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In Ukraine, industrial production includes the output of all businesses integrated into the industrial sector, such as manufacturing, mining and utilities. 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 was being produced, more than 100 million tonnes of iron ore were being mined, and some 40mn t of rolled steel 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.

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.

Mineral resources

Situated in a rich steppe and forested steppeland, Ukraine has a large supply of many valuable mineral and other resources, containing around 5% of the world’s mineral resources. These include iron ore, coal, manganese, uranium ore, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, and so on. As for reserves, Ukraine is ranked first among European countries for iron, manganese, titanium and uranium ore, and second to Spain for mercury ore reserves.


Ukraine has large reserves of iron ore raw materials. These are mostly Precambrian metamorphic ores (haematite and black), as well as sedimentary (brown iron ore). Precambrian metamorphic ores are located on the Ukrainian crystalline shield.

Ukraine’s total reserves of iron ore are estimated at 27.4bn t (A+B+C1 category) and composed of rich (1.9bn t) and poor ferriferous quartzes (24.1bn t) and brown iron ores (1.4bn t). Of the 83 iron ore deposits included in the estimate, 60 are in the Kryvyi Rih basin, whose reserves are 18.7bn t.

Coal is the main fossil fuel extracted in Ukraine. It is mined in the Donetsk and Lviv-Volyn basins. The Donetsk Basin, known as the Donbas, is by far the largest in Ukraine, covering territory in Donetsk and Luhansk Oblasts in Eastern Ukraine.

Ukraine has some of the world's largest manganese deposits, located in south central Ukraine at Nikopol, including carbonate, oxide-carbonate and oxide ores. Total manganese reserves in Ukraine are 3.5bn t, including 2.3bn t of commercial reserves. Ukraine is responsible for 32% of global manganese production.

Titanium ores have been explored in the Ukrainian crystalline shield and one of the major deposits found is the Irshansk deposit, Zhytomyr Oblast. A concentrator for ilmenite dressing operates there. Samotkan river basin titanium ore deposit in Dnipropetrovsk Oblast has virtually unlimited reserves, making it very important as titanium is used in building rockets, submarines, artificial rubies and sapphires, synthetic rubber, and more.

Ukraine has raw materials for aluminum production as well: bauxites in the Vysokopillia deposit in Dnipropetrovsk Oblast, alunites in Zakarpattia, and nephelines in the Azov Sea area.

Uranium mining began in 1948 at Pervomaiske, and 65.000 tU have been produced so far. Current output is about 1,000 tU/yr, with 960 tU in 2012 and 922 tU in 2013. The Eastern Mining and Processing Plant «VostgGOK» (the sole plant engaged in mining and processing of uranium ore in Ukraine) expects output to go up in 2014-2015.

Ukraine has deposits of rare metal ores, including zirconium, hafnium, niobium, lithium, beryllium, scandium, tantalum, yttrium, lanthanum, molybdenum, and strontium. These metals and their alloys are used in nuclear engineering, electrical engineering, electronics, and aerospace engineering. The reserves of some deposits are quite large, even gigantic. Ukraine currently produces large quantities of zirconium and germanium and smaller quantities of scandium and hafnium.

The iron and steel industries are key segments of Ukraine’s economy because the machine-building and metal-working industries depend on the ferrous and non-ferrous metals they produce. These metals are the main source of engineering materials and a key export commodity.

The metallurgy sector includes 14 integrated steel plants, 7 pipe plants, 10 plants producing metallic articles, 16 merchant-coke plants, 17 refractory production plants, 3 ferroalloy plants, 20 non-ferrous metallurgical works, 35 factories reprocessing ferrous and non-ferrous scrap metal, and other enterprises.

Today, over 38,000 enterprises operate in the extraction and processing of metals and in the production of pipes and rolling stock. These include some of the world largest steel plants making cast iron, steel, rolled stock, steel bars and pipes in Kryviy Rih, Dnipropetrovsk, Zaporizhzhia, and Mariupol.

Oil and gas

Ukraine has oil and gas deposits but reserves are not significant as these fossil fuels were partly depleted during the soviet period.

Still, Ukraine has Europe's third-largest shale gas reserves at 1.2 trillion cu m (tcm). There are two potentially large shale gas fields. The Yuzivska field is in Eastern Ukraine, running from around Sloviansk in Donetsk Oblast into Kharkiv Oblast. The Oleska field is in Western Ukraine in the Carpathian foothills, running from Lviv Oblast into Ivano-Frankivsk Oblast.

Other raw materials

Ukraine has large reserves of such raw materials as potassium and magnesium salts, table salt, native zeolites, and more. Potassium salt deposit are found in Lviv and Ivano-Frankivsk Oblasts, the Carpathian foothills. Here the deposits mostly contain sulfate, mixed sulfate chloride and chlorous salts. Sulfate salts with a К2О content of 8-10 % are the basic raw material to produce chlorine-free potash fertilizer, which is in great demand. Ukraine has large and unique deposits of table salt. In terms of chemical purity, this salt is the best in the world.

Ukraine is rich in building materials, such as granite, marble, labradorite, chalk, marl, sandstone, anhydrite, gypsum, and celestine. The largest reserves of granite and labradorite are found in Zhytomyr Oblast, west of the capital.

Ukrainian amber is extracted in northwestern Ukraine, mostly in Rivne Oblast. Ukrainian succinit from Rivne is of the same origin as Baltic amber. These stones are some 40–54 million years old, that is, the Eocene Age. Several insects found in Ukrainian amber are unique and have not been found in any other place in the world.

Heavy Industry

Much of Ukraine’s industry is concentrated in the Donetsk Basin, also called the Donbas, which contains rich deposits of coal and iron ore. In addition, the Kryviy Rih basin, known as Kryvbas, is noted for its iron-ore mines, the Nikopol area for manganese ore, and Zakarpattia Oblast for petroleum, salt and natural gas deposits.

Machine-building is the largest industrial sector in Ukraine’s economy. It accounts for over one-third of jobs and about a quarter of the total value of industrial assets. It includes enterprises involved in metals, oil, chemicals, mining, power generation, rolling stock, road construction and vehicles, farm machinery and equipment, equipment for the light and food industries, metal-cutting machine tools, and instrumentation.

The rapid development of machine-building has demonstrated Ukraine’s ability to develop and manufacture complicated research-intensive and highly technological machines and equipment. Examples include developments in the rocket and space industry (Zenit 3SL, Cyclone), aircraft building (AN-70, AN-140, Mria), the production of advanced tankers and large-tonnage vessels, the manufacture of turbines for nuclear power plants, highly-efficient gas-pumping installations, equipment for high-voltage power transmission lines, mining equipment, diesel locomotives, tractors and so on.

Ukraine’s shipbuilding industry includes a cluster of colleges, universities and research centers, experienced design bureaus, 9 shipbuilding yards with different capacities and specializations, and a number of ship repair yards. The relative nearness of the European Union, combined with up-to-date design bureaus, strong production facilities at shipyards, an experienced labor force, and the powerful domestic metals industry make Ukraine’s shipbuilding industry a very attractive alternative to distant shipbuilding centers.


Ukraine has a sizable industry devoted to chemical products that constitute a major export commodity. The chemicals industry includes two groups of enterprises, working with chemicals and petrochemicals. The predominant basic enterprises are asset- and energy-intense. This sector produces mineral fertilizers, sulfuric acid, coke products, synthetic fibers, caustic soda, and petrochemicals. The industrial plants are mainly in Kyiv, Korosten, Sumy and Fastiv.

Ukraine’s multi-branch chemicals sector includes chemicals, petrochemicals and chemical-pharmaceuticals, with over 1,600 enterprises and divisions. The sector accounts for nearly 10% of industrial fixed assets and over 5% of all those employed in industry.

Nitric fertilizers are manufactured in the Donbas at Severodonetsk and Horlivka) and the Dnipro valley at Dniprodzerzhynsk. Plants in Rivne and Cherkasy use natural gas in their production. Phosphate fertilizers are manufactured in sugar-beet producing regions in Sumy and Vinnytsia Oblasts, and in Odesa Oblast. Sulfuric acid production is concentrated in the regions where it is consumed and places where phosphate fertilizers are produced.

Energy sector

The energy sector is of key importance for the domestic economy, as both manufacturing and municipal infrastructure require power to operate. Ukraine’s energy sector is odd in that the technology and primary power generating companies are separated from consumers. As a result, power generation, transmission and distribution are all separate industries today.

Power generation facilities are of three main types in Ukraine: thermoelectric stations or TESs better known as co-generation plants, using both steam turbines and diesels, hydroelectric stations or HESs, meaning both hydroelectric stations and hydroelectric accumulating plants, and atomic energy stations or AESs, better known as nuclear power plants. The role of wind and solar power is slowly growing.

Ukraine operates four AESs: Zaporizhzhia, Pivdennoukrainska or Southern Ukraine, Rivne and Khmelnytskiy, and a series of hydroelectric cascades: 6 large hydroelectric stations on the Dnipro and 55 smaller stations on other rivers. Ukraine provides 100% of electricity for Crimea, which, being arid and surrounded by salt water, has no sources of its own.

Ukraine ranks seventh in the world and fifth in Europe in terms of the number of operating nuclear reactors, total capacity and electricity produced. Its 15 reactors generate about half of the country’s electricity. Ukraine has been exporting power to the EU since 1995 from the Burshtyn TES or cogeneration plant.

Ukraine has high average wind speeds, a good solar radiation profile, plentiful raw materials for biomass, and numerous dams on the Dnipro River, all ideally suited for renewable energy.

In early September 2013, the Government approved measures to allocate an additional UAH 4.298bn UAH, ex VAT, for a project to improve the safety at AESs over 2013-2017. This amount is partially coming from sale of electricity and thermal energy produced at 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 indicative funding for the project at UAH 12.5bn for its entire duration, 2013-2017. The Government also provided for annual reviews of this budget, which was intended to help make them more efficient.


Overall, Ukraine has a well-developed and diverse transportation system. The domestic railroad network is extensive and links cities with industrial enterprises and the country with the European Union. Waterways such as the Dnipro River and Black and Azov Seas with their port cities—Illichivsk, Mariupol, Mykolayiv and Odesa—play an important role in shipping.

The domestic highway system includes 147,000 kilometers or 91,000 miles of paved roads. Three of the largest cities—Kyiv, Dnipropetrovsk and Kharkiv—have subway systems. Buses ranging in size from large vans and small buses to large intercity vehicles carry passengers in all major cities, between cities and the countryside, and internationally. The deepest subway station in the world is the Arsenalna metro station on the Red Line in Kyiv, which is 105 meters below ground.

Kyiv, Kharkiv, Lviv and Odesa all have major international airports.

Light industry

Ukraine’s light industry and consumer goods production are underdeveloped by comparison with its heavy industry and agriculture, although it is well distributed across the country, unlike heavy industry.

The food industry is traditionally the major supplier of basic staples, such as sugar, salt and oil, and luxury items such as alcohol, confectioneries and so on. Ukraine’s food industry is the leader of the agro-industrial complex or AIC. It will remain strategically important in future, determining the well-being of the population. The sector has considerable production, research and labor potential. Among the major sub-sectors of the food industry are meat and dairy processing, sugar refining, flour milling and cereal production, oil extraction, and starch and molasses production. The most significant food processing centers are in Kyiv, Kharkiv, Odesa, Mykolayiv, Zaporizhzhia, and Lviv.

2013 recap

According to Derzhstat, the statistics bureau, industrial output grew in December 2013 compared to November, putting the industrial production index at 100.1%. These positive results were achieved due to the mining industry, to the winter-time supply of electricity, gas, steam and conditioned air. In mining, output remained at November levels, but was 107% of December 2012 output. The supply of electricity, gas, steam and conditioned air in December 2013 grew 13.9% over November, although it fell 1.3% y-o-y.

Overall, positive trends in industrial output were demonstrated by eight oblasts in 2013. The best results were 113.1% in Zhytomyr Oblast, 110.4% in Vinnytsia Oblast, 106.7% in Sumy Oblast, and 106.3%. Kirovohrad Oblast. The worst declines in industrial output were 88.9% in Chernihiv Oblast, 89.6% in Kyiv Oblast, 91.0% in Luhansk Oblast, 91.0% in Rivne Oblast, 92.0% in Kherson Oblast, and 93.5% in Donetsk Oblast.

2014-2015 update

The decline in Ukraine's industrial output in January-February 2015 continued to worsen, slipping to 22.5%, compared to 21.3% in January, 17.9% in December 2014 and 16.3% in November-October 2014. Ukraine saw a 1.6% decline in industrial output in February compared to January 2015. For January-February, the y-o-y decline was 21.7%.

The anti-terrorist operation or ATO zone is not included in these calculations, nor is the temporarily occupied territory of Crimea and Sevastopol, as in the previous quarters of 2014. Donetsk Oblast saw industrial output plummet by 59.4% in February 2015, compared to 49.1% in December, 51.3% in November, and 55.7% in October. In Luhansk Oblast, it collapsed, falling 89.0%, compared to 87.0% in January 2015, 83.0% in December 2014, 82.0% in November and 80.0% in October).

Still, industrial output also grew in some oblasts in February 2015: Kyiv, Zhytomyr, Vinnytsia, Rivne, Volyn, Ternopil, Khmelnytskiy and Chernivtsi Oblasts saw improvement, ranging from 5.4% to 28.0%.

In May 2015, industrial output fell 20.7% over the same month in 2014. The result was a marginal improvement from April’s 21.7% decrease and marked the 17th consecutive month of economic decline amid geopolitical tensions in the country. Significant falls were recorded in manufacturing, mining and quarrying, as well as in electricity, steam, gas and air conditioning.

The ongoing crisis between the Ukrainian government and Russian-supported militant groups in occupied Donbas continues to have a large negative impact on industry. Large contractions were recorded in the eastern oblasts of Luhansk and Donetsk, Ukraine’s industrial heartland and the region where the conflict has been centered. Industrial output in May plummeted 86.0% on an annual basis in Luhansk Oblast and 45.6% in Donetsk Oblast.

On a monthly basis, industrial output slipped a seasonally-adjusted 0.2% in May, which was an improvement over April’s 2.0% decline. The annual average variation in industrial output continued to fall, decreasing from -15.6% in April to -17.2% in May.

Industrial output is projected to contract 3.5% for 2015. For 2016, it is expected to rise 3.4%.