Unfortunately, most businesses in our country learn about foreign investments from the media but not directly from their own production facilities. Despite the recent positive changes in
the state, we still can’t talk about a high or at least a satisfactory level of foreign direct investment in the Ukrainian economy.
FOREIGN DIRECT INVESTMENT
According to analysts, this year’s foreign direct investment (FDI) in Ukrainian business will be at the level of 2017 and will be up to $2 billion. As for the desired or required annual amount of direct foreign investment in the country’s economy, the assessment varies from $5 billion to $20. For example, the State Agency for Energy Efficiency presented about 100 alternative energy
projects requiring 3.4 billion EUR. Thus, the forecasted $2 billion of this year’s investment is a drop in the ocean for the country’s economy.
According to the State Statistics Service, foreign investors brought $519.2 million into the Ukrainian economy in the first quarter of 2018. That includes $449.8 million from the EU countries and $69.4 million from other countries. As of April 1, 2018, the capital of non-residents in Ukraine amounted to $32750.8 million. Investors from the EU hold $25199.7 million, investors from other countries — $7551.1 million.
Technically, Cyprus in on the first place among the investor countries, $9213 million came from this country, but the true origin of the money will be covered further. $6742.6 million came from the Netherlands, $1994.6 million — from the United Kingdom, $1802.4 million — from Germany, $1,531.6 million — from Switzerland.
The funds were directed primarily to the industry — it received $10992.4 million, real estate transactions got $10213.3 million, trade and car repair sphere received $3879.8 million.
Direct investment by the principle of directivity (flows to Ukraine), billion USD
FOREIGN INVESTMENT WITH UKRAINIAN ORIGINS
The names of investor countries should not be misleading since it’s about the so-called “round-tripping” investment in many cases. This is a phenomenon of returning resident’s withdrawals abroad under a disguise of direct foreign investment.
For the past seven years, direct foreign investment, when a resident of Ukraine was the ultimate controlling investor, came from Austria, the Netherlands, Switzerland and
Cyprus which gave half of these investments. According to the National Bank, their total amount is $7.9 billion, which is 22 % of the total FDI inflow. We should also emphasize that 80 % of these funds were directed to manufacturing enterprises.
The dynamics of revenues for this period is characterized by a curve. Investment volumes grew in 2010-2013. There was a net outflow of such funds in 2014-2015. In 2016-2017, a positive dynamics started developing and they became of 6.9 % of the total investment inflow to the country. Such funds appeared to be 10.4 % of all foreign direct investment and amounted to $270 million last year.
CAPITAL INVESTMENT IN 2018
According to the State Statistics Service, capital investment (CI) in the country increased by 37.4 % in 2018 compared to the same period in 2017. Business received 89 billion UAH of CI in the first quarter of 2018. If we analyze that by industry, the largest growth of such investment is observed in telecommunication, financial and insurance spheres, transport, postal and courier
spheres. There is a downturn in the area of administrative and auxiliary services, as well as in construction.
Almost half of capital investment — 49.3 % — was spent on machinery, equipment and vehicles. 38.2 % was spent on buildings and structures. 5 billion UAH were spent on major repairs.
The source of capital investment is mainly own funds of enterprises and organizations. They became around 76 % of the total investment this year.
According to the results of the first quarter of 2018, compared to the same period in 2017, the Donetsk region became the leader of capital investment among all other regions – investment from there have grown by 2.3 times. Then go the Chernihiv region with x2 growth, Zhytomyr with 64.6 %, and Kyiv with 61.1 %. Capital investment declined the most — to 23.9 % — in the Luhansk region.
PJSC ArcelorMittal Kryvyi Rih is among companies that have been investing a lot recently. Shareholders decided to direct their profits to the production development. The company received $2.289 billion from the product sales last year. The volume of capital and operating investments amounted to $338 million. The net profit was $190 million. ArcelorMittal plans to upgrade the production lines worth $404 million in 2018. The total investment in the production development is planned to be $1.5 billion by 2022. Note that the company employs 33 thousand people
who timely receive salaries around 12000 UAH per month, as well as the 13-th salary. Since May 1, 2018, salaries were increased by 5 % for administrative staff and by 20 % for production staff.
American Coca-Cola has invested $0.5 billion over 25 years of its activity in Ukraine. In 2012, the country’s first quad-generator plant was built. It provides the company with electric power, hot water, and carbon dioxide. 18 million EUR was invested in the construction. CocaCola orders goods and services from 1400 Ukrainian companies, what covers 72 % of the company’s needs.
Therefore, each job in the company generates 17 more jobs. Recall that the company employs 1,600 people.
Swiss company Nestle S.A. started its activities in Ukraine in 1994 when it was a small enterprise with 50 employees. Nowadays, there are more than 5 thousand workers. Svitoch, which controlling stake belongs to the Swiss company, launched a new line in 2017. Volynholding, fully owned by Nestle S.A., has put into operation one of Europe’s largest storage facilities for raw materials and finished products. The company decided to invest 700 million UAH into the Kharkiv factory “Technocom” in April, 2018. They plan to completely modernize it by 2021.
A transnational company Bunge is also among enterprises that have made significant capital investments. You may be familiar with it thanks to the trademarks Oleina and Rosumnytsa. This company has invested $500 million since 2002 when it came to Ukraine. Significant funds were directed at the construction of a grain terminal in the Mykolayiv port and the construction of oilseeds processing enterprises on its territory. In 2018, the company will make another investment of $30 million to increase the capacity of the reloading complex in the Mykolayiv port.
What is there for the agrarian sector? Though investment shows us the growth dynamics, they remain insufficient. 890 million UAH were invested in crop and livestock production in the first quarter of this year. This is just 1 % of the overall capital investment structure. 202 million UAH were invested in the land, it is about 0.2 % of CI. The total volume of capital investment in the first three months of 2018 amounted to almost UAH 9 billion.
We can proudly state that Ukraine also invests in the economies of other countries. The total volume of foreign direct investment was $6325.1 million at the beginning of April 2018. Our country has invested $6077.6 million in the EU, and $247.5 million — to other countries.
Here is the priority of countries in which Ukrainians invested: Cyprus — $5933 million in total; Russian Federation — $150.2 million; Virgin Islands — $61.9 million; Latvia — $5.3 million; Hungary — $18.1 million.
FDI from Ukraine amounted to $0.7 million in the first quarter of 2018.
THE WORLD IMAGE
Total direct foreign investment on the planet amounted to $1.81 trillion in 2016 and $1.52 trillion in 2017. Developed countries cut their investments, in particular, such decline was of 27 % for Europe and of 33 % for North America. In transition countries, FDI cuts reached 17 %. At the same time, the inflow of foreign investment in the developing countries grew by 2 %, it is 653 billion dollars in monetary terms.
In 2018, the US economy is expected to grow by 2.7%, the European Union — by 2.2% and the global economy — by 3.9% in total. The world’s foreign direct investment is expected to return to $1.8 trillion.
OPEC + member states have agreed to increase oil production by 400,000 bpd per month from August. This is stated in a press release from OPEC. It is noted that the OPEC + countries will seek to eliminate the current restrictions in September 2022. Thus in December, 2021 the estimation of the market is given. […]
Poland and Denmark have solved problems related to the construction of the Baltic Pipe gas pipeline. The representative of the Polish government on strategic energy infrastructure Petro Naimski announced this on Polish Radio. “An agreement has been reached and work has resumed,” he said. Currently, the laying of 100 km of offshore section of the […]
Former head of Ukrzaliznytsia Volodymyr Zhmak filed a lawsuit demanding that the company’s order to terminate his employment contract be declared illegal. This was reported by Interfax-Ukraine with reference to the materials of the court proceedings №2 / 761/9699/2021, which were published in the Unified Register of Court Decisions. Zhmak asks to reinstate him as […]
In France, the antitrust regulator has fined Google € 500 million, according to the regulator’s press service. “The regulator has fined the company for non-compliance with several court rulings issued in April 2020,” the statement said. Agence France-Presse writes that the fine was imposed for “the corporation did not properly negotiate with the publishers of […]
The offices and apartments of the A-95 consulting group were searched on Tuesday, July 13. The company’s director Serhiy Kuyun connects them with exposing materials about the BRSM-nafta gas station network. “Today in our apartments and the office of the consulting group A-95 were searched, equipment was seized. The last thing they said:” The police […]
Boeing has identified the need to refine the 787 Dreamliner aircraft, which are awaiting delivery to customers – it will take some time. This is stated in the company’s quarterly report. Production of the Boeing 787 will be less than five units per month for some time and will gradually return to a monthly level […]
During the first six months of 2021, the Ministry of Finance attracted UAH 257.8 billion in loans or 76.6% of the plan from the state budget. This was reported on the website of the department on Friday, July 2. UAH 211.4 billion was attracted to the budget from the placement of IGLBs, including UAH 59.7 […]
Russia’s gas monopoly Gazprom has not booked capacity at annual auctions through Poland and Ukraine. It is noted that the auctions were held on the booking platforms GSA Platform and Regional Booking Platform. The operator of the gas transmission system of Ukraine exhibited additional “solid” capacities of 9.8 million cubic meters m per day for […]
PrivatBank transferred to the state budget the first tranche of dividends in the amount of UAH 10 billion, the bank’s press service reported on Friday, May 14. In total, PrivatBank will send UAH 19.4 billion for dividends to the state, which is 80% of last year’s profit (UAH 24.3 billion). In the first quarter of […]Next
The eleventh object of the state enterprise Ukrspirt Zalozetsky distillery was sold for UAH 80 million. This was reported by the State Property Fund on Wednesday, December 2. It is noted that six participants competed in transparent bidding, as a result of which the starting price increased two and a half times – from UAH […]Next
If there is a sector in which Ukraine is objectively comparable to the leaders of the world rankings, it is agriculture. According to the «Food» and «Agriculture Organization», Ukraine ranks third in the world by percentage of cropland against the total county’s area. And according to the «National Master»(global statistics portal), Ukraine occupies the 4th […]Next
Shares continue to fall in the Chinese stock market. Two major Chinese exchanges experienced a sharp decline in prices. One reason for this is the fact of fraud in the local exchange market. It will be recalled that, that the employees of the two major Chinese exchanges in the summer of 2015 are under investigation. […]Next
In Lausanne (the Swiss city) took place the final of the international start-up competition Seedstars Summit 2016 in which the best tourist startup in the world was chosen. The main prize, the investment of up to $ 500,000 received the Ukrainian company TripMyDream. The team fought for the title of winner among the ten finalists, […]Next
According to financial club, Oschasbank agreed with the credit debt of JSC Avangard-Agro (AG) restructuration. The owner of AG is Oleh Bahmatiuk. It was published in the holding quarterly status report in London exchange. According to documents, the amount of debt will be converted in Ukrainian gryvnia by the rate of 25,65 UAH per 1 […]Next
On September 14-18, the National Bank sold $ 71 million in currency on the interbank foreign exchange market. At the same time, the National Bank did not buy foreign currency in its international reserves during the reporting week. Therefore, the National Bank for the first time in the late July sold the currency on the […]Next
The commercial court of Kiev had arrested UAH 380,712 million of Creative PJSC, which is one of the largest domestic producers of oil and fat products and part of the Creative industrial group as security in the case of VTB Bank. According to the report, in January 2016, VTB Bank appealed to the court to […]Next
Deposit Insurance Fund (DIF) in the period of the interim administration and liquidation of insolvent Delta Bank recognized as negligible 175 deals worth 22.292 billion UAH. According to the DIF, in particular, to 11 business transactions, including the sale of the assets with the discount, or related parties, transaction of 12.2 million UAH were recognized […]Next
Workers of Gorodetsk local prosecutor’s office (Ukraine, Lviv region) have exacted 20 million UAH from the Ukrainian State Enterprise Ukrspyrt. This was reported to Ukrainian media by representatives of the press service of control authority. According to provided information, the manufacturer of alcoholic beverages was fined in connection with the unauthorized extraction of water for […]Next
The largest manufacturer of equipment for laboratory research Thermo Fisher, conclude a purchase deal to buy the Affymetrix company, which develops integrated solutions for genetic researches, for $ 1.3 billion cash. Following the announcement of the transaction, shares of the Affymetrix company sharply increased in price by 50%. Currently, Thermo Fisher estimates Affymetrix estimates at […]Next
ATB-Market LLC (Dnepropetrovsk), completed 2015 with a turnover of 46.7 billion UAH (including VAT) by increasing the rate for 16.5% comparing the level of 2014. This was stated by the chairman of the board of the directors, CEO of the “ATB” Boris Markov in an interview to “Business” from 29 February 2016. According to him, […]Next
The European Bank for Reconstruction and Development (EBRD) expects the means amount reduction which has invested in the Ukrainian economy. According to “European truth” newspaper, Sergey Guriev,the chief economist of the EBRD, told about it in his interview. He explained:”Really, our volume of investment this year will have been less than previous as we don’t […]Next
In the United States over the past 15 years, 25 billionaires have paid a much lower income tax than they should have. ProPublica based on confidential data from the US IRS published the investigation. In particular, among the 25 billionaires are Berkshire Hathaway CEO Warren Buffett, former New York Mayor Michael Bloomberg, Amazon founder Jeff […]Next
The Antimonopoly Committee of Ukraine (AMCU) has imposed a fine on the company operating the network of gas stations belonging to the Privat group for anti-competitive concerted actions in setting oil prices. The fine amounted to UAH 4.7 billion, the press service of the Antimonopoly Committee of Ukraine reports. Thus, on Tuesday, March 30, a […]Next
The Teva Ukraine company is the part of the Teva Corporation, the leading international pharmaceutical company specializing in the development, manufacture and marketing of generic and original medicines. The Antimonopoly Committee of Ukraine gave the permission for concerted action in the form of fulfillment of the conditions contained in Articles 9.6 and 9.12 of the […]Next