Quality, uniqueness and reliability: the main advantages of exporting products from Ukraine

Drastic changes in the global economy, caused by significant constraints due to the coronavirus pandemic, are forcing companies around the world to reconsider their business models.

Alternative approach in doing business also applies to Ukrainian producers, who are seeking to explore new markets. Until now, buyers and importers used to consider specific requirements as for the quality, while formulating or seeking a quote. However, the situation has changed over the last year. Buyers now pay much more attention to the reliability of suppliers, product quality and further cooperation opportunities, with the expansion of the range prospects in mind.

Given all this, let us relay our experts point on what are the main advantages of exporting products from Ukraine.

Resource opportunities. Ukraine is the one of main suppliers of food products and agricultural products to the world market. Ukrainian enterprises are extensively shifting from the supply of raw materials to the creation of a finished product. It is the observance of product quality requirements, at a competitive price level, that makes it possible to supply our own products both to the market of developed countries and to markets that continue to develop.
Logistics issues. Favorable dispisition creates competitive advantages for Ukrainian businesses. This provides for the development of sales and production chains creation with companies from around the world. Importers from EU are seriously considering products from Ukraine as those to play major competitors in quality and at the same time remain considerably inexpensive while compared to their EU rivals.

Strategic partnership. The threat of insufficient food supply and safety is being increased year by year.That is why products of Ukrainian origin can help meet demand in different markets around the world, making food and other products more affordable.

The uniqueness of the offer. The changes caused by the global coronavirus pandemic have led to increased demand for higher quality products with unique properties. That is why Ukrainian producers occupy new niches, creating products with unique characteristics, especially in the field of food. At the same time, the development of information technology and the creative industry provide new tools and approaches for communication and the creation of new products that can meet current demand in a particular market.

Openness to cooperation. Obtaining an association agreement with Ukraine from the EU creates preconditions for Ukrainian companies to export their own products to the markets of these countries. Ukrainian producers and suppliers entering the develiped countries markets indicates the improved Ukrainian products quality. At the same time, companies from EU opt to consider Ukrainian companies as their strategic partners for the supply of both finished products and raw materials for their own production.

Reliable partnership. Due to the fact that more and more countries are interested in Ukrainian high-quality products, there is a significant demand for it. That is why the Invest.UA specialists actively collaborate with export-minded customers and suppliers from Ukraine to establish reliable trade relationships between them in a variety of fields: from food products such as honey or meat to wood and metal products. The team of experts not only has a thorough understanding of Ukrainian legislation to minimize the risks of export operations, but also enjoys their profound domestic market expertise and insights, which allow to identify highly reliable suppliers shortlist to satisfy and meet customers' needs.

Why Ukraine: Top Five Reasons to Invest in Ukraine

A developing country seeking to attract investments from oversees offers multiple and untapped opportunities for so many businesses. Ukraine is much more the rule rather than an exception, the fact which makes the most potential investors to join those who are the biggest contributors to the Ukrainian economy current development.

Below is a pros shortlist to give a bigger picture for an investor:

1. Developing Economy

Historically, the country joined the world’s democracies community back in 90ies, establishing its independency almost 30 years ago; now it is only a start to forging the carcass of its growing economy. The reality is that the Ukrainian market will give lots of free niches while having only a few competitors at the same time. This makes the economy flexible enough to provide foreign businesses with plenty of opportunities.

2. Skilled Human Capital

Ukrainians should be considered as one of the most educated work force in Europe with more than 45 million people residing in Ukraine; over 70% of these enjoy their secondary and higher education. Here we observe the educational centers in the largest cities, the list goes with such biggest cities like Lviv, Odessa, Kyiv, Kharkiv, and Dnipro included. Here there are hundreds of thousands highly educated, naturally gifted and skilled young people willing to obtain their higher education diploma to get the access to some greater job opportunities.

Among these, the biggest share belongs to the potential employees who are technically educated (math-, science-, and computer graduates) which makes approximately 10% of the total. After having graduated, the significant part of these would join the IT sector to add to the already huge skilled workers with technical background pool.

3. Low Cost Labor

Due to the fact that the Ukrainian Hryvnya has slightly devalued recently, the country became one of the most competitive environments thanks to the low cost labor opportunities. Same situation proved for the raw materials and any other resources available (production costs, water supply, power supply etc.) at the much cheaper cost than in any other developed country.

4. Key Markets Access

Ukraine is actually favored as the one of the most attractive hubs to ensure access to the European and Asian markets and to the Black Sea basin where the most potential sea ports are capable of large vessels reception and service.

Ukrainian transport communications developed network means over 22,000 kilometers of railroad pathways together with 20 passenger airports; this is the key to efficient and up-to-date logistics business option.

5. Huge Foreign Investment Demand

Since the country seeks each and every opportunity to boost its economy, the attractiveness of its markets has been recently increased by the following factors:

  1. Deep and comprehensive free trade agreement with the European Union;
  2. Friendly business environment shall be created due to the recent Ukrainian efforts to adopt an array of favorable legal initiatives within the frames of Ukraine – EU Association guidelines. The EU will back up for the adoption and faster implementation of such;
  3. The Ukrainian government created the “National Investment Fund of Ukraine”. The latter will considerably improve the attractive image of Ukraine as for investment opportunities, reduce the challenges potential investors from oversees are currently facing, as well as it will further contribute to the development of international economic collaboration.
  4. One more Ukrainian resource so far dramatically underestimated and underutilized, this is about fertile agricultural purpose land of the country. After the private sales of agricultural land are legalized, the forecasted price of it will presumably rise several times.
  5. To do business in Ukraine now is much easier thanks to the recent positive changes with public services and innovative ideas being implemented like services digitized, the market being transformed to more predictable and hitting higher world bank rates, now climbing up another seven steps to ranks 64 with the Ease of Doing Business ranking out of 190 countries.
  6. Now Ukraine is witnessing foreign direct investment inflow in the amount of USD 16 billion, resulting in the creation of thousands of new jobs and launching hundreds of manufacturing plants.
  7. One of positive changes for better business environment operation has become the implementation of the electronic public procurement system ProZorro – the one which makes it all transparent and allows for all kinds of businesses participation in public procurement; less red tape and no more “connections matter” context!

At present the privatization process is going on in Ukraine. The privatization of the state objects is carried out through Prozorro auction system.

We are a company to have been successfully preparing, supporting and administering the clients who are the participants in the Prozorro electronic auctions system for a long time.

To carry out the aforesaid activities, we received the appropriate accreditation with the Prozorro system for all categories of auctions, as well as we got the official permission to act so issued by the fund for guaranteeing deposits of individuals.

What is Prozorro?

The Prozorro system was created by the state with the aim to trade its property in strict compliance with the law requirements and legal procedure that is to exclude any illegal operation and corruption.

This electronic auctions system allows for the legal purchase of property belonging to the state of Ukraine (for example, how soon or when it will be for sale…)

Why us?

Our team includes thorough professionals who are well-versed in the Ukrainian legislation and who have all the necessary experience to fully facilitate the process of participation in the auction for you and make it as much comfortable as possible.

For this, our team creates optimal conditions for the client for making settlements within Ukraine with the following options to choose from:

For which purpose our Company will perform like follows:

The current status of all matters is that despite the pandemic, latest lockdown challenges and issues, as well as irrespective of all issues connected to economic downturn, capital investment in the IT industry in Ukraine, for instance, for the year of 2020 increased up to USD 571 million. And 2021 should become even more active for Ukraine in terms of attracting investment.

Privatization in Ukraine

The process of privatization of state-owned enterprises in Ukraine is currently underway. The main goal of this is to increase the efficiency of the use of state property, and to privatize the assets that are not relevant to the state, in other terms to sell them at open auctions. There are more than 3.5 thousand state-owned enterprises in Ukraine. Many of them are not used effectively enough or are a “burden” for the state. State-owned companies are totally capable of generating significant gross revenues, but the financial outcome is now minimal compared to other companies in the same sector. This is due to the inefficient and even corrupt activities of the management of these enterprises. All the above factors justified the privatization of state-owned facilities in 2018.

The below are some of the main success indicators to be concerned when it comes to the Ukrainian privatization specifics, which are definitely worth noting:

1) Revolutionary new approach

The process of privatization of state property in 2018-2021 is significantly different from the privatization that took place during the previous years of Ukraine’s independence. Previously, the privatization of state-owned facilities was carried out by signing investment agreements between the state and private investors, subject to the implementation of the investment plan. Quite often such a privatization procedure failed, and neither the state nor investors have benefited from it. However, for the period 2018-2021, privatization takes place through the sale of property rights to the object and the new investor becomes the full owner of the privatized enterprise.

2) Bidding transparency

All stages of the privatization process are being currently realized using the ProZorro.Sales system, which is nowadays recognized as one of the most adequate and efficient digitalized selling platform in the world. Here, fair and open bidding procedure is ensured by conducting electronic auctions, which system contributes greatly in open and transparent auctions with no interference in bidding procedure.

3) Massive state-run companies list

The list includes state-owned enterprises to be sold through state privatization from various industries and businesses. Energy, transport, chemical, machine-building, tool-making, construction/building, agricultural, mining and many other industries are on the list for privatization.

4) Investment -attractive assets/facilities pool to choose from

Most of the state-owned facilities enjoy their developed infrastructure, highly-potential material and technical base, having preserved their scientific potential and qualified employees. These all require some more sophisticated approach and more efficient management. The telling story to confirm the fact could serve that of the JSC United Mining and Chemical Company. The latter, being manufacturer of titanium and manganese ores, after the change of management, increased its net profit by 6 times – up to UAH 600 million. This is just one example of how such advanced management approach affects the net financial performance of state-owned enterprises.

Conclusion

Privatization in Ukraine is not a permanent phenomenon, as the use of a transparent asset sale procedure creates a high demand for investment-attractive enterprises, and there is interest on the part of the state leadership to sell enterprises that are not of strategic importance to Ukraine. At the same time, privatization offers significant opportunities for investors from around the world not only to maintain their own investment capital, but also to increase it.