FT: Ukraine's Agriculture, Retail and Energy - Investment Hot Spots

KYIV, Ukraine, September 20, 2012 /PRNewswire/ --

Financial Times (FT)  issued a special report on Ukraine, identifying investment hot spots - agriculture and retail, as well as energy sector. Ukraine's predisposition to further development is attributed to vast arable lands, underutilized capacity and promising but underinvested energy potential.

"Ukraine's black earth - the chernozem - is an amazingly deep, fertile soil whose prodigiously productive capacity led the country to be christened the bread basket of Europe", begins the article on agriculture in Ukraine. The author starts analyzing the perks of investment into Ukrainian agricultural sector with the statement that "the country has close to a third of the arable land area of the whole EU, …70 percent of which is black earth up to six metres deep".

Evidently, the climate, geographical location, rail network, and labor cost create favorable conditions for agriculture in Ukraine. "It's [agriculture] the only economic sector that showed positive gains during and after the global financial crisis that hit in late 2008," the British paper quotes Ukrainian expert Bohdan Chomiak. He also noted that at present the sector had been working on 40 percent capacity.

In its article "Foreign direct investment: 'Risky' state also has its attractions" the paper highlights the positive business experiences such global leaders as fast-food chain McDonald's, supermarket chain Metro Cash & Carry, and food producer Kraft Foods had in Ukraine. McDonald's invested more than USD 200 million, and now one of its restaurants in Ukraine ranks second most visited in the world - out of its 33,500 joints. Since 1995 Kraft Foods invested USD 200 million into Ukraine, making it one of the top ten priority markets for the company, according to the local Kraft representative.

The special report article focusing on Ukrainian energy highlighted opening up of the "underinvested but promising" energy sector to the international companies. Author Roman Olearchyk noted the irony of the effect that high Russian gas prices caused - they "helped to change Ukraine's investment policy for the better".

ExxonMobil, Royal Dutch Shell, Chevron - world's top energy companies - recently entered Ukrainian market. Shell executive Graham Tiley expressed belief that Ukraine could provide more energy resources from its domestic production. He appreciated open and transparent tenders held to choose investors.