Modern economic POTENTIAL OF UKRAINE

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Investment portrait of Chernovtsy region

Regulatory environment

Investment attracting activities of the regional state administration

1. The Program for contributing to investing to the regional economy for 2004-2010 has been adopted, which provides more active investing activities in Chernovtsy region.
2. The administration keeps involving region-based enterprises and organizations in international forums, exhibitions, fairs, and seminars, which help them present their investment projects directly. Information about the events is published in mass media and at the web site of the regional state administration, as well as in “Delovoy vestnik” (Business bulletin) reference book from the Chernovtsy Chamber of Commerce and Industry.
3. 12 exhibitions and fairs have been held in 2004-2005 by the Chernovtsy Chamber of Commerce and Industry with assistance of the regional state administration.
4. The administration holds regular receptions for foreign delegations of businessmen.

New investment projects:

• Top administrators of the Chernovtsy region and Austrian Holzindustrie Schweighofer Gmb company signed a protocol of intentions in regards to construction a wood-working complex in Chernovtsy region. The assets to be invested equal EUR 70 mn.
• In September 2004, administration representatives held official negotiations with top managers of the famous VOGT-electronic company (Germany), which related to setting up a mixed capital subsidiary in Chernovtsy. The enterprise planned to specialize in the engineering of electronic components in leased facilities from former military plants. As a result of the talks, LLC Vogt Electronic Ukraine was established in November 2004.

Infrastructure

Chernovtsy region has an advantageous transportation infrastructure and geographical location, a dense network of railways, highways, pipelines, and power lines. The regional center has convenient railway transportation.

Road transport

In January-June 2005, road vehicles carried 495.1 ths. tons of cargo, which is 9.8% greater than in the first half of 2004. Passenger volume carried was 13.3 mn people – an 8.1% loss versus the respective period of 2004.

Railway transport

The length of general-use railways is 414 km. The length of railways owned by enterprises and organizations is 188 km.

The territory of Chernovtsy region is covered with 30 operating railway stations opened for cargo. These are being used by two railways – Lvovskaya and Yugo-Zapadnaya (Southwestern).

Aircraft transport

Public utility enterprise “Chernovtsy International Airport” and Chernovtsy-based structural sub-department of UkrAeroRukh company ensure traffic, landing, and technical servicing of airliners. In the first quarter of 2005, aircraft from the Chernovtsy airport carried 2,800 passengers, which was 27.3% more than in January-March 2004.

Communications

These services are mostly provided by the Chernovtsy office of UkrTelekom OJSC, Chernovtsy office of UkrPochta state mailing company, Chernovtsy branch of Utel CJSC, and Chernovtsy regional radio- and TV-transmitting center.

Demographic situation on the labor market

Population

Average population as of July 1, 2005 was 910,500 people, including 372,500 urban citizens, and 538,000 rural inhabitants. The city of Chernovtsy has a population of 242,300. Population density as of July 1, 2005 was 112.3 per 1 sq. km.

The number of people born per 1,000 citizens in January-June 2005 was 10.7 people, while 14.7 people passed away per 1,000 in the same period. The natural reduction of population per 1,000 citizens was 4 people.

The region is composed of multiple nationalities, being home to almost 80 nationalities. The national composition of population is as follows: 75% – Ukrainians; 12.5% – Romanians; 7.3% – Moldavians; 4.1% – Russians; 0.3% – Polish; 0.2% – Belarussians; 0.2% – Jews; and 0.4% – other nationalities.

Education level

The region has accumulated notable scientific potential. Higher education services are provided by 34 graduate schools of 1-4 accreditation levels, including:

• Chernovtsy national university named after Yu.Fedkovich,
• Bukovina state medical university,
• Bukovina state financial academy,
• Institute of economics and law,
• Chernovtsy trade and economics institute under Kiev national trade and economics university,
• Chernovtsy faculty of national technical university “Kharkov polytechnic institute”,
• Storozhinets faculty of the Academy of state tax service of Ukraine,
• Monitorial and consulting center of business administration faculty under the national technical university “Kharkov polytechnic institute”,
• Bukovina institute,
• Interregional academy of HR management (under Chernovtsy cooperative college of economics and law), and
• Monitorial and consulting center of Odessa national law academy.

The region has 453 high schools, including: 1 degree – 51, 1-2 degree – 112 ones, 1-3 degree – 216 (including 6 boarding schools), and 1 school of 2-3 degree. There are also 21 gymnasiums, 10 lyceums, 2 private schools, as well as 33 study and training complexes, 9 special schools and auxiliary boarding schools, and a youth training center (9-10 grades).

Classes are taught in Ukrainian in 356 high schools (including in 9 special boarding schools), in Romanian – in 83 schools, in Russian – in 2, in Ukrainian and Russian – in 4, and in Ukrainian and Romanian – in 8 schools.

Companies with foreign investments

According to statistical data, as of July 1, 2005, the region had 180 enterprises with foreign investments. Chernovtsy region is home to successful investments made by the following enterprises:

• Mitache Ukrainian-Italian joint venture, which applies the newest technology to manufacture articles that have no analogues in Ukraine today, such as parquet semi-materials on veneer base made of birch veneer and glued through cold pressing with semi-materials out of oak, maple, bird-cherry wood, beech, African wood species, etc.
• EcoSyr (EcoCheese), a subsidiary enterprise, whose main business is processing milk and production of hard rennet cheese, which meets broad demand from the population.
• Stremitelno subsidiary enterprise, which is setting up a fast-food network.
• Sozvezdie Ukrainian-Italian joint venture involved in tailoring modern garments.
• Rikka LLC, which produces modern garments that are successfully sold in local and foreign markets.

Typical features of the region

Chernovtsy region is located at the crossroad of main lines from Central, Southern, and Eastern Europe, at the southwest of Ukraine, and at the foothills of the Carpathian mountains along Dnestr and Prut rivers.

The region is spread over three natural geographic zones: mixed wood and steppe area (Prutsko – Dnester interfluve), piedmont zone (between the Carpathians and Prut river) and mountain area (Bukovina Carpathians).

Climate in the region is moderate continental, average annual temperature fluctuates from +8 î Ñ in the northeast to +3 î Ñ in the southwest of the region.

The territory of the region is crossed with 75 rivers. The largest ones are Dnestr (290 km long), Prut – 128 km long, and Siret - 113 km long. The region borders Romania in the south and southwest (state border upon the region’s territory is 226.4 km) and Moldova (178 km long). In the west, the region has borders with Ivano-Frankovsk region of Ukraine, in the north – with Ternopol and Khmelnitskiy regions and in the east – with Vinnitsa region.

Forests are significant for economic and social development of the region. Gross territory of the woods is 258 ths. hectares. The main species are spruce, beech, fir, and oak. The average age of plantations is 65 years.

Geologic and raw stock resources

The region is rich in natural resources. It contains a number of valuable construction materials, including 116 deposits of minerals applied in construction.

Pridnestrovye area and Prut river basins have substantial reserves of gypsum and anhydride. The northern and eastern parts of the region are rich in marl and limestone. There are also deposits of quartzite, slates and salt.

The region has 8 explored hydrocarbon deposits, in particular 1 oil deposit, 6 natural gas deposits and 1 deposit of condensed gas.

There are 19 fields of fresh and mineralized waters such as Izhevsk, Matsesta, Borjomi, and Naftusya type. Industrial bottling of table and curing water is conducted.

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