UKRAINE Monday, January 23, 2012 See this report at worldfolio.co.uk Taking centre stage Ukraine finds itself in a special position where the future of the country will be determined in the coming months

UKRAINE IS the second largest country enterprise and stimulating investment. make use of its geopolitical advan- In an encouraging sign of faith, the in Europe, a land of vast fertile plains Economically, the country is back tages and become a bridge between European Bank for Reconstruction and of barley and wheat as well as heavy on track after the global financial and Russia and the West. Development (EBRD), the largest foreign industry, with a population of more economic crisis checked its run as Negotiations on an association financial investor in Ukraine, last year than 45 million. Once the economic one of Europe’s top emerging mar- agreement between Ukraine and the made its second-largest contribution lynchpin of the Soviet Union, today it kets. In 2011, prices and tariffs in- EU were completed at the end of 2011, since the start of its operations in the is a country in transition, gradually creased by only 4.6 per cent, repre- but at the time of writing the deal was country in 1993, increasing its invest- shedding the legacy of the commu- senting Ukraine’s lowest rate in the still waiting to be signed, delayed by ment by 7.1 per cent, compared to 2010, nist decades that have for too long past eight years. Furthermore, GDP ex- the fallout from the imprisonment last with 41 new deals worth €1.02 billion held back its economic, political and panded by 5.2 per cent in 2011 – the October of opposition leader and for- (£843 million). social development, and seeking a highest figure in the region, beating mer Prime Minister Yulia Tymoshenko. Andre Kuusvek, EBRD director for brighter future for its citizens. an estimated 1.6 per cent for the EU Proceeding with the agreement, Ukraine, says: “We have increased Since entering office in 2010, Pres- and 4.5 per cent for CIS countries. which includes a comprehensive free the level of investment very signifi- ident Viktor Yanukovych has spoken Economic growth, which is greatly trade area, is in the interests of both cantly since the crisis of 2008-2009. of implementing a series of compre- aided by the country’s appeal for in- sides. For Ukraine, furthering politi- Out of the total €7.2 billion of invest- hensive economic, governmental and ternational business, is expected to cal association and economic inte- ment, half of that was done over the political reforms aimed at trans- be given an extra boost this year by gration with the EU, its largest trade past three years, forming Ukraine into a dynamic, free- Ukraine’s co-hosting of the 2012 UE- partner, would enhance the creation compared to the market democracy. FA European Football Championships of a more predictable climate for do- past 16 years be- Business and government leaders in collaboration with Poland. ing business, attract new invest- fore that. This would like to see the pace of reform Key to Ukraine’s future is a prag- ments into the economy and take demonstrates accelerated in 2012, with top priority matic foreign policy and its relations the country a step closer to eventu- the commitment given to changes aimed at facilitating with its neighbours. Ukraine should al EU membership. we have.” I

AN INDEPENDENT SUPPLEMENT BY UPPER REACH ON UKRAINE An advertisement supplement by UPPER REACH 2 UKRAINE UK-UKRAINE FRIENDSHIP CAN READY TO FEED THE WORLD BENEFIT BOTH COUNTRIES Following the unification of Avangard and Ukrland- farming, Ukraine can play a major role in alleviating the global food crisis Major economic, political and social ties bind the He says: “We believe that if we can get the EU- two countries Ukraine association agreement and the deep and In an encounter between Oleg Bakhmatyuk, chairman comprehensive free trade agreement, this will cre- of Avangard Ukrlandfarming – Ukraine’s leading inte- When presenting his credentials in 2008, Leigh ate a strong momentum for reforms. I hope that grated agricultural producers – and the Prime Minister Turner, the UK Ambassador to Ukraine, declared: will in turn generate pressure to ensure that the of Singapore, in which food markets were discussed, “What happens here is of immense significance for courts are more independent, which will encour- the latter said to the former: “In this world there are the UK, for Europe and for the world.” age more foreign investment.” two incomparable weapons: no food and no water.” Ukraine is important, strategically, economically In partnership with Poland, hosting the 2012 And at that moment, Mr Bakhmatyuk was reaf- and, crucially, as a source of future agricultural pro- UEFA European Football Championship is an im- firmed in his belief that Avangard’s merger with Ukr- duce – it has 25 per cent of the arable land in Eu- mense opportunity for the nation, but landfarming had created a vehicle with global appeal. rope and 33 per cent of the black earth in the world. EU accession is what will complete The transfer of 77.49 per cent of Avangard – the largest It is the largest country wholly in Europe and bor- the journey. producer of chicken eggs in all Europe and Asia – to ders four EU member states. It is also the most The British Council opened in Ukrlandfarming, was part of the largest merger in democratic country in the Commonwealth of In- Ukraine in 1992, and now oper- 2011 in all Eurasia. dependent States, having held four free and fair ates centres in Kyiv, Odessa, Mr Bakhmatyuk announced: “Due to the constant national elections since 2004. Donetsk, Lviv and Kharkiv. threat of food crisis, we intend to be the flagship of Ukraine’s population of 45 million people is a Bate C. Toms, chairman, round- Ukrainian exports of food to developing countries, as rapidly growing market for foreign countries: UK- ly echoes the Ambassadors’s well as leader of the domestic food market.” based companies exported £545 million of goods positivity, especially in terms of Ukrlandfarming has positioned itself as a global and services there in 2009 and have invested Ukraine’s agricultural vitality and player – it recently pulled off a historical US$600 mil- $2.376 billion (£1.55 billion) there since importance. lion loan to optimise its production – and is currently 1992. “Ukraine can easily increase its the number one landowner in the country. The UK is the sixth largest food production four-fold Regarding the appeal of the sector, Mr Bakhmatyuk OLEG BAKHMATYUK, Chairman of Avangard foreign investor in Ukraine. to become the explains: “Investors are thirsty for security and it is a Ukrlandfarming The Ambassador says: world’s leading safer harbour to invest in agriculture compared to “Ukraine is a valued friend producer,” he more volatile alternatives. Real markets in times of cri- one of few that still have the potential to increase and partner. We co-oper- says. sis become increasingly more attractive to investors. its agricultural production. “Argentina and Brazil ate extensively and pro- He cautions that Agriculture is maybe the only sector that can substan- have nearly reached their potential, while Ukraine’s ductively in international if the UK wants tially boost cash flow in Ukraine.” minimum growth is estimated at three to five organisations such as to wield real in- With an agricultural past inextricably linked to its times, according to analysts, which makes this an the United Nations, the fluence in a history, Ukraine boasts a strategic location – at a extremely attractive investment opportunity,” ex- Organisation for Securi- world where crossroads between Europe and Asia – and is a coun- plains Mr Bakhmatyuk. ty and Co-operation in food, rather try of temperate continental climate with much of its “Ukraine is perhaps able to feed much of the world Europe, and the than oil and terrain consisting of fertile plains and plateaus. because of its potential for agricultural output and its Council of Europe.” gas, is to be of The country’s potential is and has always been evi- proximity to other regions. We can fill 40 per cent of He is candid paramount im- dent to the world. When still a part of former Soviet the food deficit that’s in North Africa,” he adds. about problems, in portance, con- Union, Ukraine’s fertile black soil generated more than “Ukraine is estimated to be capable of producing particular a report- tinued invest- a quarter of the entire Soviet agricultural output, and anything from around 120 and 180 million tonnes a ed lack of indepen- ment in – and dia- its farms provided substantial quantities of meat, milk, year. Given that Ukraine consumes domestically dence of the courts. Nev- logue with – Ukraine is grain, and vegetables to other republics. around 25 million tonnes, this can make Ukraine – ertheless he has an abiding LEIGH TURNER, of utmost importance Ukraine now has the opportunity – and capabili- within the next decade – a clear global leader in ex- love of Ukraine and remains UK Ambassador to Ukraine for this and future ty – to capitalise on the world food crisis. What porting grain, and also a global leader in the produc- confident about the future. generations. distinguishes the country from others is that it is tion of proteins,” says Mr Bakhmatyuk. INVESTMENT IN UKRAINE: MANY REASONS TO BE CHEERFUL

While enjoying growing assets, a diversified to take place in Ukraine, the country is set to Ukrainian market can pro- portfolio and high return on public funds, ITT take another step torwards reaching its mass- duce. “We work more with Group is also confident the agricultural sector market potential. Coupled with social ameliora- foreign companies that While we watched the is set to boom tions – such as the establishment of pension come here,” explains Ms crisis evolving in other reforms – local, experienced companies such Karkarova, and comments Despite possessing the backbone for a poten- as ITT Group are prepared to set the lead in at- on Ukraine’s willingness to countries it did not have that tially strong economy – Ukraine is rich in re- tracting and orienting foreign investment. continue moving in this di- sources, strategically located and endowed Oportunities exist for early birds. “Ukraine rection: “If you do this it can much of an impact on us” with an educated workforce – the nation is does offer tremendous opportunity for growth, increase competitiveness.” ranked 145th out of 183 countries in the World and whoever invests now will get more benefits ITT, founded in 1995, is a Bank’s ease of doing business index. Howev- than those who come later,” says Oksana S. consolidated 100 per cent OKSANA S. MARKAROVA, er, this position is set to improve with new Markarova, president of the ITT Investment Ukrainian-owned company President of ITT Investment Group government measures to stimulate business Group (ITT), highlighting the importance of tim- that provides leading services development. ing for successful foreign investments. of brokerage and investment With upcoming events such as Euro 2012 set ITT knows first-hand the results that the banking, private equity, asset “ management and funds and investment consult- Ukraine you see the results of your work al- ing in Ukraine. most immediately,” says Ms Markarova. Despite the modest size of the Ukrainian With a proven track record, today four core market, the country boasts the benefits of not companies lead ITT’s main lines of business: having fully merged into the European or World ITT-Invest, ITT-Management, ITT-Real Estate and economy. “While we watched the crisis evolv- ITT-Capital. “We work in accordance with inter- ing in other countries it did not have that much national standards of governance and we are of an impact on us,” explains Ms Markarova. PricewaterhouseCoopers audited,” says Ms “When something happens in London, it does Markarova. not affect us too much.” Though the chemical industry and metal pro- In the long run, this “isolation” as some cessing are the traditional sectors in Ukraine, might describe it, proved advantageous for the for the future Ms Markarova envisions “the core Ukrainian market as it is now at the forefront of sources for growth will come from agricultural investment targets. “When you do something in business and food processing.”

UKRAINE PROJECT TEAM: TIM BRADLEY, ROCIO DE MINGO AND IRAMA VEGA

UPPER REACH, 68 King William Street, London EC4N 7DZ Tel: +44 (0)207 959 2424, Fax: +44 (0)207 959 2201

See it also at facebook.com/worldfolio An advertisement supplement by UPPER REACH UKRAINE 3 “Joining the EU will make us more open, democratic and competitive” Roman Shpek, an expert on economic matters in Ukraine, comments on the economical climate surrounding its aim to become a member of the EU and form part of the G20

AN ADVISOR TO THE PRESIDENT and senior Structural reform and privatisation to Alfa-Bank’s senior partner, followed by Russia. New technology advisor at Alfa-Bank, Roman Shpek, feels that increase competitiveness could be key in advisor Roman Shpek and electronic equipment come mainly from the International Monetary Fund’s support of drawing investments to boost domestic believes cooperation the European Union or the US, while most of the Ukraine’s macroeconomic, fiscal, budget and trade. between the country’s energy sources, including gas, metal policy is vital. “It is not just about access to Regarding the issue of non- government, national and oil, come from Russia. “Thanks to President money but it is about recognising economic performing loans within the Ukrainian bank and the IMF is Yanukovych we have significantly improved our reform as well,” he says. “The President and the banking system, Mr Shpek affirms that crucial for capital and political and economic relations with Russia Independent National Bank are crucial for the matter has been tackled and recognition of and our trade has increased. This is very Ukraine. President Yanukovych correctly confidence in the sector restored. “The economic reform important because it has opened up the determined the course of reform and he level of deposits in Ukrainian banks Russian market to Ukraine for the building determined the long-term goals. has increased significantly and the industry and the food processing industry,” Alfa Bank (Alfa), a Ukrainian universal level of credits in the economy has explains Mr Shpek. commercial bank headquartered in Kiev that increased as well. Now all bankers Infrastructure developments, resulting from has been assigned ratings by Standard & Poor’s and government officials are preparations for the upcoming Euro 2012 and Fitch Ratings CIS Limited, shares the working together to reduce the football tournament, will have a positive boost national strategic goal of European integration, level of non-performing loans,” on local consumption and possibly unbolt the which Mr Shpek believes will lead to an details Mr Shpek. Ukrainian market to the EU. “There is a lot of improvement in “living standards and labour As Ukrainians pump good food in Ukraine and lots of good, small productivity, as well as environmental money into their banks, restaurants with international cuisine and good protection and healthcare, etc.” foreign investors have made service, ” notes Mr Shpek, optimistic that the Mr Shpek is confident that “joining the EU will the country’s agricultural influx of tourists will create a consumer trend make Ukraine a more open, democratic and and energy sectors their in Ukraine that will stick with the Ukrainians. competitive state.” The first necessary step targets. “We will start to Regarding economic trends and movements, however towards becoming a member of the privatise energy generation the UK is one of Ukraine’s reference markets. common market will be to increase private companies this year and we “London is the world financial centre and the investment in the country as, according to Mr will continue to privatise UK is a very important part in the political, Shpek, “Ukrainians do not just need money, we energy distribution financial and general economic sense because need new knowledge, new technology and companies. We have there are a lot of British companies operating access to new markets.” special green tariffs over here,” says Mr Shpek. I To achieve its long-term goal of forming part for renewable energy of the G20, Ukrainian market experts have and a lot of calculated a required indispensable economic companies from growth of 9 to 11 per cent. “We have the Germany and greatest potential in the agriculture sector. We Spain are looking Ukrainians do need to attract investment banks and at the possibility corporate banks; this will help to increase of investing in not just need domestic consumption,” says Mr Shpek. wind and solar money, we need new According to Alfa’s senior advisor, to date energy,” adds Mr approximately 68 per cent of Ukrainian GDP Shpek. knowledge, new goes to exports, a positive contribution to the Presently, the country’s economy, though domestic EU is Ukraine’s technology and access production and consumption have decreased. biggest trade to new markets.” “ROMAN SHPEK, Senior Advisor to Reforms and dialogue are Alfa Bank vital to progress

them, we correct them,” he says. agrees that only reform can guarantee Ukraine Bringing the way Ukraine does government, Jose Manuel Pinto Teixeira, head of the a successful future and a realistic prospect of business and the law into line with Europe is a major delegation of the European Union to Ukraine, EU membership. says it will take “real and serious” leadership for “In addition to improving the political system challenge for the government and has spurred Ukraine to move into line with European values, that guarantees democracy, freedom of speech but that it is essential to European integration. and fair justice, it is also important to progressive changes “Tackling the challenges of Ukraine in a strengthen the competitiveness of our serious way would definitely transform the economy,” he says. country into a successful nation and create a Vitaly Klitschko, leader of the Ukrainian ADHERING TO common European values is an convicted. “I am convinced that once we fulfil more balanced distribution of wealth, which is Democratic Alliance for Reform, believes Ukraine indispensable pre-condition for Ukraine this difficult job Ukraine will get modern something that Ukrainians expect and the EU is far from meeting European standards, but that eventually joining the EU, and a challenge for the European standards in justice, procedures and supports,” he says. with sufficient political will the country could government of the former Soviet republic. human freedoms,” he said recently. Jorge Zukoski, president of the American change within a relatively short period of time: Just how much of a challenge, and just how He acknowledges there are still many issues Chamber of Commerce in Ukraine, says the “European and world politicians are on our side – much Ukraine’s credibility rests on meeting it, of the harmonisation of national legislation with problems of the Soviet legacy in the business everybody is interested to see Ukraine as a has been illustrated by the recent case of former European standards unresolved but says the arena need to be tackled, as well as the political, modern country with political and economic prime minister Yulia Tymoshenko, whose government will do everything to bring Ukraine judicial and social spheres. “Ukraine needs to stability.” imprisonment for seven years on corruption closer to European democratic standards of life. increase its competitiveness. A lot of this comes Lev Partskhaladze, chairman of the board of charges last October prompted international Modernisation of the country should be down to the fact that there needs to be the Ukrainian Building Association, sees protests, including from the EU. brought about in open dialogue with the comprehensive legislative and regulatory reform evidence of significant progress in his sector of President Viktor Yanukovych has since Ukrainian people. “We should arrange a that will be implemented in a wide variety of the economy, where bureaucracy and corruption declared there is a pressing need for reform of serious dialogue with society, go and meet different areas.” were deterring investment in construction. “We criminal justice and of the outdated criminal the people. We should not hide. We have our Roman Shpek, an advisor to the President have taken the best of experience from other code under which Ms Tymoshenko was flaws, mistakes, but we are talking about and senior advisor at Alfa-Bank, Ukraine, countries and used this as a basis,” he says. I An advertisement supplement by UPPER REACH 4 UKRAINE All eyes on Ukraine’s agriculture sector Land market reform increases focus on Urkaine’s agro-potential

WITH ITS VAST FIELDS of wheat and barley, sun- With sufficient investment, the agricultural dollars of investment Ukraine could double its boast the highest potential for increasing the flower, beets and other grain and oil crops, it is sector could become the most profitable in the annual harvests to around 50 million tonnes and volume of agricultural production worldwide.” easy to understand how Ukraine gained its economy; currently, it accounts for around 25 over the next decade become one of the world’s He says the first priority for the government nickname of the breadbasket of Europe. per cent of Ukraine’s gross domestic product. top exporters of meats. Exports aside, there is al- is the completion of its land reform programme, Ukraine is responsible for 60 per cent of world Land reform and application of the latest farm- so the potential for huge sales within Ukraine it- but he cautions that Ukraine cannot simply sunflower exports. It is the world’s top exporter ing technology would boost production both for self, given the size of the domestic market. adopt the agrarian model of other countries. of barley, a major supplier of wheat and also ex- exports and domestic consumption, and enable Unsurprisingly, almost all the world’s leading The Minister believes the way forward is for ports significant quantities of milk and meat. investors to reap enormous profits. grain-trading companies are already represent- large-scale production, farming and individual Russia, Western Europe and China provide Ukraine’s government is keen to see produc- ed in Ukraine and they are eager to see the production to coexist and develop parallel to ready markets, and as global food shortages tion levels raised. “Our realistic goal, backed up sector liberalised and opened up fully to inter- each other. “The combination of these three di- become an increasing problem, Ukraine is one by scientific and economic research, is to dou- national trade. Mr Prysyazhnyuk says: “We rections will enable us to fulfil the tasks we of the few countries in the world that could be ble the production of grain crops in the next have a clear understanding of the reforms nec- have set ourselves,” he says. in a position to make a major contribution to- three to four years,” says Mykola Prysyazh- essary in the agrarian sector in order to be able He acknowledges the need for administrative wards solving it. nyuk, Minister of Agrarian Policy and Food. to increase the pace and volume of agricultural reform and the general creation of a favourable However, to make that happen the country Indeed, analysts believe that with billions of production. We live in the country that can investment climate. Ratification of the free needs a state-of-the-art agricultural sector to trade zone agreement with the EU would be a enable it to become a major supplier of high pro- positive signal for potential investors. With a tein-based foods. This will require the invest- third of the population living in rural areas, labour costs are low; around a quarter of the workforce is engaged in agriculture or forestry, while agro-industry accounts for one-third of agricultural employment. Our country can The EBRD and the World Bank believe Ukraine boast the highest has the potential not only to significantly in- crease its grain production, but also to export potential for increasing more semi-finished and finished premium- quality food products. the volume of agricultural They say the country could have a significant impact on the world food situation, while benefit- production” ing from significant gains in terms of export rev- enue, economic growth and rural development. “With the right policies, levels of investment in agriculture can be increased and output can ment of large sums of money in new technolo- be increased significantly as well,” says Gilles “gies and infrastructure, which can only be pro- Mettetal, EBRD’s agribusiness director. I vided by a major increase in international and domestic investment into the agricultural sector. Nobody doubts the huge potential of Ukraine’s fertile “black earth”, which once was We have a clear used to produce 25 per cent of all agricultural output in the former Soviet Union. Blessed with understanding around one third of the world’s humus-rich soil, some 54 per cent of Ukraine’s land is arable of the reforms necessary land – yet today only around half of it is being used for the cultivation of crops. in the agrarian sector to increase its pace and volume” IEEC and Smart Holding create “MYKOLA PRYSYAZHNYUK, Minister of Agrarian Policy Ukraine’s first major biofuel plant and Food

A new plant in Vinnytsia the perfect investment partner for the pilot pro- harvests, amounts of agricultural waste will also Reaching one million tonnes of biofuel produc- ject. It is one of the largest groups of companies grow larger. To date, this waste has not been tion will be our second target, and if we are suc- will convert agricultural in the country and has investments in a wide made use of. We either ploughed it back into the cessful at this stage, we will expand the project range of industries, including metals, mining, soil or it was simply burnt. further: up to five or 10 million tonnes. According waste into biomass fuel and non-metallic and construction materials. A few years ago Ukraine harvested nearly 30 to the calculations carried out by the Academy of The IEEC provides professional consultancy million tonnes of grain crops per year. Last year Science of Ukraine, the potential of biomass in pellets that will provide services in energy and environmental audit we improved the result up to 40 million tonnes; our country amounts to 27 million tonnes. You and management, project development, and this year it is around 45 million tonnes already. see that the potential is huge. energy for local state-run the implementation of state-of-the-art energy- The planned production of grain crops in the enterprises and efficient technologies. It is also involved in re- coming years is 80 million tonnes. This means What else is the IEEC developing? duction of fuel consumption and pollution of that we will have huge volumes of excessive agri- We are working on a set of programs aimed to households and create jobs the atmosphere, including greenhouse gas cultural waste that needs to be recycled. We feel solve the environmental problems and improve emissions. that the best way to recycle it is to produce sus- the energy efficiency of enterprises. We are also Co-owner of the IEEC Sergey Fedorovich Yermilov pro- tainable biofuel. elaborating special projects for metallurgical in- THE FIRST LARGE-SCALE project in Ukraine to vides an overview of the landmark scheme. Parallel to this, machine building industry will dustries owned by SCM, Metinvest and Smart produce biofuel is on track to be piloted in June. be developed: we plan to produce special equip- Holding. We have also developed a number of The joint venture is the brainchild of the Insti- How do you see the biomass project developing? ment, such as boilers, because Ukraine has an large-scale projects for the Industrial Union of tute of Environmental and Energy Conservation If the pilot project is successful, in future we will acute need to modernise 30,000 heating sta- Donbass and some other companies. To sum it all (IEEC), which has partnered with Smart Holding produce one million tonnes of biofuel; and tions. Thousands of jobs can be created. up, I would like to say that our experience in the as the main investor to help turn it into reality. Ukraine will be able to reduce imports of natural development of energy efficient and environmen- More than 90 per cent of the factory’s con- gas from the Russian Federation by 500 million If the pilot goes well, will you be looking for addi- tally attractive projects has given good us con- struction is already complete. The initial tech- cubic metres annually. tional investors and partners? nections and an oportunity to create new ways of nology for processing the raw material – waste We are already pretty sure that it will be prof- At present we have the funds to complete this widening the Ukrainian market of energy efficient straw, which will come mainly from the rice, itable – this we can infer from the business plan, first pilot project. But if we decide to expand, it is technologies. rapeseed, soy and sunflower industries – is be- but only time will show how attractive it is for evident that we will need more investments and It is very difficult to explain everything about ing provided in February by two German compa- other enterprises and whether all the regions of new connections. That is why our goal at this mo- our company in such a short article. You will find nies: Claas and Amandus Kahl. the country will be interested in cooperating. ment is to inform the Western community that more information on the activity of the IEEC at Owned by leading Ukrainian businessman Taking into consideration the fact that our gov- such an initiative has been launched in Ukraine our company’s website: Vadim Novinsky, Smart Holding was chosen as ernment expects stable growth in grain crops and to evoke interest among potential partners. www.ipee.org.ua An advertisement supplement by UPPER REACH UKRAINE 5 Moving towards energy independence Energy diversification will give Ukraine the options it needs as it sets its sights on fully satisying its domestic energy requirements

CURRENTLY TOP on the list of quality legislation and regulatory poli- Ukraine’s political agenda is reform- cy are quite serious in our country. ing the energy sector, given rising Fair evaluation is the basis for finding global prices and the country’s de- the solution to these problems,” as- pendence on imported energy sup- sures Vladyslav Kaskiv, head of the plies, primarily from Russia. By the State Agency for Investment and Na- end of 2011, Ukraine was relying on tional Projects of Ukraine (SAINPU). imports to meet about three-quarters “This country has an excellent po- of its annual oil and natural gas re- tential in oil and gas,” says Dr Jim quirements and 100 per cent of its Bown, president and head of repre- nuclear fuel needs. sentation at Vanco Energy Company, The overriding objectives of the an independent oil and gas explo- country’s current strategy are to en- ration company registered in the sure its energy security and status United States that carries out deep- as a significant transit country. As water exploration and development of the main route for transferring Russ- oil and gas deposits worldwide. ian gas into Europe, Ukraine is vital “Ukraine needs to move forward very to both European and Russian ener- quickly towards energy indepen- gy interests. dence because the economy will ben- In February 2011 Ukraine became a efit tremendously.” full member of the European Energy Among the projects currently con- Community, a move seen as a signifi- sidered of top national importance is cant step in its integration into the EU the liquefied natural gas (LNG) termi- energy market and as an important nal. Mr Kaskiv is confident its comple- opportunity for more complex energy tion could transform Ukraine’s posi- reforms to take shape within the coun- tion in global politics and raise Ukrain- try. As part of its membership obliga- ian living standards. “It could ruin the Located on the main route for transporting Russian gas into Europe, Ukraine is in a prime position to capitalise on global energy markets tions, from 2012 to 2018 Ukraine will monopoly of the Russian Federation. have to implement additional ele- The given question is not of an eco- handle an estimated capacity equal to fied labour force and among the most are due to a lack of investor interest, ments of EU energy policy that regu- nomic, but rather of a geo-economic 10 billion cubic metres by 2017. liberal legislative terms throughout and announced possible alternatives late the electricity market and other and geopolitical nature,” he says. “There are a great number of advan- the entire Europe,” details Mr Kaskiv. on its final location. “One option is in energy-related environmental issues. Works in the Black Sea are expect- tages for locating enterprises in our The head of SAINPU denies reports the Odessa region near Yuzhnyi port; “We understand that problems of ed to begin once the feasibility study country: ideal geographical position, in December 2011 suggesting delays another is in the Mykolayiv region corruption, bad management, low- is concluded. The LNG terminal will much lower prime cost, highly quali- in the development of the LNG project near Ochakiv port.” I UNIQUE FUND WILL RAISE UKRAINE TO THE NEXT LEVEL

The Ukraine Economic Reform Fund is an interna- UERF was founded in 2010. What have been its tional organisation supported by contributions from big successes? private companies all over Ukraine. The Fund’s ac- Our Harvard Program relates to human capacity, as well tivity is focused on supporting projects aimed at the as the country’s positive international image. While it successful implementation of economic reforms, is common enough for most people to go abroad to en- stabilisation of the Ukrainian economy, and the im- roll in business schools, this is the first time ever that provement of Ukraine’s image abroad. The Fund was we are bringing people in to study in the School for Pub- founded in 2010, and its official presentation took lic Administration. place on January 14, 2011. In fact, Harvard’s management was surprised by Lyubov Rudyuk, president of the Ukraine how young the group was. What Economic Reform Fund, explains how the they saw was a group of vibrant, fund will help boost Ukraine’s economy. English-speaking young profes- sionals who were keen to learn. The How did the idea for the reform fund pilot program was a success. In a come about? way, it is a totally new concept. The idea of how international companies Launching the information cam- expanded their activities and built their net- paign about Ukraine on CNN and works has always interested me. I want- BBC was a good start. In addition ed to create an institution in Ukraine which to the information campaign we would incorporate the best international have launched a supplementary practices while reaching out to the na- project about the country in the tional and international organisations. This form of a brochure, which was dis- is how the idea of creating the Ukraine tributed at the World Economic Fo- Economic Reform Fund (UERF) came rum in Davos, The Economist about. Today, the Fund covers the whole LYUBOV RUDYUK, Ukrainian Summit and other im- country, by working with different organ- President of the Ukraine portant international events. isations, including the Ukrainian Cham- Economic Reform Fund Apart from beautiful pictures of Kiev, ber of Commerce, which is represented in the brochure also contained moti- every region of Ukraine. The Fund also maintains its vational quotes from Western businesses based in presence in European countries and plans to further ex- Ukraine. We continue to publish these kinds of brochures. plore the opportunities of international cooperation. However, we do need more concrete, themed events ded- icated to Europe. This is the next direction that we would Can you tell us a bit more about the organisation? like to take as a fund. UERF has a group of about 30 young professionals who work closely with the government. We also reach out to What is your long-term vision for the Fund? the high-level officials, decision and policy makers of I would like to see Ukraine implement the vision and as- the countries who are willing to share their first-hand pirations which the government and the President have experience. Our Advisory Board consists of people who declared as their agenda. are on the Committee of Economic Reforms supervised In the next five years, I would like to be in a position by the President of Ukraine. to say that we have helped make these ideas a reality. An advertisement supplement by UPPER REACH 6 UKRAINE

Intel, Microsoft and other market leaders. The Depart- ment of Cybernetics recently signed an agreement with Microsoft, which has provided the faculty with a supercomputer. “International cooperation brings us A legacy of education very significant results,” says Prof Huberskyi. Research activities in nanotechnology, biotech- nology and high technology are keenly promoted, Ukraine has produced some of the world’s finest minds thanks to its universities and KNU recently initiated a teaching-research cen- tre where just 75 Master’s students are enrolled. “We THE FOUNDATIONS of higher education in Ukraine aim to individually prepare genuine scientific elite,” were laid in the 16th and 17th centuries, when urban says the rector. populations began to organise fraternities, which KNU enjoys cooperation agreements with leading began printing books and opening schools. In 1632, universities worldwide. Their Institute of Biology co- the first institution of higher education in Ukraine – operates with the German Technical Institute on a Kyiv-Mohyla College (now KNU) – was created with research programme in biotechnology that aims to the unification of the Kyiv and the Lavra brother- identify markers of cancer. In addition, their Insti- hood schools. The new college accepted students tute of Chemistry cooperates closely with the Uni- mainly of the upper classes, government officials, versity of Toulouse. “Our professors and graduates priests, rich burghers and Cossacks. Students were go to there for training, and their professors, includ- instructed in languages, along with poetic and ing even the Nobel Prize winners, come to us,” says rhetorical skills, Greek and Roman literature, philos- Prof Huberskyi. ophy, and theology. Kyiv National Economic University (KNEU) is the The college, and others that followed, acquired a largest economic higher educational establishment reputation for excellence, in particular in the sci- in Ukraine and is highly respected in economic-acad- ences – a characteristic that was strengthened emic circles. Founded in 1906, it had 229 students down the centuries. However, Ukraine’s Zerkalo and 22 teachers; today, more than 36,000 students Nedeli newspaper has reported that the communist are enrolled on its courses. leadership took unprecedented steps to ruin the “During the Soviet times, we had a very powerful Ukrainian school of maths and other sciences af- scientific basis. The majority of traditional Ukrainian ter the Bolshevik coup in 1917. The famous Kyiv universities, the ones that were established before school of algebra was liquidated and scientific at- the war or even before the revolution, retained this tentions moved to Moscow, which became the sci- positive feature: fundamentality and a scientific entific focal point. During the decades that fol- We constantly grounding of education. Only education which is seri- lowed, gifted graduates went to Moscow and to The majority of ously backed up by science has high quality,” says universities that practiced USSR-wide “wun- study the labour traditional KNEU’s rector, Prof Anatoly Pavlenko. “At KNEU we derkinder” selection. Nonetheless, the achieve- have successfully managed to retain this high quality ments of Ukrainian scientists of the Soviet years market and see there is no Ukranian universities basic education.” in areas such as cybernetics and space explo- The quality of KNEU graduates is renowned; ration remain redoubtable. underemployment problem have retained a very both business and government representatives After the Soviet Union broke up, the best and among our graduates” often select students still in the third year of their brightest were no longer dispatched. Numbers of powerful scientific basis” studies. KNEU also regularly conducts large career Ukrainian graduates rose significantly and many fairs, in which 30 to 40 of the best Ukrainian com- stayed in their homeland to teach. Ukrainian stu- PROF ANATOLY PAVLENKO, PROF LEONID HUBERSKYI, panies participate. dents continue to win an impressive, if not un- Rector of Kyiv National Rector of Kyiv “We constantly study the labour market and see precedented, number of prizes at international Economic University that there is practically no unemployment problem competitions, especially in maths. Ukraine now has “ “National University among our graduates. This, we believe, is a good indi- a huge academic potential of brilliant teachers and cator,” says Prof Pavlenko, who also underlines the talented students and nearly 100 per cent literacy. try’s flagship university. It has more faculties and de- dents also get to perform research throughout the need for international collaboration. After independence, Ukraine began updating the partments than any other comparable Ukrainian in- academy’s many institutions. Two years ago, a re- “Ukraine ranks first among European countries in content, forms and methods of teaching to increase stitution and provides specialist training in a greater search park was created and there are plans to fur- terms of consumption of energy and we take pains to the intellectual potential and international allure of number of fields. It employs more than 2,000 acade- ther engage the academy in business and manufac- establish cooperation with foreign scientists in the the country. mic and 1,000 scientific staff: 82 per cent of lecturers turing, in particular in the field of applied research. development of alternative energy sources and ener- In recent years, further reforms have been initi- have academic degrees and status. The university works closely with Samsung, MTS, gy efficient technologies,” says Prof Pavlenko. I ated, which included merging or closing down a “We have very strong human resources. More than great number of the smaller universities, and ac- 500 of our employees are professors with PhDs, and tively developing scientific and research activity in nearly 1,300 PhD-level associate professors. This is the larger institutions. The aim was to provide the potential that no other university in Ukraine has,” them with substantial funding for scientific re- says Prof Leonid Huberskyi, rector of KNU. SCIENCE AND TECHNOLOGY search so that they achieve, and surpass, interna- Close cooperation with the National Academy of tional levels of excellence. Sciences is another contributor to success. Alumni of BURGEONING IN UKRAINE Kyiv National University (KNU) – commonly re- the academy are engaged to teach and act as scien- ferred to as “the Harvard of Ukraine” – is the coun- tific advisors, as well as manage dissertations. Stu- Ukraine’s historical scientific promi- nence feeds its future potential

The nation’s scientific and engineering pi- oneers have left an impressive legacy that has provided a substantial basis for progress and development. It is an en- dowment that will play a key part of the country’s future. “The economic reform programme for 2010-2014 envisages the implementation of a number of strategi- cally important national projects. Re- search intensity and innovation should play a decisive role,” says Prof Boris Pa- ton, president of the National Academy of Sciences of Ukraine (NAS) and the first person to have been awarded the title of Many Ukraine-educated researchers, scientists and engineers have Hero of Ukraine – the highest state deco- played major roles in cybernetics, rocket building and engineering ration that can be awarded to a citizen. Multi-disciplinary research at the NAS includes ad- to 10 per cent of Ukraine’s GDP,” he says. “Ukrainian vancing nanotechnology, the development of energy specialists are producing electronic driving licences efficient LED lighting and the reduction of carbon for EU countries and electronic passports for Interpol. emissions in the energy industry. “With proper fund- Our specialists also participate in huge projects in ing of innovative projects and activities we will be able such spheres as oil processing and rocket building; to halve the consumption of natural gas within the they create not only programming outsourcing com- next five years,” Prof Paton adds. “Also, the IT industry panies but also complex enterprises.” can be one of the leading industries of our country if Prof Semynozhenko says the government is appropriate investments are attracted.” currently involved in devising a tax stimulus The nation’s IT outsourcing industry is currently package for innovation, the creation of scientific worth $1 billion and is expected be valued at $5 billion and technological parks, and a support fund for by 2015. According to Prof Volodymyr Semynozhenko, small innovative science-intensive enterprises, head of the State Agency on Science, Innovation and as well as establishing a patenting fund and the Information of Ukraine, the IT sector grew by 40 per setting up key laboratories that employ the lat- cent last year. “By 2015, we expect it to account for 8 est achievements and technologies. An advertisement supplement by UPPER REACH UKRAINE 7 A snapshot of Ukrainian industry, as seen from the helm of Azovmash velopment of progressive movement in Ukraine. This is not based on how many countries you supply a prod- vest in such enterprises, because it all depends on achieved through public and government control and su- uct, but on the companies with which you work. To mentality. Mariupol is a working city, and people realise pervision of law enforcement. I see that today the coun- date, only very large international companies have the that the factory is the breadwinner, on which the fu- try’s leaders want to address this issue, which is a pos- resources to develop. This applies to companies oper- ture of workers and their families depend on. In Mari- itive, because the previous government, declared the ating in our sector, and using our equipment because upol there are many examples of how people work at same desires to change on paper, but they were afraid the equipment is very expensive and requires signif- the factory with their families for generations. Many fam- to implement them in reality. The fact is that undermin- icant investment. ilies exist in which the grandfather, father, and son have ing the power of government officials is a big risk for any dedicated their entire lives to working in “Azovmash”. leader. I can see how it is done today and I must say that Your year on year sales have nearly doubled. What For us it is important to keep these traditions and to it is very complex. I see concrete steps that have been is the reason? assure people understand that the plant is also a fam- made throughout the previous 20 years. I am an opti- There are no secrets. This is the consequences of the ily, and if someone from the family has problems, we mist. I think that we will achieve significant progress. crisis. In 2008, the crisis hit us, probably much hard- can help each other. These are the two main reasons er than other companies, like ours, because just be- for our success: technical upgrading and the mentali- Based on your experience as an MP, what do you fore its onset, we invested more than $200 million in ty of our people. think should be done to optimise government oper- reconstruction and technical re-equipment of our plant, ations and cooperation with representatives of busi- but did not manage to put it in action. That is when the How are you investing in your employees further ed- ness structures? crisis struck and we should have been using it to ser- ucation and professional development? On top of all the points that I have listed, it is neces- vice loans. It was a very difficult time for us, perhaps Of course, this aspect is of great importance for our com- sary to bring in the proper legal framework. Raising the worst in the history of “Azovmash”. However, when pany. Without this, further work would be impossible. the responsibility and discipline of officials, and es- the world began to emerge from the crisis, thanks to Each year, about 12 members of our staff receive spe- tablishing over them the social and governmental con- new hardware and more modern technologies, we were cialised training. We are very seriously engaged in this, trols on the legislative level is important. I believe that better prepared to work. This allowed us to increase pro- sending employees to various business trips. For ex- ALEXANDER SAVCHUK, President of Azovmash we can have different attitudes to the current tax code duction volumes 50 per cent compared to pre-crisis ample, when we supply our products to the company and other defining codes that are adopted or are in the times. This figure is more correct, because during the Arcelor Mittal, the largest of our partners and cus- planning stages. At least we finally have a compre- crisis, production figures fell by half. Compared to the tomers, our people go to India, Algeria and other coun- Alexander Savchuk, hensive document on the most important areas. Sim- pre-crisis period, we invested in modernisation, in- tries to monitor the installation of equipment. They live ilarly, is the case for pension reform. You can easily raise creased production by 505 and decreased the num- there for a long time, training local workers to the rules President of Azovmash, all sorts of populist slogans, and I want to give you an ber of employees by 20 per cent. The positive results of operation of our machines. In turn, our staff must example. Mariupol is one of the most important in- we achieved were the result of these actions. Thus, af- themselves be competent and trained to the highest speaks about the future of dustrial centres of Ukraine, accounting for 9 per cent ter a very hard period for us, we finally experienced a level. For us it is very important, so we give this issue of gross domestic product of the state, despite the fact number of advantages. This is the real specifics of a lot of attention. Moreover, we work hard to ensure that business in Ukraine that the proportion of people living here, is only 1 per “Azovmash” that explains a lot about our business. people have developed an understanding of the im- cent, with almost a third of them being senior citizens. portance of the educational process. Employees should Pension reform is vital to us. Unpopular measures, What are the main competitive advantages of the be aware that for them it is even more important than How do you personally assess the business climate which are now taken by the Government, are un- enterprise which allowed it to achieve success and for us, because no courses will help if a person has no in the country and what is needed to improve it? avoidable. We must have the strength to take them, just reach its current level? desire to educate themselves. One of the most important problems of our country to- as France, Germany, Italy, Spain and other European In fact, you asked a very difficult question. Our main day is a lack of awareness in West about the Eastern countries are doing. I repeat: there is no alternative to strength is not one single factor, but a symbiotic rela- What is your vision of the future for Azovmash over mentality. We are a young country. The history of such measures. We must have the courage to start tionship and the sum of many terms. I want to note the the next three to five years? Ukraine is very complicated. Over the last 300 years, such reforms at the cost of popularity to benefit future importance of our top managers. This is crucial be- We always think about it, because our market is great, we have rarely enjoyed independence, as our state is generations. cause of the scientific and technological base created but the country has huge resources. We are now work- on the border between East and West. Nevertheless, in the enterprise. Our market, like any other, has its lim- ing on a new car. The project is tentatively called “East- we want to make Ukraine free and rich, and create all What does it mean for you personally to be at the head its. The crisis has forced us to revise our concept of de- West”, and our aim is to build a train, we develop, that necessary conditions to ensure that people live here of the company that plays such an important role in velopment. We concluded that the main thing is qual- could go from Vladivostok to the English Channel. This as comfortably as possible. However, this is a very dif- Mariupol? ity products and customer requirements. The market is a very difficult task, because in the CIS tracks are wider ficult task. You must understand that “Azovmash” is very diversi- can not grow indefinitely. The leading position is occupied than in Europe, and require a special truck that can au- fied. The main industrial centres and headquarters are by the one who offers the best products and most fa- tomatically narrow. Therefore, the project is innovative How do you feel about the implementation and progress located in Mariupol, but “Azvomash” is not limited by vorable terms. Therefore, we don’t hesitate to spend huge and not very easy. In another line of our products - of PPPs to improve the business climate? this as it has a very complex structure. Moreover, Mar- sums on the development of new technologies as we Metallurgical Equipment – it should be noted that its I’ll tell you: we have no other choice. I will tell you very iupol is not only “Azovmash”, which is good for our understand that this is a necessary step. One of my production is not particularly relevant for Europe at accurately the differences of the era of Leonid Kuchma, company, by the way. There are, in addition to our plant, wishes would be for everyone from general manager the moment, because the steel industry is concen- the era of Viktor Yushchenko and the Viktor Yanukovych powerful iron and steel plants and ports. Thus, Mariupol to the ordinary worker to get used to change. In this trated mainly in Eastern Europe, Africa, India and Chi- era. When Mr Kuchma came to power, Ukraine did not is a poly-industrial centre providing the synergy of con- respect, the crisis helped us a lot, oddly enough. It is na. But in this regard “Azovmash” has partnered with have a functioning private sector and was not a state. It necting powers in different spheres of activity. Mari- because of the crisis that our people realised that we companies such as Siemens. For example, today we was a confusing time. Leonid Kuchma deserves a lot of upol is therefore a very important part of Ukraine, re- must differentiate ourselves from the competition are launching a new line of casting steel using the lat- credit for his 10 years in power because Ukrainians came gardless of whether there is “Azovmash” or another through higher quality and more efficient workflow, or est equipment. This is important because Europe needs to understand that they have their own country. The first enterprise. It is one of the largest industrial centres in we will be without work. In Germany, I saw the most a high-quality alloy steel for the automobile and ener- wave of privatisation began, and we started to build the country. However, “Azovmash” certainly contributes powerful production lines stopped because the people gy industries. We closely work with companies from something. As for the Orange Revolution, I want to say to the life of the city, being a significant part of a larg- had no incentive to work and upgrade. I once offered Switzerland, Germany and Italy, and I think that next that its ideas were right and good. However, those in er organism. Today in Mariupol at our facilities there are to buy a lot of German and French companies that were year we will deliver our steel in Europe. We also have a power paid more attention to clarifying their relation- more than 20 thousand employees. Furthermore, “Azov- manufacturing wagons. These companies were in poor large project in the field of wind turbines. ships between each other than to the promotion of mash” is the largest machine-building enterprise in condition, and one of the main reasons was the fact Ukraine’s progress, the establishment of international con- the entire state, not only with regard to production vol- that people did not have the interest and desire to con- Does your focus include any British company? tacts, and the improved efficiency and effectiveness of umes, but the number of employees as well. tinue the development of the company. Despite the fact We cooperate with international companies. Some have the public and private sectors. It’s not their fault, but it that, for example, in Germany the state and legislative offices in the UK, but we do not see Europe in terms of was difficult for them. Therefore, what a challenging lega- How are your export markets proceeding? levels have established all necessary conditions for the countries. For us European companies are everywhere. cy Viktor Yanukovych inherited after his election for pres- There were times when we exported goods to more promotion of its development such as exemption from The world is changing, becoming more globalised, and ident. Believe me, it was very sad. Today the situation than 40 countries, but the crisis has not spared us. To- federal and state taxes, and so on. It is useless to in- now there are no such boundaries as before. I has stabilised, but not all at once. I can say that if a per- day we should not talk so much about the countries son works in a different direction, and works effective- but the results. For example, if we talk about our prod- ly, the pressure he feels from the state has significant- ucts like carriages, we should note the following fact: ly decreased compared to previous years. The question railroad tracks found in the former Soviet Union and is, what is important for private business? It is impor- Poland are different from European tracks. They are wider. tant that the business is less interfered with from out- We also have other GOST requirements for railroad cars. side. Unfortunately, one of the main problems in Ukraine For these kinds of products we are together with the is excessive powers of officials. Today, efforts are made Russian Urals railcar plant, located in Nizhny Tagil, shar- to reduce bureaucracy in the country. Sometimes these ing 30 per cent of the market. Thus, our work does not measures are successful, sometimes they are not. We depend on the number of countries in which we export feel these changes and we can say that the direction tak- or the type of track. You can see one more example in en by the current Government is the right direction. Of the metallurgical sector. We produce converters for course, not everything, but we are at the beginning of making steel. We do not cooperate with individual coun- a long journey. Despite the fact that the will of the Pres- tries. We are working with Arcelor Mittal, delivering prod- ident is the fundamental basis for the direction, not ucts to the factories in Krivoy Rog in Ukraine, as well everything depends on him. Likewise, not everything de- as in Algeria, India, Pakistan, Kazakhstan and other pends on the will of PM Mykola Azarov or VPM Sergei countries. We work with international companies. Our Tigipko – top officials in the government. It is important cooperation with “Severstal” does not mean that we on- that the entire chain of command works cohesively. If ly supply products in Cherepovets. Working with the No- any official of a regulatory inspection – whether it be fire, volipetsk MC, does not mean we only supply good in tax or any other service – is not kept under strict con- Lipetsk. We work with the Industrial Union of Donbass, trol, it can hurt small, medium, and even large busi- but send products to more places then just Alchevsk. nesses. The main task today is to clean all that vertical For example their operations in “Dunaferr”, Hungary al- bureaucracy and military officials that prevent the de- so need our products. The modern globalised world is An advertisement supplement by UPPER REACH 8 UKRAINE DONETSK IN THE DRIVING SEAT Whether you talk politics or business in Ukraine, all roads lead to Donetsk

The Donetsk region boasts 12 per cent of the country’s natural resources, making it Ukraine’s richest in this regard. Its companies produce 22 per cent of overall industrial produce; 45 per cent of finished coal, aluminium and ferrous metals; 46 per cent of steel; and 13 per cent of the na- tion’s energy. Well-developed infrastructure, modern telecoms and access to the Black Sea mean that in terms of external trade Donetsk is one Ukraine’s leaders. In-depth professional training is also key to the region’s economic strength. Workers are highly motivated and it ranks top in terms of on-site spe- cialised research and training. Donetsk’s GDP per capita is one third higher than the national average. Donetsk accounts for 25 per cent of Ukraine’s innovation-related spending. Business leaders have been far-sighted in cooperating with bodies such as the AER and OECD. Furthermore, they have clearly identified the needs of overseas in- vestors. Ralf Goldmann, head of the European Of- fice Donetsk Chamber of Commerce and Industry The reconstructed Kyiv Olympic Stadium will host the Euro 2012 Final explains: “We formulated a way to give compa- nies a helping hand. So far, we have had a num- ber of success stories.” Gennadiy Chyzhykov, president of the Donet- sk Chamber of Commerce, highlights the can-do attitude of the workforce and says: “People come Ukraine will get a here to focus on their business and to be prag- matic. We have a positive future based on the hu- man resources here.” President of Investments and Developments (I&D) Vasyly Mikulin says: result at Euro 2012 “We have seen many positive political changes which indicate the future direction of the coun- try.” I&D’s chief strategic officer Alexey Gavrish As co-hosts of the tournament, the country will receive valuable, worldwide exposure – exemplifies the confidence shared by the na- tion’s business leaders. Of the challenges ahead, and has already enjoyed a massive boost to its infrastructure he says: “Bring them on.” The landscape of Donetsk is changing, with ACCORDING TO a report by UMG International, spend- Russia) has already increased by 6.7 per cent, ac- investors alike. President of the Football Federa- a new stadium and roads, for example. “The ing by the Ukrainian government for 2012 UEFA Eu- cording to a recent Reputation Institute study. Fore- tion of Ukraine Hryhoriy Surkis – a major driving city is becoming more beautiful,” says Alexan- ropean Football Championship (Euro 2012) has casts from the Cabinet of Ministers of Ukraine indi- force behind the event – says: “All those involved der Tislenko, chairman of the board of direc- seen a 3.7-fold increase in the building of bridges, cate that Euro 2012 should accelerate GDP growth in the preparations for Euro 2012 have clearly syn- tors at Altcom. “We are constructing a modern overpasses, tunnels and underground facilities, by 1.5 per cent, while keeping inflation stable. chronised their work. The results are really im- airport that will become a hub between East- while there has been a 1.6-fold increase in the con- Popular support has also been garnered. As Vi- pressive.” ern Europe and Asia.” struction of roads, air-facilities and sports surfaces. taliy Klitschko, former boxer and current party Mr Surkis, a Ukrainian businessman and politi- He adds: “A considerable number of country in- In fact, 83 per cent of all works in this beautiful, chairman of the Ukrainian Democratic Alliance for cian listed on Top-100 compilations of the most tellectuals are concentrated here. The world’s busy country is on new construction, reconstruc- Reforms (UDAR), says: “It will promote our country powerful people in Ukraine, says: “FIFA gave us a flagship technologies are coming to the city, and tion and technical re-equipments surrounding the and encourage investment. I was so happy when chance to build not just new stadiums, but a new not only thanks to Altcom: nearly every entrepre- prestigious event. UMG also predicts that hosting we won.” country.” neur tries to be maximally effective in the mar- the competition, along with Poland, will have a posi- The UMG report shows an overwhelming 80.9 per Ukraine is building up not just its infrastructure, kets, using innovative methods and technolo- tive effect on the country’s image and will attract cent believe Euro 2012 will have a positive impact at but a also new, enviable reputation. Alexander gies. New, modern business-centres are being more foreign investment. home, while 77 per cent feel the event will have a constructed; it will be beautiful, hospitable and Ukraine’s reputation among the “Big 8” (USA, positive effect on image abroad. investment-friendly here.” Japan, Germany, Britain, France, Italy, Canada and Worth noting is that Canada rose to first place in Futurebrand’s 2010 Country Brand Index thanks to FIFA gave us a hosting the Winter Olympic Games that year. UEFA’s Euro championships have a track record of chance to build positively impacting host countries, not only per- not just new stadiums, ception-wise, but also in terms of triggering new revenues. Portugal’s hosting of Euro 2004 improved but a new country.” overall perception by 74 per cent, and 75 per cent of tourists who visited expressed willingness to re- turn. Ukraine currently attracts tourists from Rus- HRYHORIY SURKIS, sia, Belarus and Moldova, a host of other post-Soviet President of the Football nations, with Germany and the USA as the only rep- resentatives from developed high-spending nations. Federation of Ukraine Ukraine intends to leverage the Euro 2012 com- petition to draw interest from other high-spending “Starchenko, general director of the highly success- nations. To this end, a series of advertising cam- ful KNAUF Marketing concurs: “British project com- paigns recently launched on CNN and Euronews panies are actively working in Ukraine and we hope that showcase the country’s fascinating 1,000-year that construction and developer companies will also history. Joint projects with the Discovery Channel come to this market as objects constructed by and National Geographic, showing the extraordinary British companies are very famous: Disneyland cultural diversity, have also been developed. Media Paris, Hong-Kong’s airport, the Olympic complex in targeting of key foreign markets, strong presence at Atlanta, and now Donbass Palace in Ukraine. The major tourism expos, and trained foreign language ground for investors to come to Ukraine is ready.” guides are among other key initiatives. Mr Klitschko adds, “Euro 2012 has the power to There is also the Discover Ukraine 2012 strategy. change Ukraine. It is a huge opportunity. Many peo- This unites the efforts of businesses, public sector ple will watch the championship and many will organisations, media, destination marketing and come to Ukraine. The country is beautiful; the peo- communications experts to further showcase the ple are friendly and hospitable. It will promote our best of Ukraine and to highlight the many steps the country a lot and will encourage investment.” I country is taking to raise its profile. One of the project’s key elements is its website: www.discoverukraine2012.org. The portal has been designed to attract both foreign visitors and