, and the European Union as a consumer, on such a solid basis," Chuprun said.

He added that the construction of gas pipelines bypassing Ukraine - Nord Stream and South Stream - posed a direct threat to Ukraine's transit potential.

"We are surprised that European officials have not responded to [the construction of South Stream or Nord Stream. And silence is a sign of consent. This is a serious signal to Ukraine. This is a direct threat to Ukraine's gas-transport system."

Chuprun said that the Ukrainian gas transport system had a unique potential and that it was economically more profitable than the construction of pipelines bypassing Ukraine.

"The cost of [the construction of ] South Stream is $27 billion. For the sake of momentary gain, in order to get lower gas prices, certain EU countries forget that in five years they will have to pay for this," he concluded.

Weapons exports up by $1 billion

Russia’s weapons export via the state Rosoboronexport enterprise grew by about $1 billion to reach $9.7 billion,citing Viktor Komardin, Rosoboronexport representative at the Lima-2011 weapons expo in Malaysia. He added that last year Rosoboronexport signed contracts worth $9.5 billion and “this year we will sign more.” He added that the enterprise’s portfolio of orders amounted to $36 billion.

The American who makes cheese in a Russian village

What makes an entrepreneur?

ay Close, an American living in a small village near Moscow

Up at 5am to milk his cows, battling bureaucracy by day and making late deliveries by night - becoming a cheese-maker in Russia has been "hard, hard work" for Jay Close.

The 48-year-old New York-born chef began his operation 18 months ago, as part of a move to establish a rural life with his new wife Valentina, 25, in Moshnitsy, a village an hour's drive from the capital, Moscow.

Jay was inspired to try making cheese after visiting a cheese-maker in Holland during their honeymoon.

But what began as an experiment has fast become a business, with an estimated turnover of 30,000 euros (US$40,300, £25,700) in 2011.

Jay started with one cow. Now he has five plus eight goats, buys extra milk from nearby farmers and employs a worker from Tajikistan.

He began making one to two kilogrammes of cheese a day, but can now make up to 30 - and 30 different varieties.

The operation has taken over the entire downstairs of the farmhouse he built himself. "I'm making cheese in my living room and my kitchen," he says.

On top of covering the couple's living costs and debt repayments, the business is delivering about US$300 a month, which they are reinvesting in materials for a separate cheese-making building.

Jay also now sells to restaurants in the capital, using connections built during many years working in their kitchens.

In addition, a recommendation by a French tennis coach he met in one restaurant has delivered a market for about two-thirds of his output, via an organisation called Lavka Lavka, which delivers high-end farm produce directly to a network of individual customers.

Lavka Lavka also helped to find four keen potential buyers who between them stumped up 3,300 euros for equipment to enable Jay to scale up production.

"Cheese futures," he jokes, adding that most of the money has now been repaid - in cheese.

The rest of the business, and the house itself, was funded from Jay's savings, some inheritance, and the proceeds from selling a houseboat he owned on the Seine River in Paris.

Jay lived in countries as diverse as Mexico, Australia, Papua New Guinea and Fiji as a child, and speaks English, French, Spanish, Italian and Russian.

His experience in catering began in California, when he ran away from home at the ago of 14 to avoid being sent back to boarding school in the UK.

He slept in the stairwell of an expensive apartment building, and washed dishes in a restaurant across the road, before eventually going with his father to Australia where he studied graphic arts.

But he later became a chef, although stints in construction and an abattoir have also brought experience which has come in useful in setting up the farm.

After visits to Moscow in 1993 and 1994, Jay moved in 1995 to work in post-Soviet Russi

"I didn't understand and I wanted to understand - how people lived, how they ate, how everybody seemed to have work but nobody had a salary. There were no shops, no advertising, no neon signs - people had very little, and no money, but they still had smiles."

Jay is constantly busy, breaking off to check batches of cheese, forgetting to eat breakfast, trying to recoup money from a truck driver and fielding calls from Lavka Lavka.

Although clearly stressed at times, he comes alive as he talks about his products, which he describes as "something that was made the way things were supposed to be made before progress stepped in and made things worse".

He believes most cheese in Moscow's supermarkets, which sells for as little as 220 roubles ($7; £4.50) a kilo, is mass produced and has vegetable fat added.

Jay uses 10 litres of milk - which he says costs 450 roubles - for each kilo of cheese.

The cheese sells for 500-600 roubles a kilo when bought directly from him, but Lavka Lavka customers pay almost twice as much.

Despite his growing success, Jay is divided as to whether he would recommend Russia as a suitable business environment.

The bureaucratic struggles are constant, and he describes lengthy difficulties in buying land and getting his cheese certified for sale.

"You've got to have some inside connections. For a foreigner thinking he's going to start something in Russia, it's too much - the culture, the people, the land... A lot of people just give up," he says. "I can't say you wouldn't regret it."

"I've had it all on my shoulders, I've worked on cruise ships with 20-30 chefs under me, making three meals a day for 250 passengers," he says.

But tired of Moscow's erratic wages, commuting, and working for others, Jay says he wanted to do something for himself.

"This is more rewarding psychologically," he says. "When you're working for yourself, you put more of yourself into it."

"It's never dull - there's always some new adventure."

MTS Ukraine launches pilot broadband Internet network in Kyiv

PJSC MTS Ukraine from Dec. 1 launched a pilot fixed broadband Internet network in Kyiv, the operator's press service has told Interfax-Ukraine.

The service was launched jointly with Comstar-Ukraine, which is also part of MTS.

Currently the service is available in the Osokorky district, a district on the left bank of the Dnipro in Kyiv.

The operator will provide the service under the Home MTS Connect brand.

The company uses the FTTB technology (Fiber-to-the-building) to provide access to the Internet.

Several tariff plans with the access speeds of 10 Mbps and 100 Mbps with a minimum monthly fee of Hr 50 are available to subscribers.

In addition, subscribers can use the IPTV service (over 60 TV channels, free of charge during the test period), as well as have access to a free library of movies.

You can subscribe to the service through the operator's Web site www.mts.com.ua or in brand stores.

Return of the five year plan?

Russian lawmakers, it seems, have been digging around in the countrys Soviet past for economic policy ideas – and are looking to reintroduce aspects of a planned economy.

The Economic Development Ministry announced last week that it had drawn up a bill on strategic planning of the economy for approval by the Duma after the forthcoming elections.

The bill aims to ensure that the regional and federal authorities coordinate their planning of strategic programs to increase the effectiveness of budgetary spending.

The ministry has been working on the bill for the past two years, but its finalization was blocked by former Finance Minister Alexei Kudrin, whose policies focused on long-term budget strategies over strategic planning.

Kudrin resigned earlier this fall after a fall out with President Dmitry Medvedev over budget spending policies.

The paper noted that the passing of the bill very much depends on who is appointed as the next finance minister after the presidential elections in March.

But as the daily points out, such measures would have very limited functionality since the private sector makes up more than 65 percent of the Russian economy (a greater share than in France.)

Are we talking here about capitalist Stakhanoviks? asked Finam chief economist Alexander Osin, with ironic reference to the Communist workers movement which overachieved state production quotas in the 1930s.

Our state has only maintained control of a few strategic sectors – like banking and oil and gas – everything else is in private hands. So if they are trying to go down the Chinese path, they should bear in mind that the state there controls around 80 percent of the economy.

Other experts say that more structural planning would be positively perceived by foreign businesses working in Russia.

Foreign investors need to see a low risk opportunity in Russia, therefore a laissez-faire economic model might be even less attractive, said Kendrick White, head of the Marchmont Capital Partners investment consultancy. The government is to plan actively, especially when it comes to infrastructural issues, but a return to five year plans is a complete contradiction to a market economy, White said.

Both experts said it is impossible to reintroduce an economic planning process without coordinating it with trends in other countries.

It will work if we see a tendency of growing role of state planning on the world level, said Osin from Finam. Developing countries are actively using state leverages, which is causing huge disproportions in growth rates between countries.

Back to basics

With his thick beard and round belly, Boris Akimov looks more like a Russian peasant than a former music critic at Rolling Stone or Afisha and even less like the creative director of jet-setter magazine Snob.

But to his new role as Russia’s guru of locally-sourced food, this image fits perfectly. Last year Akimov ditched his high-flying jobs in the journalism world to focus all of his energies on Lavka, a Moscow fresh food movement that is sprouting up faster than mushrooms in a damp forest.

The ruddy Muscovite says he founded the movement completely unintentionally and for purely selfish motives. After years of foraging around Moscow’s under-stocked supermarkets for fresh produce, Akimov and his friends decided to start sourcing their dinner ingredients by themselves and share their experiences in a blog.

“The idea to create this network first came from a desire by my friends and I to cook and eat better quality and more diverse food and provide our families with healthy products,” Akimov said.

Partly due to Akimov’s well-established name and partly because many Muscovites shared needs for sources of fresher food, word about the site quickly spread and was soon being filled with posts from many hundreds of city dwellers.

The movement has now blossomed into a full-blown business, with 50 employees, shops in Moscow and St. Petersburg and a popular Internet delivery site.

A recent publicity campaign featured celebrities dressed as farmers and brandishing pitchforks under the slogan “support local producers.”

Akimov says the biggest challenge to the movement has been in finding farmers willing to take part in the project.

In search of real Russian farmers, Akimov and his partners first tried food markets in the Moscow region, where they had little luck.

“Many people were just sub-purchasers who bought their tomatoes from the suppliers as supermarkets, others didn’t want to take us to their production sites, others just sneered at the idea of selling via the Internet,” Akimov said.

“There were some farmers who had long been trading on the markets, and for them Rizhsky market was something of a holy cow – they just didn’t want try anything else.”

However, gradually, the friends managed to rein in the support of a small handful of farmers, whose cooperation helped to convince other farmers of the project’s potential.

Lavka currently works with around 35 different farms across the Moscow, Kaluga, Lipetsk and Tambovsk regions.

And the movement’s rather professional-looking website now even features a nifty function that picks up on a visitor’s IP address when they log in and instantly brings up a list nearby production sites and farms.

But Akimov says the expansion of the project should never deter from its key principle: ensuring that all produce is locally sourced and of a high quality.

“Before we start working with anyone, we visit them and find out about their families, their daily routines and production, even how they raise their hens or grow potatoes,” Akimov says. “We believe a consumer should be able to trace the origins of his food.”

While most of the project’s sources are farmers in the traditional sense, the list also includes a varied bunch of independent producers working in niche markets, such as U.S. cheese maker Jay Close, who has set up a production base at his home in the Moscow region.

With their project, the Lavka founders have inadvertently spearheaded Russia’s very own version of the locavor movement, which has been storming developed nations for the past few years.

Akimov, himself a great lover of food, says the Lavka project has opened his eyes to a whole world of new flavors and cuisines.

His new project has encouraged him to explore pre-revolutionary Russian cook books for forgotten recipes and scourge the Russian countryside for the ingredients of exotic foreign recipes like roast pigeon.

“On finding out more about food and the ways it’s produced we’ve learned that even our everyday products are far from what you expect them to be,” Akimov told The Moscow News. “So, along with a wider assortment the project we created is aimed at delivering healthy and organic food.”

The group is now working on expanding its range of unique Russian produce, which currently includes a European Smelt fish from the lakes near Vologda and a traditional apple marshmallow from a village in Tulskaya Oblast.

“We are searching for local gastronomic treasures from various Russian regions. I believe this is the only way to protect local life, encourage local employment, and boost tourism,” Akimov said.

Rich Russians top the Swiss charts too

Rich Russians top the Swiss charts too

Russian Viktor Vekselberg, owner of conglomerate Renova and head of science hub in waiting Skolkovo, is the richest Swiss resident, according to Swiss magazine Bilan.

Renova played a in scuttling the BP – Rosneft deal earlier this year, frustrating the British company’s hopes to delve the Arctic for oil, and its boss’s wealth adds up to 11 billion Swiss francs, Newsru.com cited the magazine as saying.

Gennady Timchenko, of Russian gas exporter Novatek, also makes it onto the Swiss list. His fortune is estimated at 4-5 billion Swiss francs.

China gas deal sidelines Russia

Russia’s position in long-standing gas negotiations with China was delivered a new blow this week when China signed an agreement with Turkmenistan to increase natural gas supplies from the Central Asian country.

The agreement, signed between the presidents of the two countries on Wednesday, will more than double the gas stream through the Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline in 2012.

Reserves in Turkmenistan’s core gas field, Southern Iolotan, were recently estimated to be the second biggest in the world, with an capacity of some 13-21 trillion cubic meters (cm).

Under the deal, Turkmenistan will supply China with some 65 billion cubic meters of natural gas a year by 2014-2015, three times current volumes, the Kommersant business said on Thursday.

Russia has been negotiating a gas supply contract to China, the world’s biggest energy consumer, for five years but the sides have been unable agree on pricing.

Sources close to Wednesday’s talks told Kommersant that Turkmenistan agreed to supply gas to China for $250 per 1,000 cm, a $150 discount on Russia’s asking price.

“The deal will decrease Gazprom’s negotiating power – it will have to continue negotiations with China under less favorable conditions,” said Elena Savchik, an oil and gas analyst at Aton investment bank.

“From China’s point of view, signing a deal with Turkmenistan is a good way to push its terms to Russia and prove they have other suppliers” she added.

China has invested some $4 billion in the development of the Southern Iolotan field and says it will continue to invest further to secure its hold on supplies from Turkmenistan.

“Beijing does not want Turkmenistan to build a pipeline to the European Union, get a different gas price on the European market and then increase it for China…Beijing will do its best to make sure the Transcaspian pipeline project is not developed,” a Chinese diplomat said.

Lady Miss Kiev

KIEV, Ukraine -- In 1994, three years after the fall of the Soviet Union, Ukraine was an unmitigated economic disaster. The inflation rate had reached nearly 100 percent per month.

Fat-cat politicos feasted on assets that once belonged to the state, and more than half of all economic activity was estimated to be illegal.

The national currency, known then as “coupons,” became so worthless that one Ukrainian factory used it to produce toilet paper.

It was at this moment of total insecurity that Oksana Sergeevna Moroz, a wealthy woman from Kiev, knocked on the showroom door of Azzedine Alaïa in Paris.

She had come with a simple message: Let’s do business. But before she could sell Alaïa at home, she had to sell herself to the West.

“I was dressed all in Chanel because I loved Chanel at that moment. In our country, maybe 10 people understood what it was,” said Moroz-Hunt. (She now goes by the name of her deceased ex-husband.)

“And when I came to Alaïa, very elegant, wearing a gold Rolex watch, they started to touch me, and they looked at my watch and asked, ‘Is this a real Rolex?’ ”

Before long, clothes designed by Alaïa, Gianfranco Ferré and Thierry Mugler arrived at Moroz-Hunt’s small store, called Vogue, in central Kiev. “I would hire a special security company with guns and armor because at the moment everything would get stolen and broken on the roads.”

Moroz-Hunt decorated the shop herself and dressed all the mannequins. She served imported chocolates and Champagne. Astronomically expensive by local standards, the clothes she sold dressed the wives and girlfriends of the country’s emerging elite.

Before she entered politics, the famously braided former prime minister Yulia V. Tymoshenko (who is now in jail) also came there. Seventeen years later, Moroz-Hunt’s boutique has become Sanahunt, a gleaming multilevel department store for New Ukrainians who crave everything from Céline bags to stuffed animals made of chinchilla.

In the passion play that is post-Soviet Ukraine, Moroz-Hunt sees herself as fashion messiah. “I understood that people were dressed awfully. They were very low-cultured.

But they wanted to change,” she said. “I saw how they looked at me, how they tried to mirror me.” But as with any messianic figure, Moroz-Hunt’s path to fashion salvation was beset by persecution, both real and imagined.

On a screaming hot day in Kiev, back in June, Philip Vlasov met me on the ground floor of Sanahunt, next to the Balenciaga boots and the Y.S.L. sling-backs. He had recently moved to Kiev from Moscow (where he worked for Russian Vogue) to become Sanahunt’s marketing director.

Vlasov is soft-spoken. He was wearing expensive sweatpants and had an unruly mop of hair dyed almost white. A few months after we met, he would quit, citing exhaustion and frustration with Moroz-Hunt; she said that she chose not to renew his contract.

At our first encounter he was still upbeat. “Kiev is like Moscow in the ’90s,” Vlasov said. “Now, in Moscow, people spend less. Even rich people — they’ve started wearing High Street brands. But here it’s still about showing off.”

We were seated on the leafy fourth-floor terrace of the Sanahunt Lounge, eating that mayonnaised Soviet staple salat olivier (this one topped with black caviar).

One block away is Budynok Uryadu, a massive Stalinist edifice where the prime minister and other officials have their offices. Politicians eat lunch at the Lounge all the time.

The wealthiest Ukrainians, Vlasov said, tend to buy brands that have been traditionally popular in Eastern Europe, like Dolce & Gabbana and Versace.

But Sanahunt also stocks designers that don’t translate as easily into the local market, like Joseph Altuzarra and Alexander Wang. They sell poorly and at the end of the season are sharply discounted.

“Sometimes I get clothes, knowing they might not sell,” Moroz-Hunt said. “But I still buy them because my clients must see that they exist.”

Cecilia Dean, the editor of Visionaire, met Moroz-Hunt this year when she was in Kiev for a Sanahunt event. “It’s a really impressive store,” Dean said. “It was curated very well.”

She can’t recall what Moroz-Hunt was wearing “but I’m sure it was something with a lot of cleavage. She’s got a body and she flaunts it. More power to her.”

In August, Moroz-Hunt met me in the lobby lounge of the Mandarin Oriental hotel in New York, which, along with the George V in Paris, she thinks of as “like home.” (Her actual homes are in Kiev and Cannes, France, where she owns a villa.) She was dressed in a black Alexander McQueen blazer, a white tuxedo shirt by Stella McCartney, black Balenciaga pants and dangerously sharp Jimmy Choo heels.

“Caviar?” she asked a waiter, not impolitely, in thickly accented English. “American sturgeon — what is this? If you have something good, give us.” Rosé Champagne arrived along with caviar-topped tuna tartare.

It is unclear how much money Moroz-Hunt has. NetJets features a customer profile of her on its Web site. In Kiev, where she has bodyguards, she drives around in a chauffeured Rolls-Royce Phantom.

In Cannes, she has a Ferrari. She said that Sanahunt was built on an initial investment of $340,000 and has grown purely through profits.

When Moroz-Hunt first began to make money, her landlord decided arbitrarily to raise her rent. This was her first brush with post-Soviet business ethics. “My personality is I hate when people blackmail me,” she said. “I just don’t let them mess with me.”

Moroz-Hunt is trim, busty, thick-lipped and long-nailed. Christophe Robin, the celebrated Paris colorist, tends to her platinum hair. Her visage seems to morph from pallid to uncomfortably flushed, depending on the topic of conversation.

“I’ve had a few husbands,” she said. “But I’m not married right now. Maybe, I don’t know, maybe it wasn’t the right people. Or maybe the business and husbands just don’t work out.”

Moroz-Hunt said she was born in Kiev in 1964, the child of scientist parents. Before the Wall came down, she lived in Moscow and, she told me, was married to a judo star whose status enabled her to travel widely and be exposed to fashion.

She eventually divorced him and in the late 1990s, after she moved back to Kiev, met Alexander Hunt, a Russian who had at one time immigrated to the United States. They married (“Sanahunt” is a hybrid of their two names) and, in 2000, had a son, Nicholas, who attends a private school in the south of France.

At some point their relationship soured, dramatically. According to court papers, Hunt left Ukraine in January 2003, and the couple divorced, on April Fool’s Day, in Port-au-Prince, Haiti.

Then, in June, Moroz-Hunt sent a letter to the Interior Ministry, claiming that Hunt had a criminal history and that he came to Cannes and threatened to kidnap Nicholas while he was under the care of a nanny there.

Hunt was subsequently banned from the country and stripped of his parental rights by Ukrainian courts. In response, in 2004, he sued Ukraine in the European Court of Human Rights, arguing that the government took illegal steps at Moroz-Hunt’s behest. In 2006, the court awarded Hunt about $13,000 in damages.

“He wanted to take everything,” Moroz-Hunt said. She said she became gravely ill during the custody battle and speaks of that period cryptically, as if she were the victim of an intricate plot at some imperial court. “My entourage was waiting for me to die,” she said.

She became emotional when discussing her ex-husband. “He did many things. He sued me. He threatened me,” she said. “A lot of story! And, end of story is, he is dead. I was very close to death, and unfortunately, I don’t know how it’s possible, he had a heart attack and he died. That was three years ago.”

The Ukrainian press, not surprisingly, had a field day with the story, writing thinly sourced exposés filled with lurid details. And the Hunt affair is not the only incident that fuels Moroz-Hunt’s murky mystique.

She is connected to Leonid Kuchma, Ukraine’s controversial former president, through his daughter, Elena Pinchuk, who is the godmother of Moroz-Hunt’s son.

In 2008, Moroz-Hunt and Viktor A. Yushchenko, the former president, became godparents of a mutual friend’s daughter.

People in Kiev seem to know Moroz-Hunt’s reputation better than what clothes she puts in her store. Security at Sanahunt is tight. When I came in unannounced, a day before my meeting with Vlasov, a shopkeeper trailed me suspiciously from room to room.

The store was mostly deserted, save for an Orthodox Jew and a stout businessman exchanging Russian anecdotes on the lounge terrace. This makes one wonder who exactly shops at Sanahunt.

“My friends and I, we never go in there,” said Natasha Lysova, a former journalist who is now Tymoshenko’s spokeswoman. “We couldn’t afford anything.” The average gross monthly salary in Ukraine is about $320, which buys a few orders of lobster pasta at the Sanahunt Lounge.

Still, Sanahunt is a symbol of what can now be achieved in Ukraine — through grit and vision, or shady dealings and high-placed connections, or all of the above. I asked Moroz-Hunt if many of her customers came from the oligarchy, which swelled during last decade’s commodities boom. “Of course. They love beautiful things,” she said. “We treat them like royalty.”

Moroz-Hunt is at work on a second Sanahunt store, to open in 2013 in Odessa, on the Black Sea coast. She also plans to unveil a capsule collection, provided she can find an appropriate designer. During his time at the store, Vlasov had struggled with this task.

“Finally,” he said, “I insisted on Miguel Adrover, whom she hadn’t known but found interesting.” Vlasov found Adrover in Majorca, Spain, and convinced him to come to Paris to negotiate terms, but then Moroz-Hunt canceled the meeting at the last minute.

“She called me and said, ‘You know, I realized that I really like Adrover’s styling, but I don’t like the shoulder line on his garments. It’s rounded. It’s weak. I want the Chanel shoulder line: straight, or even pointing upwards.’ ”

Japan Buys 800,000 Tons Corn From Ukraine As U.S. Substitute

TOKYO, Japan -- Japan, the world’s largest corn importer, made its biggest purchase of European grain in at least a decade, seeking a cheaper alternative to U.S. supply.

The country bought about 800,000 metric tons (800 million kg) from Ukraine after it removed a tax on exports last month.

The purchase, made by five Japanese trading companies, was for shipments in November to March at prices that were about $20 a ton cheaper than U.S. corn, Nobuyuki Chino, president of Continental Rice Corp. in Tokyo, said in an interview today.

Japan, which sourced almost 90 percent of its corn last year from the U.S., the biggest exporter, is seeking different options after a drought hurt the U.S. crop, driving annual prices to an all-time high and curbing global food supplies.

“Japan joined other Asian buyers in finding cheaper alternatives to U.S. corn in feed as the American supply became too expensive,” Takaki Shigemoto, a commodity analyst at research company JSC Corp. in Tokyo, said today by phone.

“A shift in demand will drag Chicago futures toward $6.”

Chino, who has traded grains for three decades and worked for Continental Grain Co. of the U.S. before establishing his company in 1999, declined to identify the trading companies as the information is not public.

The country’s livestock industry is increasing efforts to cut raw-material costs as it struggles to recover from the March 11 earthquake and Fukushima nuclear disaster, which destroyed feed plants and tainted beef and milk with radioactive cesium.

Corn futures for March delivery lost 1 percent to $6.485 a bushel on the Chicago Board of Trade at 3:52 p.m. Tokyo time.

Corn, which has gained 3.1 percent this year, is used mostly to make livestock feed and ethanol.

Global food prices tracked by the United Nations fell 9.1 percent from a record in February.

Japan imported 7.3 million tons of feed corn in the nine months ended Sept. 30, data from the finance ministry show.

Of the total, 6.8 million tons was from the U.S. and 231,160 tons was from Argentina, the second-largest supplier.

Ukraine’s corn shipments in October may have climbed to a record on export demand and as farmers sold the grain after a 12 percent tax was removed, researcher UkrAgroConsult said Nov. 8.

The duty, which had been in place since July 1, was abolished Oct. 22.

The Ukrainian government forecast 12 million tons will be exported in the marketing year that started July 1 from a record harvest of about 20 million tons.

Average corn yields in Ukraine rose to a record on favorable weather, reaching 6 tons a hectare (2.47 acres) on average as of Nov. 8, the Agrarian Confederation said.

The bumper harvest added to a glut of feed-grain supplies this year as wheat exports also expanded on increased shipments from countries including Russia and Kazakhstan.

Japan’s agriculture ministry bought 63,280 tons of feed wheat in a weekly tender on Nov. 9, the largest volume of this fiscal year, ministry data showed.