Ukraine

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Welcome to the “Odesskiy Dvorik” residence, the ideal place that offers the perfect setting for busi-ness or pleasure! The Odesskiy Dvorik is a gateway to Odessa’s downtown scene. Our hotel is located on Uspenskay street, a lively destination within walking distance of the best attractions in down-town Odessa.

Located very close to the sea, “Lanzheron” beach, Privoz, and last but not least the historical centre of the city.

The hotel features a conference hall, gym and res-taurant. The “Juzzy Buzzy” restaurant is well known and defined as the best for its local Odessa cuisine, Caucasian cuisine on the grill and Japanese cuisine.Perfect for the individual business traveller, con-ventioneer, couple or group attendees, the hotel offers 48 rooms (Standard, Junior Suite, Suite and Presidential Suite) especially designed for a serene and inviting stay.

Guests can indulge in the hotel’s bath amenities and enjoy all the comforts of home. Each guest room of-fers new furnishings, air conditioning, satellite and cable TV

Odesskiy Dvorik Residence - 19, Uspenskaya street - Odessa cityTel: +380 48 777 72 71 - Fax: +380 48 728 75 73 - e-mail: dvorik@online.ua - website: odesskij-dvorik.ua

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inTrODUCTiOn•EconomyHasStrongLong-TermProspects 4•Government’sDifficultReformProcessBeginningtoBearFruit 6•EUAmbassadorTeixeira’sViewonUkraine 7•AmbassadorHighlightsBusinessFriendlyInvestmentClimate 8

BUSineSS & inVeSTMenT OPPOrTUniTieS•BringingLegislationinLinewithEUStandards 10•EconomyPoisedtoTakeOffasFDIContinuestoFlowIn 11•StateAgencyforInvestmentandNationalProjects 16•StateAgencyServesasWindowonUkraineforInternationalInvestors 18•InfluentialBusinessAssociationPromotingCloserTiestoEU 19•DanishAssociationAssistingForeignInvestors 20

FinanCe•WorldBankConfidentaboutUkraine’sLongTermProspects 22•EBRDHelpingtoBringBusinessEnvironmentuptoEUStandards 23•FinancialSectorReformstoImproveBusinessEnvironment 24•BeitenBurkhardt 28•B.C.Toms&Co 29

aGriCULTUre & FOOD PrODUCTS•AgricultureSectorOffersVastDevelopmentPotential31•MyronivskyHliboproduct 32•TheWorld’sBreadbasketinthe21stCentury 34•NestléSA 36•Elit 37

HeaLTH•RapidlyDevelopingHealthcareSectorWelcomesEuropeanSupport 39•RocheUkraine 40•BringingHealthcareSystemuptoGlobalStandards 41•Farmasoft 43•TevaPharmaceuticals 44

Ukraine

Project Coordinators: Mihai Petrut, Andreea Bebu - Business Analyst: Fabian Conde - Public Relations Coordinator: Slavina Stoyanova -InternationalRelationsManager:MarielleDeLeener -DirectorGovernmentRelations:TomVanDorst -Editorial:EmilyEmerson-LeMoing -Proofreading:VickyKox-ProductionCoordinator:KatrienDelamotte-HeadofProduction:FatimaDarghal-OfficeManager:SamiraDarghal-Design:MartineVandervoort,DirkVanBun,WalterVranken,CarineThaens,JohnyVerstegen-Photography:dreamstime.com

TheEuropeanTimesPOBox68566-LondonEC1P1XP-UnitedKingdomPhone:+44(0)2083712356-Fax:+44(0)2083712410info@european-times.com-www.european-times.comTheEuropeanTimesisatradingnameofCrystalMediacorpLtd

Thisguideisprotectedbycopyright.Allrightsreserved.Thispublication,oranypartthereof,maynotbereproduced,storedelectronicallyortransmittedinanyform,withoutthepriorwrittenpermissionofEuropeanTimes.Everyefforthasbeenmadetoensureinformationcontainedinthispublica-tioniscorrectandup-to-date.Theauthorsandpublisheracceptnorespon-sibilityforanyerrorsitmaycontain,orforanyloss,financialorotherwise,sustainedbyanypersonusingthispublication.

enerGY & GaS•MinistryBringingEnergySectorinLinewithEUCriteria 46•AssociationHelpingtoUpgradeGasSectorLegislation 47

TraDe & inDUSTrY•ChamberPromotingUkraineLocallyandInternationally 49•Belgian-UkrainianChamberIdealPartnerforInvestors 50•Panasonic 51•MajorBusinessUnionPromotingFreeMarketPrinciples 52•DynamicOrganisationSupportingEntrepreneurship 53•Iceblick 54

inFraSTrUCTUre•MinistryofRegionalDevelopmentBuildingFoundationsforFutureGrowth 56•Over€11BillioninConstructionProjectsPlanned 57•Odessa:ThrivingTradeHubDrawingFDI 58•MajorUpgradesforTransportandLogisticsInfrastructure 60•FreightForwardersGroupEnsuringWorldClassService 61

eDUCaTiOn•EducationSystemImplementingEUStandards 63

iT & TeLeCOM•NewRegulationsMakeITInvestmentsEvenMoreAttractive 66•Miratech 67•TelecomandITLiberalisationCreatingNewOpportunities 68

TOUriSM•Euro2012Jump-StartingTourismIndustry 70•Euro2012MuchMorethanSportsEvent 71•Top10“MustSee”Sites 72•RivieraBoutiqueHotel 74•Hertz 76•GrataApartments 77

Contents

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Ukraine

economy Has Strong Long-Term ProspectsAs its high profile hosting of the Euro 2012 football champion-ships this year symbolises, Ukraine is determined to carve out a niche for itself as a productive member of the European and global economy. While many challenges remain, Ukraine’s forward thinking government recently reported that 2011 saw significant economic progress being made. Ukraine’s President, Viktor Yanukovych, recently commented, “We ended 2011 with generally positive trends in the national economy, even though we understand that we did not reach the growth our citizens hoped for and we still need to step up the pace of reforms.”

In mid January, Ukraine’s PrimeMinisterMykolaAzarovannouncedthat Ukraine’s GDP expanded in2011at its fastestpace since2007,spurredonbyagoodharvest andincreased exports, and that theeconomygrewbyalmost5%overallin2011comparedto4.2%in2010.In fact, a recent report by globalbanking group HSBC highlightedcertain economies around theworldthatitsaidwouldmovefroma “low starting point” to “rapidgrowth and strong fundamentals”by 2050, and Ukraine was one ofonlyfourcountriesonthelist.

When President Viktor Yanu-kovych presented Ukraine’s

new economic strategy for 2012,which is the part of the govern-ment’s ongoing economic reformprogramme up to 2014, he saidthatUkraine needs to increase itsaverageGDPgrowthto6%peryear.Headdedthathewillaimtoreachthis targetbyreducing thebudget

deficit, simplifying the tax system,attractingforeigninvestments,anddevelopingfinancialmarkets,whilealso continuing to push forwardvariousreformmeasures.

Reducing Ukraine’s energydependence on Russia – a

Viktor Yanukovych, President of Ukraine

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Introduction

stumblingblockfortheUkrainianeconomy for many years – isanother key goal for the govern-ment in 2012. Ukraine’s MinisterofEnergyandCoalIndustry,YuriyBoyko, declared in early Januarythat his country will import onlyenoughgastosustainthenationaleconomy this year – some 27billioncubicmetres,orabouthalfUkraine’susualgasimports.

Buildingonkeyeconomicstrengths

Ukraine’s key economic strengthsare its strategic geographicalposition that makes it an idealtradehublinkingEastandWest; itseducatedandlowcostlabourforce;anditssubstantialnaturalresources.To make the most of these advan-tages,Ukraineissteppingupitstieswith the EU, which has become itsmaintradingpartner,andbysteadilyimplementingEUstandardsineveryeconomicsector.

Ukraine has a history of strongperformance.Itwasthekeydriverof the Soviet economy, producingfour times as much output asthe next most productive Sovietrepublic. Ukraine’s fertile soilgeneratedmorethanone-fourthof

Soviet agricultural output, and itsfarms provided substantial quanti-tiesofmeat,milk,grain,andvege-tablestootherrepublics.Likewise,its diversified heavy industrysupplied unique equipment (suchas large diameter pipes) and rawmaterials to industrialandminingsites (including vertical drillingequipment)inotherregionsoftheformerUSSR.

Ukraine’s agriculture sectorcontinuestounderpinthenationaleconomy;Ukraine has long beenamajorproducerofwheataswellas rye, flax, corn, barley, sugarbeets, sunflowers and potatoes.Ukraine’s natural resources alsoinclude iron, manganese, coal,anthracite, aluminium, mercury,nickel, natural gas, oil, zinc,titanium and bauxite. Leadingindustrial products include steel,tractors, machinery, buildingmaterials, chemicals, consumergoodsandfertilisers.

Ukraine has decentralised itseconomy; Kharkiv, Donetsk,Lugansk, Dnipropetrovsk, Zapor-zhzhya, Mariupol and Makiyivkaare all major industrial hubs,while Vinnytsya and Zhytomyr areimportant centres for agriculturalactivities. Ukraine has been diver-

sifying its export markets and nowexports a wide range of productsto Russia, Germany, Italy, Belarus,China and Turkmenistan, amongmanyothercountries.

Stronggrowthforindustrialsectorin2011

While independence broughta sharp decline in Ukraine’seconomy, by 2006 the countryreached 7% GDP growth, whichit maintained the following year,fuelled by high global prices forsteel–Ukraine’s topexport–andby strong domestic consumption.Theglobal crisishitUkrainehardbuttheeconomybegantorecoverin2010,buoyedbyexports.Inthefirsthalfof2011,Ukraine’s indus-trial sector grew by an impressive8.9%.

Thanks to increasing state invest-ments in infrastructure projects,a successful agricultural harvest,good performance by the con-struction industry, higher socialspending and other factors,Ukraine’s economy managed tocontinue to grow in the secondhalf of 2011, and the agriculture,energyandtradesectorsareseenashavingparticularlystrongpotentialin2012andbeyond.

AttractingFDI,particularlyfromEurope

Ukraine’s public and private sectorleaders arewell aware thatUkraineneedsforeigninvestmentandcloserties to the EU to help it reach itseconomic potential. The govern-ment is working hard to upgradeUkraine’sbusinessenvironmentandcreate new incentives for investors,particularly from the EU, sinceUkraine sees itself as a Europeancountry thatwilleventually jointheEUfamily.

© Dimaberkut | Dreamstime.com

Residence of the President of Ukraine

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Ukraine

Government’s Difficult reform Process Beginning to Bear FruitUkraine’s government has made impressive progress in helping the country recover from the effects of the global crisis. Mykola Azarov, Prime Minister, says, “Ukraine suffered a 15% decrease in GDP in 2009 and we had a large debt problem as well as a severe budget imbalance. The main aim for the current government is to achieve economic stability, reduce public sector expenses, and bring the budget deficit down to 3.5%. We are on target to reach these goals.”

Ukraine’sGDPgrewbymorethan4.2%in2010andis expected to grow close to 5% this year, while thegovernmenthasbrought thebudgetdeficitdownby5%(from18.7%in2009),withagoalofachievinganadditional3.5%decreasebytheendofthisyearand2.5%nextyear.

Mykola Azarov explains that the government haspursued an ambitious reform programme that hashelped streamlinebureaucracy, clarify tax legislationandreducetaxes.Thegovernmenthasalsostrength-enedthecountry’spension,educationandhealthcaresystems. “These reforms have been unpopular butsomethinghadtobedone,evenif thegovernment’sapproval rating has dropped,” the Prime Ministersays.Henotes that thenewestnuclearMRT surgicaltreatmentcentreforcancerpatientshasbeenopenedandthattheeducationalsystemisbeingupgradedtomakesurethatUkrainianstudentsreceivethetrainingtheyneed.

Changingthelocalmindset

MykolaAzarovpointsoutthatthemostdifficultreformistochangepeople’sminds.Afteryearsinacommunistsystem inwhichmany serviceswere free or very lowcostthoughnotofhighquality,Ukrainianconsumersarefindingthatcosts(includingofapartmentrentalsandofoil)haverisensharply,andthishasmadethereformprocessevenmoredifficult.

Inspiteofthesechallenges,Ukrainehasmadeprogresson many fronts, including in fighting corruption

and attracting foreign investment.Thegovernment issteppingupitseffortstomaketheworldmoreawareofUkraine’s investmentappeal.ThePrimeMinistersays,“UkrainehassomeofthebiggestandmostproductiveagriculturalresourcesinEurope,alongwithatemperateclimateandsufficientrainfall.Foreigninvestorsinouragriculturesectorwillachievesignificantreturns.”

Nomatterwhich sector they target, investorswillfindthatUkraineoffersahighlyqualified, lowcost labourforce, extensive energy and other natural resources,and developed infrastructure. The Prime Ministerconcludes,“UkraineisadevelopedandhighlyimportantEuropeancountrywithgreatpotential,andweareonourwaytoEuropeanintegration.”

Mykola Azarov, Prime Minister

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Introduction

eU ambassador Teixeira’s View on UkraineUkraine has made good progress towards building an increasingly close relationship with the EU. As José Manuel Pinto Teixeira, European Union Ambassador to Ukraine explains, “Ukraine was the first post Soviet country after 2004 to be offered an Association Agreement with the EU. Now it should work hard to embrace EU values, including ensuring democracy, human rights, protection of minorities, rule of law, and an open, market oriented economy. The EU is providing a very comprehensive programme of assistance for Ukraine. There is no question that Ukraine is already a European country, but it needs to go through a serious process to meet EU criteria, particularly at the political level.”

Andthisroadisstillmarredbyseriousshortcomings.In spite of the EU’s assistance Ukraine still has notadoptedanelectoralcodewhichwouldbeinlinewithOSCE/ODHRrecommendationanditsowncommit-mentswiththeEUasprovidedforintheAssociationAgenda.The latest developmentswith regard to theelectoral reform are of serious concern, especiallytakingintoaccounttheOctober2010localelections,whichwereconsideredasastepbackwardsincompari-sonwiththelastPresidentialelections.Now,accordingtoJoséManuelPintoTeixeira,“Ukraineneedspoliticalleaders who will put the interests of the country’scitizens aheadof their own economic interests.ThisisthemainchallengeforUkraine’sleadershiptoday:definingobjectivesandtransformingthemintorealityinasmoothprocess.”

Businessenvironmentbeingupgraded

Another priority is to upgrade Ukraine’s businessenvironment by combating corruption, removingbureaucratic hurdles, and improving the perfor-manceofpublicinstitutions.Suchimprovementswillserve toattract the foreign investment thatUkraineurgentlyneedsinordertomoveforward.JoséManuelPinto Teixeira explains, “Ukraine offers vast invest-mentprospects.Itisahugecountrythathasthemostfertilefarmlandintheworld,aneducatedworkforce,

an increased number of multilingual young people,a sizeable consumer base, and access to the EU, yetits infrastructureisstillundeveloped.Whileinvestingherenowisstillachallenge,weareworkingonnego-tiating a unique Association Agreement including aDeep and Comprehensive Free Trade Agreement.If the Association Agreement would be signed andimplemented,itwouldsignificantlyimproveUkraine’sinvestment appeal. Ukraine’s future could be poten-tiallyverybright.”

José Manuel Pinto Teixeira notes that Ukraine hasthe potential to offer strong prospects in agriculture,tourism and manufacturing. He concludes, “Ukraineneedstobringitsagriculturesectoruptointernationalstandards.Anumberofmajorforeigninvestorsinagri-culturehavealreadycomehere,includingfromtheUK,butthelackoflandownershipandtheabsenceofclearrulesareanissuefacedbyinvestorsacrosssectors.Asfortourism,Ukraineisabeautifulcountrywithveryhospi-tablepeople.Inaddition,incertainareasthemanufac-turingsectoriscompetitive.”

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Ukraine

ambassador Highlights Business Friendly investment ClimateEuro 2012 will show the world all the progress Ukraine has made in recent years, and Ukraine is on track to completing its prepara-tions for this major event. Ihor Dolhov, Ukraine’s Ambassador to Belgium, explains, “We are regularly visited by representatives from the European football union, and in their opinion – not just in mine! – Ukraine is on schedule with getting ready for Euro 2012 and is in good shape to make this event a very positive experience for all of Europe.”

Euro2012willbemuchmorethanafootballtournamentforUkraine,since it will draw thousands ofvisitors (and potential investors)who will see for themselves every-thing Ukraine can offer for bothtourismandbusiness.AmbassadorDolhov points out, “Ukraine hascancelled visa requirements forcitizens of Europe and theUS, sonowEuropeansandAmericanscaneasilytraveltoUkraine.Thiswasabigstepforwardforus.”

Ukraine has also made significantprogress in making itself morebusinessfriendly.“Thegovernmentisdoinganexcellentjobincuttingred tape and making the businessclimate here in Ukraine moretransparent, not only for foreigninvestorsbutalsofordomesticones.Ukrainians are now investing inUkraine.Thesepositivechangesarealreadywellknowntomajorplayersonaglobalscale,”saysIhorDolhov.

Internationalinvestmenthighway

Infact,moreandmoreUkrainiansarenotonlyinvestingintheirowncountry but also abroad, further

Ihor Dolhov, Ukraine’s Ambassador to Belgium

strengthening Ukraine’s interna-tional business ties. AmbassadorDolhov says, “We are building aninternational investment highwayand this highway is getting widerandwider.”

UkraineisparticularlysteppingupitsbusinesslinkswithEurope.IhorDolhov points out, “As Ukraine’sAmbassador to Belgium, I cantestifytothefactthatUkraine’srela-tionshipwithBelgiumisverygood.Belgian companies are very activein Ukraine, and more and moreprojects between Belgium andUkraine are being launched everyyear.ThisillustrateshowUkraine’stiestoEuropearegettingstronger.We anticipate that the free tradeagreement between Ukraine andtheEUwillsignificantlystepupthepaceofbusinessandtradebetweenthetwomarkets.”

Ambassador Ihor Dolhov expectsto seemore andmore investmentinUkraine in the future.He says,“Ukraineoffersaveryexperiencedlabourforceatrelativelylowcosts,and doing business in Ukraine isdefinitelygettingeasier.NowisthetimetoinvestinUkraine.”

Business & InvestmentOpportunities

•BringingLegislationinLinewithEUStandards

•EconomyPoisedtoTakeOffasFDIContinuestoFlowIn

•StateAgencyServesasWindowonUkraineforInternationalInvestors

•DanishAssociationAssistingForeignInvestors

“Ukraine has huge potential for investors, and for visitors this country has a tremendous

cultural and natural heritage.”Anatoliy Mohylov, Former Minister of the Interior

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Ukraine

Bringing Legislation in Line with eU StandardsUkraine is committed to implementing EU standards in every aspect of its regulatory environment and legal structure. Anatoliy Mohylov, former Minister of the Interior, explains, “We are working on adapting all our legislation to EU standards, which is particularly important since we are stepping up our cooperation with EU countries. We aim to make all our cooperations more transparent. Ukraine’s parliament has adopted several new laws which are in line with EU legislation, and we are currently focusing on implementing these laws and other EU criteria. For example, we have stepped up our border controls. Migration and refugee laws are crucial issues between Ukraine and the EU.”

“Fighting crime and corruption is a priority forUkraine’sgovernment,andinstitutingEUlegislationisanimportanttoolinthisprocess,”formerMinisterMohylovpointsout.Hesays,“Weareworkingcloselywith Interpol and Europol to combine forces withtheEU to combat crime and apprehend criminalswhomightcrossoverbetweentheEUandUkraine.Imetwith the director of Interpol recently in theHague concerning how we can partner to fightcrime,andwehavenowsignedastrategicagreementwithEuropol.”

Ukrainehasmade significantprogress in reducingcrimeandhasnow reached the levelof theEU ingeneral concerning crime statistics. “Security hereisalsothesameastheEUaverage,butwestillneedto fight corruption, and the current governmenthasimplementednewlawstoensurethis,”AnatoliyMohylovsays.

PreparingforEuro2012

Security issues will not be a factor when Ukrainehosts Euro 2012, the former Minister of Interiorexplains.Hesays,“WeareworkingcloselywithotherEUcountries toprepare forEuro2012.AlongwithPoland,thecohostofEuro2012,wehaveattended

Lviv city

a lotof trainingsessionsandroundtablesonsecurityissues in different countries, including Germany,PolandandtheNetherlands.WhenEuro2012begins,wewillbeready.”

AnatoliyMohylovurgesEuropeaninvestorsandtravel-lerstovisitUkraine,notonlyforEuro2012,buttoseeeverythingthecountryhastooffer.Hesays,“Ukrainehas huge potential for investors, and for visitorsthis country has a tremendous cultural and naturalheritage. In addition,we aremaking great progresswith our reforming processes. We are dedicated tomovingforwardtowardstheEU.”

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economy Poised to Take Off as FDi Continues to Flow in

Ukraine, which achieved the highest average GDP growth in Europe over the past decade, has weathered the global financial crisis better than many countries. Today, Ukraine continues to build on its many advantages – particularly its strategic location, vast natural resources, huge domestic market, and skilled labour – to drive forward its economic development programmes and to create new opportunities for investors.

ForgingclosertiestotheEUForgingclosertiestotheEUiscrucialtoUkraine’splans. Ukraine, the largest country in the EU’s“EasternPartnership”with formerSovietrepublics,is also the biggest recipient of EU aid, with some€470million earmarked for the 2011-2013 period.TheEUaccountsforonethirdofUkraine’sforeigntradeandhas significant economic interests in thecountry,includingitsannual€40billioninimportsofnaturalgas.

TheproposedAssociationAgreementbetweentheEUandUkraineistoincludea“DeepandComprehensiveFreeTradeArea(DCFTA)”,thefirstofitskind,whichwill not only further liberalise Ukraine’s economicrelationswith theEUbutwill also requireUkraine topass tradelegislationthatmeetsEUstandards insuchareas as intellectual property, competition and stateaid.TheAssociationAgreementwill of course greatlyenhanceUkraine’sinvestmentappeal.

ThebiggestsingleforeigninvestorinUkrainetodateistheEBRD,whichhasprovidedover€7.5billioninfinancing for almost 300 projects in Ukraine since1993.InasignofconfidenceinUkraine’slongtermprospects, the EBRD recently announced it hadincreaseditsinvestmentsinUkraineby7.1%in2011compared to 2010 to reach a total of €1.02 billionin 41 new investments in the country last year, thesecondlargest totalannual investmentby theEBRDinUkrainesince1993.

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Ukraine

EBRDtoinvest€1billionperyearinUkrainethrough2014

André Küüsvek, the EBRD’s Country Director inUkraine, recently said that the bank is ready toinvestaround€1billionperyearinUkrainethrough2014.TheEBRDfocusedonUkraine’sprivatesectorlast year, providing financing to 35 companies andfivefinancialinstitutionsaswellasmaking16invest-ments in share capital in financial institutions andcompanies.TheEBRDalsosupportedpublicsectorprojects, including Ukraine’s biggest renewableenergyproject for 2011: thebankprovided a€200million loan to Ukrhydroenergo to upgrade itshydroelectric power plants on the Dnipro River.In the high potential agriculture sector, the EBRDprovidedalmost€190million infinancing in2011,with an additional €105 million in financing forprojects involving developing Ukraine’s naturalresources.

“Ukraine is a transitional market

economy with significant investment

potential and has shown the highest

rate of GDP growth in Europe

during the last 10 years.”

PromotingUkraineinAsia

While Ukraine continues to highlight opportunitiesforEuropean investors, thecountry’sofficialsarealso

promoting Ukraine’s investment attractions fartherafield. Igor Zhovkva, Ukraine’s Director of ForeignDirect Investment and International Cooperation,recentlytravelledtoKoreatopresentUkraine’sinvest-ment opportunities. Addressing local business leadersin Seoul, he said, “Ukraine is a transitional marketeconomywithsignificantinvestmentpotentialandhasshownthehighestrateofGDPgrowthinEuropeduringthelast10years.”

IgorZhovkvalistedseveralkeyadvantageshiscountryoffers, with the most attractive being its geopoliti-cal position which grants access to three strategicregionalmarkets–theEU,RussiaandAsia.“Ukrainealso offers connections to the Middle east via itsshipping lanes and to the rest of Europe throughfour out of 10 European transportation routes,”he added.Whilenoting thatUkraine stillneeds toimprove its business climate, IgorZhovkvapointedoutthatthemajorchangesthecountryhasalreadymade,alongwithitsexceptionalhumancapitalandother factors, have alreadymadeUkraine an idealinvestmentdestination.

Newlegislationimprovingbusinessclimate

InvestingintheUkrainemarketcanbringenormouspotential benefits in spite of the challenges. Ina recent report on Ukraine by Pricewaterhouse-Coopers, Managing Partner Boris Krasnyanskypointed out, “Ukraine’s proximity to both the EUandRussia, thesheerquantityof itsconsumers(46million)andthephysicalsizeofthecountrymakeitanexcellentlocationforbusinessestoexpandbothlocally and regionally. Preparations for the UEFAEuropeanFootballChampionshipareontrackand

ForeigndirectinvestmentintoUkraine(bycountry) ForeigndirectinvestmentintoUkraine(byregion)

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will stimulate interest in Ukraineand help in the development ofinfrastructure and the tourismindustry. Accession to the WorldTrade Organisation has acceler-ated trade and played anotherlayer of protection on invest-ments, and the anticipated freetrade agreementwith theEUwillfurtherincreaseopportunities.”

“Despite the difficulties experienced by some

banks in Ukraine, the banking sector remains

very attractive for investors.”

Citing Ukraine’s new comprehen-sivetaxcodeandothernewinvestorfriendly legislation enacted overthe past year as additional reasonsthe investment climate is gettingbetter, Boris Krasnyansky added,“These and other measures shouldmarkedly improveUkraine’sratingsin the World Bank ease of doingbusiness indexinthemediumtermandshouldmakeUkraineanattrac-tiveinvestmentlocation.”

National investment promotionagencyInvestUkraineconcurswiththis assessment. According to theagencyUkraineisstillconsideredahighriskcountry,whichmeansthatinvestorshavethepossibilityofhighreturns on investments which aredone thoroughly, with strong legalsupport,professionalduediligenceand the appointment of trustwor-thy management in key positions.Ukraine offers a wide range ofinvestment opportunities acrossindustriesandalloverthecountry.

© Oleg Pilipchuk | Dreamstime.comIndependence square Kiev

Business&InvestmentOpportunities

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Ukraine

Agriculturesectorseenastopinvestmenttarget

Invest Ukraine highlights keysectors with particularly stronggrowth potential. Number oneon their list is agriculture. InvestUkraine lists agricultural land inUkraine as one of the best midand long term investment oppor-tunitiesintheworld.Knownasthebreadbasket of the Soviet Unionin the past, Ukraine’s fertilefarmlands and temperate climateare ideal for growing a widerangeofcropsand forproducinglivestock, wine grapes, and allkindsoffruitsandvegetables.

Infact,accordingtoInvestUkraine,Ukrainehasover30%oftheworld’sbest farmland, and its rich blackarablesoil,knownas‘chernozem’,isso fertile that ithasbeencultivatedlargelywithouttheuseoftoxicferti-lisers,pesticidesandotherchemicaltreatments, making Ukraine anatural for organic agriculture. AsInvestUkrainepointsout,“Organic

and biodynamic agriculture canresult in a 25% to 35% savings inoperational costs and irrigationneeds compared to conventionalfarmingandcanresultinover20%higheryields.”

According to the World Bank andthe EBRD, only around 40% ofUkraine’s agricultural potential iscurrently being exploited, leavingsignificant opportunities forinvestors to help position Ukraineasoneoftheworld’stopsourcesforagriculturalproductsinthecomingdecades.OnerecentinvestmentisbyDesnagrain,aUkrainebasedsubsidi-aryoftheFrenchagriculturalenter-prise Champagne Céréales, whichhas received US$30 million (€23.4million) insupport fromtheEBRDtoexpanditsoperationsinUkraine.Investment opportunities inUkraine’s agriculture sectorinclude building agriculturalinfrastructure (such as grainelevatorsatports)andimplement-ing modern technologies to help

farmers boost yields and produc-tivity. Invest Ukraine points out,“Our farming experts possessstrong practical internationalexperience, global industry rec-ognition and Ukrainian govern-mentalawards,particularly in thefield of sustainable agriculture,storage efficiency and interna-tionaltrade.”

Financialservicessectorhasroomtogrow

The financial services sector isanother opportunity singled out byInvestUkraine,whichnotes,“DespitethedifficultiesexperiencedbysomebanksinUkraine,thebankingsectorremainsveryattractiveforinvestors.Banks which have managed todeal with currency risks and adoptprudentpolicieshavebuiltthefoun-dations for future strong growth.Modernretailbankingtechnologiesandsuperiorclientservicepracticescan still make any new player inthemarketawinner inaveryshortperiodoftime.”

Invest Ukraine also cites oppor-tunities in insurance and leasing,an industry segment in whichopportunities exist for largeoperator entry, takeover ofexistingcompaniesandtheestab-lishment of brokerage networksacrossthecountry.InvestUkrainehas an experienced team of spe-cialised consultants ready toassist potential new entries intoUkraine’sfinancialsector.

Ukraine’s banking sector hasalready attracted significant FDI,andforeignbankscontinuetoentertheUkrainemarketorexpandtheirpresence there. Deutsche Bank,forexample,hasestablishedanewsubsidiary in Kiev, Deutsche Bank

Railway station in Kiev

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DBU,whichwill play a role in theGerman banking group’s effort tostrengthen its position in CentralandEasternEurope.

Buildingonexpertiseinsoftwaredevelopment

Software development is anothersectorinwhichUkrainehasalreadyestablished a strong reputationworldwide thanks to its highlytrained and experienced softwareprofessionals. Many Ukrainiansoftware developers provideresearch and development as wellasbackofficesupportforEuropeanandUScompaniesandanumberofglobal software outsourcing leadershave opened branches in Ukraine.

“Ukraine’ssoftwareprofessionalsareinvolvedinelaboratesoftwarearchi-tecture design projects and brainintensiveresearchanddevelopmentprojects,”InvestUkraineobserves.

Ukraine also offers tremendousinvestment opportunities inhealthcare, sports and recreationfacilities.AsInvestUkrainepointsout, “In spite of rapidly risingstandards of living in Ukraine,the countryhas stillnot attractedmajor international operators ofspaandwellnessclubs,sportsgyms,fitness centres, and other healthrelated recreational services. Atthe same time, demand for rec-reational services as well as formodernhealthcareservicesiscon-tinuingtogrow.”

Ukraine’s property market isanothertargetforinvestors.InvestUkraineexplains,“Longtomediumterm investing in Ukrainian realestatehasalwaysbeenriskybuthasnever failed! Lowermarket valuestodayonlymeanagreateropportu-nityfortomorrow.”

As Ukraine continues to pushforward reform measures,implement EU standards, andcreate investment incentives,exciting new opportunities forFDI are sure to develop. InvestUkraineisreadytoassistpotentialinvestors by providing insightsabout investment opportunities,Ukraine’s business climate andcurrentprojectsnowunderwayorbeingplanned.

Business&InvestmentOpportunities

Ministry of Foreign Affairs (Mikhailovsky Square)

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Ukraine

State agency for investment and national Projects

national Projects Designed to Draw Billions in FDiUkraine’s State Agency for Investment and National Projects is spearheading the country’s investment reforms while also developing and promoting key large scale projects that offer outstanding investment appeal. Through these National Projects, the agency aims to increase total FDI in Ukraine to US$72 billion (€54.5 billion) by 2013.

TheNational Projects are designednot only to modernise Ukraineand create excitingnew investmentopportunitiesbutalsotoimplementthe agency’s investment reformprocess. Ukraine’s investmentclimateisalreadyimprovingrapidlythanks to the agency’s efforts topromote simplifiedprocedures andworldclassstandards.

Ukraine’s National Projects, desig-natedashavingstrategicimportancefor the nation, reflect Ukraine’sdrive to establish a dynamic freemarket economy. All NationalProjectsareintendedtobecommer-ciallyviableandfunded80%bytheprivate sector.Toget theseprojectsoff the ground, Ukraine’s govern-

ment isfinancing feasibility studies,providing building land, streamlin-ingbureaucraticprocedures,andinsomecasesofferingstateguarantees.

Keynationalprojects

Ukraine now has 11 NationalProjectsandexpectstolaunchthreemore later this year. The currentNational Projects are a new LNGterminaltobringliquefiedgasfromAzerbaijan toUkraine and beyond;the “Olympic Hope 2020” projectto upgrade Ukraine’s tourism andsports infrastructure as part of thecountry’sbidtohostthe2022WinterOlympics; “New Life”, a health-care programme for mothers and

President of Ukraine Viktor Yanukovych opens modern perinatal centre in Kirovograd on January 31st, 2012

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TheStateAgencyforInvestmentandNationalProjectsofUkraine

7-a,TsytadelnaStr.Kiev01015

Tel:+380442544015

www.ukrproject.gov.ua

infants; the “Clean City” project toimplement modern waste disposalsystemsthatconvertwastetofuelandother useful materials; the “OpenWorld”projecttoupgradeUkraine’seducation system by introducing anew “4G” national Internet infra-structure to help promote Internetlearning; the “Energy of Nature”drive to develop renewable energy;the“AffordableHousing”projecttopromote quality low cost housing;the“AirExpress”highspeedraillinkbetween Kiev and Boryspil Interna-tional Airport; “Danube Corridor”,designed to stimulate shipping andrelatedservicesintheDanubebasin;“QualityWater”,anefforttoensurereliable supplies of pure drinkingwater throughout the country; and“City of the Future”, to encouragecuttingedgeurbandevelopment.

Ukraineisnotnewtoimplementinglarge scale infrastructure projectssuccessfully, as the country’s prepa-rations for the Euro 2012 soccerchampionships demonstrate. Tosupportthishighprofileeventwhichwill draw the world’s attention toUkraine, the country has managedto complete new airport services,stadiums and infrastructure ontime,includingrepairingmorethan2,000kmofroadsandbuildingnewhighways.

Ukraine has also already madeprogress on its National Projects. InDecember2011,Ukraine’sPresident,Viktor Yanukovych, commented,“Ukraine’s National Projects arenecessary to trigger Ukraine’s devel-

opmentintheyearstocome.Amongthemostsuccessfullyimplementedtodateare‘EnergyofNature’,‘NewLife’and‘OpenWorld’.Forthe‘EnergyofNature’project,forexample,lastyearwehavebuilt twosolarenergyplantsintheCrimea,andtheAzovskywindpark is already operating. These arethemostsignificantalternativeenergyprojects in Ukraine in the 20 yearssince independence. The NationalProjects are a uniqueopportunity todemonstratetotheworldthatUkraineisaviableandreliableplacetoinvestanddobusiness.”

StateAgencycuttingredtape,ensuringtransparency

The State Agency for InvestmentandNationalProjectswillmakesurethe National Projects are a successby improving access to the Ukrainemarket for international investors,upgradingUkraine’sbusinessclimate,cutting bureaucratic red tape, andimplementing a transparent andenforceableregulatoryenvironment.

TheNationalProjectsarealsomeanttodemonstratethatitispossibleto

completemajorprojectsinUkrainethatarefreefromcorruption.Elim-inating corruption is a toppriorityfor the State Agency for Invest-mentandNationalProjects,whosemission statement says, “Our workispartof theprocessofrebuildingthe national image of our countrythat has been so badly tarnishedover the past decade.” The agencycan guarantee full transparencyandopennessconcerningallitskeymanagement decisions, an openprocess for selecting partners forNational Projects, and tender pro-ceduresthatmeetthehighestinter-nationalstandards.

In fact, theStateAgency for Invest-ment and National Projects isUkraine’s ambassador of change.The agency is making the worldaware of Ukraine’s vast, untappedpotential and exceptional invest-ment attractions and is helpingto position Ukraine as one of theworld’s most promising choices forFDIinthecomingyears.

Vladyslav Kaskiv, Chairman

Business&InvestmentOpportunities

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Ukraine

State agency Serves as Window on Ukraine for international investorsUkraine’s State Agency for Investment and National Projects provides essential services for investors in Ukraine. Formed by combining previous agencies into one, the State Agency for Investment and National Projects drives forward Ukraine’s economic development, helps to ensure a world class regulatory environment for investors, and promotes Ukraine all over the world.

In February 2012 the agency isto issue an official report on theresultsofitsworkin2011-thatwillbethefirstcomprehensivepublicreport by the central executivebodyofthestateinUkraine.Theagencyhasalsomadeitcustomtomake public announcements onthe resultsof tenderingbids andfeasibilitystudydevelopments.

Showcasinglocalsuccessstories

The agency’s report serves to raisetheprofileof topUkrainianenter-prises and to focus the world’sattention on Ukraine’s outstand-ing investment opportunities. “Wealso showcase Ukrainian successstoriesandletpeopleknowthatthiscountryisaveryexcitinginvestmenttarget,”VladyslavKaskiv,Chairmanof theStateAgency for InvestmentandNationalProjectspointsout.

The State Agency for Investmentand National Projects helps those

Vladyslav Kaskiv, Chairman State Agency for Investment and National Projects

outsideUkrainebetterunderstandthecountry’s business environment. TheagencyworksinclosepartnershipwithUkraine’sgovernmentaswellaswithlocalandforeignprivatesectororgan-isations active in Ukraine, includingbusiness associations, chambers ofcommerceandembassies.TheagencyservesasanimportantliaisonbetweenUkraine’s public and private sectorsandinternationalorganisations.

The State Agency for Investmentand National Projects is known forinnovation and is currently devel-oping Ukraine’s first regulationscoveringpublicprivatepartnerships.Vladyslav Kaskiv explains, “Ourpublic private projects will be thefirstoftheirkindinUkraineandwe

willcreateastandardforotherPPPsinthefuture.”

Other initiatives for the agencyincludenewe-servicesfor investorsandanannualinternationalinvest-mentforumtobringgloballeadersto Ukraine. Ukraine now has 11national projects in the crucialareas of energy, infrastructure,social services and Ukraine’s bidto host the 2022WinterOlympics.Vladyslav Kaskiv says, “We haveshowcased these projects in 15financialhot-spotsof theworld(inEurope, theUSA,MiddleEast andAsia)in2011andwewillbepresent-ingtheminglobalroadshowsin25citiesthisyear.Wewelcomecontactswithinternationalinvestors.”

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influential Business association Promoting Closer Ties to eUThe European Business Association (EBA), with 830 local and foreign member companies, is the biggest foreign business association in Ukraine and is widely regarded as an influential representative of the country’s business sector. The association’s main goal is to strengthen ties between Ukraine and the EU by promoting EU standards in all Ukraine’s business and industrial activities. “We are bringing Ukraine closer to the EU by removing barriers for investment, focusing on contrib-uting to Ukraine’s EU membership negotiation process, and promoting Ukraine as a business destination,” says Anna Derevyanko, Executive Director.

The European Business Association is a non profitorganisationfoundedin2000andbasedinKiev.Italsohas six regional offices throughout the country andanofficeinBrusselstoenhanceconnectionsbetweenUkraineandtheEU.

TheEuropeanBusinessAssociationprovidesanumberof services for its members, including lobbyingsupport, information, networking opportunities andeducationalassistance.“Wehaveformedmorethan20groupsinvolvingcompaniesinallkindsofeconomicsectors.Weregularlymeetwithourmembercompaniestounderstandtheirconcerns,andwehosteventseveryday. We have also formed very productive ties withthegovernment,becauseit iscrucialtohavepositivecooperationbetweengovernmentandbusiness,”AnnaDerevyankopointsout.

Workingcloselywithgovernmenttopromotepositivechange

The European Business Association is currentlytargeting corruption, the judiciary system, valueaddedtaxregulations,customspractices,landreform,technical regulations, and currency liberalisation asissuesitbelievesareparticularlyimportantforUkraine.AnnaDerevyanko says, “We canvas ourmembers fortheir viewson such issues and thenpresent them tothe government to encourage our leaders to adopt

Anna Derevyanko, Executive Director European Business Association

policies that support investment and foster a positivebusinessenvironment.”

Whilechallengesstillexist,Ukraineoffersoutstandingdevelopmentpotential thanks to its strategic location,pleasantclimate,growingtieswiththeEUandforwardthinkingpopulation.AnnaDerevyanko says, “Ukraineis a very dynamic country; you can feel change inthe air. Companies that invest here need to do theirhomework about the positives and negatives, ensurethattheiremployeesarecommitted,andingeneraltakeaveryproactiveapproach.Weencourageourmembercompaniestotakeactionandmoveforwardtoachievepositivechange.AsfortheEuropeanBusinessAssocia-tion,wewillcontinuetodoeverythingpossibletoensurethatEuropeanbusinessesthrivehereinUkraine.”

Business&InvestmentOpportunities

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Ukraine

Danish association assisting Foreign investorsThe Danish Business Association (DBA), one of the leading foreign business associations established in western Ukraine, serves as an advocate for Danish investors there as well as helping investors from other countries. Lars Vestbjerg, an experienced expat working in Ukraine since 2003, CEO of Sika Footwear in Ukraine, Chairman of DBA and Advisor for the Danish Investment Fund in Ukraine explains, “Denmark is the leading country of foreign investment in western Ukraine. I saw that there was a huge need for a support system for Danish companies.”

The Danish Business AssociationhelpsDanishcompaniestoquicklyintegrate into the Ukrainianeconomy. “We provide informa-tion to companies and we workclosely with Ukraine’s govern-mentinordertoserveasaliaisonbetween Danish companies andthe public sector,” Lars Vestbjergsays.

While the Danish Business Asso-ciation was founded to serveDanish companies, it also advisescompanies from other countries.Lars Vestbjerg points out, “Othernationalities operating herecontact me and I welcome othercompaniestodothesame.”

As theCEOofaDanishcompanyin Ukraine, Lars Vestbjerg has indepth knowledge of Ukraine’sbusiness environment as well aslocations that are a good choice

forcertaintypesofcompanies.Heexplains,“MycompanyisbasedinLviv,which, froma logisticspointofview,isanidealchoicebecauseit is close to Ukraine’s borders.Around 95% of the companiesoperating in Lviv region areinvolved in manufacturing andthis location is an excellent baseforthem.”

“Western Ukraine is particularlyopen to foreign investors,” LarsVestbjerg points out. He citeslight industry and agriculture astwo activities with strong growthprospects for foreign investors inwestern Ukraine. He adds, “Weexpect to see more and moreforeign companies here in thefuture, both Danish companiesandothers.Ukraine is still attrac-tiveforinvestorsasalogisticpointclose to EU countries, where theAsian countries are not compat-ibleanymore.”

“Doing business in Ukraine doesnot have to be difficult,” LarsVestbjerg points out. He says, “Ifcompanies are doing the rightthings and working within thelegislation of Ukraine, consultedwith consultants and advisorswho understand local condi-tions,therearenoproblems.TheDanish Business Association, forexample, has signed all necessarymemorandumswithlocalauthori-tiestoprotectforeigninvestmentsin Ukraine. There are estab-lished direct connections withthe authorities where investorscan highlight problems and helpdeveloptheinvestmentclimate.”

Lars Vestbjerg, Chairman Danish Business Association

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Finance

“Ukraine has a strategic location between Russia and the EU, a

market of 44 million people whose income could double in the next decade, access to the Black Sea,

and a skilled labour force.”Martin Raiser, Country Director World Bank

•WorldBankConfidentaboutUkraine’sLongTermProspects

•EBRDHelpingtoBringBusinessEnvironmentuptoEUStandards

•FinancialSectorReformstoImproveBusinessEnvironment

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Ukraine

World Bank Confident about Ukraine’s Long Term ProspectsThe World Bank has made a long term commitment to Ukraine. As Country Director for Ukraine, Belarus and Moldova Martin Raiser explains, “The World Bank has been present in Ukraine since its independence. In this time, our cooperation has extended across many spheres of the economy, and our track record here mirrors Ukraine’s own trajectory: exciting, often challenging but ultimately full of long-term potential.” The World Bank has committed €4.1 billion (US$6 billion) to Ukraine, including €1.38 billion (US$2 billion) in its current portfolio, of which €900,500 (US$1.3 million) has not yet been dispersed.

Immediately following Ukraine’s independence, theWorld Bank provided assistance in basic institutionbuilding,suchasestablishingtheregulatoryenviron-ment for the country’s banking system, setting up apublicfinancialmanagement systemormovingawayfrombarterintheenergysector.Workinginpartner-shipwiththeInternationalMonetaryFund,theWorldBankhelpedlaunchUkraine’sfreemarketeconomy.

Broadbasedprogrammesinmanysectors

Morerecently,theWorldBankhasbroadeneditsfocus,gettinginvolvedinUkraine’slandreform,infrastruc-turedevelopmentandsocialsystems.“Wearebuildingup a growing portfolio of investments in the powersector, municipal water systems and road infrastruc-ture;wefindthatUkrainehasmanytrainedengineersand high quality construction companies and yearsof underinvestmentmeans there is a lot to do. Weare also providing assistance in improvingUkraine’shealthandeducationsectorsaswellasvarioussocialreforms, including the ongoing pension reforms,”MartinRaiserpointsout.Buthealsocautionsthatinalloftheseareas,benefitswillbefullyrealizedonlywithmoreconsistentpoliciesandimprovedgovernance.

MartinRaisercitestheagriculturesectorasonewithparticularly strong investmentpotential inUkraine.Hesays, “Theworldneedsmore food,andUkraine

Martin Raiser, Country Director World Bank

canhelpfulfildemand.Withtherightkindofinvest-ment climate, Ukraine could become like Brazil, aplacewherenewseeds,technologiesandmethodscanbe implemented in the agriculture sector. This willrequiremorepredictableandmarketorientedpoliciesandsowearediscussingwiththecurrentgovernmentwhatneedstobedonetorealiseUkraine’sbigagricul-turalpotential.”

TheWorldBankisconfidentaboutUkraine’slongtermprospects.MartinRaiser says, “Ukrainehasa strategiclocation between Russia and the EU, a market of 44millionpeoplewhoseincomecoulddoubleinthenextdecade, access to the Black Sea, and a skilled labourforce.Withthepotentialoffreetradeagreementswithboth the EU and Russia, investors in Ukraine couldsupplybothofthesemarketsatlowcost.Thereishugepotentialinthistriangularrelationship.”

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eBrD Helping to Bring Business environment up to eU StandardsThe European Bank for Reconstruction and Development (EBRD) has been playing a key role in Ukraine’s economy since 1992. André Küüsvek, EBRD Country Director for Ukraine, says, “Our priorities are to make Ukraine’s business environment more transparent and competitive in both the public and private sectors. We particularly target the private sector since it accounts for around 70% of the market here in Ukraine, but we have begun to work with the public sector in infrastructure and energy projects.”

The EBRD has helped Ukraine’s private sectorweather theglobalfinancial crisis andcopewith theups and downs of international investment flows.AndréKüüsveksays,“Between2006and2008,Ukrainereceived more foreign direct investment than inthe period between 1991 and 2006. Suddenly localcompanies were receiving financial support in fairlylarge amounts, but they sometimes used short termloanstopayforlongtermprojects,andthenwiththecrisis they were sometimes unable to pay the loansback. Basically, the corporate sector fell on its face.TheEBRDconcentratedonprovidingsupportforthebankingsectorduringthistime,whichwearecontinu-ingtodo.”

Extensiveduediligence

The EBRD always performs extensive due diligencebefore entering into a partnership. André Küüsvekexplains, “We always make sure that we pick ourpartners very carefully, judging not only by theirbalance sheets but, even more importantly, by eachcompany’s behaviour. We monitor our investmentsthroughregularreportsandhaveateamthatcheckstomakesureourinvestmentshavebeenusedastheyweredesignedtobeused.WehaveagreattrackrecordinpickingstrongUkrainiancompanies.”

While much progress has been made, Ukraine stillneeds to upgrade its business environment to meetEUstandards,AndréKüüsvekbelieves.Hesays,“Mostnegotiations are still done in the old-fashioned way,

André Küüsvek, Country Director EBRD

andissuesrelatingtolicenses,permissions,theenviron-mentandtaxationcanbetoughhere.Wewouldliketoseeaclearerseparationbetweenbusinessandpolitics.Ukraineneedstofocusmoreonthinkinglongterm.”

In spite of the current challenges, the EBRD is veryconfident about Ukraine’s future. André Küüsvekexplains,“Ukrainehasbeenfamousformissingoppor-tunities,but ithasenormouspotential,particularly inagriculture,energyandtrade.IfyoulookatEUcountriesandwheretheycanbein10yearsandcomparethemtoUkraine,Ukrainehaswhat it takestogetfartherthananyothercountry.”

Finance

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In mid 2011, Ukraine’s President, Viktor Yanukovych, launched a series of reforms for the period 2011 to 2014 which are designed to create a “Rich Society, Competitive Economy, and Effective Government” in Ukraine. Several of the reform measures target the financial sector, including stabilisation of the state budget, the tax code, financial sector development, the pension insurance system and other areas.

Financial Sector reforms to improve Business environment

One of the key measures in thereform programme is a new taxcode, which went into effect onJanuary 1, 2012. Of the new taxregulations, Ukrainian PrimeMinister Mykola Azarov says, “Weare doing a great job in simplify-ing Ukraine’s business environ-ment. This is not an easy job, butwewillconcludeit.IamconfidentthatUkrainewillbeacountrywithoneof themost liberal tax laws intheworld,andthatourcountrywillhaveanadministrative system thatwillputnopressureonbusinesses.”

Corporateprofittaxesreducedfrom23%to16%by2014

The new tax code includes newprovisions on corporate profittaxes,valueaddedtaxes,andindi-vidual income tax. Concerningcorporate profit taxes (CPT), thenew code gradually reduces theCPT rate from 23% in April 2011to 16% in January 2014. Recogni-tion of income and expenses for

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tax purposes will be generally based on nationalfinancial accounting standards, with some restric-tionsandexceptions.Thenewcodedoesnotcontainrestrictionson“carryforward”oftaxlosses.

Thenewcodeimposesarestrictionontaxdeductibil-ity of royalties andexpenses related to thepurchaseofmarketing,advertisingandconsultingservicesfromnon-residents, with certain exceptions, and thesepayments are tax deductible to the extent that theydo not exceed 4% of the Ukrainian taxpayer’s sales(revenue) for theprevious year.A similar restrictionapplies to engineering servicespurchased fromnon-residents.Inthiscasethelimitationis5%ofcustomsvalue of the equipment imported pursuant to therespective contract. All of the above payments, nomatterwhattheamount,arenotdeductibleiftheyaremadetononresidentsregisteredinanoffshorejuris-diction appearing on a list approved bytheUkrainiangovernment.

Concerningdividendsdis-tributed by a Ukrainiancompany, the new codespecifically exempts CPTpayers from advance CPTondividendspayabletoindi-viduals.Furthermore,unlikeprevious tax regulations,the code allows sharehold-ers(includingnonresidents)to extend financial aid toUkrainian subsidiaries on atax free basis provided thatsuch financial aid is returnedby the subsidiary within 365days.

Depreciation of all groups of fixed assets is nowcalculatedforeachitemseparately(incontrasttothegroup based approach in the previous legislation).Thenewcodehassubstantiallyincreasedthenumberoffixedassetsgroups:16 for tangibleassetsandsixforintangibleassets.

A10yearexemptionfromCPTisgrantedtoaircraftmakers, shipbuilders, hotels, light industry, andproducers of agricultural machinery, amongothers. Provision of services (including con-sulting) by a non resident inUkraine throughits personnel shall constitute a taxable privateenterprise,ifsuchservicesarerelatedtoasingleprojectandareprovidedformorethansixmonthsinany12monthperiod.

VATreducedfrom20%to17%in2014

Another key provision of the code is to reduce thevalueaddedtax(VAT)fromthecurrent20%to17%by 2014. Consulting services and certain softwareactivities are fully exempt fromVATunder thenewcode; these include consulting, engineering, legal,audit, actuarial and other services of a consultingnature, along with the supply of software, its devel-opment and/or testing as well as other IT relatedservices.

Thesupplyofgrainorofindustriallyproducedcropsis alsoexempt fromVATuntil January1,2014.ThenewcodehasalsoeliminatedaninconsistencyintheprevioustaxcodewhichresultedinVATliabilitiesfor

© Sofiya Yermakova | Dreamstime.com

Finance

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Ukraine

suchtransactionsasmergersandspinoffs.Underthenewcode, reorganisation transactions are free fromVATliabilities.

ThenewcodeintroducesaprocedureforautomaticVAT refunds for exporters andestablishes apenaltyfor untimely VAT refunds. The VAT invoices givingtherighttodeclareinputVATforamountsexceedingcertainthresholdsaresubjecttomandatorystatereg-istration.VAT invoicesareonlyconsideredvalid fordeclaringtaxcreditwithin365daysoftheirissuance.

Residentsandnonresidentspaysamepersonalincometaxrate

Unlikepreviouslegislation,thenewcodegenerallyestab-lishesthesamerateofpersonalincometax(15%to17%)forresidentandnonresidentindividuals.ForthisreasonitisnolongernecessaryforforeignnationalsworkinginUkrainetoobtainUkrainiantaxresidencycertificates.

Monthly income that does not exceed 10 minimumwage amounts (currently around€917) is subject to

15% personal income tax, with any balance taxedat the 17% rate. Dividends received by individu-als from Ukrainian companies are subject to a 5%rate. Ukrainian sourced interest income is generallyexemptedfromtaxuntilJanuary1,2015,afterwhicha5%ratewillapply.

Significantprogressoveroldtaxregime

Ukraine’snewtaxcoderepresentsasignificantimprove-mentover theprevious tax regime. In a “PayingTaxes”studyreleasedbyPricewaterhouseCoopersandtheWorldBanktwoyearsago,Ukrainewasidentifiedasoneofthemostdifficultcountries inwhichtopay taxesoutof the185countries surveyed.The studyalsonoted thatmanycompanies operating in Ukraine have been forced toemploytaxaccountantsinadditiontofinancialaccount-antsastaxaccountsareseparatefromfinancialaccounts.Thestudyestimatedthatamodestsizeddomesticbusinesswouldneedtomake98taxpaymentseachyear,andwouldrequire2,185hoursperyeartocomplywithitstaxcompli-ancerequirements.ThenewtaxcodehasdefinitelymadetaxpaymentsinUkrainesimplerandmoretransparent.

© Vladyslav Starozhylov | Dreamstime.com

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Betterconditionsforbusinessesinkeyindustries

Thegovernmentdeveloped its new tax codewith thehelp of the International Monetary Fund (IMF), theWorld Bank, the European Bank for Reconstructionand Development (EBRD), the European InvestmentBank and other international financial institutions.AccordingtoPrimeMinisterMykolaAzarov,thenewtaxcode improvesconditions forbusinesses tooperate inkeyindustriesinUkraine,suchasenergyconservationandtheproductionofagriculturalequipment.

Thenew tax codeandotherfinancial sector reforms,includingofthebankingsector,weremandatedbytheIMFwhenitdesignatedaUS$15billion(€11.6billion)support package for Ukraine in 2010. As part of itsefforttofulfilIMFrequirements,inmid2011Ukraine’sMinistryofFinancemovedbadassetsfromthreenation-alisedbanks intooneof them,Rodovid, to revive theothers,whiletransferringretaildepositsfromRodovidintostaterunOschadbank.StringentmonetarypoliciesimposedbytheNationalBankofUkrainearehelpingtostrengthenthebankingsector.

Now the government must push forward pensionreforms,alsorequiredbytheIMF.InSeptember2011,Ukraine’s parliament approved a pension reform billthatwouldgraduallyraisetheretirementageforwomenfrom55to60andincreaseby10yearstheperiodduringwhichworkersmakecontributions to their retirementfunds. Energy price hikes, more effective measures

againstcorruption,andtrimmingthepublicsectorareotherreformsstipulatedbytheIMF.

Ukraine’s leadersknowthatmaintaininganambitiousreformagenda iscrucial forUkraine’sglobalcredibil-ity. Moody’s ratings service, in a warning to Ukraine,recently noted, “A lack of structural reforms hindersUkraine from unlocking the economic potential ofits favourable geographical location, educated andlow wage workforce and substantial natural resourceendowment.”

Ukraine’s government is determined to keep thereformprocessmovingforward,andsomereformsarealreadybearingfruit.Duringthefirsthalfof2011,theUkrainian government enjoyed a 24.4% year on yearnominalincreaseinbudgetrevenues,withtaxrevenuesgrowingby47%overthesameperiod.Suchanimpres-sive increase was the result of both selected tax rateincreases(includinghigherexcisetaxesonpetroleumproducts in the first quarter of 2011 as well as rentpayments) and a general improvement in Ukraine’seconomicsituation.RevenuesfromcorporatetaxesandVATpaymentsalsorose,by28%and50.4%respectivelybetweenthefirsthalfof2010andthefirsthalfof2011.

2011aturningpointinUkraine’shistory

“The year 2011 will be remembered as a turningpoint in the history of Ukraine,” commented PrimeMinisterMykolaAzarovinDecember.Headded,“ThisyearUkrainemanaged to overcome the inertia of an

© Dreamstime.com

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Ukraine

extremelydeeprecessionandstartedtoimplementbigprojects,suchasintroducingenergysavingtechnology,supportingdomesticproducers, andachieving importsubstitution.Ingeneral,wehavebeguntoshapepublicpolicy at the request of civil society, consulting withpeoplebasedontheirinterests.”

PrimeMinisterAzarovnotedthatakeytaskofthegov-ernment in 2011 was to improve conditions for thepoorestmembers of Ukraine’s society.He said, “NowtheaveragepensionisaboutUAH1,200(€170),publicsectorwages last year rose six times ina row, and theaveragewagehasnowreachedUAH2,600(€253.5).Itismuchmorethanin2010.”

ObserversofUkraine’seconomyareverypositiveaboutthe long termeffectsof thegovernment’s reformsonthe country’s macroeconomic fundamentals and FDIappeal.AnalystsatArtCapitalInvestmentGrouppointout, “Should the reforms aimed at reducing bureau-cracy and corruption, increasing the attractiveness ofUkraine for foreign investors and restructuring theeconomy be maintained (and this is our base casescenario),thatwouldlayasolidfoundationforrobusteconomicgrowthinthecomingyears.”

Beiten BurkhardtWorld Class Legal Services for Foreign investorsBeiten Burkhardt, headquartered in Germany, provides world class legal services in Ukraine, Russia and other former Soviet countries as well as in the EU, Eastern Europe and China. Offering global reach as well as in depth local knowledge, Beiten Burkhardt Kyiv office has positioned itself as a reliable, transparent local partner for foreign investors in Ukraine.

The firm special-ises in legal servicesrelatedtorealestate,bankingandfinance,commercialactivities,labourandtaxissues,litigation and arbi-tration, complianceand other crucialfactors involved indoing business inUkraine. JulianRies,Managing Directorexplains, “We arehere to serve clientswho are already in

UkraineaswellasclientsaimingtoinvestinUkraineandlookingforahighqualitylegalpartner.Wehaveapproxi-mately10yearsofexperienceinthelocalmarket.”

JulianRies urges investors to look intoopportunities inUkraine, for example in the high potential agricultureandgreenenergysectors.Headds,“PotentialinvestorsinUkraineshouldpreparewellbeforeenteringthemarket,bereceptivetochanges,andhavestrongpartners,espe-ciallyinthelegalfield.BeitenBurkhardt’ssubstantialexpe-rienceinCISmarketsenablesourspecialiststorenderthehighestlevelofservicetoourclientsinUkraine.”

38,Turhenevskastreet,5thFloorKiev01054

Tel:+380444940400bblaw-kiew@bblaw.comwww.beitenburkhardt.com

Julian Ries, Managing Director

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B.C. Toms & Co

World Class Legal Services from Multinational Ukraine expertB.C. Toms & Co provides world class legal services in Ukraine. The multinational law firm with its team of multilingual Ukrainian and Western attorneys specialises in Ukrainian law and was the first Western law firm to open an office in Kiev.

Nowone of the larger law firms in the country, B.C.Toms&Cohas developed expertise in corporate, oiland gas, agricultural, real estate and tax law and hashandledthelegalworkformanyofthelargestcommer-cialtransactionsinUkraine.Thefirmalsohasanactivedispute resolution practice, in particular successfullyhandlingmajorlitigationandarbitration.Forexample,it succeeded in obtaining the removal of overUS$20millionintaxandrelatedclaimsandpenaltiesagainstaWesternoilandgascompany’sUkrainiansubsidiary.

BateToms,ManagingPartner,isveryconfidentaboutUkraine’s future and stresses the importance forEuropeofbringingUkraineintotheEU,particularlygiven Ukraine’s vast potential for food production.He says, “TheEU shouldhave a policy encouragingUkrainetobecomeamemberoftheEUwhileUkrainewantstobeamember,whichitdoesnow.Asasolutionforglobalfoodshortages,Ukrainewillhaveincreasingstrategicimportanceinthenearfuture.”

Highpotentialsectorsforinvestors

Bate Toms, who has completed deals for many ofUkraine’s largest foreign investments todate, singlesout key sectors which he believes have particularlystronggrowthpotential.Hesays,“Massiveinfrastruc-ture investment isneeded, forexample inports andstoragefacilitiesfortheexpectedincreaseinagricul-turalexports.Such infrastructure,andagriculture ingeneral,aredefinitelyattractivesectorsforinvestorsinUkraine. In addition,Ukraine’s oil and gas sector islargelyundevelopedandhasgreatprospects.Ukrainehasmassive reserves of shale gas, and shale gasmaychangetheeconomicmapoftheworld,especiallyinthispartofEurope.”

Bate Toms, Managing Partner

B.C.Toms&Co.haspositioneditselfastheideallocallegalpartnerforinvestorsinUkraine.BateTomssays,“Given the many legal loopholes and problems withUkrainian legislation that have became apparent, asithasdevelopedfromtheSovietperiodtorespondtothepresentneedsofamarketeconomy, it isessentialinUkraineforanysignificantinvestmenttohavelegaldocumentationandadviceof thehighestquality, thattheinvestorcanrelyuponintheeventofadispute.Ouradviceisalsobackedupbyourcapablelitigationteam.”He adds, “Investors in Europe should realize that inagriculture,aswellasarguably forcertainoffshoreoilandgas,Ukraineoffersmoreopportunitiesnow thananyothercountryintheworld.”

18/1ProriznaStreet,Suite1Kiev01034

Tel:+380444906000

kyiv@bctoms.netwww.bctoms.net

Finance

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Ukraine

Agriculture &Food Products

“Ukraine’s agriculture sector is important not only to our

country but also to the world, since Ukraine can play a major contribution to ensuring food

security at a global level.”Mykola Prysyazhnyuk, Minister of Agrarian Policy and Food

•TheWorld’sBreadbasketinthe21stCentury

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agriculture Sector Offers Vast Development PotentialWith its huge expanses of fertile farmland, temperate climate, tradition of agricultural production and significant water resources, Ukraine has long supported a thriving agriculture sector. Today, agricultural activities offer some of the country’s most promising investment opportunities.

Mykola Prysyazhnyuk, Minister of Agrarian Policyand Food, explains, “Ukraine’s agriculture sector isimportantnotonlytoourcountrybutalsototheworld,sinceUkrainecanplayamajorcontributiontoensuringfoodsecurityatagloballevel.TheMinistryofAgricul-turehasaclearvisionforUkraine’sagriculturesector,andweaimtomakeitanevenbiggercontributortothecountry’sGDP.Ourfirststepislandreform.”

TheMinistryofAgrarianPolicyandFood isworkinghardtomakeUkraine’sagriculturesectormoreattrac-tivetoforeigninvestors.Afteraccomplishingnecessarylandreforms,theministrywantstocreatealandmarketthatwillproveofinteresttogloballyactiveagriculturalenterprises.Inaddition,theministryhasplacedahighpriority on achieving transparency inUkraine’s agri-culturalproductionactivities.

Forgingstrongerinternationallinks

Ukraineissteppingupitsinternationallinksintheagricul-turesector,andtheMinistryofAgrarianPolicyandFoodrecentlysignedanagreementwiththeChicagoCommodi-tiesExchangeaspartofitsliberalisationdrive.Ukraine’sagriculture sector has already attracted major investorsfromtheEUandtheUS,andin2010Ukraine’sagriculturalenterprisesachievedatotalUS$8billion(€5.6billion)inforeignexchangerevenues.Autumn2011,theMinistryofAgrarianPolicyandFoodpresentedanupdateddevelop-mentplanfortheagriculturesectorduringameetingoftheEUParliament.

Mykola Prysyazhnyuk points out that Ukraine is anatural for agricultural development. He says, “Inadditiontoallitsotheradvantagesforagriculturalpro-duction,Ukraine is strategically locatedbetween theEUandRussiaandissteadilyadoptingEUstandards.

Mykola Prysyazhnyuk, Minister of Agrarian Policy and Food

Wewantforeigncompaniestoknowthattheywillfindstabilityandaclearregulatoryenvironmenthere,andthatUkraine isverywellplacedtobea topEuropeanagriculturalproductioncentre.”

UrgingforeigninvestorstotakeacloserlookatUkraine’sagriculturepotential,MinisterPrysyazhnyukconcludes,“Wewelcome investments in agricultural infrastructure, grainproduction,andinnewtechniques,equipmentandtech-nologies.Forexample,wedonothaveenoughcombinesfor grain harvesting and have been experiencing somelosses.TheMinistryofAgrarianPolicyandFoodisfosteringaliberalised,openagriculturesectorinUkraine,andweareconfidentthatagriculturewillbecometheleadingindustryintheUkrainianeconomy.”

Agriculture&FoodProducts

32

Ukraine

Myronivsky Hliboproduct

Dynamic Ukrainian Firm - europe’s Top Poultry ProducerMHP (Myronivsky Hliboproduct), a leader in Ukraine’s agro-industrial sector, serves as a benchmark for other agricultural enterprises and demonstrates the potential of Ukraine as an investment target. Yuriy Kosiuk, CEO, says, “We are one of the companies responsible for Ukraine’s improving global image. We see ourselves as an educator and as a representative of Ukraine.” Having achieved outstanding growth, particularly over the past five years, MHP will soon become the biggest poultry producer in Europe when it opens its latest man-ufacturing facility in Ukraine in 2013.

MHPproducesandsellshighqualitychickenproductsandisaccountedforhalfofthechickencommerciallyproducedinUkrainein2010andnowadays.Coveringthefullvaluechain,MHPisalsoinvolvedingrainpro-ductionandprocessingaswellasinthepreparationofotherfoodproducts,includingsausages,cookedmeat,premiumfreshbeef,foiegrasandfruit.Operatingonthe principle “if you want something done well, doityourself,”MHPrunsafleetofaround500deliverytrucks and offers its products through a network offranchised stores and supermarkets. Around 8% oftotal production is exported to CIS countries, theMiddle East andCentral Asia. Sooner or laterMHPwillbepresentintheEU.

ListedonLondonStockExchange

Onemeasure ofMHP’s success is that it is the firstUkrainianagro-industrialcompanytobelistedonthemain market of the London Stock Exchange. YuriyKosiukpointsout,“Wedon’tseeMHPas justa localplayer anymore, but rather an international player,with international standards. We try to educate thelocalcommunity,forexampleconcerningproductionof high quality meat and responsibility towards theenvironment.We want to show that if a company ishonestandtransparent,itcanbeverysuccessfulhereinUkraine.”

Yuriy Kosiuk, CEO

WhileMHP’s accomplishments are well known today,getting the company’s IPO off the ground proveddifficult because of Ukraine’s negative internationalimage,aproblemthecountryisstillfacing.YuriyKosiuksays, “When we started our IPO process, potentialinvestors, asked me upsetting questions like, ‘Whereis Ukraine?’(laughing). They ranked Ukraine alongwithverylowpotentialcountries.So,webegantoshowpeoplewhat thepossibilitieshere really are.Throughourtransparency,opennessandstellarresults,wedem-onstrate that Ukraine is part of Europe and a goodcountrytodobusinessin.”

Fantasticinvestmentopportunities

ForbeshasneverthelessrankedUkraineverylowinthequalityofitsbusinessenvironment,whichYuriyLogush,VicePresident,believesisunjustified.Hesays,“IamtheViceChairmanoftheAmericanChamberofCommerceinUkraine,andIhearaboutcompanies’problems indoingbusinesshere,butratingsaresubjectiveandoftensetbypeoplewithoutmuchexperienceinthecountry.InvestorshereneedtounderstandthattheyneedtotakethetimetoadaptandtounderstandUkraine’sbusinessenvironment,which isnot at all like theAmericanorEuropeanones.Infact,Ukraineoffersfantasticinvest-ment opportunities, not abstract ones but real ones.If companies have the right tools anddrive, they can

33

MyronivskyHliboproduct158,AkademicaZabolotnogoStr.

Kiev03143Tel:+380442070000

www.mhp.com.ua

accomplishwondershere thatwouldbe impossible inEuropeorAmerica.”

In1989,Ukrainewastheworld’s13thbiggesteconomy,butwiththefalloftheSovietUnion,it lost70%ofitsGDP.YuriyLogushexplains, “Recovering from suchablowtakestime,andUkrainestillneedstocoverhugeamountsofgroundtocatchupwithEUcountries,buttheinfrastructureisalreadyhere,andpeopleherearehighlyeducatedandmotivated.Ifinvestorsarewillingtotakeonthechallenges,thereisnothingtokeepthemfromsucceeding.”

WhatarethereasonsbehindMHP’ssuccessstory?YuriyKosiuk says, “MHPblends thebestmanagement tech-niquesandthehigheststandardswithawelleducatedstaffandresources,soithasallthenecessaryingredientsforgrowth.TheresultisthattodayMHPistheleaderineverysegmentinwhichitispresent–poultryandcropproductionaswellasmeatprocessing,etc.”

Exceptionalopportunitytopartnerwithawinner

MHP will continue to grow along with Ukraine’sagriculture sector, which offers enormous potentialasamajorsourceof theworld’s foodinthecomingdecades. Yuriy Logush explains, “Ukraine has the

richestpossiblesoil,alongagriculturaltraditionanda history of innovation. All Ukraine needs is moreinvestmentandtrust.”

MHP aims to expand internationally and anticipatessuccessintheEUandothermarketsthankstoitshighquality products, including meat produced withoutgrowth hormones, steroids and antibiotics. MHP haspositioned itself as the ideal partner for Europeancompanies looking for opportunities in Ukraine. AsYuriy Logush puts it, “Europe is cutting agriculturalsubsidiesbutstillneedstofeeditspeople.MHPoffersEUquality atone third theprice, andweunderstandtheEuropeanbusinessculture.MHPisareliable,trans-parentbusinesspartner,andwearelookingforpartnersnow.My advice to potential investors is, invest smart,invest in therightpartner,andchooseMHP.Wehavealreadyprovedthatwecandoitright.”

Yuriy Logush, Vice President

34

Ukraine

The World’s Breadbasket in the 21st CenturyUkraine, once known as the breadbasket of the Soviet Union, aims to become the world’s breadbasket in the future. Ukraine has carved out a leading role for itself in the inter-national agricultural products sector and is now ranked number one globally in exports of sunflower oil, number three in exports of sunflower seeds, among the top three in exports of grain, number one in exports of barley, third in exports of corn, and number five in exports of cheese. In 2011, Ukraine recorded its biggest grain harvest since its independence 20 years ago: more than 55 million tonnes.

AgricultureunderpinningGDPgrowth

ThethrivingagriculturesectorcontinuestounderpinUkraine’sGDPgrowth.Infact,theagriculturesectorgrew by an impressive 17.5% in volume in 2011,buoyed by a recordharvest. According to the StateStatisticsService,thehighestgrowthwasachievedinnorth-easternUkraine.

Ukrainian Agrarian Policy and Food Minister MykolaPrysyazhniuk recently announced that Ukraine hasalreadyexported9.65milliontonnesofgrainsincethebeginningof thenew2011-2012marketingyear, a riseof2.86milliontonnes,or29.6%,overthesameperiodlastyear.Thisstrongperformanceisinspiteofadverseweatherconditionsinthefallandwinterof2011.Hesays,“Ourcountrywastheworld’sbiggestexporterofbarleyin2011andthesixthlargestexporterofwheat.Inaddition,wealsoincreasedourexportsofnongraincrops.Overtheyear,weincreasedouragriculturalproductsexportsby35%,toreachoverUS$10billion(€7.83billion).”

EveryregionofUkraineboosteditsagriculturalpro-duction in 2011, but another factor for the strongresultswasariseinexportstoEUmarketsthankstoUkraine’seffortstoimprovethequalityofitsagricul-turalproducts. MykolaPrysyazhniukexplains,“Thegrowth of export figures for agricultural productsshipped to the EU which we experienced in 2011is the direct result of the improved quality of ourgoods.”Theremovalofexporttaxesandtariffswereotherreasonsbehindtheexportrise.

NewWorldGrain:DynamicForeignInvestorinAgricultureSector

NewWorldGrain,partof theglobalSouffletGroup, isplaying a leading role in Ukraine’s agriculture sector.NewWorldGrainacquiresgrainfromfarmersandlocaltradingcompanies,managessupplychainactivitiesandmarketsgraindomestically.Jean-MarcPhilouze,GeneralManager,explains, “NewWorldGrainUkrainehandlesaround500,000tonnesofgrainperyear.TheUkrainianmarketisveryimportantfortheSouffletGroupbecauseUkraineproducesaqualityproductthatcanbeexportedallovertheworld.”HeaddsthatinspiteofcorruptionatalllevelsandnewregulationsthatpreventNewWorldGrainandothercompaniesfromexporting,heishopefulfor the futureofUkraine’sgrainproduction,whichheexpectstodoubleoverthenextfiveyears.

AgriculturesectorkeyfactorinEUAccessionAgreement

TheAccessionAgreementbetweenUkraineandtheEUwillhaveamajorimpactontheagriculturesectorbesidestheobviouseffectonbilateraltrade.TheagreementwillservetoenforcetheimplementationofEUstandardsintheUkrainian agriculture sector, including concerningfoodsafetyandsecurity;itwillgiveagriculturalproducersgreateraccesstointernationalfundingmechanisms;anditwillsignificantlyincreasetheappealofUkraine’sagri-culturesectorforinternationalinvestors.

© Mykola Komarovskyy | Dreamstime.com

35

TwostumblingblockstothefinalsigningoftheAssocia-tionAgreementinvolvetheagriculturesector,butmostobservers agree that these are close to being workedout. One issue is grain exports. While the EuropeanCommission prefers a quota systemwhen it comes toUkrainian grain, for Ukraine a total liberalisation offoreign trade with the EU would bemore profitable.However,Ukraine isprepared toagree toa transitionperiodduringwhichexportquotaswillgrow,accordingto Prime Minister Mykola Azarov. The second itemrelatingtotheagriculturesectorthatiscausingdebateinthenegotiationsistheuseofgeographicalnamesinUkrainianbrandnames.“Wearepreparedtowaivetheuse of distinctive geographical namesduring a transi-tionperiod,thatis,overthenext10years,”thePrimeMinistercommentedinearlyJanuary.

Steppingupqualitycontrolsforagriculturalproducts

Ukraineisalreadymakingprogressinthecrucialareaoffoodqualitycontrols.Infact,inmidJanuarythisyearIvanBisiuk,headoftheUkrainianStateVeterinaryandPhytosanitaryService,announcedthatthegovernmentofUkrainehasdecidedtosetupafoodqualitycontrolmodel based on the EU’s. He explained, “FollowingtheexampleoftheEU,theUkrainianVeterinaryandPhytosanitary Service will fully control the qualityand safety of food products: from the application oforganicandmineral fertilisers inthesoil toverifyingthecontentsofanimalfeed,monitoringpesticideandveterinarydrugresidues inanimalproducts,process-ingvegetableandanimalingredients,ensuringreliablesupplies to consumers, andmonitoring logistics andsalesthroughoutthecountry.”

ThegovernmentaimstoestablishanationalauthoritytooverseethequalityofallfoodproductsinUkraine.IvanBisiuksays,“Thegovernmentwillsetupanationalorganisation based on the State Veterinary and Phy-tosanitaryService,butthisdoesnotmeanthatonlyvet-erinariansshouldmonitorproductsofvegetableoriginorspecialdietaryandbabyfood.Itiswiththispurposethatspecialistsfromotherstructures–includingfoodhygiene,sanitation,quarantinesandplantprotection--willbehiredtoparticipateintheauthorisedgovern-mentservice.”

KeyreasonstoinvestinUkrainetoday

Urging international investors to take a closer lookat Ukraine’s agriculture sector, First Vice PrimeMinister Andriy Klyuyev observes, “Ukraine is in themiddleofEurope.Itseconomyistodaydevelopingat

astableandsustainablerate,butisdestinedtobecomethe world’s new economic miracle, especially sincehighly developed neighbouring markets have nearlyexhaustedtheirgrowthpotential.CouplingUkraine’sfavourablegeographiclocationwithawelldevelopedrailwaysystem(somethingweexpecttoimprovemuchupon soon), it takesonly a coupleofdays todelivergoods fromUkraine to a Berlin shop or warehouse.Ukraine’s economy continues demonstrating a sus-tainablegrowthrateof5%withanupwardtrend.Thebenefits of investing in Ukraine are obvious, simpleandindisputable.”

OneinternationalinvestortakingnoteisJersey-basedJadenFinch, which entered the Ukrainian agricul-turesectorin2009throughitspurchaseofEnselco,a33,000hectarefarmingbusiness itsoldinSeptember2011. The investment group recently announced,“JadenFinchLimitediswellcapitalisedandkeentousetheproceedsoftheEnselcosaletoacquirenewfarmsorfarmingcompaniesinUkraine.”

© Iakov Filimonov | Dreamstime.com

Agriculture&FoodProducts

36

Ukraine

© Demydenko Myhailo | Dreamstime.com

nestlé Sa

Global Leader Making Long Term investments in UkraineNestlé SA – the world’s leading nutrition, health and wellness company – has carved out a leading position in Ukraine, where it has been present for 18 years. Maurizio Patarnello, CEO of Nestlé in Ukraine and Moldova, explains, “Nestlé maintains the same high standards here in Ukraine as we do everywhere in the world. Ukraine plays an important role for the Nestlé group and makes a strong contri-bution towards Nestlé’s growth in Europe. Nestlé did not lose faith in Ukraine even during the crisis in 2008, and we aim to continue to invest extensively here.”

Nestlé chose Lviv, Ukraine asthe location for its new NestléShared Business Services CentreEurope, Nestlé’s fifth businessservices centre worldwide.Maurizio Patarnello says, “Lvivis well located and, because ofthe universities there, it haswell qualified young talents.Our new centre employs over300 multilingual young peoplewhoareproviding services in20countries.WearethepioneersinUkraine for this type of ventureandweplantoexpanditfurther.We are committed to creatingsharedvalueinUkrainebothforshareholdersandlocalcommuni-

Maurizio Patarnello, CEO

ties. Through this centre, we willcreate value for society and par-ticularly for young and talentedpeople by forging partnershipswith local universities and devel-opingtrainingprogrammes.”

Doubledigitgrowthplanfor2012

Nestlé has also made significantinvestments in implementingnewtechnologiesandnewdistributionsystems inUkraine, in Kharkiv aswellasLviv.“Wehaveadoubledigitgrowth plan inUkraine in 2012,”Maurizio Patarnello says. Nestlérecently acquired a local firmproducing Asian-style noodles,seasonings and mashed potatoesin Ukraine, and, after upgradingthe company’s technologies andproduction systems to meet thehighest quality standards, Nestléaims to export its Asian noodlesfromUkrainetomarketsthrough-outEurope.

AsalongterminvestorinUkraine,Nestlé has forged a productiverelationship with the governmentand is committed to supportingUkraine’s continued economicdevelopment.MaurizioPatarnelloexplains,“Thisisayoungeconomywithseveralissuesanditneedstheexperience developed in othercountries. We do not make anyexceptions inUkraine in the wayweimplementourprinciples.”

Nestlé’s success story in Ukrainedemonstratesthecountry’sappeal

72-A’,VerkhniyValstr.Kiev04655

Tel:+380444908000

www.nestle.ua

Good Food, Good Life

for foreign investors. MaurizioPatarnello points out, “InvestorsshouldlearnmoreaboutUkraine,andnotbeputoffbysomeofthenegative stories they might haveheard.Nooneshouldbeafraidtodobusinesshere.”

37

elit

innovative ice Cream Producer anticipates Strong GrowthElit, founded in 2003, specialises

in the production of high quality

ice cream, and its ice cream

products under the Azhur brand

have become top sellers in the

Ukraine market. Based in Kiev,

Elit has established several state

of the art production facilities

throughout the country which

have all received ISO certifica-

tion, including ISO 9004:2000

for Total Quality Management.

Elit’s plants handle the full

cycle of the ice cream production

process, from transforming raw

materials to packaging.

Innovation is one of Elit’s pri-orities, and the company willcontinue to add to its diverseportfolio of ice cream products,includingthedozensofproductswithitsverysuccessfulOpenworklabel. Grachyk Vardanian,GeneralManagersaysthatqualityand an efficient managementstructure account forElit’s com-petitive edge. He explains, “Weare very proud of our quality:the quality of our products,the quality of our employees,and the quality of our produc-tion processes. We also strive toachieveanindependentsystem,asystemthatcan functionwellonits own regardless of the personincharge.”

Cuttingedgeinfrastructuretoaccommodatefuturegrowth

Elit has developed proactively byinvesting in cutting edge infra-structure that can handle thecompany’s anticipated growth.Grachyk Vardanian says, “We donotneedanymoreinvestmentsininfrastructure or equipment; wealreadyown90%ofourtransportfacilities and have implementedthe latest information technologysystems, including computer con-trolledproductionprocesses.Ourinfrastructure is able to handlefourtofivetimesourcurrentpro-ductionandsales.”

Elitplanstobuildmorefactoriesin order to boost its direct sales,particularlyinlargecities,andtoexpanditssalesinareaswithhighdemand,suchastourismcentres.Vardanian welcomes the oppor-tunity to work with internationalpartners. He says, “Our idealpartnerwouldbeacompany likeoursthatwantstoinvestintheicecream market here in Ukraine.Elit is definitely a promising

investment choice because notonly are we a proven success inthe market and have alreadydeveloped high quality produc-tion and distribution processes,butwearealsoaverytransparentcompanythatmeetsinternationalstandards.”

Grachyk Vardanian is veryconfident about the futureof Ukraine and of Elit. Heconcludes, “Ukraine is a marketwith excellent growth potential,asitshostingofEuro2012shows.TheicecreammarketinUkraineis growing fast, andElit is at theforefrontofthisgrowth.”

KurortnayaSt.11Kiev04075

Tel:+380445940775

www.azhur.ua

P R I V AT E L I M I T E D L I A B I L I T Y C O M PA N Y

Agriculture&FoodProducts

38

Ukraine

Health

“The Ministry of Health has developed ambitious programmes and we are eager to make them a

reality. Ukraine’s healthcare sector has huge development potential.”

Oleksandr Anischenko, Minister of Health

•BringingHealthcareSystemuptoGlobalStandards

39

rapidly Developing Healthcare Sector Welcomes european SupportUkraine’s Ministry of Health is working to attract more international support to help it achieve its goals for Ukraine’s healthcare sector. Oleksandr Anischenko, Minister of Health, explains, “Ukraine is a civilised country with highly developed science and technology, but we lack sufficient funding for the medical sphere, including for new medical technologies and equipment.”

TheMinistryofHealthhasalreadyformedclosepart-nershipswithUNICEF,theWorldBankandotherinter-nationalfundingorganisationsconcerninghealthcareprogrammes,includingprojectstoresearchandtreatHIV,tuberculosisandmalaria,amongothers.Interna-tional funds have also been directed towards organ-ising healthcare systems, providing medicines andupgradingtheoperationofhealthcarefacilities.

Increasingprivatesectorinvestment

Ukraine’shealthcare sector isalsoattracting supportfrom international investors. The pharmaceuticalssector,forexample,isnowdominatedbyinternationalcompanies,andmoreandmoreprivateinvestorsaretargetingUkraine’s healthcare facilities and services.Investors from Japan and Switzerland are currentlytaking part in projects for children’s hospitals inUkraine;theSwissprojectinvolvesprovidingnewtech-nologiesandexpertiseinusingequipment.“Interna-tionalinvestorsandfundersarenotcurrentlyworkingwithUkraine’s state ownedhospitals but ratherwithprivatehealthcare facilities.Weare seeingmoreandmoreprivateclinicsopeningwiththehelpofinterna-tionalfunding,”OleksandrAnischenkopointsout.

TheMinistryofHealthwouldespeciallyliketoattractinternational investment in establishing localhealth-care centres, setting up cancer treatment facilitiesandlaunchinginstitutionstotrainmedicalpersonnel.OleksandrAnischenkosays,“Forthemoment,wearenot seeingenough investmentcoming fromEurope,but we are getting a lot of interest from India. It isveryimportanttoustohaveEuropeaninvestorshelpusdevelopnewhealthcare technologiesandtoassistuswithequipmentuseandmaintenance.Wewantto

Oleksandr Anischenko, Minister of Health

bringourhealthcaresectoruptoEUstandardsandwewilldoeverythingwecantoassistEuropeaninvestors.”

Rehabilitation centres and medical tourism are twootherparticularlypromisinggrowthareasforUkraine’shealthcaresector,accordingtotheMinisterofHealth.He says, “Ukrainehashighly trainedphysicians alongwithmanytourismattractions.WeneedtostepupoureffortstomaketheworldmoreawareofwhatUkrainecanoffer.”

Urging investors and healthcare institutions in theEU to look into opportunities inUkraine,OleksandrAnischenko concludes, “The Ministry of Health hasdevelopedambitiousprogrammesandweareeagertomake them a reality. Ukraine’s healthcare sector hashugedevelopmentpotential.”

Health

40

Ukraine

roche Ukraine

Bringing World Class Medicines to PatientsGlobal group F. Hoffmann - La Roche (Roche), the Switzerland based international leader in bio-technological treatments, set up a representative office in Ukraine in 1998 and has steadily expanded its business there ever since. General Manager Ala Ciobanu says that Roche Ukraine LLC was launched in 2009 and in November this year it started local sales. She explains, “Roche Ukraine LLC is now a fully-fledged affiliate of the Roche group. We have warehouses which meet the global Group’s standards and we meet all the necessary international criteria in business handling. This is a major accomplishment.”

Ala Ciobanu, General Manager

physicians,weparticipateinmedicalconferences and organise educa-tional activities for doctors. We doour best to provide the adequatetreatmentforeverypatient.”

Roche hasmade a long term com-mitment to Ukraine. Ala Ciobanuexplains, “Our two major tasks aretobuildupagood imageofRochein Ukraine and a good image ofUkraine in Roche. Ukraine is anemerging market. Development ofthismarketisapriorityofthesocialpolicy realised by the Ukrainiangovernment. I’m sure that imple-mentationoftheworldwidemodernstandardsandprinciplesofbusinessin Ukraine will allow us to achievesignificantresults.”

Roche Ukraine demonstrates thepotential of Ukraine as an invest-ment opportunity, Ala Ciobanubelieves. To prospective investors,she says, “You should not be afraidto come to Ukraine. There is highcomplexityofthismarketbutatthesame time it ispossible tobe reallysuccessfulhere.”

BCLeonardo,19-21BogdanaKhmelniskogoStr.,

10thFloorKiev01030

Tel:+380443543040

www.roche.com

RocheUkrainenowhas37productsin its portfolio, with five newproducts currently undergoing theregistration process. “Ukraine hasimplemented the highest standardsin drug regulations and is now ingroupAofcountriesconcerningtherequirements for registering newdrugs,”AlaCiobanuexplains.

Puttingpatientsfirst

Roche Ukraine works closely withthe Ukrainian healthcare systemmanaging to deliver a productwithin48hoursatthegovernment’srequest, thus savingmany lives.AlaCiobanu explains, “We collaboratewiththehealthcareinstitutions,butforusthepatientalwayscomesfirst.Rochemedicinesarehighly innova-tiveandmostofthemareintendedfortargetedtherapies.Todelivertheinformationaboutourmedicinesto

Roche Ukraine proves that aUkrainian company can succeedwithout resorting to corruptionandbribes.AlaCiobanucomments,“RocheUkraine is a highly ethicalcompany and at the beginningpeople were shocked by thisapproach to doing business, butUkraine is changing. If you workhardandstriveforexcellencewhilekeepingadistancefromcorruption,peoplerespectyouhereforthis.”

Roche Ukraine has brought allRoche’s well known products tothe Ukrainian market, includinginnovative treatments for cancer,hepatitis, rheumatoid arthritis,osteoporosis and transplants.

41

Bringing Healthcare System up to Global StandardsUkraine’s healthcare sector is steadily improving as new healthcare facilities open and modern medical technologies are implemented. Ukraine’s President, Viktor Yanukovych, has said that he is aiming for full modernisation of Ukraine’s primary healthcare system by 2013.

Headds,“Wehavedevelopedanewlawonhealth-care and we are on the right path to healthcarereform. Now we must move ahead even faster tobringourhealthcaresectoruptoglobalstandards,whichwehopetodowiththehelpofinternationalpartners.”

Ukraine’sMinisterofHealth,OleksandrAnischenko,recently announced the opening of a modernperinatal centre in Dniepropetrovs which willprovide high quality medical care for mothersand newborns. Theminister added that 16 moreperinatal centres will be open in Ukraine by theendof 2012.Thesenew centres reflect themajorchangesunderwayinUkraine’shealthcaresystem.

Heldbackby a lackof funding, technologies andexpertise, thehealthcare sector faced overwhelm-ingchallenges inthefirstyearsofUkraine’s inde-pendence but it is definitely making progress.

Ukraine’s healthcare sector now includes dynamicprivatefacilities,civil initiatives,andavastnetworkofstaterunclinicsandhospitals.

“The task is basically to turn a virtually nonexistent health service arena into a consumer driven and

accessible industry.”

Privatehealthcaredrivingdevelopmentforward

Private investment is spearheading healthcarereforms and development in Ukraine today.According to R. Alex Sokol, President, AmericanMedical Centres, “Clearly the private sector isdriving the nation’s health, with the governmentleaning towards a privatemodel and amulti-secto-ral approach,withhealthcare reform largely basedon theprivate sector’s success.Undoubtedly, thereremains a tremendous voidandhenceopportunityinprivatehealthservices inUkraine,notonlyonaprovider, general or specialist level, but indeed inallareas.”

R.AlexSokolpointstotheneedforbothcapitalandmodernmanagementskills ifthetransformationof

Medical Exhibition Public Health 2011 in Kiev

42

Ukraine

Ukraine’s healthcare sector is to be a success. Hesays,“ModernisingUkraine’shealthsystemrequirescapital andmanagement in order to develop bothhorizontally–expandingclinicalofferingsinservicedynamics and geographical coverage -- and verti-cally,indevelopingatoptobottomrangeofinnova-tivehealthservicesprovision.Thetaskisbasicallytoturnavirtuallynonexistenthealthservicearenaintoaconsumerdrivenandaccessibleindustry.”

MinisterofHealthciteshealthcareinvestmentopportunities

Ukraine’s Ministry of Health recognises that foreigninvestment is essential inUkraine’s drive to continueto improve its healthcare system. Ukraine’s pharma-ceuticals industry has already attracted significantinternational investor interest, and now the MinistryofHealthwouldliketoseemoreforeigninvestmentinsuchareasasnewmedicaltechnologiesandexpertise,localhealthcarecentres, rehabilitationcentres,healthtourismfacilitiesandservices,specialisedcentressuchas cancer treatment facilities, and trainingopportuni-tiesformedicalprofessionals.

“Our new model for the healthcare system has already been functioning

well in pilot regions, which is a very positive sign for the future of

healthcare in Ukraine.”

American Medical Centres, founded 15 years ago,openedoneofthefirstprivatehealthcarecentresinUkraineandhaveplayedakeyroleinbringingworldclassstandardstothelocalhealthcaresector.Today,American Medical Centres serve as a benchmarkin Ukraine’s healthcare sector. American MedicalCentres have provided treatment for over 100,000patientsandhavetrainedcountlessmedicalprofes-sionals.Currentprojects includebuildinganew22bedhospital.R.Alex Sokol explains, “Ourmissionisnothing less than to transformhealth services inUkraine.”

Ukraine’sextensivereformsofthehealthcaresystemcover the spectrumfromupgrading thehealthcareregulatory environment to modernising health-

© dreamstime.com

43

care training, infrastructure, technologies andfinancingoptions. In January2011, theMinistryofHealthbeganpilotprojects inthreeregionstotestUkraine’s healthcare modernisation programmes;these programmes are to be extended to otherregionsthisyear.

Compulsorymedicalinsurance

A key proposed change for Ukraine’s healthcaresectoristheintroductionofinsurancebasedhealth-care. Oleksandr Anischenko recently commented,“I hope that the law on nationwide compulsorymedicalinsurancewillbeadoptedthisyearandthatinsurancebasedhealthcarewillbe implemented inUkraine starting from 2015.” Financing has longbeenachallengeinUkraine’shealthcaresector,andtheinsurancebasedsystemwillbedesignedtofundbetterhealthcare facilitiesandservices forpatientswhile also taking some of the burden away frompublicbudgets.

While the challenges are great, Ukraine is clearlymakingprogressinitshealthcarereforms.OleksandrAnischenko says that the Ministry of Health hasto implement structural reforms, prepare thehealthcare system to function with a new financialstructure, anddevelop standards andprotocols formedical treatment, all of which takes time. Theminister explains, “The tasks are difficult becausetheproblemshavebeenaccumulatingforyearsandimmenseeffort isneeded inorder tocopewithallthis.Nevertheless,Ukraine’sMinistryofHealthnowhasthepoliticalwill forchangeandthesupportofthegovernment.Ournewmodelforthehealthcaresystem has already been functioning well in pilotregions,whichisaverypositivesignforthefutureofhealthcareinUkraine.”

FarmasoftWorld Class Services for Pharmaceutical Companies

The Ukrainian pharmaceutical market is one of the fastest growing in Europe, achieving double digit growth for the last several years. This makes it an attractive business choice for foreign pharmaceuticals companies.

MostleadinginternationalpharmaceuticalcompaniesarealreadypresentintheUkrainianmarketthroughtheirrepresentativeoffices.Smallandmediumsizedcompanies,however,willfindsomebarrierstomarketentry,suchasgovernmentregulationofthepharma-ceuticalindustry,achanginglegislativeenvironment,andspecificissuesconcerningpromotiononthelocalmarket.ThegoalofFarmasoftistohelpforeignphar-maceuticalcompaniesaccesstheUkrainianmarket.

Farmasoft is a dynamically developing Ukrainiancompany with an innovative approach to solvingproblems concerning the marketing, distributionandlogisticsofpharmaceuticalproductsinUkraine.Building on its vast experience developed since1993, Farmasoft has achieved significant success inprovidingservicesinthepharmaceuticalindustry.

Farmasoft provides a range of services for interna-tional pharmaceutical companies, includingmarketanalysis, registration of pharmaceutical products,organisation of supplies to Ukraine, customsclearance,warehousingaccordingtoGDPstandards,promotion and sales, and logistics of clinical trials.Having an experienced local partner in Ukrainegives international pharmaceutical companies costeffectiveaccesstotheUkrainianmarket.

14,PolovetskayaStr.Kiev04107

Tel:+380445858183info@farmasoft.kiev.uawww.farmasoft.com.ua

Health

44

Ukraine

Teva Pharmaceuticals

Global Pharmaceuticals Leader Committed to Ukraine Market

Global pharmaceuticals group

Teva, headquartered in Israel, is

now ranked the biggest producer

of generic pharmaceuticals in the

world and is active in 60 countries.

Teva Pharmaceuticals is committed

to increasing access to high quality

healthcare by developing, producing

and marketing affordable generic

drugs as well as innovative and

specialty pharmaceuticals and

active pharmaceutical ingredients.

Teva’s branded businesses focus on

CNS, oncology, pain, respiratory

and women’s health therapeutic

areas as well as biologics.

Teva has been active in Ukrainefor more than a decade and hassteadily grown over the yearsthrough mergers and acquisi-tions to become a leader in thenational pharmaceuticals sector,holding a 3%market share. TevaUkraine expects to continue togrow rapidly. Alexandra Sologub,GeneralManager, explains, “Tevalaunched operations in Ukraineas a representative office special-ising in oncology products. AsTeva integrated other companiesin Ukraine, we diversified andenlarged our business. Today,Teva Ukraine not only serves thelocalmarketbutisalsoTeva’shubfor exports to Moldova, Georgia,AzerbaijanandArmenia.”

TevaUkraineservesasabenchmarkforhighqualityinUkraine’spharma-ceuticalssector.AsaruleTevaphar-maceuticalsproductsareproducedincompliancewithGMPrequirements,that has been confirmed by leadingregulatoryauthoritiesoftheindustry,e.g.FDA,MHRAandothers.

Teva Ukraine offers a full rangeof pharmaceuticals products,including over the counter (OTC)medicines,drugsforhospitals,andgeneric and special prescriptionpharmaceuticalsintheareasofcar-diology, pulmonology, neurology,psychiatry, gastroenterology,hematology, infectious diseases,oncologyandothers.TevaUkrainewillcontinuetoexpanditsproductportfolio to increase availability ofquality treatment at an affordablepriceforUkrainianconsumer.TevaUkraine benefits from its in depthunderstanding of the local marketcombinedwiththeexpertiseoftheinternationalTevagroup.

A challenge in Ukraine’s phar-maceuticals market, which isdominated by generic products,is a lack of reimbursement forpharmaceuticals purchases. Somepatients have health insurance,but definitely not a majority.“When Ukraine introduces reim-bursement for pharmaceuticalsproducts, our market will defi-nitelychange,”AlexandraSologubpointsout.

Tevahasmadea long termcom-mitment to Ukraine, where itsupports a number of corporatesocial responsibility projects.Alexandra Sologub concludes,“Corporate social responsibil-ity is very important for TevaUkraine.”

45

Energy & Gas

“Ukraine’s energy sector will provide reliable and steady returns

on investments.”Deputy Minister of Energy and Coal Industry, Volodymyr Makuha

•MinistryBringingEnergySectorinLinewithEUCriteria

•AssociationHelpingtoUpgradeGasSectorLegislation

46

Ukraine

Ministry Bringing energy Sector in Line with eU CriteriaAs in other sectors of its economy, Ukraine is rapidly bringing its energy sector up to world class standards and creating new opportunities for international investors. Deputy Minister of Energy and Coal Industry Volodymyr Makuha, explains, “The whole economy is undergoing the process of deep structural reforms, including in the energy sector. We have reformed our energy ministry so that it now oversees all aspects of Ukraine’s energy activities, including oil and gas, thermal energy and coal. Our aim was to achieve more effective coordination and ensure transparency.”

The Ministry of Energy’s top priorities, according totheDeputyMinister,aretomakesureallconsumersinUkrainehaveuninterruptedaccesstoenergysupplies,thatthecountryhasenergysecurity,andthatUkraineiswellintegratedintotheEuropeanenergynetwork.Theministryiscountingoninternationalinvestmenttohelpitreachitsgoals,andhaslaunchedaprogrammeto attract around€300million in investments to fullymoderniseUkraine’sgastransportsystem,amongotherenergy projects. The ministry has also implementedenergylegislationthatisinlinewithEUstandards.“WehavealreadyupgradedourgaslawstoEUcriteriaandnowweareworkingonmodernisingourelectricitymarket,which will create significant incentives for investors,”DeputyMinisterofEnergyVolodymyrMakuhasays.

Privatisationprogrammeinprogress

TheMinistryofEnergyisworkinginpartnershipwiththeWorldBank,theEBRDandotherorganisationsto

liberaliseandmoderniseUkraine’senergy sector. “Wehavegotten thegreen light from theCabinetofMin-istries to privatise energy generation companies andseveralregionalelectricitydistributioncompanies,andwearemovingtowardsreformingourmajoroilandgasmonopoly,”VolodymyrMakuhapointsout.

Ukraine’senergysectoroffersvastinvestmentpotential.Deputy Minister of Energy Volodymyr Makuha sitesextraction activities, projects involving alternative gassources(suchasarecentlysignedagreementwithShelltoexploreandproduce“tight”gas),andotherprojectsasparticularlypromisingopportunities.Heconcludes,“We are moving towards the tender process and weexpectbiginternationalproducerstocometoUkraine.Ukraine’senergysectorwillprovidereliableandsteadyreturns on investments, and theMinistry ofEnergy isreadytogiveinvestorsanyhelptheyneed.Wearedeter-mined to bring Ukraine into the European energynetworkandtoensurethattheenergysectorservesasakeydriverforUkraine’seconomicdevelopment.”

Str.Tupoleva8-Kiev03062-UkraineTel:+380444497890-Fax:+380444223838info@abbusiness.net-www.abbusiness.net

47

association Helping to Upgrade Gas Sector LegislationThe Gas Traders of Ukraine Association is playing a major role in the process of upgrading Ukraine’s high potential gas sector. Roman I. Storozhev, President, explains, “The Gas Traders of Ukraine Association is involved in anything to do with the legislation of Ukraine’s gas market. We monitor legislation, ensure that current legislation is put into practice, and give our suggestions to the Ukrainian government any time there are any problems involving Ukraine’s gas market. We work closely with all companies involved in Ukraine’s gas sector as well as with government insti-tutions, particularly the Ministry of Energy and the Regulation of Energy Committee. Over the past year in particular, we have stepped up our cooperation with the Ukrainian government, for example concerning the new legislation on natural gas.”

Ukraine’sgassectoroffersoutstandingattractionsfor foreign investors. Roman I. Storozhev says,“Ukraine has vast potential for the extraction ofoilandgas,andtherearemanyundiscoveredareasthatwouldbeofgreatinteresttoforeigninvestors.In addition, Ukraine has the biggest gas storagesystem in Europe.” The Gas Traders of UkraineAssociation foresees that, thanks to Ukraine’sunique resources and its strategic location, thecountry will become a key centre for gas sales toEuropeanmarketsaswellasamajorgastransporthubconnectingRussiaandEurope.

Investmenturgentlyneededtomodernisegassector

InvestmentsupportisurgentlyneededtomoderniseUkraine’sgasindustry.“Ukraine’sgassectorneedsaround€352.7million (US$500million)per yearin order to be fullymodernised and to realise itspotential.Thecountry’sgas transportationsystemneedsaninitial€1.76billion(US$2.5billion)and

Roman I. Storozhev, President Gas Traders of Ukraine Association

thenanadditional€3.5billion(US$5billion)inthenextstage,”RomanI.Storozhevpointsout.

NotingthatUkraine’sentry into theEUwillcreateevenmorereasonstoinvestinthecountry,RomanI.Storozhevadvises investorstoget inonthegroundfloornow,forexamplethroughinvestinginextrac-tion activities and then selling gas to EUmarkets.HeaddsthattheGasTradersofUkraineAssociationisreadytohelpforeigninvestorsenteringUkraine.He says, “We can provide consulting services andwillguideinvestorsthroughallthenecessaryproce-dures, including the process of obtaining licenses.Wecanalsohelpinvestorsregistertheiroperations,obtain licenses to sell gas, and make contact withpotentialcustomersandmarkets.”

Energy&Gas

48

Ukraine

Trade & Industry

“The Ukrainian Chamber of Commerce and Industry will offer even stronger support to Ukraine’s trade and industry sector and to

individual entrepreneurs.”Serguiy Skrypchenko, President Chamber of Commerce and Industry

•Belgian-UkrainianChamberIdealPartnerforInvestors

•MajorBusinessUnionPromotingFreeMarketPrinciples

•DynamicOrganisationSupportingEntrepreneurship

49

Chamber Promoting Ukraine Locally and internationallyThe Ukrainian Chamber of Commerce and Industry, which will celebrate its centennial next year, now has more than 9,000 members, both companies and individuals, and is affiliated with several other regional and international business organisations. Serguiy Skrypchenko, President, explains, “The Ukrainian Chamber of Commerce and Industry has signed agreements with partner organisations in 50 countries, which helps to strengthen business ties between Ukraine and foreign entrepreneurs.”

TheUkrainianChamberofCommerceandIndustry’sservicesforitsmembersincludeissuingcertificatesoforigin, preparing customs declarations for exports,assessingrealestateforprivatisationpurposes,issuingdocuments testifying to unforeseen circumstancesaffecting foreign trade, providing legal assistanceand quality control support, assisting in intellectualproperty protection, and drafting applications andotherdocumentsnecessaryforobtainingpatents,reg-isteringtrademarks,barcodingandmore.

Serguiy Skrypchenko adds that the UkrainianChamber of Commerce and Industry also acts as aliaisonbetweentheprivatesectorandthegovernmentand organises networking events, conferences andexhibitions inUkraineandinternationally, includingmorethan15inKievlastyear.

Foreigndirectinvestmenthasrisenby21.5%since1997

The Chamber of Commerce and Industry stronglypromotes Ukraine as a target for foreign investors.Serguiy Skrypchenko points out, “Contrary to thenegativereputationitsometimeshasabroad,Ukraineoffers enormous development potential, and infact foreign direct investment inUkraine has grownby 21.5% since 1997. The Ukrainian Chamber ofCommerceandIndustrystrivestoimprovethecountry’slegalenvironment.Certainlytherearesomeproblems,forinstanceintaxlegislation,butthishasprovednoobstacleforABB,Iveco,Shell,Unilever,Philips,Bosch,

Serguiy Skrypchenko, President Chamber of Commerce and Industry

BritishAirways,KLM,Daewoo,Honeywell,Cargillandmanyothers,includingsmallandmediumcompanies,whichhaveachievedsuccesshere.”

OneoftheChamberofCommerceandIndustry’spri-orities is to improve Ukraine’s tax legislation and, inpart thanks to theChamber’s efforts, someof its sug-gestionsanticipatingsimplifiedtaxpaymentprocedureweresupportedinUkraine’sparliamentwhenthenewtaxcodewasadopted,alongwithupdatedcustomsleg-islationandothernewpoliciesthatwill“makeUkraine’sregulatoryenvironmentmoretransparentandpredict-ableandmake thecountry’seconomymoreattractiveforinvestors,”SerguiySkrypchenkobelieves.

Serguiy Skrypchenko concludes, “The Chamberstrivestotakeanactivepartinpromotingthedevel-opmentofsmallandmediumsizedenterprises,and,in this era of global trade, theUkrainian Chamberof Commerce and Industry will offer even strongersupporttoUkraine’stradeandindustrysectorandtoindividualentrepreneurs.”

Trade&Industry

50

Ukraine

Belgian-Ukrainian Chamber ideal Partner for investorsThe Belgian-Ukrainian Chamber of Commerce – an independent, private, non-governmental and non-profit organisation founded in Belgium in 2010 – is playing a key role in stimulating business ties between Ukraine and Belgium. The organisation’s mission is to “develop relations between Belgium and Ukraine in the fields of industrial, commercial, agricultural and cultural exchanges,” says Olga Bukavyn, President. The Chamber’s membership list is a who’s who of leading Belgian and Ukrainian companies as well as business leaders and government officials in both countries.

ProvidingassistancetopotentialandcurrentinvestorsinbothBelgiumandUkraineisoneoftheChamber’stoppriorities.TheChambercanhelpsetupbusinessmeetings,make contacts betweenpotential partners,offerhelpwithlegaldocumentsandmuchmore.

In recognition of the Chamber’s professionalism,in March 2011 the Accreditation Board of the Bel-gian-Luxembourg Chambers of Commerce Abroadvotedunanimously toaccredit theBelgian-UkrainianChamber of Commerce, which was formerly knownas theBelgian-UkrainianBusinessClub. “This recog-nition reflects the accomplishments of the Belgian-UkrainianChamberinitsfirstsixmonthsofexistence,”OlgaBukavynsays.

To enhance business relations between the twocountries, the Belgian-Ukrainian Chamber ofCommerceregularlysupportsnetworkingevents,con-ferencesandseminars.TwopasteventswereElisavet-gradInvestment,heldNovember10and11,2011 inKirovograd, and the International Industrial Forum,heldinKievNovember22to25,2011.

TheChamberishelpingtoraiseUkraine’sprofileinBelgium and to draw Belgian investors’ attention tothemany business opportunitiesUkraine offers. Forexample, in October 2011, the Chamber organisedworking visits to Limburg and Antwerp by OlgaBukavyn and by IhorDolhov,Ukraine’s AmbassadortoBelgiumandHeadofUkraine’sMissiontoNATO.

Highprofileeventsstrengtheningbusinessties

The Belgian-Ukrainian Chamber of Commerce alsoorganisesseminarsfocusingonspecificbusinessoppor-tunities.OnNovember10,2011,theChamberhostedaseminaron“NewBusinessOpportunitiesinUkraineintheWakeofEuro2012.”OnNovember24,theChamberhostedaseminaronenergyandenvironmentalissues.Seminarsonopportunitiesinspecificsectors,includingagricultureandenvironmentallyfriendlyconstruction,arealsoplanned.

TheChamberpublishesamonthlybulletinwithuptodate business information about Ukraine, providinginvaluable information for companies and investors.For Belgian investors looking into opportunities inUkraine,theBelgian-UkrainianChamberofCommerceistheidealfirstpointofcontact.

Olga Bukavyn, President Belgian-Ukranian Chamber of Commerce

51

Trade&Industry

Panasonic

Panasonic offers the best energy-saving technology and service in Ukraine

Panasonic is a long term player

in the Ukrainian market, where

the global electronics leader

established a representative office

in 1996. Panasonic Ukraine Ltd.

opened earlier last year.

We opened our new companyhere to better serve customersin Ukraine. Panasonic hasbeen achieving remarkableresults in Ukraine, particularlysince 2010 when demand forelectronic technology began togrowagainafterthecrisis,”explainsKoji Terajima,ManagingDirector.Panasonic’ssuccessinUkrainewillcertainlyencourageotherJapanesegroupstoinvesthere.

Panasonic provides a full range ofelectronic products for individualandcorporatecustomersinUkraine,from TVs and home appliances toprofessional equipment to meetbusiness needs. Panasonic has astrong commitment to promotingenergy saving technology. Forexample, Koji Terajima says, “Wehave been selling air conditionersfor more than 15 years. Air

conditionersusealotofelectricity,so we are always promoting the‘inverter’type,whichcandrasticallycut the consumption of electricity.That way consumers save moneyandthecountryuseslesselectricity.

Panasonic is a leader in theelectronicindustryinJapan,wherewe are facing our own Chernobyl.WewillcontinuetoprovideUkrainewith the latest energy-savingelectronictechnology.”

‘Fahrenheit’BusinessCentre,off.201

30-VFizkulturyStr.Kiev03680

Tel.:+380444903488

Koji Terajima, Managing Director

52

Ukraine

Major Business Union Promoting Free Market PrinciplesUkrainian League of Industrialists and Entrepreneurs, with around 37,000 members, was created two decades ago when Ukraine became independent. Today, the League members make a total contribution to Ukraine’s GDP of around 83%.

“Our main goal as an independ-ent organisation is to promote adialoguebetweenthebusinesssectorandthegovernmentofUkraine.Weadvocate reforms that will ensurean equitable free market economyhere inUkraine,” explainsAnatoliyKinakh,President.HeaddsthattheLeagueisalsoveryactiveinsupport-ing social development as well asissuesrelatedtodoingbusiness.

The League of Industrialists andEntrepreneurs partners with theUkrainian government at all levels,from the President and parliamentto local authorities. The Leaguehas also established representativeoffices in Europe, Asia and Africaand collaborates with diplomaticservicesinUkraineandabroad.“Wehelp Ukrainian and internationalpartners find each other,” AnatoliyKinakhsays.

Importantplayeringlobaleconomy

In his role as the head of one ofUkraine’smost prominent businessorganisations, Anatoliy Kinakhbelieves strongly that promotingdemocratic principles and a com-petitive economy are the keys toUkraine’s long term success. He isverypositiveaboutUkraine’s futureand about the country’s advantagesas an investment target. He says,“Ukraine is on its way toEuropeanintegrationasademocraticcountry.It already has an export orientedeconomy;exportsaccountforalmosthalfofUkraine’sGDP.Ukrainehasa strategic location for trade andgreat competence and potential inscience,agricultureandtechnology,

Anatoliy Kinakh, President Ukrainian League of Industrialists and Entrepreneurs

forexampleinsuchdiversefieldsasshipbuilding,infrastructureandtheaviationandautomotivesectors.”

Maintaining the flow of foreigndirect investment is crucial forUkraine’seconomicgrowth.AnatoliyKinakh says, “Ourmainobjective isto implement EU standards, espe-cially since most of the foreigninvestment in this country is fromthe EU. Investors will find manypossibilities here in Ukraine. ThiscountryhaseverychancetobecomeanimportantplayerintheEuropeanandglobaleconomy.”

The upcoming Euro 2012 will helpspur on Ukraine’s developmentthanks to new investments in infra-structure, hotels and services relatedto the event, Anatoliy Kinakh says.“These are investments in Ukraine’sfutureandshouldhelptostrengthenUkraine’s global image,”hebelieves.To international travellers as well aspotential investors in Ukraine, headds, “Come and experience foryourselfwhatthiscountryhastooffer.”

53

Dynamic Organisation Supporting entrepreneurshipIn a country where a market oriented economy does not have a long tradition, supporting entrepreneur-ship, particularly in smaller enterprises, is essential in ensuring sustainable economic growth. The Entrepre-neurs’ Union of Small, Medium Sized and Privatised Enterprises of Ukraine, a public entity, was launched to defend its members’ legal, social, economic and other interests and to support the growth of Ukraine’s SMEs and privatised companies.

“We facilitate cooperation among our membercompaniesandpromotetiesbetweenUkraine’sSMEsand largercompaniesasameansofprovidingSMEswithmoresecurityandhelpingtoimprovethequalityof goods and services in Ukraine. We also work toeliminatemonopolies,andweaimtofosterlegislationinUkrainethatsupportsentrepreneurship,”explainsVyacheslavBykovets,Chairman.

TheEntrepreneurs’UnionfocusesonassistingSMEsmeetthespecialchallengestheyface,includingdevel-opingtheorganisationalandtechnicalprerequisitesforbusinessgrowth.TheEntrepreneurs’UnionalsohelpsUkraine’s SMEs benefit from regional programmesdesignedtoassistsmallbusinesses.“Wealsopromotestate support for SMEs and privatised companies aswellasforeigninvestmentinthesecompanies,andwehelpourmembercompaniesfindpartnersandenterforeignmarkets,”VyacheslavBykovetssays.

Thewide rangeof services theEntrepreneurs’Unionprovides itsmembers range frombusiness consulting,auditing assistance and legal support to the organisa-tionoftrainingprogrammesandprofessionalnetwork-ingevents.TheUnionworks closelywithgovernmentagencies,localauthoritiesandnongovernmentorgani-sations to support entrepreneurship in Ukraine andtoremoveanyobstaclestobusinessdevelopment.TheUnionhasalsoestablishedrelationshipswithchambersof commerce and other business organisations withinUkraineandabroad.

AttractingforeigninvestmenttoSMEs

A key goal for theEntrepreneurs’Union is to attractmoreforeigninvestmenttoUkraine’sSMEsandpriva-tisedcompanies.“Wepromoteinvestmentinmanufac-turing, industrial cooperation and trade developmentactivitiesinUkraine,andwewelcomethechancetohelpforgestrongertiesbetweenourmembercompaniesandforeignpartners,”VyacheslavBykovetssays.

The Union has been particularly active in creating abusiness friendly regulatory environment in Ukraine,forexamplethroughits successfulefforts toeliminatethestampduty.In1998theUnioninitiatedthecreationoftheCoordinationandAnalysisCentreofUkraine,acoalitionaimedatmakingsureUkraine’slawsandregu-lationssupportentrepreneurship.Thecentrecurrentlyemploysmore than 60 public business associations atboththeregionalandnationallevels.

54

Ukraine

iceblick

rare Gasses Supplier known for innovationIceblick, which supplies 65% of the world’s production of Neon and 15% of the world’s production of Krypton and Xenon, was established in Odessa, Ukraine, in 1990 and has grown steadily ever since. Chairman of the Board, Vitaly Leonidovich Bodarenko, explains, “The idea behind Iceblick was to collect a small portion of rare gasses from different places and pre-concen-trate these gasses for final purification.”

I c e b l i c ko p e r a t e stwo produc-tion facili-ties, onein Odessaand one inM o s c o w ,both witheasy accessto ports.The one

inOdessaisthekeyproductionunitof Rare Gases International Group.Iceblick exports 99% of its produc-tiontoglobalmarkets.InUkraine,thecompany’scustomersincludePhilips,OSRAM,GE,NASAandtheRussianspaceagency.Iceblickachieved€11.2million(US$15million) in turnoverin 2010, yet another successful yearforthecompany.

Committedto innovation,Iceblickdevelops new product lines every

two or three years, an incrediblyfast rate in its sector.Over thenextsix months, Iceblick will introduceanother new line of products thatwill include neon isotopes, a non-radioactive,allnaturalisotope.Neon21, Iceblick’s latest product, couldreplaceHelium3,whichwouldhelpsolveaworldwideshortage.

Iceblickiscurrentlyaimingtobuilditsownairseparationunittobridgeagapintheindustry;airseparationfor rare gas suppliers is currentlyhandledbysteelcompanies.Iceblickisalreadyinvolvedinmajorairsepa-rationprojectsintheUS,CIS,SouthKoreaandChina.

Seekingpartnersforhighpotentialproject

Iceblick’s air separation projectis budgeted at €30 million to €50million. The company wants tocomplete this project within twoyears and already has amarket foritsproducts.NowIceblickisseekingcredit lines. Having worked withlocalbanksandprivateinvestorsforthepast22years,IceblickislookingtopartnerwithEuropeanbanks.

Iceblickanticipatescontinuedstronggrowth in all itsmarkets, including

China,theUSandIndia.InEurope,whichaccountsforhalfofIceblick’sexports, Iceblick supplies productsfrom lighting to lasers and energyefficientwindows.Iceblick’swindowsare twice as energy efficient asregularwindows.

Iceblick is an innovative, awardwinningcompanywithastrongteamand a solid reputation as a reliablepartner,a100%Ukrainiancompanywhich is also100% international inits perspectives. Iceblick is a majorplayerintheglobalmarket,butthetruemeasureof its success is that itconstantlydevelopsnewideasandisalwayslookingtothefuture.

Vitaly Leonidovich Bodarenko, Chairman of the Board

Unit for Ne isotope production

29PasteraStr.Odessa65026

Tel:+380482329273office@iceblick.comwww.iceblick.comwww.raregases.org

55

Infrastructure

“ We can offer very low cost labour and hundreds of industrial

facilities that are not currently in use.”

Anatoliy Blyznyuk, Minister of Regional Development, Construction and Housing and Communal services

•MinistryofRegionalDevelopmentBuildingFoundationsforFutureGrowth

•Over€11BillioninConstructionProjectsPlanned

•Odessa:ThrivingTradeHubDrawingFDI

56

Ukraine

Ministry of regional Development Building Foundations for Future Growth

Ukraine’s Ministry of Regional Development, Construc-tion and Housing and Communal Services not only focuses on fostering economic development all over the country but also on establishing the right foundations for long term prosperity. Current projects to help Ukraine prepare to host the European Championships in 2012 illustrate Ukraine’s capacity to complete challenging initiatives and to plan effectively for the future.

wearedoingourbest tocopewith theproblems inorder to create a more business friendly environ-ment,”theMinistersays.

Ukraine offers outstanding development potentialthroughoutthecountry,andtheMinistryofRegionalDevelopment, Construction and Housing andCommunalServicesaimstohelpmakethecountry’sinvestmentappealbetterknownworldwide.AnatoliyBlyznyuk concludes, “Ukraine needs to upgrade itstechnologies,diversifyitseconomy,andrebranditselfinternationally. We can offer very low cost labourand hundreds of industrial facilities that are notcurrentlyinuse.BigcompaniescancometoUkraineanduse these industrial facilitiesas the foundationsforhighpotentialbusinessventures.TheMinistryofRegional Development, Construction andHousingandCommunalServiceswantsforeigncompaniestoknowthattheywillfindtheentireinfrastructuretheyneedhereinUkraine.”

Facilities for the European Championships arebeingbuilt all over the country, including inKiev,Donetsk and Lviv. Anatoliy Blyznyuk, Minister ofRegionalDevelopment,Construction andHousingand Communal Services, says, “One project forthe European Championships is to build a newstadiuminDonetsk,whichwearedoingthroughapublic private partnership. Ukraine has a new lawtocoverpublicprivatepartnerships,andthisisthefirstexampleofsuchaproject.Wehavereceivednocriticismaboutourpreparationsforthechampion-ships,andaftertheyareover,Ukrainewillbeabletocontinuetousethenewinfrastructureputinplaceforthisevent.”

The Ministry of Regional Development, Construc-tion and Housing and Communal Services takesa proactive approach towards Ukraine’s future.Anatoliy Blyznyuk explains, “We are currentlyworking on combating corruption and fostering acompetitive atmosphere.Ukraine has a stable gov-ernmentandasolidregulatoryenvironment,andwehavemadeagreatdealofprogressinashorttime.”

Reducingbureaucraticstumblingblocks

One example of this progress is the process ofobtaining permission to build a new hotel. Thisoncetook450daysandinvolvedmanybureaucratictanglesaswellaspotentialcorruptionhurdles,butnow procedures are transparent and have beenreduced to 90days (30days for landdevelopmentpermitsand60daysforconstructionpermits).“Weknowwhy investorshaveavoidedcominghereand

Anatoliy Blyznyuk, Minister of Regional Development, Construction and Housing and Communal Services

57

Infrastructure

Over €11 Billion in Construction Projects PlannedUkraine’s construction sector, par-ticularly hard hit by the global crisis, began to recover in 2011 and is poised for strong growth as the government pushes forward around l11.6 billion in new projects. These involve transport infrastructure, energy facilities, building construc-tion and water and waste treatment systems, among others.

“One project is to build a newliquefied natural gas (LNG)terminal at one of Ukraine’sBlack Sea ports to receive, storeand re-gasify liquid natural gas,”says Vladyslav Kaskiv, head ofthe Ukrainian State Agencyfor Investment and NationalProjects (SAINPU). The projectwill involve the construction ofan LNG terminal with a totalcapacityof10billioncubicmetresper year. New pipelines are alsounderdiscussion.

Renewableenergyprojects

Several renewable energyprojects are on the drawingboard, including a €7.3 millionbiomass project for the Kievregion.Ukrainewillalsobuilda€40million,10MWsolarpowerplant and a €150 million, 100MW wind farm, according toVladyslavKaskiv.

Building facilities forEuro2012has stimulated the construc-tion sector and will continue todo so. New sports facilities in

Kiev, Kharkiv, Donetsk and Lvivhave been completed, althoughmore hotels and public transportupgrades are still needed. NowUkraine is planning to make abid to host the Winter Olympicsin2022,whichwillmeanbuildinghotels,winter sports facilities andother projects in the Borzhavavalley in Ukraine’s Carpathianmountains.

In addition, theUkrainian “CleanCity” project envisages the con-struction of 10 waste manage-ment centres with a total capacityof treating twomillion tonnesperyear. Ukraine’s road and airportconstruction continued evenduring the crisis, growing by 23%in2010comparedto2009;furthergrowth is anticipated as newtransport infrastructure projectsarelaunchedthisyear.

While residential constructionhasslowed, construction of office andretail space continues to moveforward. Around 300,000 sq m ofnew retail space is scheduled tobe completed inUkrainebetween2011 and 2012, while 800,000 sqmofoffice space is set tobebuiltbetween 2011 and 2014. Kiev’sSky Mall is being enlarged andhas attracted several new tenants,including British retailer TopShop.Homeproducts giantLeroyMerlinhasalsoopenedanewstoreinUkraine.

Several tenders for the construc-tionofwaterandsanitationsystemsin Ukraine were announced forthemonthofJanuary2012alone,indicating continued potentialbusiness for internationalinvestors and construction firmsthisyearinUkraine.

Odessa

58

Ukraine

Odessa: Thriving Trade Hub Drawing FDi

Odessa, Ukraine’s fourth largest city, is one of the country’s economic powerhouses. A thriving port on the Black Sea, Odessa is the administrative centre of the Odessa Oblast (province) in southern Ukraine. A key trade hub for centuries, the city was officially founded by Catherine the Great in 1794 and served as a free port for most of the 19th century, when it was the fourth biggest city in Imperial Russia. Having served as the Soviet Union’s top port, Odessa is now playing a key role in spurring on Ukraine’s economic development and inter-national trade.

In 2000, Odessa’s Quarantine Pier was declared afreeportandfreeeconomiczonefor25years.AlexGoncharenko,ViceChairmanoftheOdessaCouncil,explainsthatOdessaactuallyhastwoports,thePortofOdessaandthePortofYuzhne;bothhaveimportantoil terminals. South-west of Odessa is another portat Illichivs’k. He says, “Together, these three portsrepresent a major hub served by rail connectionsand a pipeline network that joins Odessa’s oil andchemicalprocessingfacilitiestoRussiaandtheEU.”

Ambitiousinfrastructuredevelopment

TheprovinceofOdessahas launchedanambitiousdevelopment programme which includes buildingnew schools, libraries and hospitals as well asimplementing new gas infrastructure and openingnew container terminals. “One of our goals is tomoderniseourpipelinestomakethemmoreenergyefficient,” Alex Goncharenko says. He adds, “Wewelcometheparticipationofforeigninvestorsinourdevelopmentprojects.”

Odessa Marine Port

59

Odessaoffersinvestorsexceptionalgrowthpotential,a strategic location, established infrastructure,skilled human resources, and a local governmenteager to provide assistance. The Odessa Council,largelymadeupofbusinessleadersfromtheprivatesector,hastheexpertiseinvestorsneedtomakenewprojectsasuccess.

“As Ukraine overcomes corruption and pushes forward

its reform programmes, the country’s international image

will improve. As for Odessa, when investors learn about us, they will be impressed by all the

opportunities we offer.”

The Odessa Council has selected a US companyto modernise Odessa’s airport and build a newterminal there in aproject budgeted atmore than€77.7million.Other projects in theworks includenew road and rail infrastructure,modernisation ofhealthcare facilities and services, development oftheagricultureandfoodprocessingsectorandmuchmore. “Our budget for these projects is unprece-dented,”AlexGoncharenkoexplains.

One goal for theOdessa Council is tomake inter-national investors more aware of everythingOdessaoffers.AlexGoncharenkosays,“AsUkraineovercomescorruptionandpushesforwarditsreformprogrammes,thecountry’s international imagewillimprove.AsforOdessa,wheninvestorslearnaboutus, they will be impressed by all the opportunitiesweoffer.”

Opera Theatre

Infrastructure

Odessa Marine Port

60

Ukraine

Major Upgrades for Transport and Logistics infrastructureUkraine’s GDP will reach pre crisis levels in 2012, according to Prime Minister Mykola Azarov, who said at a recent press conference, “Getting back to pre crisis levels this year will allow us to direct funds towards major infrastructure projects and the continued mod-ernisation of the economy.”

Key transport infrastructure projects now underwayinclude upgrading the M10 Lviv-Krakovets motorway,whichispartoftheInternationalTransportCorridorIIIlinking Kiev and Lviv to Wroclaw and Berlin. Ukraineisalsobuildingahighspeedrail linkbetweenKievandBoryspilInternationalAirport;theairportsawa20%riseinpassengernumbersin2011andnowhasanewterminal.

Ukraineaimstoreplaceallitsrollingstockonitsrailnetworkoverthecomingsixyears,accordingtoVicePrimeMinister andMinister of Infrastructure BorysKolesnikov. In December, the minister travelled toKoreatoinspectUkraine’sfirsthighspeedtrain,whichisbeingproducedbyHyundai.

Discountsforcargohandlingatports

Ukraine aims to boost traffic at its ports and willimplement discounts of 18% to 50% for handlingtransit cargo atUkrainianports starting this year. In

addition,aspartof itsdrive toupgrade thequalityoftransport and logistics services, the Ministry of Infra-structure will perform inspections on licensed freightand passenger road transport operators this year toensure that all companies meet new standards. TheMinistryofInfrastructureisalsobeginningaprogrammetodeveloprivertransportinUkraine,particularlyalongtheDnieperRiver.

In October 2011, the Ministry of Infrastructure heldahigh levelworkshop to familiarise local leaderswithwhatUkraineneedstodotobecomepartoftheSingleEuropean Sky Initiative, which is designed to bringEU standards to the aviation and air transport sectorthroughouttheEUandincountriesaimingtojointheEU,includingUkraine.

AnotherprojectistointegrateUkraine’stransportinfra-structure into the Trans-European Network (TEN-T)with the support of public private partnerships. Thisyear, major infrastructure projects will attract arounde7.73 billion in investments, according to VladyslavKaskiv,headof theStateAgency for Investments. Hesays, “We have designated 11 national projects thatclearlydefine thestrategyofUkraine’snationaldevel-opment for the first time.OnDecember 1, 2011, welaunchedUkraine’s first one stop window for foreigninvestors,andwehavebeguntoholdroadshowsaboutUkraineallovertheworld.”

© Katatonia82 | Dreamstime.com

Railway bridge in Kiev

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Freight Forwarders Group ensuring World Class ServiceThe Association of International Freight Forwarders of Ukraine (AIFFU) was founded 16 years ago to represent freight forwarders operating in the country and to ensure seamless transport for customers in Ukraine and across its borders. Now a member of the International Association of Freight Forwarders Associations (FIATA), AIFFU plays a key role in bringing world class logistics services to Ukraine’s business sector.

Yuriy Prikhodko, President since the beginning ofthe association, explains, “Freight forwarders, inordertodotheir jobwell,needtoknowabouttheeconomy and laws of the country where they areoperatingaswellasaboutexternaltradeissues.IfyoulookatallUkraine’sexternaltrade,membersofourassociationareinvolvedinaround60%ofit.WeareworkingwiththeFIATAtohelpraisethestandardsofallthecompaniesthatworkwithus.”AIFFUwasthefirst company to adopt FIATA training systemsand has now trained some 250 freight forwardersandhelpedthemobtainFIATAcertification,whichisrecognisedallovertheworld.

Promotingtransparency,fightingcorruption

For its 163 members, AIFFU offers advisory andconsultancy services and serves as an advocate forfreight forwarders in issues involving Ukraine’spublic sector. “We are widely recognised for ourtransparency and for fighting corruption, as wellas forpromotinga levelplayingfield for localandforeigncompanies,”YuriyPrikhodkosays.

Challenges for freight forwarders operating inUkraineincludecurrentlegislation,forexamplethefactthatnonresidentsofUkrainepay20%morethanresidents for freight forwarding services.Generallybad road conditions are not a great problem forfreight forwarders in Ukraine, however, becausemost transport inUkraineandacross itsborders isbyseaandrail.“Transporthereisnotaffectedverymuchbybadroadconditionsbecauseonlyaround

Yuriy Prikhodko, President Association of International Freight Forwarders of Ukraine

20%offreighttransportinUkraineisbyroad,”YuriyPrikhodkosays.

Overall,whileUkrainestillneedstomakeprogressinfighting corruption, it generally offers services thatmeetEU standards, Yuriy Prikhodkopoints out.Heexplains,“ForEUcustomersworkingwithcompaniesin Ukraine, the best choice is companies that aremembers of reputable business associations like theAIFFU.Ourcustomersknowthat theycancountonthebestservicesandqualityfromourmembers.Forthe past 16 years, we have been building up a verystrongimagehereinUkraine.”

Infrastructure

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Ukraine

Education

“We aim to increase the quality of higher education in Ukraine

and encourage greater integration with European and international

educational systems.”Dmitry Tabachnik, Minister of Education, Youth and Sports

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education System implementing eU StandardsUkraine has been steadily modernising its education system to meet EU standards. The system comprises pre-school education, comprehensive secondary education, vocational technical education (VET in EU terminology) and higher education.

The government’s main priori-tiesfortheeducationsectoraretoimprove overall quality; establishan independent testing system ofsecondaryschoolgraduates;ensuregreater autonomy for universities;provide comprehensive supportforresearchanddevelopment;andimprove the quality of textbooksand other. The organization ofeducational activity in Ukraineis provided by the Ministry ofEducationandScience,YouthandSport(hereinaftertheMinistry).

Neweducationlawtobepassedsoon

Dmitry Tabachnik, Minister ofEducation,YouthandSports,saysthatthenewlawislikelytobepassedinthefirsthalfof2012.Headds,“Theinnova-

tionsthenewlawproposesforthehighereducation sector will optimise highereducation infrastructure, improve thequalityof training,andboost theeffi-ciencyofscientificresearchinUkraine.Weaimtoincreasethequalityofhighereducation inUkraine and encouragegreaterintegrationwithEuropeanandinternational educational systems.”The law includes a provision that allmedical,agriculturalandotherprofes-sional institutions in Ukraine will beoverseenbytheMinistryofEducation,YouthandSportsaspartofthedrivetoraisestandards.

Highereducation

Ukraine has a vast and dynamicsystem of public and privatehigher education institutions, the

Education

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Ukraine

Kyiv National Economic University

KyivNationalEconomicUniversity

54/1,PeremogyAve,KievTel:+380444465055www.kneu.edu.ua

bestofwhichareobtaining inter-national recognition. Accordingto the Ministry in the 2008-2009academic year, Ukraine hadaround2.7million students in itshigher education institutions, ofwhich around 1.6 million werestudying fulltime. Ukraine’s newLawonHigherEducation(underdiscussion) sets more rigorousstandards for higher education,which is basedon research activi-ties of the universities. TheMinistryhasannouncedkeyobjec-tives for higher education whichfocus on improving quality andencouraging greater integrationwithEuropeanandglobalsystems.

Aligning Ukraine’s highereducationsystemwiththerequire-ments of the Bologna process,whichUkrainejoinedin2005,isatoppriority.TheMinistrystates,“AsanactiveparticipantoftheBolognaprocess, Ukraine recognises thebroad transformed mission ofhigher education and the role ithastoplayunderglobalisation,thetransfer to a knowledge economy,rapid technological developmentsand demographic crisis. To adjustto the new challenges, to becomethe engines of innovation and

change, Ukrainian universitieshave to embark onmodernisationandrigorousreforms.”

Leadinguniversityopentointernationalpartnerships

Vadym Hetman Kyiv NationalEconomic University, an autono-mous research oriented insti-tution, reflects the progressivechanges of higher educationalsector inUkraine.Theuniversity,which has been admitted to theMagna ChartaUniversitatum, haslaunched 13 successful researchinstitutions andmanynew educa-tionalandtrainingcentres.RectorAnatoliy Pavlenko is well knownscientist, the Hero of Ukraine;he is one of the country’s mostprominent education leaders.Under his guidance, the Univer-sity has stepped up its interna-tional links. TheRector explains,“Vadym Hetman Kyiv NationalEconomic University is thepartnerwithseveralsisteruniversi-tiesaroundtheworld.Westronglybelieve in cultural exchange forall students, both Ukrainian andforeign. Vadym Hetman KyivNational Economic University is

always open to formingnewpart-nerships with other universities,particularlyinWesternEurope.”

Anatoliy Pavlenko, Rector Kyiv National Economic University

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IT & Telecom

•NewRegulationsMakeITInvestmentsEvenMoreAttractive

•TelecomandITLiberalisationCreatingNewOpportunities

66

Ukraine

new regulations Make iT investments even More attractiveIn December 2011, Ukraine’s Parliament passed the first of two new draft laws designed to create favourable conditions for the IT sector, and in January this year, the IT committee of the European Business Association (EBA), the biggest foreign business association in Ukraine, proposed a reduction in taxes on profits for Ukrainian IT companies to help boost the development of Ukraine’s software industry.

TheEuropeanBusinessAssociationproposalcallsforreducingtaxesonUkraine’sITcompaniesto5%andfor simplifying taxreportingprocedures.Accordingto theEBA, if all theproposednew regulationsareimplementedthisyear,theUkrainianITsectorcouldexpect a UAH 180 million (€17.2 million) rise inrevenuesfor2012.

Regionalleaderinsoftwareexports

Ukraine’s IT sector has already proven itself to bea key economic driver of the national economy.

AccordingtotheCentralandEasternEuropeanOut-sourcing Association’s recent review of IT outsourc-ing in 16 countries, Ukraine’s exports of computersoftwaretopped€77.3billionin2011,oronefifthoftheregion’stotaloutsourcingexports.Infact,Ukraineis one of the biggest exporters of IT services in theworldandachievesthehighestrevenuesfromtheout-sourcing market of any country in Europe. UkrainehasdevelopedanenormouspoolofITspecialists;onlytheUS,IndiaandRussiaareahead.

Gene Marks, owner of an IT consulting firm in theUS and a frequent contributor to Forbes’ onlinemagazine and other publications, is one westernbusinessexecutivewhoisverypositiveaboutworkingwith companies and software developers inUkraine.Hewrites,“TherearemassesoftalentedpeoplebasedintheUkraineandIndiawhoarehappytododevelop-mentworkforreasonablerates. MostspeakEnglish.Mostare familiarwithSkype. Ofcourseoutsourcingworkoverseashasitsrisks.ButIknowfromfirsthandexperience that evenhavingAmerican programmerssittinginyourofficeisnoguaranteethataprojectwillbedonetherightway.”

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MiratechiT Services Leader Serving Fortune 1000 CompaniesMiratech, the leading Ukrainian IT services enterprise, has earned an international reputation for its high quality business support. One of the first IT service organisations in the former Soviet Union and now a fully independent Ukrainian enterprise, Miratech provides the world’s leading companies with the best in class outsourcing, business process automation and IT consulting.

MiratechservesanumberofFortune1000companiesand partners with all the major vendors includingAlcatel-Lucent, Avaya, Cisco, Citrix, EMC, Genesys,HP,IBM,Microsoft,Oracle,VMwareandothers.Overthelast5yearsMiratechhasbeengrowingbyaround34%peryear.

CEOValeriyKutsyy,whowasnamedthemostsuccessfulCEOinUkraine’ssoftwareindustryin2010,says,“Telecomandbankingarethemainmarketsforus.InUkraineweworkwiththemajortelecomproviders,includingKievstarandMTS.OurbiggestcustomeroutsideUkraineisAlcatel-Lucent.WeareoneofthelargestITserviceprovidersforthedomesticbankingsector.Ourshareinsomeproductsegmentsexceeds50%.”

Readytoservemorecustomersworldwide

Valeriy Kutsyy points out that Ukraine is already rec-ognised in the global IT and software industry for itsexpertise in cutting edge fields and its highly skilledhumanresources.UkrainianpotentialinITexportisoneofthebestglobally.ITUkraine(anindustrialITassocia-tion)initiatedabillonspecialconditionstosupportthecompetivenessoftheindustry.Inthefallof2011Parlia-mentmajorityhasapprovedadraftlawinthefirstreadingandthereisastrongchanceforafinalapprovalinthesecondreadingin2012.MiratechhasbeenchairinginITUkraineassociationin2011andwillcontinuesupport-ingITreforminitiativesin2012.InlinewithUkraine’sglobalreputation,Miratechaimstoexpandits interna-tionalpresence.Hesays,“Culturally,UkraineisclosetoWestern Europe andNorth America, two of themost

importantandstrategicmarketsforMiratech.OurglobalheadquartersinStockholmandouroperationalheadquar-tersinKievareonlyatwohourflightfrommostofEuropeandaninehourflightfromtheUS.ThisgivesUkraine,aswellasMiratech,anadvantageforcommunicationandcollaboration.”

Miratech’smissionistodeliverhightechservicesofexcep-tional quality for organisations around the globe. Thecompany,whichnowemploysover500peoplelocatedalloverUkraine,putsahighpriorityonstaff trainingandemployeesatisfactionaspartof itsdrive toprovide thebestinclasscustomerservice.Foritscustomers,Miratechdelivers a unique blend of real business experience,strong engineering, international project delivery andprovenexpertiseinvaluechainoptimisation.

Defininghiscompany’scompetitiveedge,ValeriyKutsyysays, “Miratech is completely focused on IT servicesspanning from application and infrastructure servicestobusinessprocessandstrategicoutsourcing.WheneverMiratech isresponsible forawholebusinessprocessorstrategic services delivery we integrate technology andhardware from our vendor partners. At Miratech, wenevercompromiseonthequalityofourservice.”

Valeriy Kutsyy, CEO

41,NaukyAve.,Kiev03028Tel:+380442064090

www.miratechgroup.com

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Ukraine

Telecom and iT Liberalisation Creating new OpportunitiesUkraine’s large population supports a significant telecom market worth around UAH 48.5 billion (€4.67 billion) in 2011. Ukraine is liberalising its telecom and IT sectors and creating new IT and telecom investment opportunities.

Recent developments include the privatisationof Ukrtelecom, which was sold to Epic ServicesUkraine, and the merger of VimpelCom andKyivstar. This year, Ukraine’s National Commis-sion forStateRegulation inCommunications andIThopestoannounceatenderonlicensesfor3Gmobilecommunications,amoveexpectedtobringin new players. Ukraine has also created specialbusinessparksforhightechenterprises.

Ukraine’s proposed Association Agreement withtheEUwillhaveamajorimpactonthetelecomandIT sectors by mandating EU standards, includingthe creation of an independent telecom regulator.Ukraine’sgovernmentisdeterminedtomaketheAsso-ciationAgreementasuccess.CommentingoncriticismofUkraine’simprisonmentofaformerPrimeMinister,OlegVoloshin,Directorof InformationPolicyof theMinistryofForeignAffairs,says,“Whateveryouthinkofonepersonandoneprocessagainstthisperson,itdoesnotmeanthatUkraineshouldbedeprivedofachancetojointheEU.”

Stronggrowthinbroadbandservices

Continued growth is predicted for broadband servicesin Ukraine. The broadband segment expanded by animpressive 38.6% in 2010 thanks to risingdemand forxDSLservicesandmorecompetitivepricing,andattheendof2011,Ukrainehadaround3.86millionbroadbandsubscribers. Fibre to home broadband services areincreasinglyavailable,thoughonlyinmajorcitiessofar.Kyivstar’sfibrenetworkservedover2.2millionunits in20,000apartmentbuildings last year, and thecompanycontinuestoexpanditsbroadbandcoveragearea.

Mobile broadband services present the next growthopportunity in Ukraine’s telecom sector given thestagnant fixed line market, saturated mobile voicemarket,andgrowingdemandfornewtypesofmobileservices.Ukraineisexpectedtohavearound5.7millionmobilebroadbandsubscribersbytheendof2015.

Ukraine’s IT sector is represented by the ITUkraineAssociation, headed by Alexey Kozhenkin, ManagingDirector,andValeriyKutsyy,CEOofMiratech.Theasso-ciation’s members include almost 50 private softwaredevelopers inUkraine,oraround25%of the localITmarket.Ukrainealreadyexportssoftwareproductswitha total valueofaround€77.3millionevery year. TheIT Ukraine Association can help foreign companiesexplore opportunities for IT outsourcing and otherbusinessventuresinUkraine’shighpotentialITsector.

People’s Friendship Arch in Kiev

© Hugoht | Dreamstime.com

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Tourism

•Euro2012Jump-StartingTourismIndustry

•Top10“MustSee”Sites

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Ukraine

euro 2012 Jump-Starting Tourism industry As the global economy recovers and the international tourism industry picks up again, Ukraine aims to build on its natural beauty, cultural attractions and welcoming population to make tourism one of its key growth sectors. Andrii Klyuyev, Ukraine’s First Vice Prime Minister and Minister for Economic Development and Trade, points out that Ukraine’s hotel industry has already attracted significant local and international investment. He says, “In 2011, investment in our hotel sector grew by 125.6% over 2010.”

Ukraine’scohostingoftheEuro2012footballchampi-onshipsthisyearisdefinitelyafactorinthisincreasedtourism related investment. Ukraine’s Vice PrimeMinisterBorysKolesnikovexplains,“Ensuringwecanoffer Ukraine’s traditionally warm hospitality to themaximumnumberofvisitorsnotjustforEuro2012,butbeyond,meansdeliveringhotelprojectsthatcoverthefullrange.”Thegovernmentoffersapackageofincen-tivesforhotelinvestorsthatincludesbuildingland,taxbreaks,streamlinedconstructionpermitsandmore.

Promotinginvestmentinhospitalitysector

At a 2010 conference on the long term investmentopportunities to be generated by Euro 2012, BorysKolesnikov promised representatives of the globalhotel industry that red tape would be cut to helpget hospitality projects off the ground as quickly as

possible.Heexplained, “WearealreadyenactingnewlawsprovidingexcellentinvestmentincentivesaimedatexpandingUkraine’s hospitality sector and encourag-ingthegrowthofourpotentiallyhugetourismmarket.We promise further new initiatives to ensure we notonlydeliverasuccessfulEuro2012butanextendedandenduringtourismlegacyforUkraine.”

John Litzenberger, Vice President of InternationalHotel Development at Marriott International,attended theKiev conferenceandcommented, “Thenewgovernmentacceptsthatthereisalottodo,butUkrainecertainlyhasthepotentialforahighlysuccess-fultourismsector.”

Likeotheremergingeconomies,Ukraineisbettingontourism to boost its economic development. NataliaIzosimova, Director of the Foundation for EffectiveGovernance, says, “The experience of Bulgaria andCroatia demonstrates that tourismhas great potentialin emerging countries and can even grow faster thanGDP.Inaddition,thecreationofatourismworkplaceistentimescheaperthancreatingoneinmanufacturing.However, thispotential is currentlyheavilyunderusedin Ukraine. The average amount spent per visitor toUkraine each year is only around€155, which is halfthat spent in Russia and three times lower than inPoland.With20,000visitors,justreachingRussia’slevelcouldbringUkraineadditionalrevenuesof€3.1billionayear.”

Ruins of the ancient basilica in Crimea

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© Aliaksandr MazurkevichDreamstime.com

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euro 2012 Much More than Sports event

Euro 2012, the 2012 Union of European Football Asso-ciations (UEFA) European Football Championship, will have great symbolic and economic significance for Ukraine. Markiyan Lubkivskyi, Tournament Director, explains, “I see Euro 2012 as not just a sports event but rather a geopolitical project. It will demonstrate that Ukraine can meet EU standards, because we have to achieve UEFA criteria for safety, security, public transport and more.”

The choice ofUkraine andPoland tohost thefinaltournamentoftheeventinJuneandJuly2012reflectstheUEFA’sefforts tobringEuropeancultureaswellasfootballculturetoEasternEurope,MarkiyanLub-kivskyipointsout.He says, “Poland isalreadyanEUmember,butforusEuro2012isauniquechancetoshowtheworldthatUkraineispartofEurope.”

In its drive to achieveEUmembership,Ukrainehasalreadyestablisheda strongpartnershipwithPolandconcerningsuch issuesascustoms, transport,bordercontrols, safety and security, all areas which presentchallengesforUkraineinhostingEuro2012.Ukrainehas made impressive progress in preparing for theevent, including building new stadiums in Kiev and

Lviv.Anotherkeyproject is tocomplete theconstruc-tionofnewterminalfacilitiesandrunwaysatKievandLviv airports by the end of this year. “I am confidentthatbynextsummerwewillbereadytohostthehugeamountofpeoplethatwillvisitUkraineforEuro2012,”saysMarkiyanLubkivskyi.

Preparingtohost7,300visitorsinKiev

Euro2012 isexpected tobring7,300visitors toKiev,andprovidinghotelaccommodationsforthesepeopleis a top priority. Markiyan Lubkivskyi says that Kievnowhashotelfacilitiesfor6,500visitorsandthatthiscapacity will be increased to 8,000 by next summer.HeaddsthatthesehotelroomswillservenotonlytosupportUkraine’sgrowingtourismsectorbutwillalsoreinforcethecountry’sroleasaregionaltransportandbusinesshub.

Euro2012willalsohelptoattractmoreforeigninvestorsto Ukraine. Markiyan Lubkivskyi says, “Euro 2012 isan opportunity to changemany things for the betterhere in Ukraine. Around €500 million will be spenton facilities andother improvements for the event inPoland andUkraine, and these preparations will alsobringinnewknow-how.Ibelievethatthenew,modern,betterUkrainewillsurprisetheworld!Euro2012isthebeginningofasuccessstoryforUkraine.”

Tourism

Olympic National Sports Complex in Kiev

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Ukraine

Top 10 “Must See” Sites

Crimeanresorts

TheCrimeancoastlinealong theBlackSeanotonlyoffersbeautifulbeachesandspasbutalsoawealthofhistoricarchitecturaltreasures.Overthecenturies,theareahasattractedsettlersfromGreece,Venice,Genoaandotherplaces,allofwhomhavelefttheirmark.

CarpathianMountains

TheCarpathianregionisaparadisefornaturelovers.The ruggedmountains are crisscrossed by rivers andstreams.Cycling,hiking,riverraftingandcaveexploringarejustafewoftheactivitiesvisitorscanenjoy.

Kiev,Ukraine’scapitalcity

Kiev(Kyiv),apicturesquecityofaroundthreemillionpeople locatedalong theDnieperRiver, isUkraine’sbusiness,culturalandeconomichub.Locatedonthemajor trade route between theBaltic and theMedi-terranean, Kiev (Kievan Rus) was a bustling tradecentreinthe11thand12thcenturies.Kiev’sSt.SophiaCathedralisontheUNESCOWorldHeritagelist.

Lviv,ablendofancientandmodern

ThelivelycityofLviv,crisscrossedbynarrowmedievalstreets,isknownforitswellpreservedarchitecture.Itsbeautiful city centre is adesignatedUNESCOWorldHeritagesite.NearbyisoneofUkraine’smostfamouscastles,Olesko.

Odessa,the“PearloftheBlackSea”

OdessaisUkraine’sthirdlargestcityaswellasthemainport on the Black Sea.Odessa’smild climate, warmwatersandsunnybeachesattractvisitorsyeararound.

Yalta,the“JeweloftheCrimeanPeninsula”

Steep mountain peaks serve as a lovely backdropfor Yalta, a seaside resort where the writer AntonChekhov chose to live. Yalta is often described asa combination of Carmel, California, the FrenchRivieraandGreece.

Kamyanets-Podilsky

Kamyanets-Podilsky, one of the oldest cities inUkraine,isafortifiedsettlementonarockyislandintheSmotrichRiver. Ithasbeen inhabited formorethan 1,000 years and has more than 200 uniquearchitecturalmonuments.

Chernihiv

Chernihiv,foundedmorethan2,000yearsago,containsthe 11th century SpaskyyCathedral, the 11th centuryChurchoftheAssumptioninYeletsMonastery,andIvanMazepa’s baroque army building from the 17th and18thcenturies,amongmanyothersites.

SophievkaPark,Uman

A masterpiece of landscape architecture, SophievkaPark inUman was created in the late 18th and early19thcenturiesandcoversover154hectaresattheedgeoftheancienttownofCherkassy.

KyivPecherskLavra

Kyiv (Kiev) Pechersk Lavra is a unique monasticcomplexontheUNESCOWorldHeritagelist.Beneathits Eastern Orthodox religious buildings lies a hugecomplexofundergroundcaves.

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Crimean panoramic landscape near Yalta © Yurikr | Dreamstime.com

Eletskiy Assumption Monastery in Chernigov © Mikhail Markovskiy | Dreamstime.com

Public opera theatre in Odessa © Soleg1974 | Dreamstime.com

Cascade in Carpathian forest © Katatonia82 | Dreamstime.com

Tourism

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Ukraine

riviera Boutique Hotel

art of LeisureThe luxurious four star Riviera Boutique Hotel excels at providing the personalised accommodations and services for which the finest boutique hotels are known worldwide. Like all true boutique hotels, the Riviera Boutique Hotel is furnished in a themed, stylish and inspirational manner and is consider-ably smaller than mainstream hotels. Ideally located in the heart of Old Kiev, the Riviera Boutique Hotel has only 79 guest rooms, but it also contains two restaurants, including the Cote d’Azur with its rooftop terrace. Guests can be pampered in the hotel’s Elixir Spa or arrange business meetings in fully equipped conference facilities. The Riviera Boutique Hotel is known for its very professional services and is under the same ownership as the Fairmont Grand Hotel Kiev, the Intercontinental Kiev, and a new hotel opening on Kiev’s Predslavinskaya Street.

Location

One of the Riviera Boutique Hotel’s attractions is itsprime location just steps from the Poshtova SquaremetrostationandtheDneprriver.Numerousrestaurantsare rightdown the street.Otherattractions less thanakilometreawayincludeSaintAndrew’sChurch,Andrew’sHill(themostpopularplace inKiev tobuyhandmadeUkrainian souvenirs), St. Michael’s Monastery with itsgoldendome,SaintSophiaCathedral,andtheportontheDneprriver,startingpointforscenicrivercruises.

Thebuilding

The hotel’s architecture, amix ofmodern and classicstyles,isuniqueandfitsinperfectlywiththeatmosphereof Kiev’s picturesque Podol district. The design alsoenhancestheRivieraBoutiqueHotel’sspiritofhospitality.

InteriorDesign/PublicAreas

Exceptional interior design is a hallmark of theRivieraBoutiqueHotel,which is filledwith custom-ised furniture, fabrics and original paintings and

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SagaydachnogoStreet15Kiev04070

Tel:+380445812828info@rivierahotel.com.uawww.rivierahotel.com.ua

sculpture. The hotel’s public areas, including theentranceandlobby,areveryintimateandEuropeanin style. Special touches include fine woodworking,mouldings,inlaidwoods,andhighqualitytilesaswellasmarbleandgraniteflooringandcountertops.Thehotel’s lighting isdesignedtobepracticalaswellasdecorative, featuring unique freestanding fixtures,wall sconces and chandeliers. TheRiviera BoutiqueHotelislikeasmallmuseumthankstoitsdisplaysofanexceptionalcollectionofpaintingsandsculpturesby post Soviet Union artists; the collection is con-stantlybeingreplenished.Liveplantsandfreshfloralarrangements changed daily are found throughoutthehotelaswell.

Service

TheRivieraBoutiqueHotelpridesitselfonprovidingpersonalised attention and intuitive service. Thehotel’s Reservation Department will follow up eachreservationwithadirectemailtothecustomerwitharequestfortheguesttocompleteapersonalprofile.Thisallowsthehotel’sstafftoanticipateguests’needsand offer outstanding service, from furnishing therightpillowtypetoarrangingorganicgroceriesintheroomororganisingagymscheduleandevenbookingabathforaguest’spet.

The Riviera Boutique Hotel offers diverse servicesaroundtheclock,includingreception;“LeCléD’Or”concierge service; personal butlers; in-roomdining;laundry and dry cleaning; valets; transportation;

personalpackingandunpackingandcomplementaryshoeshines;aswellasworldclasssecurity.

TheRivieraBoutiqueHoteloftenwelcomeshighprofileguests, from sports starts to entertainers and govern-ment leaders. Thehotel also specialises in organisingcocktailparties,musicalevents,weddings,presentationsand exhibitions. “We are dedicated to providing ourguests with unforgettable experiences by introducingthem toKiev’s gorgeousnatural beauty, rich architec-turalandculturalheritageandmore,”saystheRivieraBoutiqueHotel’sGeneralManager,ElizavetaYurusheva.Sheadds,“Ourhotelisaplacewhereyoufeelwellcaredfor, amused, comfortable and, above all, at ease. Weoffer impeccable service that is friendly,not fussy.Weare a luxuryhotel that valueswarmth, beingdown toearthandcreatingagenuinelyfriendlyatmosphereforourguests.Expecttobegreetedbynamewhenyoustaywithus.Wecareabouteverysingleguestandabouttheexperienceswhichweareoffering.”

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Ukraine

Hertz

Global Car Hire Brand Guarantees World Class ServiceHertz Ukraine, founded 13 years ago, has grown from a tiny car hire operation into a thriving enterprise with a network of 11 branches in major cities across the country. Hertz now has the biggest network of any car hire operation in Ukraine and is ranked the country’s number one car hire firm.

Hertz Ukraine is well known for its exceptionaltransportservicesfor localandforeigncompaniesaswellasforitsservicesforindividualcustomers.HertzUkraine’s General Manager Yana Khoziainova says,“When Hertz opened in Ukraine, the local marketdidnotunderstandwhatacarhirecompanywas.Wehavesucceededbecausewehaveaverycommittedandcompetentstaff.”

Roundtheclockcustomerservice

Hertz Ukraine prides itself on guaranteeing clean,wellmaintained, reliable vehicles as well as 24 hourcustomerserviceeveryday,includingroadassistance.Hertz Ukraine’s winning offerings include a desig-natedaccountmanagerforeachcorporatecustomer,English speaking drivers on request, the possibilityofmakingpayments invariouscurrencies,andmanyother benefits. Hertz Ukraine has a wide choice ofvehicles for every budget, from economymodels toluxurycars;chauffeurdrivencarsarealsoavailable.Allvehiclesareintiptopcondition.

Yana Khoziainova has set ambitious goals for HertzUkraine. She explains, “We reached our target forturnover last year even though the carhire industrywashurtbytheglobalcrisis.Wearelookingforwardtostronggrowthinthefuture.Wewantanyoneplanningto visitUkraineduringEuroCup2012 toknow thattheycancountonHertzUkraineforthebestpossibleservice. No matter what time of the day or night,HertzUkraineisreadytogiveourcustomersanyhelpthey need.Hertz sees itself as a rolemodel here in

Yana Khoziainova, General Manager

Ukraine.WearecommittedtoshowingvisitorsthebestUkrainehastooffer,andwewillseizetheopportunitytorepresentUkrainenotonlyduringEuroCup2012butforyearstocome.”

HertzUkraineaimstoplayamajorroleinstimulatingthe growth of Ukraine’s tourism sector. To potentialvisitors to Ukraine, Yana Khoziainova says, “Pleasedo not be afraid to comehere and see this beautifulcountry with your own eyes. Andwhile you are here,useHertzUkraine,aprofessional,trustworthycompanythatisreadytofulfillallyourcarhireneeds.”

ZdolbynivskaStr7DKiev02081

Tel:+380444923270rent@hertz.uawww.hertz.ua

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Grata apartments

Serviced apartments Provide Home away from Home in UkraineGrata Apartments has been offering

homes away from home for visitors to

Ukraine for the past 10 years. Grata

Apartments provide the ideal option

for business and leisure travellers

seeking serviced apartments as an

alternative to hotels.

In Kiev, Grata has around 37apartments on its list, from VIPluxury accommodations startingataround€70pernighttobudgetoptions starting at around €30per night. The apartments rangefrom studios to three bedroomapartments and all have beenfully renovated. Grata also hasapartments throughout Ukraine,including Lviv a popular tourismdestination.

“Our services definitely make visitors

feel at home here in Ukraine.”

“Our apartment tenants cancount on a wide range ofservices, including Internetaccess, breakfast, room service,cleaning and laundry services.We even offer English speakingdrivers and carhire.Our servicesdefinitely make visitors feel athome here in Ukraine,” explainsAlexander Goncharuck, owner.

Grata Apartments have provedparticularlypopularamongforeignvisitors, particularly Europeans.AllGrataApartmentsarecentrallylocated, beautifully maintained,and staffed by well trained,multilingualprofessionals.

“We ask for feedback from our clients and do everything we can to satisfy their needs.”

Grata Apartments is seeing itsvisitornumbersrisethankstoverypositivewordofmouthadvertising.AlexanderGoncharuckconcludes,“We ask for feedback from ourclients and do everything we cantosatisfytheirneeds.”

Mykhailivs’kyiln.9,off.3Kiev

Tel:+380442382603service@aparthotel.kiev.ua

Tourism

78

Ukraine

ABBUSINESSCOMPANY8Tupolevastr.

Kiev03062,UkraineTel:380444497890Seemoreonpage46

ICEBLICKLTD.29Pasterastr.

Odessa65026,UkraineTel:+380482329273

PANASONIC‘Fahrenheit’BusinessCentre,off.201

30-VFizkulturystr.Kiev03680,UkraineTel:+380444903488Seemoreonpage51

ENERGY & GAS

TRADE & INDUSTRY

ROCHEUKRAINELLCBCLeonardo

19-21BogdanaKhmelniskogostr.,10thFloor

Kiev01030,UkraineTel:+380443543040Seemoreonpage40

KYIVNATIONALECONOMICUNIVERSITY

54/1,PeremogyaveKiev252057,UkraineTel:+380444465055Seemoreonpage64

MIRATECH41,Naukyave.

Kiev03028,UkraineTel:+380442064090Seemoreonpage67

HERTZZdolbynivskastr.7DKiev02081,UkraineTel:+380444923270Seemoreonpage76

GRATAAPARTMENTSMykhailivs’kyiln.9€,off.3

Kiev,UkraineTel:+380442382603Seemoreonpage77

RIVIERABOUTIQUEHOTELSagaydachnogostr.15Kiev04070,UkraineTel:+380445812828Seemoreonpage75

HOTELLEOPOLISTeatralnastr.16Lviv,Ukraine

Tel:+380322959500Seemoreonpage79

EDUCATION

IT & TELECOM

TOURISM

FARMASOFT14,Polovetskayastr.Kiev04107,UkraineTel:+380445858183Seemoreonpage43

STATEAGENCYFORINVESTMENTANDNATIONALPROJECTSOFUKRAINE

7-a,TsytadelnaStr.Kiev01015

Tel:+380442544015Seemoreonpage17

B.C.TOMS&CO18/1Proriznastr.,Suite1

Kiev01034Tel:+380444906000Seemoreonpage29

MYRONIVSKYHLIBOPRODUCT158,AkademicaZabolotnogostr.

Kiev03143Tel:+380442070000Seemoreonpage32

NESTLE72-A’,VerkhniyValstr.

Kiev04655Tel:+380444908000Seemoreonpage36

TEVAPHARMACEUTICALS30-VFizkulturystr.Kiev,Ukraine

Tel:380445947080Seemoreonpage44

ELITKurortnayastr.11Kiev04075,UkraineTel:+380445940775Seemoreonpage37

BEITENBURKHARDT38,Turhenevskastr.,5thFloor

Kiev01054Tel:+380444940400Seemoreonpage28

BUSINESS & INVESTMENT OPPORTUNITIES

LEGAL SERVICES

AGRICULTURE & FOOD PRODUCTS

HEALTH

AMERICANMEDICALCENTERSAmerican Medical Centers is a leading inter-national healthcare provider with family practice based and specialty care clinics in Ukraine. AMC Kyiv provides family practice and emergency care services, assistance services, gynaecology and obstetrics, pre-natal care, paediatrics, psychology and over twenty specialties and sub-specialties.

Preventative healthcare programs and wellness plans for groups and individuals are available that include a wide range of healthcare services. AMC Kyiv and its community health centres provide direct billing to most interna-tional insurance groups.

OneBerdychivskaStreet04116Kiev,Ukraine

Tel.:+380(044)4907600Fax.:+380(044)4907600info@amcenters.com

patientservice@amc.com.uawww.amcenters.comSkype:reception_amc1

79

PJSC Myronivsky Hliboproduct158, Akademica Zabolotnogo Str, Kyiv, 03143, Ukraine,

Tel.: +380 (44) 207 00 00, Fax: +380 (44) 207 0002office@mhp.com.ua, www.mhp.com.ua Retail

MYRONIVSKY HLIBOPRODUCT

M y r o n i v s k y Hliboproduct

A truly integrated businessMHP (Myronivsky Hliboproduct) is a truly vertically-integrated company: in its determination to become self-sufficient. The group grows its own grain to sup-ply its fodder mills; produces feed for its two breeder farms and four chicken farms. MHP undertakes the entire production cycle, from chicks to mature birds to finished product and its distribution with its own fleet of trucks. The company sells much of its pro-ducts through a network of franchised stores.

Grain

Convenience food

Sunflower protein

Energy

Distribution

Fodder

Poultry