Modern economic POTENTIAL OF UKRAINE

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Investment portrait of Ternopol region

As of January 1, 2005, the amount of direct foreign investments into the economy of the region was USD 37.2 mn or 129.6% if compared with their volume as of January 1, 2004. Capital of non-residents herewith increased over 2004 by USD 13.1 mn.

Direct foreign investments in 2004 came from the Virgin Islands, Denmark, Estonia, Ireland, Italy, and Slovakia.

The following states should be mentioned in the list of largest direct investors to the economy of the region: the Czech Republic (18.4% of the total investment volume), Great Britain (16.9%), Australia (12.1%), Germany (10.0%), and Estonia (9.6%).

The largest share of direct foreign investments in terms of different economic activities was in the food industry and processing of agricultural produce (30.6%), transportation and communications (22.5%), output of other non-metallic mineral articles (12.2%), light industry (11.9%), machine building (8.0%), and agriculture (5.7%). Hence, changes in the pattern of direct foreign investments by kinds of economic activities versus indices from 2004 mainly took place due to an increase of volumes in transportation and communications (by 76.2%), light industry (29.1%), and industries of agriculture (by 17.9%).

The city of Ternopol is the most active from the point of view of regional administrative and territorial distribution of drawn foreign capital, (55% of the total investments), followed by Zborovskiy district (18.1%), Chortkivskiy district (5.7%), Shumskiy district (5.0%), Ternopol district (4.9%), and Bortshevskiy district (4.8%).

The list of the largest companies with foreign capital in the region is as follows: CJSC Dobra Voda (Good water), joint Ukrainian-Czech venture on production of soft drinks and mineral water; JV Vatra-Schreder (joint Ukrainian-Belgium venture on production of light output); LLC Yanke-Ukraine (joint Ukrainian-German company on production of apple juice concentrate); company with 100% Austrian capital Billirbeck-Ukraine (production of feather pillows and blankets); LLC Vinisun (joint Ukrainian-Polish venture on production of light industry output); LLC Gidina ZK Ukraine (joint Ukrainian-Slovak venture on production of poultry), LLC Terland Agro with foreign investments (joint Ukrainian-Irish company on manufacturing of agricultural produce); company with 100% Danish capital LLC Lindevang (agricultural produce), LLC Diana International LLC (joint Ukrainian-Swedish company on providing of transportation services), etc.

Priority directions of foreign investing are the food industry, processing of agricultural produce, transportation and communications, light industry, agriculture, tourism and recreational activities, development of tourist transportation corridors, and objects of tourist infrastructure.

Industry

Over the year 2005, the region boosted industrial production volume by 9% and manufactured output worth UAH 1.9 bn. The task of the program for social and economic development of industrial production was fulfilled in the region by 116%.

Positive results were shown by most of key industries. Hence, companies in food processing industry augmented output by 8%, in particular, dairy produce – by 20%, alcohol – by 27%, brewing production – by 14%, and confectionary articles – by 10%. Extractive industry demonstrated increase by 15%, light industry – by 13%, wood working – by 19%, chemical and petrochemical – by 51%, metallurgy and metal working – 55%, machine building – 4%, and output of construction materials added 21%.

All categories of enterprises produced 1,045 ths. tons of grain (in clearing weight), which is less than in the last year by 10 ths. tons or 1%. Production of sugar beets (at 1,481 ths. tons) boosted by 202 ths. tons or 16% as compared to 2004.

Production of vegetables throughout 2005 grew by 17 ths. tons or 18% having reached 145 ths. tons.

Winter grain and green fodder crop area for 2006 covers 157 ths. hectares, which include 153 ths. ha for grain – 105% if compared to the forecast. The region has sizably expanded the area for rape seed crop: 26 ths. hectares were planted – by 8 ths. ha more than the year before. Besides, spring rape area is expected to widen.

The stock of pigs made 273 ths. heads having expanded by 26 ths. pigs or 11%, and poultry stock numbered 4.2 mn heads – increase by 16 ths. or 0.4%.

In 2005, production of eggs versus 2004 went up by 5% and reached 291 mn eggs.

The turnover of retail segment and paid services to population augmented 1.2 times. Local goods account for some 90% of gross volume of retail commodity turnover.

Foreign trade

The region’s foreign trade turnover of goods and services throughout 2005 amounted to USD 178 mn (107.6% as compared to foreign trade turnover of goods and services in 2004), including export equal to USD 80.6 mn (83.3% of export volumes in 2004) and imports at USD 97.5 mn (141.8% of the volumes imported in 2004).

Trade in services went up as compared to 2004. Foreign trade turnover of services added 7.7% and reached USD 6 mn, including export of services, which grew by 16% (USD 4.4 mn) and import that lost 10% (USD 1.6 mn).

In the course of 2005, the region’s enterprises were involved in foreign trade operations with 87 countries of the world. The largest trade partners were Germany (24% of foreign trade turnover), Russia (14%), Poland (11.5%), Moldova (4.5%), Italy (4.3%), Austria (3%), the Netherlands (2.9%), Bulgaria (2.4%), Turkmenistan (2.4%), and others.

The region’s export consists of alcohol and soft drinks, wood and timber articles, products of fruit and vegetable processing, furniture, meat and food by-products, knitwear clothes, ferrous metals, edible fruit and nuts, citruses, food processing industry wastes, as well as textile garments. At the same time, the region imports boilers, machinery, apparatuses, mechanical devices, pharmaceutical articles, surface vehicles, polymer materials, plastics, ether oils, cosmetic substances, devices and apparatuses, electrical machinery and equipment, ferrous metals, tanning extracts, dies, as well as paper and cardboard.

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