Modern economic POTENTIAL OF UKRAINE

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Light industry

Light industry in Ukraine is one of the most socially important economic segments, as it is a multi-industry complex with a high level of internal cooperation. The light industry sector includes 25 distinct segments and 500 production enterprises, and employs more than 300 ths. people.

The main market segments are textiles, leather, garments, knitwear, footwear, textiles and haberdashery, clothing accessories, leather haberdashery, fur, toys, china and porcelain, and others.

As a whole, the country’s enterprises make up around 7% of the industry’s total production potential and 2.4% of production funds. The largest segments in terms of production volumes and number of employees are textiles, leather footwear, garments, and knitwear.

The regions contributing the most to light industry production volumes are Zhitomir region (10.2%), Lugansk (7%), Chernigov (6.6%), Lvov (6.1%), Rivne (5.5%), Ivano-Frankovsk (5%) regions, and the city of Kiev (9%).

Light industry production capacities enable annual production covering cotton tissues of 610 mn sq. m, wool tissues – 78 mn sq. m, silk fabric – 208 mn sq. m, linen– 69 mn sq. m, as well as suits – 10 mn, skirts and dresses – 42 mn, coats – 12 mn, jackets – 8 mn, shirts and blouses – 44 mn, upper knitwear articles – 63 mn, and, besides, 30 mn pairs of socks and stockings, 136 mn pairs of leather footwear, 3.2 bn sq. dm of natural leather, 15 mn sq. m of artificial leather, and 205 mn units of china and porcelain. The industry’s companies serve both public and private customers domestically and abroad.

The availability of notable technological facilities has helped a number of companies receive international awards for the high quality of their articles. Hence, OJSC Cheksil was awarded a Woolmark international certificate from the International Wool Secretariat based in Dusseldorf for 14 articles of wool-worsted fabrics. For its collection presented in Paris, Lugansk-based OJSC Lutri received an Oscar award. The Association of Enterprises of America and Europe awarded the Tismenitsa Fur Company a prize “For Commercial Prestige and the Best Trademark”, while “The Best Trademark” award was presented by the Madrid Club of Trade Leaders.

The list of domestic market leaders is headed by the Textile-Contact firm, whose main business is the production and sales of all types of fabric, artificial fur, knitwear material, applied materials, and accessories (more than 20 ths. articles). The company produces such a wide range thanks to large orders for cotton, wool, and semi-wool fabrics, as well as for beddings for internal use by several government ministries and institutions. Textile-Ukraine Corporation is another fast-growing union with industrial, research, and financial potential. The development of the corporation was encouraged by large financial partners from Russia. The corporation embraces 27 enterprises from all over Ukraine, which manufacture almost the entire spectrum of light industry articles. Dominant exporters for the past several years have been JSC Ukraina (Zhitomir), which sells its articles to Germany, the Czech Republic, Slovenia, Croatia, Hungary, and Poland; Cherkassy Silk Works, shipping silk fabrics to the USA, Denmark, the Czech Republic, and Hungary; as well as OJSC RivneLen and CJSC VOZKO (Voznesensk).

CJSC Lyubava Knitwear Enterprise of Cherkassy, and UkrAmTex Company (Brovary) are other enterprises with successful experience of designing new clothes articles and selling them abroad. Almatti trademark is the largest producer of high-quality outerwear. Each year Almatti offers more than 100 models of coats, jackets, and suits of various silhouettes and styles to women.

The industry includes 26 joint ventures, most of which are working in textile, sewing, and the leather footwear segments of production. The most notable are Ukrainian-British JV Demitex based on the Poltava Cotton Mill, Ukrainian-German JV Sanders established in the premises of Irshava Garment Factory, Ukrainian-Dutch JV TikaFurLux set up on the base of the Tismenitsa fur company, Ukrainian-Lithuanian JV Vaise established upon the facilities of Cherkassy Garment Factory, Ukrainian-Italian JV RIF based upon Polymer Union of Kiev, and many others.

Enterprises engaged in textile industry and garment sewing increased output by 3.2%, while leather and leather footwear manufacturers slashed production by 9.9%.

Out of 500 companies, more than 140 are running foreign trade. Their exports of fabrics (cotton, wool, and silk), socks and stockings, knitwear, and garments, china and porcelain, as well as leather semi-products, and other articles are destined for 25 countries of Europe, Asia, the Americas, and the CIS.

Geography of light industry products’ export from Ukraine.

Export of main light industry articles – preliminary results of 2005

Pattern of main light industry articles import – preliminary results of 2005.

The investment attractiveness of light industry enterprises in terms of the allocation of capital (such as finance, equipment, or raw stock) lies in the fast return on investments – thanks to short production and sales cycles, quick updating of the product mix, the availability of local raw resources (wool, linen, raw leather) and the potential capacity of the Ukrainian market.

Now the task of Ukraine is to support and develop positive trends in the industry, especially in relation to investments, which encourage upgrade of production, implementation of state-of-the-art technologies, and the commissioning of new types of competitive products.

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