CAPITAL PLACEMENT IN UKRAINE: AVAILABLE OPPORTUNITIES TO INVEST IN THE UKRAINIAN ECONOMY

1. Development and management of large scale entertainment centres

Case study:  Ukraine presently sees intensive development of restaurant chains and night clubs.  There is also strong demand for fitness centres, tennis facilities, swimming pools, and water parks.  A solarium recently launched in Kiev has already built a stable client base. 

Furthermore, Kiev still lacks a full-service golf course, although numerous studies and estimates have been completed in the recent years to justify importance and economic viability of such a project for the city.  Equally attractive would be development of multiplex cinemas located close to large residential neighbourhoods.

2.  Development and management of hotel projects

Case study:  Prices for hotel services in Kiev are as high as in EU countries, with demand growing incessantly.  For its 3 million population Kiev has a very limited number of hotels whose availability is rather constrained, prices high, and service leaving much to be improved.  Thus, there is a great potential to enter the market and capture its serious share.

3.  Development and management of suburban cottage neighbourhoods

Case study: Price growth tendency on the suburban house rental and purchase market has remained stable for many years.

4.  Development of recreation venues in the Carpathians, the Crimea and other picturesque locations of Ukraine

Caser study:  Privat Group actively invests on this market buying out ski resorts in the Carpathians.  Three years ago, investors from Donetsk poured serious capital in Crimean seaside resorts.  Another source of investment into Crimea is the Russian capital, like that of National Reserve Bank (related to Russia’s Gazprom).

5.  Development of commercial apartment buildings in kiev

Apartments in these buildings will be for rent for extended terms.

Case study:  Rental for residential properties in Kiev have grown for many consecutive years manifesting shortage on the residential estate market in both Kiev and other large cities of Ukraine.

6.   Development and subsequent management of container transhipment dock at a Ukrainian seaport

As an alternative, transhipment dock for other cargoes could be considered.

Case study:  While cargo traffic continuously grows investment into port infrastructure development still remains rather inactive.  Therefore new capacities with acceptable rates will be welcome.

7.    Agribusiness and agricultural output processing complex in one of Ukraine’s regions

Ukraine has two serious competitive advantages on the global agricultural market: very favourable climate and fertile soils. 

Case study:  A number of modern agribusinesses successfully function in Ukraine operating with high profitability and continually increasing output volumes.  However, market of agricultural production and processing if far from saturation.

8.  Development of new airports facilities or retrofitting existing ones for private aircraft docking and servicing

Case study: Liberalisation of small aircraft use in autumn 2004 has caused growth in small private aircraft traffic.  A special suburban club with a runway, maintenance and service facilities, a hotel and facilities for sports and entertainment will for sure attract attention of aviation amateurs. 

9.   Development and subsequent management of chain of special marinas with hotels and small ship maintenance and service facilities

Such projects may be located both along the Black and Azov sea coasts and on larger rivers and water intakes in their basins.

Case study: A number of yacht clubs exist near Kiev and in Crimea, however all of them lack decent service level.  At the same time, the number of expensive yachts in the country grows at a rapid pace.

10. Development of supermarkets in regional cities

Case study:  According to managers of existing supermarkets, such projects reach payback within 2 years.  Actual profitability often exceeds 50%.

11. Development of economy class residential estate in suburbs of large industrial centres to let and for sale to people who migrate to industrial localities from remote places in the country.

12. Development of Formula 1 training and race track

The number of motor sport devotees is increasing continually in Ukraine.  On the other hand, there is lack of comfortable venues (with tracks, hotels and other ancillary facilities) for admirers of various types of motor sport.

13. Development of a large wind park

Wind energy facilities are known to have longer than average payback terms.  On the other hand, while windmills are still sparse in Ukraine there is a chance to secure economically more attractive locations for their development.  These locations, practically always subject to strong winds, are mostly located in the Crimean and Carpathian mountains.

14.  Production of mineral resources from spoil dumps of large industrial facilities or development of new deposits

Spoil dumps of large industrial enterprises having 100 and more years of age nearly always contain metals whose production from slag has become technologically viable only 20 to 30 years ago.  A number of enterprises in Ukraine have been successfully exploiting spoil dump reserves; development opportunities are still present on this market.

15. Wood mills development and management

Most timber is still exported from Ukraine in raw logs.  Accordingly, there is an immense development potential for wood mills, paper mills, and furniture productions.

16.  Establishment and management of software development centres

Case study:  Ukraine has over a dozen firms of this kind whose principal resource is massive professional workforce market.

17. Establishment and management of a construction contractor and ancillary companies

All sector experts share the opinion that construction market in Ukraine will be growing rapidly in 5 to 10 years to come, and that today’s development volumes are far from those typical for a 50-millionn nation having a medium development level.  Hence availability of a large construction company with a set of ancillary businesses (sand and granite quarries, cement plant, design office) would facilitate implementation of some of the above projects and would allow to contract other jobs across Ukraine.

18. Rehabilitation of Ukrainian industry production chains disrupted by crisis

It is known for a fact that as the result of economy crisis of the early 1990s a number of productions were forced to stop release of certain products because of dropout of allied enterprises from relevant production chains or due to shutdown of critical production facilities.

As an example, Zaporizhzhya Titanium and Magnesium Mill stopped production of titanium metal and silica. 

Furthermore, Ukraine possesses serious reserved of Uranium ore that may be processes into fuel for nuclear power reactors of which there are plenty in Ukraine, Russia, and the EU.  There are mothballed Uranium mines and enrichment facilities in Ukraine.  Activating this project takes recovery of existing facilities and development of a few new ones.  Design of a nuclear power plant fuel production facility was completed more than 10 years ago but remained on paper due to lack of finance.

Development of slow proton nuclear reactors

Both Russia and the USA possess a state-of-the-art nuclear reactor technology designed to use not only cheaper nuclear fuel but also spent nuclear fuel from earlier generation reactors.  Such spent fuel stockpiled worldwide should be enough for decades of operation.  Considering friendly relations between Ukraine and Russia this advanced technology could be made available to Ukraine provided there are funds to support its implementation.  Realisation of this technology in Ukraine could be strongly supported by specialised research institutions in nuclear energy, as well as by a developed nuclear power plant workforce market.  Furthermore, the project will enjoy international support as the new reactor type is substantially safer that the existing nuclear power units. 

Kryvyi Rih oxide material dressing mill project

A major ore-dressing mill was launched in Kryvyi Rih in the early 1980s with involvement of some East-European states.  Today, the facility is 90% complete; its finalisation takes to buy-out the share of the government who has no money to complete the mill and to fund commissioning and completion works.  The facility is unique by a number of parameters as it allows to extract all mineral resources present in ore. 

Development of prospective deposits of coal in Donetsk industrial region and rehabilitation of potentially attractive mines

Albeit most of government-owned coal mines in Donbass make loss the region still has some serious easily recoverable coal reserves, as well as some potentially profitable mines shut by the state thoughtlessly that if rehabilitated could show viable results.

Production of oil and gas offshore the Black Sea and the Sea of Azov

This area is known for substantial proven reserves of hydrocarbons.  The principal reason for low production rates is lack of serious cash needed for full-scale exploitation of the available reserves.