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Multisectoral Market Study Central Ukraine

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Multisectoral Market Study Central Ukraine Mulitsectoral Market Study – Central Ukraine Commissioned by the Netherlands Enterprise Agency and Netherlands Embassy in Kyiv Multisector Market Study Central Ukraine ITFC - Ukrainian Industry Expertise Contents Executive Summary ............................................................................................................. 1 1. Profile of sectors under investigation. Important indicators and characteristics ........................... 5 1.1. Characteristic of companies of the sectors under study .............................................................................. 5 1.2. Volume of sales by sectors and regions. Top companies ........................................................................... 7 1.3. Export by sectors and regions ................................................................................................................... 15 1.4. The enterprises with FDI, international grants and participants of donor programs ................................ 18 1.5. Sectors’ sales channels. Retails share in sales .......................................................................................... 42 1.6. Foreign business’ feedback on local authorities’ support ......................................................................... 42 1.7. Availability of information for foreign businessmen or investors ............................................................ 44 1.8. Sector associations, cooperatives, business support organizations ........................................................... 54 1.9. Overview of sector events in the regions 2019 ......................................................................................... 57 1.10. Key obstacles to the business development by sector of consideration ................................................. 88 2. Agro-food and Horticulture. Detailed sectoral analysis ......................................................... 90 2.1. Agro-food sectors analysis ....................................................................................................................... 90 2.2. Production of fruits and berries ................................................................................................................ 99 2.3. Production of vegetables and mushrooms .............................................................................................. 109 2.4. Production of milk .................................................................................................................................. 120 2.5. Processing of milk .................................................................................................................................. 129 2.6. Processing and preserving of fruit and vegetables.................................................................................. 138 3. Industrial Sectors. Detailed sectoral analysis .................................................................... 147 3.1. Industrial sectors...................................................................................................................................... 147 3.2. Textile, clothing and footwear industry................................................................................................... 157 3.3. Metalworking .......................................................................................................................................... 168 3.4. Furniture production ................................................................................................................................ 177 3.5. Bioenergy (current and planned projects in bioenergy) .......................................................................... 185 3.6. Production of machinery, equipment, materials for agro-food and horticulture sectors ......................... 197 4. Sector “Joker” ............................................................................................................ 202 Cherkasy region .............................................................................................................................................. 204 Chernihiv region ............................................................................................................................................. 205 Khmelnytskiy region ...................................................................................................................................... 207 Kirovohrad region .......................................................................................................................................... 208 Kyiv region ..................................................................................................................................................... 210 Vinnytsia region ............................................................................................................................................. 212 Zhytomyr region ............................................................................................................................................. 214 Annexes…………………………………………………………………………….....217 Annex 1. List of foreign companies Annex 2. List of Cooperatives Annex 3. List of NGOs Annex 4. List of Companies in the sectors under study Annex 5. Report on interviews with enterprises 1 ITFC - Ukrainian Industry Expertise Executive Summary 1. The purpose of the study is to raise the interest of Dutch companies to do business in Central Ukraine and therewith contribute to the private sector development of the region. 2. Sectors under investigation: − agro-food and horticulture (production and processing of milk; production of greenhouse vegetables; production and processing of open field vegetables, fruit, berries, mushrooms; production and processing of potato); − industry (textile, clothing and footwear industry, furniture production and metalworking industry); − bioenergy (current and planned projects in bioenergy); − production of machinery, equipment, materials for above mentioned agro-food and horticulture sectors (real and working sites), namely agricultural machinery, seeds and boilers, fertilizers, pesticides, refrigeration equipment, milking complexes, press machines for making juices); − “joker” sector (selected among manufacturing sectors on the basis of regional specialization indicator): Vinnytsia and Zhytomyr regions - manufacture of wood and of wood products; Kyiv and Chernihiv regions – manufacture of paper and paper products; Kirovohrad region – manufacture of other machinery and equipment; Khmelnytskyii region – manufacture of electrical equipment; Cherkasy region - manufacture of basic pharmaceutical products and pharmaceutical preparations. 3. This study includes interviews with the governmental representatives of the selected regions, businesses and NGO’s operating in the selected sectors. They may reflect subjective opinions on the economic and political situation in Ukraine as of 2020 and might contradict with other expert opinions. 4. In the 7 Central Ukrainian regions’ economies, the positions of the studied sectors differ significantly: the largest share is observed in the Zhytomyr region - 8.7%, and the least - in the Kirovohrad region - 3.0%. 5. Sectors under analysis in the 7 Central Ukrainian regions under investigation include 10,385 companies employing 120,701 full-time employees. Sectors’ sales volume in 2018 amounted to UAH 80.6 billion, which was mainly generated by the Kyiv region (UAH 20.3 billion), the Vinnytsia region (UAH 17.3 billion) and the Cherkasy region (UAH 12.1 billion). 6. In terms of sales value, the largest sectors are dairy products production (UAH 27 454 million or 34%), metalworking (UAH 16 344 million or 20%) and milk production (UAH 10 883 million or 14%). Together, these sectors accounted for almost 68% of sales. 2 ITFC - Ukrainian Industry Expertise 7. The sectors under study face some important challenges. Interviewed companies stressed the following key obstacles to growth: lack of government support (43%), inaccessibility of funding (41%) and shortage of workers (36%). 8. There is a significant interest for cooperation with Dutch business - 91% of the surveyed companies show interest in cooperation with Dutch companies, first of all in entering foreign markets (57%), obtaining new technologies (24%), and receiving financing (22%). 9. The fruits and berries production sector includes 529 companies employing 5,059 full- time employees (excluding seasonal workers). The sector’s sales volume in 2018 amounted to UAH 1 104 million, which was mainly generated by the Vinnytsia region (UAH 681 million) and the Khmelnytskyii region (UAH 160 million). 10. The vegetable production sector includes 484 companies employing 3,755 full-time employees (excluding seasonal workers). The sector’s sales volume in 2018 amounted to UAH 3.9 billion, which was mainly generated by the Kyiv region (UAH 1 222 million) and the Cherkasy region (UAH 1 105 million). 11. The milk production sector includes 386 companies, employing 17,808 full-time employees. The sector’s sales volume in 2018 amounted to UAH 10.9 billion, which was mainly generated by the Cherkasy region (UAH 2.52 billion), the Kyiv region (UAH 2.0 billion) and the Chernihiv region (UAH 2.0 billion). 12. The milk processing sector includes 224 companies, employing 22.1 thousand full-time employees. The sector’s sales volume in 2018 amounted UAH 27.4 billion, which was mainly generated by the Vinnytsia region (UAH 8.9 billion), the
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