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UKRAINE AEROSPACE www.chamber.ua AND TECHNOLOGY INDUSTRY
STATE CONCERN State Concern “Ukroboronprom”, established in 2010, is the largest state EUROPEAN STRONGEST ARMIES RANKING “UKROBORONPROM” defense holding group in Ukraine with over 120 subsidiaries operating in five major industries as well as in R&D and export-import activities Country Place in the world Aviation cluster of Ukroboronprom — around 30 companies enaged in aircraft engineering and maintenance. The corporatization of key enterprises France 1 (SE “Antonov” and SE “Plant 410 CA”) was initiated United Kingdom 2
Germany 3 STATE SPACE AGENCY OF UKRAINE Italy 4
manufacturing design companies of Poland 5 8 enterprises 5 bureaus 11 other types Spain 6
AIRCRAFT Ukraine has the full cycle of aircraft manufacturing — from design to serial Greece 7 MANUFACTURING production and complex after-sale support. State Enterprise “Antonov” is the producer of An-124 “Ruslan” and An-225 “Mriya” aircraft, which are Sweeden 8 among the biggest aircraft in the world Ukraine 9 >200 >100,000 >90 Czech Republic 10 R&D, engineering centers engineers, specialists enterprises of Source: Global Firepower — 2017 European Powers Ranked by Military Strength Ranking and production companies and workers employed private sector in the industry in the industry
LARGEST EXPORTERS OF MAJOR WEAPONS
Country Place in the world DEFENCE HUB 558 state and private WAS ESTABLISHED USA 1 IN APRIL 2017 enterprises Russian Federation 2
Source: State Concern “Ukroboronprom”, Ukrainian Chamber of Commerce, Ministry of Economic Development and Trade of Ukraine, Cabinet of Ministers of Ukraine China 3
France 4 UKRAINIAN AEROSPACE INDUSTRY Germany 5 Performance Indicators 2016 1 half-year of 2017 United Kingdom 6 Production volume growth 45.7% (for 9 months)* 35.1%** Spain 7 Sales volume growth 22.6%*** 37.9%** Italy 8 Sales proceeds UAH 3.73 bln UAH 1.87 bln
Export sales growth 14.8*** 39.7%** Ukraine 9
Export sales share 56.6% 60.5% Israel 10
Source: State Space Agency of Ukraine, Interfax. * Compared to 9 months of 2015 ** Compared to 1H 2016 Source: Stockholm International Peace Research Institute (SIPRI), *** Compared to 2015 ranking for 2012–2016 103
UKRAINE AEROSPACE www.chamber.ua AND TECHNOLOGY INDUSTRY
STATE CONCERN State Concern “Ukroboronprom”, established in 2010, is the largest state EUROPEAN STRONGEST ARMIES RANKING “UKROBORONPROM” defense holding group in Ukraine with over 120 subsidiaries operating in five major industries as well as in R&D and export-import activities Country Place in the world Aviation cluster of Ukroboronprom — around 30 companies enaged in aircraft engineering and maintenance. The corporatization of key enterprises France 1 (SE “Antonov” and SE “Plant 410 CA”) was initiated United Kingdom 2
Germany 3 STATE SPACE AGENCY OF UKRAINE Italy 4 manufacturing design companies of Poland 5 8 enterprises 5 bureaus 11 other types Spain 6
AIRCRAFT Ukraine has the full cycle of aircraft manufacturing — from design to serial Greece 7 MANUFACTURING production and complex after-sale support. State Enterprise “Antonov” is the producer of An-124 “Ruslan” and An-225 “Mriya” aircraft, which are Sweeden 8 among the biggest aircraft in the world Ukraine 9 >200 >100,000 >90 Czech Republic 10 R&D, engineering centers engineers, specialists enterprises of Source: Global Firepower — 2017 European Powers Ranked by Military Strength Ranking and production companies and workers employed private sector in the industry in the industry
LARGEST EXPORTERS OF MAJOR WEAPONS
Country Place in the world DEFENCE HUB 558 state and private WAS ESTABLISHED USA 1 IN APRIL 2017 enterprises Russian Federation 2
Source: State Concern “Ukroboronprom”, Ukrainian Chamber of Commerce, Ministry of Economic Development and Trade of Ukraine, Cabinet of Ministers of Ukraine China 3
France 4 UKRAINIAN AEROSPACE INDUSTRY Germany 5 Performance Indicators 2016 1 half-year of 2017 United Kingdom 6 Production volume growth 45.7% (for 9 months)* 35.1%** Spain 7 Sales volume growth 22.6%*** 37.9%** Italy 8 Sales proceeds UAH 3.73 bln UAH 1.87 bln
Export sales growth 14.8*** 39.7%** Ukraine 9
Export sales share 56.6% 60.5% Israel 10
Source: State Space Agency of Ukraine, Interfax. * Compared to 9 months of 2015 ** Compared to 1H 2016 Source: Stockholm International Peace Research Institute (SIPRI), *** Compared to 2015 ranking for 2012–2016 104
www.chamber.ua
FINANCIALS OF THE STATE CONCERN “UKROBORONPROM”
Financials 2016
Net profit UAH 28.3 bln
Budget payments UAH 4.6 bln
Average wage UAH 7,365
Capital investment UAH 683.6 mln
Profitability of operating activities 5.4%
Source: State Concern “Ukroboronprom”
MAJOR Non-effective corporate governance in state-owned enterprises. State PROBLEMS/ ownership is fragmented and scattered among numerous stakeholders DIFFICULTIES (MOD, MIA etc) with the frequent overlap and conflict of interests IN THE SECTOR Defective export-import control and IP protection legislation regarding military and dual use goods Excessive limitations of access to data in the industry Legal restrictions related to the establishmebnt of joint ventures by state- owned enterprises Lack of political will and senior leadership issues among key decision-makers in the industry. A number of reforms were announced but not implemented
PROSPECTS, Privatization of non-strategic state-owned enterprises POSSIBILITIES, Establishing supervisory councils with independent directors in state- INNOVATIONS owned enterprises IN THE SECTOR Reforming export/import control system, strengthening end-user control Amending Public Private Partnerships (PPP) and Joint Ventures (JV) legisla- tion, as well as the intellectual property protection legislation regarding military and dual-use goods Reform of the system of protection of state secrets and other restricted information based on EU and NATO practice Implementation of NATO standards
“The capabilities of the Aersopace and Techology sector make it one of Ukraine’s largest potential export sectors and economic drivers. The primary goals are connecting the industry industry with 21st century processes already developed and implemented in the west/NATO countries, creating conditions for bringing investment into the sector and implementing the announced reforms.” Anastasiya Bolkhovitinova, Legal Director, DLA Piper Ukraine