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.
Radisson Hotel Group has plans to more than double its serviced apartments portfolio within the next 5 years across EMEA. Today, serviced apartments represent around 10% of the Group’s EMEA portfolio with 45 properties and more than 5,400 units in operation and under development. Radisson Hotel Group operates its serviced apartments as a stand-alone or […]
On Monday, December 7, Uber and startup Aurora Technologies announced an agreement under which Aurora will take over Uber’s Advanced Technologies Group, which has been developing self-governing cars. Under the terms of the agreement, Uber will receive $ 400 million, 26% of Aurora shares, and the general director of the taxi service, Dara Khosrowshahi, will […]
Electric car maker Tesla has agreed with brokerage companies to sell its shares for a total of $ 5 billion. This was reported by Bloomberg, citing documents submitted to the US Securities and Exchange Commission (SEC). The shares will be sold at the market price. This is the third sale of Tesla shares in 2020. […]
The first batch of Pfizer coronavirus vaccine has been delivered to Israel. This was reported by The Jerusalem Post on Wednesday, December 9. “A DHL flight from Brussels carried more than 100,000 doses of the newly created vaccine and landed at Ben Gurion Airport in Tel Aviv around 9 a.m.,” the statement said. The doses […]
The American oil and gas giant Exxon Mobil had one of the worst years in its history. Exxon shares have fallen by 45.36% since the beginning of 2020. The company has lost money for three quarters in a row, and in August they were excluded from the benchmark index of “blue chips” Dow Jones Industrial […]
Shares of Pfizer and BioNTech fell 1.74% and 2% (respectively) on Thursday amid news that companies will deliver half of their planned number of vaccines against COVID-19 in 2020. On November 20, Pfizer and its German partner BioNTech applied to the FDA (US Food and Drug Administration) for permission to use their vaccine in an […]
Chinese e-commerce company JD.com Inc announced on Saturday that it will be the first platform in the country to accept China’s digital currency. The Central Bank of China will hold its second digital yuan lottery among citizens of Suzhou, near Shanghai on Friday. The total amount of playable digital yuan is 20 million ($ 3.06 […]
In Ukraine, land belongs to citizens only within the limits allowed not by the law but the authorities, and the problem of ownership is inherited from the totalitarian times. By the way, the moratorium on selling land operates in Venezuela, Congo, Tajikistan, North Korea, and Cuba, in addition to our country… Law and Practice Neither the Verkhovna Rada nor the Constitutional […]Next
Ukrainian IT company the Archer Software has announced an agreement with the American company Cprime. This was reported on the company’s website. The amount of the deal is not disclosed, but the publication Ain says, “According to experts, 100% of the company could be valued at 5-8 million dollars.” But the transaction amount may vary […]Next
The group of the companies Energy Resources of Ukraine together with its Polish partner the state oil and gas company PGNiG won the tender for gas supply for the GTS Operator of Ukraine. This is stated in the message of the company “ERU Trading”. “ERU Trading was able to offer the most competitive prices thanks […]Next
In Ukraine it will be one less source of information. Ukraine Today is an online channel with International broadcasting, which is owned by Ukrainian businessman and former owner of Privat Bank Ihor Kolomoiskyi. The fact that in the near future Ukraine Today will stop their work became known from the publication of General Director of […]Next
A recent study by the Law Society of Scotland has shown a 42% pay gap between female solicitors and their male counterparts, despite women representing half of the legal profession in Scotland. The Law Society found that from the age of 36, women are paid a lower salary, on average £18,000 less, than men of […]Next
The well-known British businessman Richard Branson said at the World Economic Forum, during a private event “Ukrainian lunch” in Davos, that he is ready to invest in the Ukrainian startups, told Andrei Kolodyuk, the partner of AVentures Capital, who visited the event. He also said that he talked to Branson and discussed the issue about […]Next
One of the largest airlines in the United States and globally, United Airlines Holdings Inc., warned on Wednesday that it could lay off 36,000 employees since October 1. Almost half of these employees are flight attendants. The company employed about 96,000 people as of December. This step of United confirms the deplorable state of the […]Next
The National Bank of Ukraine (NBU) has decided to revoke the banking license and eliminate the Soyuz bank. It is reported by the National Bank press service. The liquidation of the bank will be held under the compact procedure due to violations in the sphere of financial monitoring legislation, – noted in the NBU. “The […]Next
European Bank for Reconstruction and Development (EBRD) provides a revolving credit facility for $ 20 million for working capital of the “Ukrainian Agrarian Investments” company, that has more than 70 farms in northern and western Ukraine. This loan replaces the previous funding of $ 13 million, which was granted to “Ukrainian Agrarian Investments” in 2014. […]Next
Due to the actions of the prosecutor ‘s office in Mykolayiv region the Sea specialized port Nika-Tera has frozen a large investment project of 40 million UAH. At the same time the city budget of Mykolayiv has lost a considerable amount of lease of the water fund lands. This was stated by the chairman of […]Next
The recent scandal with financial fraud and losses of $ 4.5 billion in the Toshiba Company led to the fact that the Japanese giant’s shares collapsed by 43%. Toshiba is the oldest Japanese manufacturers of electronics and has been on the market for 140 years. All events that occur in the company significantly affect the […]Next
As Interfax-Ukraine reports, the Administrative court rejected the claim of the International Airline Company of Ukraine (IAU) for the charge of the collection in specialised state fund of aviation activities expenses financing. On November 9, 2016, the court made the decision on materials of the state register of judgments which were published on its official […]Next
Apple has given to CEO Tim Cook two options which can be converted into approximately 1 million shares of the company under certain conditions. This follows from the documents submitted by the corporation in the Securities and Exchange Commission (SEC) of the USA. The first option is 333,987 shares with the restrictions, which the head […]Next
December, 14 2015, Shell announced that after they finish the merger with the British oil company BG Group PLC, they will fire 2,800 people. The company said in report that their plans are to reduce the number of employees by 3%. Terminations will start in 2016. Earlier, Shell announced plans to cut the number of […]Next
Chinese yuan in the next ten years could become the third global reserve currency after the dollar and euro. Such conclusion was reached by analysts of Morgan Stanley, writes CNBC. The growth of investment in the Chinese economy is called to be the reason for the increase in demand for the yuan. Currently, it accounts […]Next
The Turkish company Molino intends to build a modern grain terminal in Odessa with a fast speed of stowing a ship. During the investment forum “Prospects of development of sea trading ports of Ukraine” in Odessa the Turkish company Molino offered investors to construct modern grain transfer complex with a fast speed of stowing a […]Next