Business in Ukraine

Machine-building is the largest Ukrainian industrial sector. It accounts for over one-third of the employed and about a quarter of the total cost of industrial main assets.

Machine-building in Ukraine arose long ago. Back in the 1860s agricultural machinery was manufactured in Kyiv, Odesa, Kharkiv and other cities. Later, transport machine-building, manufacturing of equipment for mining, metallurgic and food-processing industries gained in strength. The Donbas and Prydniprovia formed into centers of mining and metallurgic machinery. In Mykolaiv and Kherson, ship building developed. Odesa, Kirovohrad and Kharkiv became centers of agricultural machine-building.

The rapid development of machine-building in the next historical period proved Ukraine’s ability to develop and manufacture complicated science-intensive and highly technological machines and equipment. Among the examples are development of the rocket and space industry, aircraft building (AN-70, AN-140, “Mria”), production of advanced tankers and large-tonnage vessles, fabrication of turbines for nuclear power plants, highly-efficient gas-pumping installations, equipment for high-voltage power transmission lines, etc.

The largest machine-building subsectors in terms of their employment are instrument-making, tractor and agricultural machinery building, electric enginering, automobile building, chemical and petrochemical engineering, and machine-tool construction. The largest heavy engineering centers are Novokramatorsk Machine-Building Plant, Kramatorsk Plant “Energomashspetsstal”, Mariupol Heavy Engineerinf Plant, Kharkiv Turbine Plant, etc. The major electric engineering facilities are concentrated in Kharkiv, Zaporizhzhya, Kyiv, Donetsk, and Dnipropetrovsk. Transport machine building, including railway transport, automobile, aircraft and ship building, is gaining momentum as a priority development sector in Ukraine. This concerns development of new generations of aircraft (AN-70 and AN-140), rocket and space industry (“Sea Start”), new types of vessels, etc. Its main centers include Zaporizhzhya, Kyiv, Kharkiv, Lviv, Dnipropetrovsk, Mykolaiv, Kherson, and Odesa. Advanced are agricultural machine-building and instrument making, automation and computer equipment fabrication.

Support provided within the national policy framework to domestic manufacturer and encouragement of the sector restructuring will condition machine-building development as a priority strategic sector, whose role is to ensure progress of other sectors of the national economy.

Tags: Machine-building sector by Vitaliy Tretyakov
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The multi-branch chemical sector of Ukraine includes chemical, petrochemical and chemical-pharmaceutic sub-sectors with over 1,600 enterprises and structural units. The sector accounts for nearly 10% of industrial fixed assets and over 5% of all those employed by Ukrainian industrial sector. About 90% of the capital assets and about 80% employees involved in the industry are concentrated in chemical sector. Petrochemical and chemical-pharmaceutic sub-sectors account for the remaining production potential.

The chemical industry provides the basis for an extensive use of chemical technologies and man-made materials by the national economy. This sector ensures scientific and technical progress, and increases the efficiency of many industrial sectors, agriculture and construction. In Ukraine, manufacturing of various kinds of chemical products (niter, salts, alkali, etc.) was established long ago. However, the sector began developing as an industry only in the late 1800s. At that time, the industry was represented by plants manufacturing dyes, soda, superphosphate, etc. At present, the chemical industry is a developed multi-branch industrial sector.

Until 1990, Ukraine was producing 16% of the total of mineral fertilizers in the former Soviet Union, 24% plant-protection chemicals, 18% sulfuric acid, 25% soda ash, 16% caustic soda, and 13% chemical fiber.

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, non-organic acids and soda. Nitric fertilizers are manufactured in Donbas (Severodonetsk, Horlivka) and Prydniprovia (Dniprodzerzhinsk). Rivne and Cherkasy enterprises use natural gas in their production. Phosphate fertilizers are manufactured in sugar-beet producing areas (Sumy, Vinnytsia) and in Odesa and Kostyantyniv (Donetsk oblast). Production of sulfuric acid is concentrated in the regions where it is consumed and in the centers of phosphate fertilizers production. Basic chemistry is concentrated in the Crimea and comprises production of bromine, magnesium and iodine.

Enterprises of the organic synthesis industry manufacturing synthetic resins, plastic masses, chemical fiber, man-made caoutchouc and threads are located in Donetsk, Zaporizhzhya, Kyiv, Chernihiv, Cherkasy, etc.

The petrochemical industry manufactures a variety of products, of which the most important are car and motor-cycle tires (Dnipropetrovsk, Bila Tserkva), hoses, and consumer goods. The regions where petrochemical and rubber-asbestos enterprises are concentrated are Donbas, Prydniprovia, Prysivashia and Prykarpattya. The major centers of the sector are Kyiv, Cherkasy, Chernihiv, Shostka, Sumy and Rubizhne.

Considerable structural changes are under way in the chemical industry. State-owned enterprises are less than one-fifth of the total number of chemical industry enterprises manufacturing about one-third of the products. The remaining enterprises are in collective ownership, with open and close joint-stock companies being the predominant form.

Tags: Chemical industry by Vitaliy Tretyakov
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Ukraine was the world’s seventh-leading producer of iron ore, and continued to be a major world producer of coal, ferroalloys, ilmenite, steel, and manganese ore (with 75% of the former Soviet Union’s reserves). The mining and metallurgical industry employed 500,000 persons; 270,000 worked in ironmaking, steelmaking, and ferroalloys enterprises. In 2000, metal products accounted for $6 billion worth of exports, 63% of the country’s total exports; ferrous metals, whose production increased by 17% in 2000, accounted for $4.7 billion in exports. Ferrous and nonferrous metals were Ukraine’s top export commodity in 2002, and their production ranked third among the country’s industries; coal production ranked first, and chemicals manufacturing ranked fifth. Fuel and petroleum products were the country’s second-leading export commodity.

Production outputs for 2000 included: marketable iron ore, 55.88 million tons (47.6 million tons in 1996); manganese, mined in the Nikopol’ and Bol’shoy Tokmak basins (metal content), 930,000 tons (675,000 in 1999, 1.03 million tons in 1997); rock salt, 2.29 million tons (2.8 million tons in 1996); and potash (at the Stebnik and Kalush mines), 30,000 tons (76,000 in 1996). In addition, Ukraine produced alumina, mercury, titanium (ilmenite and rutile concentrates), zirconium (the FSU’s only ore producer), cement, clays (bentonite and kaolin), graphite, nitrogen, and sulfur (from the Rozdol and Yavoriv deposits). Iron ore production—concentrated at seven mining and beneficiation complexes in the Krivyy Rih (Krivoy Rog) Basin, and at the Poltavskiy complex—fell by 50% in 1990–95. Explored iron ore reserves totaled 33 billion tons, including 28 billion tons of industrial reserves; total capacity was 108.5 million tons per year. Manganese reserves totaled 2.2 billion tons, and annual capacity was 6 million tons. No antimony, cadmium, lead, nickel, tin, zinc, zircon, dolomite, limestone fluxes, quartz, soda ash, talc, or uranium was mined in the past several years, the Ukraine having sharply reduced or ceased producing a number of these commodities as a result of the large reduction in demand following the breakup of the Soviet Union.

At the end of the 1980s, Ukraine mined 5% of the world’s output of mineral products. After the breakup of the Soviet Union, production fell precipitously, and recovery of the mining sector was considered critical for the country’s economic recovery. A 1999 law provided tax benefits for mining and metal industry firms for two and a half years. By 2000, the privatization of small-scale enterprises was virtually completed. The mining industry was a major source of waste, having accumulated 30 billion tons of mineral wastes.

Tags: Metallurgy by Vitaliy Tretyakov
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System Capital Management or SCM (Ukrainian: Систем Кепітал Менеджмент) is a big Ukrainian financial and industrial holding company with the headquarter based in Donetsk in the east of the country. The business is controlled by a Ukrainian businessman Rinat Akhmetov who owns 90% of the company shares. According to recently published figures the group has revenues of over $17 billion and has assets worth over $26 billion.

SCM was set up in 2000 and now includes over 90 businesses in metals and mining, power generation, banking and insurance, telecommunications, media and real estates as well as in some other spheres. The biggest company in the SCM Group is Metinvest, which is a mining and steel business and is generally agreed to be Ukraine’s largest private business and is one of the bigger steel businesses in Europe. It is also the largest Ukrainian producer of iron ore. Metinvest also has assets in Italy, UK, Bulgaria and Switzerland. The second company of the Group is DTEK which mines coal and owns and operates a number of power stations in Eastern Ukraine. SCM also owns two large banks and an insurance company. In telecommunications, SCM has a fixed line business, Farlep-Optima and a big share in mobile operator, Life:). The Group’s media interests include the newspaper Segodnya and the TV station TRKUkraina. The group is also in the real estate business and owns two five star hotels - one in Kyiv and one in Donetsk.

• Metinvest Holding
  • Krasnodonugol Coal Company
  • Severniy Iron Ore Mining and Processing Works
  • Central Iron Ore Mining and Processing Works
  • Ingulets Iron Ore Mining and Processing Works
  • Avdeyevka Coking and Chemical Plant
  • Azovstal Steel Works
  • Yenakievo Steel Works
  • Khartsizsk Pipe Works
  • Metinvest International (Switzerland)
  • Ferriera Valsider (Italy)
• DTEK
  • Pavlogradugol Coal Company
  • Komsomolets Donbassa Mine
  • Vostokenergo Power Generation Company
• Financial Business
  • First Ukrainian International Bank
  • Dongorbank
  • ASKA Insurance Company
• Telecommunications
  • Farlep-Invest Telecommunications
  • Astelit Mobile Communications
• Sarmat Brewing Group
• TRK Ukraina Broadcasting Company
• Segodnya-Multimedia Publishing Group
• Donbass Palace Hotel (Donetsk)
• Opera Hotel (Kiev)

The business and Rinat Akhmetov are possibly best known for being the owners of the Ukrainian Shakhtar Donetsk Football Club, which plays regularly in European competitions.

The company declares its plans to become an international business and is expanding into Europe and recently raised $545 million to help fund future expansion. The group has announced plans to invest $6 billion over the next 4 years.

Tags: Steel sector enterprises by Vitaliy Tretyakov
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The Privat Group, or Privatbank Group (Ukrainian: Група “Приват”) is an influential business group in Ukraine grouped around the Privatbank. The group is controlled by the Ukrainian businessmen Henadiy Boholyubov, Oleksiy Martynov, and Ihor Kolomoyskyy (the latter being the leading partner, best known to public). Privat Group controls steel, oil, chemical, energy and food industry companies in Ukraine, Russia, Romania and the United States. Most businesses of the group (including Privatbank itself) are based in Dnipropetrovsk Oblast, which is regarded as its “homeland”. Being a business oligarch entity, Privat Group controls several Ukrainian media, maintains close relations with politicians and sponsors professional sports.

The businesses of Privat Group are not formally included in a corporation, and its top managers sometimes state that there is no such group at all. However, either PrivatBank or “Privat-Intertrading” company indirectly own all companies regarded as parts of the group. Typically, industrial companies are controlled through a complicated chain of offshore companies. Despite this, the Ukrainian public has a clear understanding of what exactly belongs to the group. To describe such relations, the media use the wording “company X is controlled by the Privat Group” or “the business of the X company is being organized by the PrivatBank”. The group never denies such statements.

Steel industry

Various steel companies form the core of the Privat Group, presenting a full manufacturing chain of metallurgy. This oldest and most important part of the group is mostly located in and around Dnipropetrovsk, which is one of the biggest ukrainian cities.

Ore mining and processing companies

• Marhanets Mining&Processing Kombinat and Ordzhonikidze Mining&Processing Kombinat extract and enrich ferroalloy ores, controlling the domestic market of this raw material (cities of Marhanets and Ordzhonikidze, respectively)
• “Suha Balka” JSC extracts iron ore (Kryvyi Rih)
• Pivdennyi Mining&Processing Kombinat (co-owned with Vadim Novinskyi) extracts and enriches iron ore (also in Kryvyi Rih)

Ferroalloy mills

• Apart from its ferroalloy-ore assets, Privat Group has stakes in all three of Ukraine’s ferroalloy mills and controls two of them.
• Nikopol Ferroalloys Plant, the world’s second ferroalloy manufacturer (co-owned and fiercely fought over with the Interpipe Group) (Nikopol)
• Stakhhanov Ferroalloys Plant (Stakhanov, Luhansk Oblast of Ukraine)
• Zaporizhzhia Ferroalloys Plant (Zaporizhzhia)
• Alapayevsk Metallurgy Plant (Alapayevsk, Russia)
• Ferroalloys company in Romania (mentioned by the group co-owner but undisclosed as yet)
• Highlanders Alloys LLC (New Haven, USA)

Steel mills

Dnipropetrovsk Metallurgy Kombinat named after Petrovskyi (Dnipropetrovsk)

Tags: Steel sector enterprises by Vitaliy Tretyakov
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Interpipe Group, or simply Interpipe (Ukrainian: Науково-виробничо-інвестиційна група “Інтерпайп”) is the influential Ukrainian business group founded and mostly owned by local business oligarch Victor Pinchuk. The group focuses on steel industry (particularly rolling), although indirectly controlling assets in various fields of industry, services and media. Interpipe is a globally-important player on the metal pipes (hence the name), steel wheels and ferroalloys markets.

Companies of the Interpipe Group are mostly situated in the Dnipropetrovsk Region of Ukraine

The Interpipe product portfolio is focused on creating value-added and technological advantages for companies extracting and transporting oil and gas. Interpipe’s long experience and understanding of the oil and gas business gives it the opportunity to find tailored solutions for clients and to create long-term partnerships with them. Working in tandem with its clients Interpipe Group achieves efficiency increases in exploration work and cost reductions for oil extraction. Above all, Interpipe provides reliability ensuring secure strategic oil and gas pipelines. By opening trade offices in strategic regions around the world Interpipe Group meets its clients’ needs by directly reducing communication distances and optimizing order processing and implementation.

The quality of Interpipe Group business is recognized by international standards and strong partnership relations with such companies as Gazpromneft, Lukoil, Rosneft, Surgutneftegaz, Transneft, Kaztransoil, Kaztransgaz, Turkmenneft, Uzbekneftegaz, Ukrnafta, Ukrgazdobycha, SOCAR, Kuwait Oil Company, Oil India Ltd., Syrian Petroleum Co and Orient Petroleum Co. and SITEP.

Tags: Steel sector enterprises by Vitaliy Tretyakov
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LTD. “STAL’PROM”

OKPO 13437017

Phones: +38 (056) 440712 468701 441198

Address: Ukraine, 49030 Dnepropetrovsk, street of Shevchenko, 30

EXPORT: - PIPES, TUBES And TYPES are HOLLOW, BESSHOVNYE, FROM BLACK METALS (EXCEPT FOR CAST-IRON CASTING)

IMPORT: - CALDRONS are STEAM OR OTHER PAROPROIZVODYASCHIE CALDRONS (EXCEPT FOR AQUATIC CALDRONS of CENTRAL HEATING, CAPABLE ALSO to MAKE STEAM of LOW PRESSURE); AQUATIC CALDRONS With PAROPEREGREVATELEM
- ALUMINIUM is UNTILLED
- PRUTKI FROM ALLOYED STALEY is OTHER; CORNERS, SHAPED And SPECIAL TYPES, FROM OTHER ALLOYED STALEY; PRUTKI is HOLLOW FOR BORINGS WORKS FROM ALLOY OR UNALLOYED STEEL
- STEEL In BARS OR OTHER PRIMARY FORMS; CARBON STEEL

Tags: Steel sector enterprises by Vitaliy Tretyakov
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Metallurgy is the largest key industry in the economy of Ukraine. 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.

The metallurgy sector includes 14 integrated steel making 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.Metallurgy in Ukraine has long history. In the 19th century, blast furnaces were in operation and cast iron was smelted in Donetsk and Luhansk. The main factors of development of metallurgy in Ukraine are the proximity of iron and manganese ore deposits, coking coal, and non-metallic materials – limestone, molding sand, and refractory clay. In addition, the dense transport network makes for efficient delivery of raw materials and goods to the plants.

There is also a developed system of training the workforce, and a presence of reliable consumer – the machine building industry and other industries that consume large quantities of metal.The main raw material for ferrous metallurgy is iron ore. Ukraine is completely self-sufficient in iron ore, coke, manganese, and various supplementary materials. Kryvy Rih basin is the source of most iron ore (about 90%). It is the world’s largest area of iron ore extraction. From there, iron ore is shipped not only to Ukrainian plants, but also to the countries of Western and Eastern Europe. The total iron ore deposits in Ukraine (categories A, B and C) amount to 27 billion tons.

The main area of manganese ore extraction is the Transdnipro manganese-ore basin, an area with unique deposit contents. Both the manganese ore from Transdnipro and Chasiv Yar deposit of refractory clay are well known far beyond Ukraine’s borders. The unique proximity of all the raw materials necessary for the metallurgy industry to each other is the cause of the economic prevalence of the Ukrainian metallurgy industry in the national economy and its significance for the economies of other European countries. Ukraine had been the metallurgy workshop of the former USSR; it used to be the second in the world in steel production, and the fourth in cast iron smelting. In steel production per capita (1059 kg), Ukraine used to be the first in the world. Most of the facilities of the industry are engaged in production of ferrous metals (over 44%) and extraction and enrichment of crude ore (over 30%). The third largest subsectorin terms of production assets involved is the by-product-coking industry.

There are four iron-ore basins in Ukraine: Kryvy Rih, Kremenchuk, Bilozerske and Kerch basins. There are two manganese ore basins, one in Nikopol and the other in Velyky Tokmak. In addition, there are several non-metallic raw material deposits: fluxing limestone (Donbas, Transdnipro, Crimea), dolomites, and refractory clays.The vast majority of metallurgy enterprises of Ukraine are powerful integrated companies that produce over five million tons of metal per year. The largest of them are Azovstal, Zaporizhstal, and Kryvorizhstal. Three metallurgical regions have developed in Ukraine: Transdnipro, Donetsk, and Transazov.Non-ferrous metallurgy includes ore extraction and enrichment, non-ferrous metal production, and secondary raw material processing. Most prominent in the non-ferrous metallurgy industry is aluminum production, using bauxites, alunites, etc. as raw materials. The availability of resources and the rising needs encourage creation of a large aluminum industry in Ukraine.Two large aluminum and titanium-magnesium plants are situated in Zaporizhia. The aluminum plant gets its raw materials from Mykolayiv alumina plant, and the titanium-magnesium plant – from Irzhansk.Verkhniodniprovsky mining-and-smelting integrated works manufactures zirconium and titanium articles exported to dozens of countries.

The production of magnesium uses the salts of Sivash Gulf. Mykytivka mercury deposit (Donetsk Oblast) is the main production source of this metal. The lead-zinc industry is well developed too – zinc is smelted in Kostiantynivka (Donetsk Oblast).Secondary metal enterprises also belong to non-ferrous metallurgy: the hard alloy works (Torez), the rolled brass and copper mill (Artemivsk), pure metal works, etc.In the future a production of superconducting materials, hard alloys, pure metals, etc. is expected to develop fast.

Tags: Metallurgy by Vitaliy Tretyakov
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