Ukraine has a large manufacturing base which historically was focused on heavy industry. In recent years, this sector has undergone changes and gradually diversified in response to market sector demands. The sector continues to be supported by an extensive network of polytechnic institutes, which annually graduate thousands of engineers across a wide range of disciplines.
Heavy Industry – Machine Building
Ukraine’s heavy manufacturing sector is dominated by an extensive network of machine building enterprises. Over 25% of the population is employed by manufacturing companies involved in mining, railway rolling stock, energy, farm equipment, road construction equipment, machine tools, aircraft engines, instrumentation and manufacturing for the light and food industries. This manufacturing capacity, together with its excellent educational institutes, has enabled Ukraine to become a global competitor in specialized industries such as automotive, aerospace and ship building.
The automotive industry in Ukraine has become one of Ukraine’s fastest growing industries owing to a favorable combination of increasing demand, availability of skilled workers, competitive costs and access to markets.
At the present time Ukraine’s auto manufacturing output is approximately 200,000 vehicles per year. New foreign investors are investing and expanding operations in cluster areas, particularly in Western Ukraine. This manufacturing is concentrated largely in the assembly of foreign passenger cars for the export market, and domestically produced heavy vehicles for the domestic market.
Notable specialized manufacturing includes the production of diesel locomotives and a wide range of tractor models and track vehicles by Kharkiv’s well known tractor plant XTZ.
Ukraine has a long tradition in the aviation industry and is noted for having introduced some exceptional innovations in world aircraft design. Ukraine’s famous “Antonov” design bureau was responsible for designing many notable aircraft including the world’s largest airplane the AN-225 “Mriya”. However, Ukraine’s production of aircraft on a large scale basis has never been realized, in part, because of the fragmentation of the supply chain that occurred following the collapse of the Soviet Union. The Government is now devoting significant attention to redress this condition and is expanding opportunities for public-private investment in this sector.
Ukraine is also becoming known for its niche market in the production of unique ultra-light planes, hang-gliders and paragliders of all designs and models. The Aeroprakt models in particular have become very well-known and have attracted buyers in the United States, Australia, New Zealand and in many European countries.
Ukraine today ranks among the 10 largest shipbuilding countries in Europe. The country’s maritime industry is extremely large and diversified and includes design bureaus, research facilities, shipyards and repair facilities.
At the present time, there are over 35 major state companies that are engaged in the design and construction of a wide range of vessels. These include powerboats, barges, bulk carriers (dry cargo ship), tankers, including liquefied gas carriers.
In turn, these facilities are supported by an extensive network of technical institutes and universities which continuously contribute to a pool of experienced workers with high degrees of specialization. In addition, Ukraine devotes significant resources to the training of merchant seamen who are able to service both the domestic market and foreign companies as well. It is estimated that Ukraine currently has over 100,000 trained seamen in its maritime registry.
Comparatively speaking, Ukraine’s light manufacturing industry is significantly underdeveloped and considerably smaller than the heavy industry sector. However, the industry has great growth potential owing to Ukraine’s highly educated work force and cost efficiency.
The industry currently has a wide profile with selective hubs of manufacturing in such areas as pharmaceuticals, electrical equipment, plastic and rubber products, food processing and textiles. The latter two, in particular, have exhibited a noticeable growth spurt in the last three years.
The agricultural sector is the unquestionable leader in this regard as increasing investments are heading into the ‘value-add’ chain, and creating new opportunities in the canning industry, meat, vegetable and dairy processing. These in turn have stimulated the growth of the food specialty market, as smaller investors are increasingly venturing forward into the under-developed field of specialty products such as artisan breads, confectioneries, jams, alcohol and cottage breweries.