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Ukraine hopes more investment will be lured to its battered economy, including from European companies as post-pandemic supply chains face reformatting.
Production of mattresses and furniture are already planned, Bloomberg reports.
"Asia was the world's leading production venue," Sergiy Tsivkach, head of a state-run UkraineInvest agency, said in an interview. "But because of the coronavirus, it became clear that long supply chains can impact contracts' effectiveness. It puts Ukraine on the map for European investors."
While Ukraine benefits from its location between Asia and the European Union, "endemic corruption and weak governance often deter foreign direct investment, which turned negative on a net basis last year amid the pandemic," the report reads.
As Ukraine economy rebounded 4.8% this year due to domestic consumption, experts and foreign creditors note that the country requires investments to ensure sustainable growth.
Read also Turkey invests almost US$3 bln in Ukraine – Finance Minister Marchenko UkraineInvest helped secure more than $600 million of investments in 2020, Tsivkach says, adding that the agency aims for $7.7 billion of deals starting in 2021, including $2.4 billion in concession projects.
The article points to a number of early dividends:
- Belgium's Monks International will build in western Ukraine a facility for the confection of mattress covers, aimed for exports;
- Denmark's furniture producer Hjort Knudsen this spring will launch construction of a new plant, where production start is planned for late summer for the European market as well as Canada, the U.S, Israel and Japan; and
- Kronospan is building a new EUR 200 million ($241 million) facility, and Black Iron sees $1.1 billion of investments into a mining and processing plant.
"Everything's in our hands – there's interest," Tsivkach said. "We should ensure comfortable conditions" for investors.
As the government seeks to improve the investment climate, investors still complain about things like documentation approvals, law enforcement, and the tax and customs agencies, as per Tsivkach.