Three key Ukrainian sectors offer opportunities to investors (en)
Ukraine’s food-processing, aviation and information technology sectors offer attractive opportunities for investors keen to reap good business returns while contributing to sustainable development. A new business intelligence report based on company-level data shows that Ukrainian firms in these three key sectors are poised to grow and integrate further into global production and distribution networks.
Invest in Ukraine: Local business intelligence published by the International Trade Centre, the Ministry of Economic and Development and Trade of Ukraine and UkrainInvest, provides a snapshot of the investment readiness of Ukrainian companies to help investors make informed decisions and explores the three sectors prioritized by the country’s export strategy.
With its fertile farmlands, rich water resources, favourable climate and proximity to major markets, Ukraine has a booming agri-food sector. Exploiting these better will allow the country to become a major powerhouse in food production and processing and a leading exporter of agri-food products.
According to Invest in Ukraine, Almost 80% of Ukrainian food-processing firms have globally recognized certification, and most of these businesses are exporting, the survey finds. Most agri-food companies that were interviewed (56%) also have efficient inventory management systems, and nearly half consider logistics services in Ukraine to be high quality.
Food processing also offers significant opportunities for Ukrainian women, who own 42% of companies in the sector and play a vital role in many aspects of the food and beverage value chain. This is also reflective of the government efforts to promote women and gender equality.
Most firms in the Ukrainian civil aircraft maintenance, repair and operations (MRO) sector are exporters and more than half meet international standards, the report says. Ukraine boasts a vast network of aviation universities and research institutes as well as a highly educated and productive labour force. These features, combined with government support programmes and direct tax benefits, ‘create an exciting environment for potential investors and entrepreneurs’, the report says.
Like agri-food businesses, companies in the MRO sector enjoy high-quality logistics services, with 88% delivering goods and services on time. In both sectors, around half of the firms interviewed, are innovative and hold registered patents. MRO providers are especially focused on research and development, and 69% say they are extremely protective of sensitive business information, according to Invest in Ukraine.
As one of the top 10 countries in software development and information technology (IT) outsourcing, Ukraine has already attracted a great deal of foreign investment. Some 88% of Ukrainian IT firms participate in value chains, and many have succeeded in creating their own start-ups or becoming global leaders themselves.
A skilled and cost-competitive workforce and low operating costs enable many tech start-ups and established companies to compete on a global scale by offering high-quality goods or services. These enterprises also benefit from value-added tax exemptions and a 5% tax on revenue, making it easier to invest in Ukraine, the report says.
The country’s tech sector has developed rapidly, to $3.6 billion in 2017 from $110 million in 2003. This high growth rate means that related ICT services and infrastructure are likely to expand rapidly in coming years – offering more opportunities to investors.
‘Ukraine’s dynamic technology sector is growing and serving customers worldwide,’ the report says. ‘IT services and outsourcing, start-ups and the software research and development segments are only increasing their potential.’
Download Invest in Ukraine: Local business intelligence.