December 18, 2013 Hotel business grows by leaps and bounds in Ukraine       December 18, 2013 Ukrainians continue to buy more and more coffee every year

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2014-12-23

Kiev +4
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Industry

In the mid-1980s, soviet Ukraine had an established, diversified, mature industrial sector covering some 20 major industries, including power generation, fuels, ferrous and non-ferrous extraction and processing, chemicals and petrochemicals, gas, machine-building, metalworking, forestry, woodworking, pulp & paper, building materials, light industry, and food processing. By 1990, around 300 billion kW/h of energy, more than 100 million tonnes of iron ore were being mined, and some 40mn t of rolled steel stock and 6.5mn t of steel pipes were coming out of domestic steel mills. Ukraine was producing around 37,000 metal-cutting machine tools a year, and more than 100,000 tractors.

By 2013, the energy sector was producing a total of over 193.8bn kW/h. The electricity production decreased in 2013 compared to 2012 by 2.1 %. Nuclear power plants, whose share in the national production of electricity is about 43% for 2013 reduced electricity production compared to 2012 by 7.7 % - to 83.2 bn kW/h. Thermal power generation in 2013 has reduced by 1.3% - up to 95bn kW/h and hydropower has increased its output by 31.6 % - up to 14.4bn kW/h. A relatively new trend – alternative energy forms (wind and solar power) increased the electricity output by 91.2% - up to 1.2 bn kW/h

The government in early September approved meausres for allocation of an additional 4.298 billion UAH (excluding VAT) for the project to improve the nuclear power units safety in 2013-2017. This amount is partially coming from sale of electricity and thermal energy produced at the NAEC "Energoatom" facilities. Other sources of funding for the Ministry of Energy and Coal have to be agreed with the Ministry of Finance. The Cabinet of Ministers approved the indicative funding for the project (12.5 billion UAH) for the entire period of its operation in 2011-2017. The government also provided for an annual revisions of the amount that should help make project more efficient.

More than 250 coal mines operate today in the country’s three coal-mining regions. Ukraine produces only 2.3mn t of its own oil, but its complex network of pipelines supports the operation of 10 petroleum plants. Ukraine’s natural gas pipelines carry Russian gas to Central and Western Europe.

Today, over 41,000 enterprises operate in the extraction and processing of metals and in the production of pipes and rolling stock. These include the world largest steel plants making cast iron, steel, rolled stock, steel bars and pipes in Kryviy Rih, Dnipropetrovsk, Zaporizhzhia, Donetsk, Makiyivka, Mariupol, and other cities.

The mechanical engineering is the largest Ukrainian industrial sector. It includes enterprises involved in metals, oil, chemical, mining, power generation, rolling stock (locomotives, passenger cars, tank cars, and so on), road construction and vehicles (ships, aircraft, cars, urban transport), farm machinery and equipment, equipment for the light and food industries, metal-cutting machine tools, and instrumentation. It accounts for over one-third of the employed and about a quarter of the total cost of industrial main assets. The rapid development of machine-building proved Ukraine’s ability to develop and manufacture complicated science-intensive and highly technological machines and equipment.

Zaporizhzhia’s MotorSich plant manufactures aircraft engines for all the CIS. One of the world largest aerospace concerns, Pivdenniy, operates out of Dnipropetrovsk and Kharkiv’s turbines are known around the world. A high-capacity chemical plant is located in the city of Kalush.

Much of Ukraine’s industry is concentrated in the Donetsk Basin, also called the Donbas, where there are rich deposits of coal and iron ore. In addition, the Kryviy Rih area is noted for its iron-ore mines, the Nikopol area for manganese ore, and the Zakarpattia region for petroleum, salt and natural gas deposits.

Ukraine’s iron and steel industries are very important segments of the economy. Its importance is due to the fact that the machine building and metal-working industries depend on the production of ferrous and non-ferrous metals, and that metal is the main source of engineering materials and an important export article. Other major industries include food and beverages, non-electrical equipment, finished and semi-finished metal products, and industrial chemicals and petrochemicals. Manufactured items include tractors, motor vehicles, rubber tires, refrigerators, washing machines, televisions, consumer electronics, aluminum products, textiles, and shoes. Sugar beet processing, winemaking and distilling are the chief food-processing industries. Kyiv is known for its flour and textile mills, sugar refineries, glassworks, and tobacco factories. L’viv is known for its breweries and distilleries, Odesa and Mykolayiv for their shipyards.

Ukraine has a sizable industry devoted to chemical products and these constitute a major export commodity. The structure of the chemical sector includes two groups of enterprises – chemical and petrochemical ones. Within the structure of the industry, predominant are asset- and energy-intensive basic chemistry enterprises. This sector is represented by production of mineral fertilizers, sulfuric acid, coke products, synthetic fibers, caustic soda, and petrochemicals. The industrial plants are mainly in Kyiv, Korosten, Sumy and Fastiv.

Ukraine has more than 10,000 state-owned and private enterprises, as well as hundreds of private and community-owned SMEs established over the last decade in various industries.
According to the State Statistics, industrial production grew in December 2013 compared with November. Industrial production index was 100.1%.

Positive results in December were achieved due to the mining industry, as well as due to supply of electricity, gas, steam and conditioned air. In mining, the output remained at the level of November 2013 and reached 107% from December 2012. The supply of electricity, gas, steam and conditioned air in December 2013 grew by 13.9% from November. At the same time, it fell by 1.3% YOY.

The overall positive dynamics of industrial production were demonstrated by 8 regions in 2013. The best results were achieved by Zhytomyr region - 113.1%, Vinnytsia region - 110.4%, Sumy region - 106.7%, Kirovograd region – 106.3%. The greatest fall was taken by industrial production in Chernihiv region - 88.9%, Kyiv - 89.6%, Luhansk region - 91%, Rivne region - 91%, Kherson region – 92% and Donetsk region - 93.5%.