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Modern economic POTENTIAL OF UKRAINE |
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Investment portrait of the Autonomous Republic of CrimeaGeneral information about the Autonomous Republic of CrimeaEstablished: 1991 Area (the city of Sevastopol excluded): 26.08 ths. sq. km (4.3% of the territory of Ukraine), 13th among the regions of Ukraine Transportation infrastructure and communicationsThe Autonomous Republic of Crimea has a well-developed transportation infrastructure. The network of highways (total length 6,200 km) connects all communities in the region. In 2005, motor vehicles owned by enterprises and individuals from the Autonomous Republic of Crimea transported 2.4 mn tons of cargo, which was 3.6% more than in the previous year. Cargo turnover (by all types of transportation) throughout 2005 was 6,301.9 mn km. Branched railways link the large cities of Crimea to other Ukrainian regions and foreign countries. The Simferopol state international airport can receive aircrafts of any class in any season. Its capacity is 14-15 ths. departures. The airport has a VIP hall, business hall, trade network, and a hotel. There is another Crimean airport in Kerch that performs passenger transportation, while Dzhankoy does cargo freight. The sea ports of the Crimea are Feodosia, Yalta, Yevpatoria, and Kerch, which link the peninsula to the southern regions of Ukraine, Georgia, through Volgodonskiy navigational channel to the Caspian sea, Beloye (White) and Baltic seas, and through Bosporus, Dardanelles, and Gibraltar Straits to almost every country worldwide. The Kerch ferry links Crimea via the Kerch Strait to the Krasnodar district of the Russian Federation. Industrial potentialThe industry of the Autonomous Republic of Crimea has a wide spectrum of economic activities. Within the pattern of industrial output sales over 2005, the extraction industry accounts for 4.7%, electrical energy generation and distribution 18.7%, processing industry 76.6%, including food industry 38.8%, chemical and petrochemical 21.4%, machine building 9.1%, production of other nonmetallic mineral articles 3.7%, as well as metallurgy and metal working 2.3%. Industrial production has maintained growth trends in the last three years (in 2003 118.9%, in 2004 128.2%, in 2005 113.8%). Changes of industrial production volumes in 2005 (progressive total in percentage versus the respective period of the last year)
When compared to 2004, the structure of industrial production saw positive changes throughout 2005: the food industry expanded by 3.1% and made up 45.9% of the total, chemical and petrochemical industries by 2% (up to 23.8%), whereas enterprises generating and distributing electrical energy widened their presence by 0.1% to 6.5%. Extraction enterprises increased output of products (works, services) in 2005 by 9.5% compared to 2004. Natural gas production added 9.2%. In the period under review, the production volumes from the processing industry increased by 14.6%, mostly due to enterprises from the food industry and agricultural produce processing, which accounted for more than 45% in the industrys gross volume. Production of the food industry increase is attributed to considerable augmentation in output by large enterprises such as OJSC Krym (Crimea) Brewery and Soft Drink Works (+60.8%), LLC Proliv Southern Manufacture (+58%), OJSC Soyuz-Viktan Firma LTD (+34.1%), Massandra Scientific and Production JSC (+28.3%), OJSC Druzhba narodov Nova (+22.2%), and OJSC KrymMoloko (Crimean Milk) (+15.3%). Almost a quarter of the entire volume of industrial output is concentrated in enterprises from the chemical and petrochemical industry that reached a 17.4% growth rate. The positive results were mostly backed by higher industrial production at OJSC Brom (Bromine) (+164.8%) and the OJSC Crimean Soda Plant (+12.2%). The volume of output (cost of services) by enterprises of metallurgy and metal working in 2005 went up by 8.8% compared to 2004 thanks to facilitated industrial production at the largest enterprise of this group Kerch-based UPP UTOS "Krym-pack" (+7.6%), which contributed 44.5% to the gross metallurgical production of Crimea. Agro-industrial potentialClimatic conditions and resources of the Crimean peninsula define industrial and agrarian development of the region. As of January 1, 2005, all agricultural enterprises and farms of Crimea owned and leased 1,802 ths. ha of agricultural land, including 1,261 ths. ha of tilled soil. Agricultural land area allotted to the population for individual farms, commercial agricultural production, horticulture and olericulture, hay making, and livestock grazing totaled 534.6 ths. ha. Main areas of crop growth are:
Key husbandry lines are:
In 2005, agricultural produce volume exceeded the figure of 2004 by 4.5%. As of January 1, 2006, the number of productive livestock and poultry in all farms was: cattle stock 198.1 ths. heads; pigs 118.9 ths. heads; sheep and goats 218.1 ths. heads; and poultry 9.9 mn heads. Production of animals by all categories of farms (including production in the city of Sevastopol) in 2005 was meat (in live weight) 156.8 ths. tons; milk 346.8 ths. tons; and eggs 571.4 mn. The agro-industrial complex of the Autonomous Republic of Crimea can be described as extremely attractive for investing. The main investment determinants for Crimea are fertile lands; low-cost and professional labor resources; available facilities for processing; as well as the geographical location contributing to easy facilitation of export. Viniculture is one of the most attractive segments of the food industry. Crimean wines can easily compete with the most exquisite world brands. Established in 1894, the Massandra Company has been producing high-quality wines for over 100 years already. Since 1900, Massandra-made wines took part in international exhibitions and wine tasting, having been awarded with 148 medals and 2 Grand Prix cups. Massandra has the largest wine collection in the world. Its cellars store around one million bottles of wine of various kinds. It also has a collection of the oldest wines. There are wines, which crossed their hundred-year threshold, but still keep receiving high scores for quality. As an agro-industrial region, Crimea is also famous for production of volatile oils. Cropping of lavender, sage, and roses bears industrial importance. Sanatorium, resort, and tourist complexThe Crimean peninsula is one of the most important tourist centers in Ukraine and all over the Black Sea. The Crimean wealth is its climate, which is characterized by plenty of sun, warmth, and light. Peculiarities of air circulation accompanied by the effect of the Black and Azov seas and the Crimean Mountains form three major climatic districts: prairie, highland, and southern Crimean zone. A variety of microclimatic conditions, prosperity of evergreen mountain and highland flora, as well as deposits of curing mud and mineral water sources formed several types of resorts: climatic (Old Crimea), climate-and-balneological (Yalta, Alushta), climate-balneological-and-mud (Evpatoria, Feodosia, Saki). The Crimean peninsula is well-known for its rich recreational potential. The peninsula now has 25 explored deposits of curing muds and brine, and more than 100 sources of mineral water of miscellaneous chemical composition. More than 90% of recreational sites are concentrated in a narrow 3-km shore strip. Heart territories (mountains and highlands) host only small (up to 100 beds) objects, although this Crimean Switzerland has every condition and resource for recreational exploration of a high level. By and large, Crimea has over 633 sanatoriums, resorts, and healing institutions used for year-round and seasonal retreats. Sanatoriums and pensions with curing services account for 28% of all institutions and are mostly situated on the Southern shore of Crimea, as well as in Evpatoria, Saki, and Feodosia. Tourist resources and peculiarities of the infrastructure help develop rare tourism types in Crimea: spelean, rock-climbing, horse riding, biking, hang-gliding, hiking, wine and hunting tours, helicopter tours, yacht excursions, aqualung diving, as well as scientific and auto tourism. Crimea is a unique region in Ukraine, whose rather small territory hosts 149 sites of natural lands, which total 128.8 ths. ha: 6 wilderness areas, 2 regional landscape parks, 29 preserves, 69 nature memorials, 2 botanic gardens, 1 dendrologic park, 1 zoo, 31 parks landscape architecture monuments, and 8 protection carriers. In 2005, the Autonomous Republic of Crimea welcomed 6.7 mn people. Around 1,143.6 ths. people came for retreat in sanatorium, resort, and tourist institutions. The number of registered tourists in unorganized retreats was 318.6 ths. people. The proceeds by resort districts to the budget of the Autonomous Republic of Crimea were UAH 904.6 mn, which was UAH 115.2 mn more than in 2004 a growth rate coming to 115%. Along with traditional tourism, new forms are being actively developed, such as rural green tourism, cultural and ethnographic, scientific, congress, hunting, spelean tourism, auto tourism, SPA tourism, and others. Investments in the regionThe Autonomous Republic of Crimea is one of the most attractive investment regions in Ukraine thanks to its resort and industrial potential, available mineral deposits, high scientific and technical potential, well-developed transportation infrastructure and banking system, as well as close location and easy access to markets of Ukraine, the CIS, Europe, and Asia. Today the Crimea is in the top ten regions of Ukraine, which are drawing the most foreign investments. The volume of direct foreign investments received by the Republic in 2005 was USD 131.9 mn, which increased by 12.9% versus 2004. Per capita direct foreign investment in the Crimea was USD 232.6. In the course of 2005, the most active investors in Crimea were German companies. The volume of foreign investments by them within a year amounted to USD 46.1 mn (volume rising 1.6 times), Cyprus USD 21.7 mn (3.1 times), the Russian Federation USD 17.5 mn (+13.9%), the British Virgin Islands USD 14.2 mn (1.6 times), the United Kingdom USD 12.1 mn (up 3.6 times). Besides, investments originated from Belarus USD 5.1 mn, Panama USD 3.9 mn, and Kazakhstan USD 3.0 mn. The highest rise of investments over 2005 was reported by the enterprises of:
Investments in the Autonomous Republic of Crimea have been facilitated by the introduction of a special regime of investment activities. The council on priority development territories approved 43 investment projects of gross value USD 430.5 mn. The volume of commodity sales amounted to UAH 2.8 bn, meanwhile, 16.1 ths. jobs were created and preserved. Territories of priority development were used to create image sites for Crimea the 4-star Oreanda hotel, aquaparks in Yalta and Sudak; Aquavita Company at Alushta priority development territory completed construction of the plant, which will engineer state-of-the art equipment of drip irrigation. Other giant enterprises operating at priority development territories are the CJSC Crimean Titan (Titanium) and OJSC Crimean Soda Plant. Another positive development is that enterprises finally became financial stable as these projects were implemented, while the profit was reinvested into further development and expansion of production. By the volumes of invested foreign capital, the Autonomous Republic of Crimea is in top ten regions of Ukraine. Investment demand of the Republic was USD 20 bn. Foreign economic activitiesThe dynamics of foreign economic development by the Autonomous Republic of Crimea proves the region has conditions for stable development of foreign economic activities. The results of 2005 demonstrate that in comparison with 2004, exports of goods and services increased by 17%, imports were up 10%, and amounted to USD 502.1 mn and USD 177.8 mn respectively. The positive foreign trade balance in 2005 came to USD 324.3 mn. The biggest articles in the structure of commodity export are dies and pigments 30.9% of the entire commodity export; inorganic chemicals 20%; ships and vessels 10.4%; mechanical machinery and equipment 5.7%; electrical machinery and equipment 5.4%; fertilizers 4.9%; alcohol and soft drinks 3.4%; as well as animal and vegetable fats and oils 2.3%. In regards to the import of goods, 24.3% decrease for mechanical machinery and equipment was traced; 9.7% for construction materials; 5.7% ferrous metals; 4.6% surface vehicles; 4.4% devices and systems; 4.3% pharmaceuticals; 4.2% polymeric materials, plastics, and their articles; 4% electrical machinery and equipment; and 2.6% furniture. The export of services has an important place within foreign trade turnover of the Republic. In 2005, the largest export supplies were bound to the Russian Federation (44.6%), Cyprus (4.9%), the British Virgin Islands (4.8%), the United Kingdom (4.8%), and Turkey (4.2%). The heaviest portion of gross supplies of services from Crimea in 2005 belonged to recreational services 43.7% (including services related to healthcare 18.0%, trip bureaus and travel agencies 15.5%, hotels and restaurants 10.2%) and transportation complex 42.2%. In regards to the geographical structure of import of services, the largest volumes arrived from Europe (27.4%), Asia (20.2%), and America (14.0%). Transportation services accounted for an impressive 47.6% of the import services to the Autonomous Republic of Crimea, real estate operations, as well as leases and services to legal entities 29.9%, while construction related services contributed 7.8%. |
