AGRICULTURE

The agro-industrial complex has always been one of the most important sectors in Ukrainian economy. Ukraine, until recently, was responsible for a very large percentage of former Soviet agricultural production. Ukrainian farms produced 58 percent of all sugar beet grown in the former Soviet Union, 25 percent of meat and dairy products and 20 percent of all grains. While wheat is the primary crop, barely, corn, rye and tobacco are also harvested in the country. Sunflower seeds, flax and potatoes are produced in large quantities.

Ninety-five percent of Ukrainian land is rich in plain black soil, with 14.3 percent (8.6 million hectares) covered by forests.

A critical problem faced by the Ukrainian agriculture sector is product preservation. The capacity of Ukraine in packing materials and storage facilities is below 30 percent. The agricultural processing sector is regarded as the first priority in the Ukrainian economy.

Growing losses during harvesting, storage and processing as well as inadequate transportation have highlighted the need for better and more efficient storage/transportation facilities.

The construction of new storage facilities as well as the development of the transportation infrastructure has been inadequate compared to the apparent requirements and continues to lead to significant losses in production.

According to government projections, a decrease in production losses and an improvement in food processing technologies alone could increase per capita consumption of meat by 0.7 kg. (to 71.8 kg.), milk and dairy products by 2.7 kg. (381.2 kg.), eggs by 10 (285 kg.), vegetables by 14 kg. (153 kg.) and fruits by 7 kg (67 kg).

GRAIN PRODUCTION

The major grain production regions include Odessa, Dnepropetrovsk, Kharkov, Vinnitsa, Zaporozhe, Poltava, Kherson and Nikolayev provinces. Significant return may be obtained if investment is made in the following areas:

a) application of high-quality seeds and chemicals,

b) transfer of the state-of-the-art grain cultivation technologies which may allow for sizable increase in yields; and

c) use of modern harvesting machinery.

SUGAR INDUSTRY

The major sugar producing areas are : Vinnitsa, Khmelnitsk, Poltava, Chercassy and Kiev provinces. Promising directions for investment include:

a) high-quality seeds,

b) transfer of advanced sugar cultivation and harvesting technologies, and

c) re-equipment of sugar processing plants.

EDIBLE OIL PRODUCTION

Ukraine has accumulated vast experience in the production of vegetable oil, especially sunflower and corn oil. Investment in this sector may yield significant returns due to the high export potential of edible oils.

The principal investment areas are:

a) introduction of soya beans and rape seeds which have not been harvested

b) reconstruction of existing plans, construction of new plants for the production of vegetable oil, refinement and packaging of end-products, and improvement in pressing and extracting techniques.

MEAT AND DAIRY

This industry remains quite promising, especially in terms of the production of some items (dry milk, butter, cheese).

The following projects, among many others, have been identified by government authorities as the most important in this sector:

- development of children’s foods with biologically active components for the reduction of radiation effect

- development of processing and storage technologies.

- new technologies for cultivation and processing sugar beet.

- Development of a grape production facility and vineyard.

- Construction of special film-packaging equipment for food products.

- Production of rape and rape seed oil.

- Plant for the production of soft drinks in plastic 1.5 liter bottles.

BUSINESS AND INVESTMENT OPPORTUNITIES IN UKRAINE:

UKRAINE OPEN FOR BUSINESS

Having recently gained its independence, Ukraine is a country comparable in geographical size and population to Italy and France. The country possesses numerous competitive strengths, namely a strategic geographical position and mils climate, rich natural resources, sizable consumer market, highly educated labor force, well developed transport infrastructure, significant achievements in natural sciences and military related research, and a sophisticated research and development infrastructure.

However, the Ukrainian economy is currently in a critical position. This is due to the fact that the economy of Ukraine was previously quite isolated, not oriented towards satisfying the national interest of the country. The pricing policy was basically inappropriate because the prices for raw materials and fuel supply were very low and were stimulating their rational use and the introduction of high technology to industry.

Ukrainian efforts to be integrated to the world market were, over the first three years, very reticent and did not realize the national potential.

Prior to independence, more than 80 percent of total ‘exports’ and ‘imports’ were accounted for by inter-republic trade. As well as being tightly integrated with the economy, Ukraine accounted for a major share about 25 percent of the Net Material Product (NMP) for the former Soviet Union.

Needless to say, at independence the severance of the inter-republic links had a particularly disruptive effect on Ukrainian enterprises and on the national economy as a whole.

The foreign trade linkages of Ukraine will no doubt play a key role in the recovery of the Ukrainian economy in this transition period.

Upon gaining independence in 1991, Ukraine has become an equal member of the international community. There is little doubt that the economic, scientific, and human potential of Ukraine is one of the most promising in Europe and offers many business and investment opportunities.

Attraction of new investments in the Ukrainian economy, including foreign investments, is one of the effective ways of overcoming this situation.

Date: 2015-01-29; view: 836