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Meanwhile, China marches on in Odessa

April 22, 2016

Over the past few years this blog has attended numerous business and investment forums in Odessa.

On 22 April there is another, the Nordic Business Forum.

As this blog has no business interests whatsoever – anywhere – other than occasionally writing for publications that request a few (far more professional and erudite) lines in return for a small token of appreciation, its attendance at such events are either from a general interest regarding the who, what, where, when and why, rather than schemes, plans, PEST and SWAT considerations, or to meet specific diplomats that contact the blog wanting to put aside some time for a chat – or normally both.

The diplomatic chats aside, the contents of which don’t appear on the blog, there is naturally a lot of chit-chat from the business community about investment, investment climate, nefarious dealings, corrupt and unreliable courts, local and national political problems and how to mitigate as much of the threats and leverage as many of the positives where ever possible – all of which can be done.

At none of these innumerable events has this blog ever witnessed a Chinese presence.  Not once.

Yet China is well on its way to reaching its investment target of $12 billion here – and is likely to go beyond that.

It has spent many $ billions in Odessa Oblast on industrial parks, grain silos and food storage already.

A Chinese company is about to buy a very large IT company with offices in Odessa for approximately $1.2 billion.  The name of both parties cannot be disclosed at the time of writing but will very soon become known – a matter of weeks.

china

It has now become public knowledge that the Chinese company CNBM International (part of CNGC) has acquired eight solar panel plants (previously owned by Activ Solar behind which were the Kluyev brothers, both now wanted in Ukraine having done rather too well within the Yanukovych regime for all their business dealings to be entirely above board).

The two “Franko” solar farms in Starokozache , both “Danube” solar farms in Artsyz, the pair of “Lakeside” solar farms in Kilivy, and twin “Limanskaya” farms in Renne have certainly been acquired by CNBM.

It is quite likely that the remaining Activ Solar farms in Bolgrad have the same CNBM owners too, although as yet that cannot be confirmed.  Also unconfirmed, but of reasonable likelihood given the source, is a further solar farm being built by CNBM.  CNBM is after all, a renewable energy superpower across Asia and a global heavyweight in wind farm blades – not withstanding thin film solar cells.

(It will surely not be long, if it hasn’t quietly happened already, that parent company CNGC expands its own interests into Ukraine – cement and drywall production and raw material trading on truly global scales.)

Regardless, China via CNBM has just acquired in Odessa one of the top 50 solar power plants in the world, and seemingly intends to expand its solar energy production in Odessa even further.

(With regard to these solar power plants/farms in Odessa, more than 70% of the parts are actually manufactured in China by part of the CNGC industrial empire – thus no surprise that its subsidiary CNBM have now acquired the Activ Solar assets.  Indeed the Kluyev brothers Activ Solar loans were underwritten by these Chinese produced assets.)

Thus there is over the past few years a significant (almost $10 billion) Chinese investment in Odessa in industrial parks, food silos (and storage), energy, soon IT, and a rumoured port terminal (probably Yushni) – undoubtedly justifying the biggest consulate in the city – without any attendance at a single investment conference, nor indeed hosting one.  Indeed the only time the Chinese diplomatic and/or business leaders are to be seen (and chatted with) are at certain restaurants in the city occasionally.

A reader may perhaps wonder, with Ukraine no longer the most receptive of markets for the Russian Federation – and therefore opportunities aplenty exist where they once did not – why it is China that is prepared to walk the business investment walk, whilst it is the Europeans with the DCFTA and reform financing leverage over Ukraine, that are still engaged in business talk.

Still. the Scandinavians are a smart lot – we shall see what they have to say at the Nordic Business Forum beyond the usual PEST and SWAT diet (and off the record diplomatic “chats”).

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