Rivne Region

Rivne region is situated in the Northwestern part of Ukraine and occupies an area of 20.1 thousand square kilometres, that is 3.3% of the total territory of Ukraine. The region borders on Zhytomyr, Khmelnytskyi, Ternopil, Lviv and Volyn regions of Ukraine as well as on Gomel and Brest regions of Byelorussia.

In the sense of political division, the region has 16 districts, 4 cities of regional and 6 cities of district subordination.

The population of Rivne region is 1.2 million people, which is 2.3% of the population of Ukraine.

Favourable geographical position of the region contributed to the development of road and railway networks and to the developing of its natural resources.

The region is crossed by the highways Kyiv-Warsaw, Kyiv-Brest, Kyiv-Lviv and Kyiv-Chernivtsi.

The airport of Rivne is available to receive all kinds of air transport.
There are more than 615 deposits of treasures of the soil located on the territory of the region, being exploited only 80 of them. Rivne region gives about a third of all feldspar, 20% of chalk, more than 10% of kaolin, between 5 and 8% of facing stone and quarry stone extracted in Ukraine, as well as basalt, raw material for cement manufacture, mineral waters, etc. Lately the prospective for the development of the deposits of phosphate and native copper had been developed; there are positive showings of diamonds and precious stones. The priorities are: the projects efficient development of more than 100 deposits of facing stone and quarry stone, basalt, amber and phosphates. 19 of 35 located deposits of quarry stone are being developed. In the eastern part of the region there are 8 deposits of facing stone (pink and blue-grey granites), situated at the depth that makes possible their open working. It is possible to increase the extract of decorative stones (diorite, diabases and habroides).

The forestry of the region counts with the area of 853 thousand hectares, 794 thousand hectares is covered with forests; the total reserve of timber is 672.1 hectares.

The leading branches of the regional economy are industry and agriculture. The region is known in Ukraine for the manufacture of fibreboards, plywood, chemical fertilizers, cement, amber, agricultural, meat and milk products.

The main directions for the development of the agriculture are growing cereals, potatoes, processing of sugar beet, long-fibred flax and livestock breeding. The total area of the agricultural grounds is 916.2 thousand hectares.

The development of the foreign-economic activity is one of the efficient mechanism for the solving of the tasks for economic and social development and contribution to restructuring of the economy of the region its districts and cities, satiation of its market with goods and services, elevation of paying capacity of the population, introduction of new technologies and employment of the population.

One of the positive tendencies in the region’s economy for the last four years has been the increasing of the foreign trade turnover. Just compare foreign trade turnover of goods and services in 2000 (163 million dollars), 2001 (181 million dollars), 2002 (235 million dollars), and the five months of 2003 (136,5 million dollars), which is 75% (78 million dollars) more than for the same period of 2002.

During this period the export increased 57%, import 94%, respectively 62,2 million dollars and 74,3 million dollars.

The foreign trade operations with goods are performed with 80 countries of the world, 10 of them are the countries of CIS and 70 others.

The largest volumes of exportations are directed to Russian Federation, Poland, Italy, Germany and Byelorussia.

The prevailing exported goods are timber and wares made of it, organic chemistry compounds, fertilizers, cereals, electric machinery, glass and glassware.

The largest importations come from Germany, Poland, Russian Federation, USA, France, the Netherlands and Hungary.

The prevailing imported goods are chemical products, machines and equipment, paper and cardboard, mineral fuel, oil and oil products, plastic and plastic ware.

It is to note that there has been a tendency to increase the proportion of the products with high degree of processing, using latest technologies, and the decreasing of manufacture of goods made on commission.

The structure of goods exportation has overcome the period of being raw appendage of the foreign trade and to a certain degree has achieved the level of high liquid goods and deep processing.

The efficiency of foreign economic ties is greatly determined by the structure of exportation and importation which testifies the high level of economic development, technological progress and exporting and resource potential of the region.

The bulk the foreign exchange operations has greatly decreased which is the evidence of the improvement of the economic development, Ukrainian legislation, transport-storehouse, finance and bank constituents of the infrastructure of foreign economic ties.

The foreign investments to the economy of the region have reached 52 million dollars, coming the largest foreign investments from the Great Britain, Russian Federation and Germany.

A special regime of investment activity in road building and civil engineering with a flexible system of customs facilities, tax remissions, etc. is to be introduced in the five northern districts of the region in order to improve the investment appeal the region.

The region is interested in the development of cooperation and partnership with potential investments in road building, civil engineering and creating the network of joint ventures for development modern means of communication, team work for growing and processing agricultural products according to European technologies, manufacturing compact agricultural machines, light industry goods and development of the infrastructure of the cities.

COMMERCIAL OFFERS

Here is a short review of enterprises and companies of Rivne region that we believe can be a model of the efficient activity under the conditions of market economy.

JV “AD-Zoria”
It’s a new enterprise with modern technology for manufacturing glass package of different shapes and capacity according to European standards for liqueurs and other beverages. The manufacture of production that is now exported to Russia, Moldova and Baltic countries, as well as is sent to the home market, was started in 1998.

The goods produced by the plant were awarded with the highest prise at the 15th business forum in Kharkiv in 2000.

“Agropererobka” Ltd
The plan has been working since March 1995 and producing the whole range of high quality dairy products: (milk, cheese, yoghurt, sour cream) using modern European processing lines.

A stationary mini-dairy was put into service in October 1997.

A tinned food factory was commissioned in 1998 and now it is producing filling compounds for ice cream and sour milk products, jams, dressings, ketchups and fruit dough containing 35-40% of dry substance.

In May 2001 “Agreopereerobka” Ltd was awarded with the diploma of the national contest for high quality of fruit and vegetable fillers.

Production, commercial scientific-technical and innovation firm “Renome”
Main directions of activity:

Computer technologies. Development, sale and maintenance of software
In 1990 the development, supply, repairs and maintenance of technological programmed complexes, automated workplaces, office equipment as well as development and adaptation and introduction of software for all kinds of computers was started. In 1993 “Renome” created the software for the Administration of Passport Registry and Migration of the Ministry of Home Affairs of Ukraine and for the Consular Administration of the Ministry of Foreign Affairs of Ukraine hat now is used in 19 regions of Ukraine and in more than 75 countries of the world. After 5 years of work in the field of computer technologies “Renome” has become an authorized partner of the German company Fujitsu Siemens, the most powerful manufacturer of computer technology in Europe.

Complex projects for banks based on the equipment of the firm and development of software/hardware complexes for the bank systems of self-service for the population. In 1995 “Renome” became an official partner of the firm Sidemen’s Nixdorf, Europe’s largest producer the bank systems of self-service for the population. The firm offers its services for the supply, installation, linking of the bank equipment of self-service to the local and international payoff systems.

A specialized service centre for warranty and post-warranty maintenance of bank equipment of self-service was opened in the central and western regions.

Construction
A new trend was introduced in 1996, energy-efficient technologies for building, namely the Dryvit system of heat insulation and decoration of outer walls of the buildings.

“Renome” is an authorized distributor of the concern “Dryvit” and has the right to work and form the dealer network in Ukraine. He agreements on sale were concluded with the firms of Zaporizhia, Donetsk, Ternopil, Kharkiv, Poltava, Kyiv, Lutsk and Kherson were completed.

In July 2000 an agreement about dealing was signed with the German firm Caparol, the works for the outside and inside arrangement of the buildings are in process.

Trade of consumer electronics, Hi-Fi equipment and photographic wares and construction materials.

In 1994 the photographic centre “Renome” was opened, since 1996 the Technology trade Centre has been operating, where consumer electronics, Hi-Fi equipment of the world largest manufacturers is sold. In August of 2000 two new shops were opened to sell consumer electronics, Hi-Fi equipment? Photographic wares and cell phones.

“ODEK” Ukraina Ltd
“ODEK” Ukraina Ltd is the largest manufacturer of plywood, including laminated plywood, in Ukraine. The history of the company dates back to the 80-s of the XIX century when the joint stock company for the mechanical treatment of timber was organized in Orzhev. Now the plant has modern equipment of the Finnish company “RAUTE” with the productivity of 50 000 cubic metres a year. Russian birch used in the production process is the best raw material for the plywood. Among the partners of the company there are well-known companies form Germany, Italy, the Netherlands, Belgium, Austria, Denmark, USA, some countries of the Northern Africa and Middle East.

“ODEK” offers its clients two kinds of plywood: polished birch plywood and laminated plywood. The specifications for the plywood produced by “ODEK” we made up taking into consideration international standards. The production of the plant was certified at the Institute of Material Testing of Brandenburg, Germany.

The commonest field where the production is used:
- Construction;
- Confection of concrete forms;
- Construction of typical houses;
- Machine building; bus construction; car building;
- Box manufacturing;
- Furniture factories.

Packing makes it possible to preserve the production during any kind of transportation.

INVESTMENT OPPORTUNITIES

According to the statistics, the total of the foreign investments attracted to the economy of the Rivne region achieved by July 1, 2003 52 million USD that is 10% more than a year ago. 73 enterprises residents of the region take part in the international cooperation.

The most investments came from the United Kingdom (31 million dollars), Russian Federation (11 million dollars), USA (2.4 million dollars) and Germany (1.4 million dollars). The share of these countries in the whole of the investments is 88%. 44.5 USD of foreign investments account for each inhabitant of the region.

As examples of efficient utilization of the foreign investments for the last years we can mention the most modern in Ukraine and the whole CIS glassware plant JV “AD-Zoria” that produces goods corresponding to the European standards. The plan was put into service thanks to the investments of the European Bank for Reconstruction and Development and of a Canadian company. The plant supplies exclusive production for a number of Ukrainian and foreign companies.

It was foreign companies that helped to organize the supply of modern goods and services from the JV “Rise-Invest”, from “ODEK Ukraina” LTD, from the firm “VIC-Expo” and Klesiv State Forestry.

Thanks to the 1.2 million dollar investments from Moldova the firm “Dubnonasinnia” LTD specialized in preparing sugar beet seed is operating in the region.

An important issue for the region is getting funds for such important projects as “Introducing modern technologies for manufacture of hard thermo-insulating mineral basalt wool slabs” (“Komunenergia”), “Reconstruction of ammonia production on the base of energy saving technologies” (OJST “Rivneazot”), “ Introduction of manufacture of energy saving bulbs Prolux-mini in Ukraine” (“Gasotron”, Rivne).

To succeed in solving its socio-economic problems the region is in need of foreign investments.

According to the concept of the investment program for the steady development of Rivne region during the period of 2001-2010 (approved by the Head of the Regional Administration on August 21, 2001, order ¹ 543) that comprises 132 projects, the need of the region for the investments amounts to 112 million USD. The program foresees to create about 7 thousand and to preserve 13 thousand work places.

The meetings of the agents of the economical activity with the representatives of Ukrainian and international establishments for innovation, investment and credits were put into practice in order to contribute to the development of the investments of the region.

The information about the investment projects and business offers of the enterprises of the region are permanently spread at exhibitions, business forums, through the Internet and Offices for Trade and Economy at Ukrainian Embassies. In December 2001 Rivne region was represented at the exhibition “Industry of Ukraine: investment potential” within the Second International Forum of Economic Cooperation “Partnership for consent and development”.

The main factor affecting the process of foreign investment into the region is the lack of the steady legislative base, technological backwardness of the most of the enterprises which produce non-competitive goods, undeveloped regional fund market, undeveloped system of warranties for returning funds to the investor, lack of efficient mechanism for the protection of the foreign investors’ interests.

Being the tasks of stimulation of the market of capitals and activation of non-bank financial establishments (pension funds, insurance and leasing companies), the system of investment risk insurance, efficient protection of the foreign investors’ property solved at the governmental and legislative level, the conditions for business and investment activity will improve.

DEVELOPMENT OF SMALL AND MIDDLE BUSINESS.

The complex support to the development of small business, development of the infrastructure for the small business are the foreground task of the local authorities. This matter is attended by number of bodies, such as Rivne regional Business Centre, Centre of Regional Development, Rivne Chamber of Commerce and Industry, Centre of Scientific, Technical and Economic Information, Rivne branch of the Ukrainian National Fund for the Support of Farms and 29 social associations of enterprises.

The crediting of small and middle business is effectuated by the state and commercial banks of the region and at the expense of foreign funds. For the last year the banks of the region granted 580 million hryvnias to the agents of small and middle business.

Between June and August of the current year Rivne Regional Business Centre together with Rivne Regional State Administration, representative office of the State Committee for Business and with the financial support of the project “BIZPRO” in Kostopil, Goscha and Radyvyliv districts and in the city of Rivne held seminars and trainings about opening business for the unemployed citizens who want to go in for business.

On June 27, 2002 the meeting of the “round table” took place on the occasion of conclusion of the project “My business – my success” run by Volyn Business Association “21st century” and directed to the solving of the unemployment problem and improvement of the social situation of women of Rivne region. In the frame of the project women obtained 600 consultations on running business, 145 participants of the project were involved in the seminars on the foundations of business undertaking. The project was held within the program “Winrock International” (USA).

In order to energize the development of business in the region the following foreground tasks were set:
- Implementation of new technological lines based on the complex usage of local resources;
- Introduction of modern technologies of production, storage and processing of agricultural products;
- Development of social infrastructure;
- Development of services for tourism (hotels, pensions, rest homes);
- Implementation of modern communication systems and information technologies;
- Solution of ecological problems of the region;
- Training, retraining and professional development of the staff for private enterprise.

REGIONAL COOPERATION

One of the foreground tasks in the sphere of cooperation for the region is the development of direct ties with trade partners at the level of regions, which will contribute to the widening of the cooperation and increasing of goods turnover.

Up to date Rivne Regional Administration concluded a number of agreements at the interregional level, among them the agreement about trade and economic cooperation between Rivne region of Ukraine and Warmino-Mazurske Province of Poland.

This agreement foresees the contribution to the establishment of joint ventures, trade firms, commercial centres, evaluation of the possible investment projects, establishing the system of direct currency and financial clearing-off.

According to the prospective tasks determined at the third Polish-Ukrainian forum held in Poland and in pursuance of the agreements reached at the meeting of the governors of the Polish provinces and heads of the Ukrainian Regional Administrations and agreements between the delegations of Rivne State Administration and Warnino-Mazurske province a regional commission was appointed to prepare the program for the realization of the articles of the signed agreement which will be sent to the executive structures of Warmino-Mazurske province to be coordinated.

The student exchange takes place between the universities of Rivne and Varmino-Masurske province the Days of Polish Culture are held, the cooperation in the field of tourism is developed, the contacts between the agents of the economic activity has been established in the agro industrial field, in the processing, chemical and food industry.

In order to activate the work of the agents of economic activity a visit of an official delegation of Rivne region has been planned to Poland in the frame of the program of interregional and international cooperation to sign the agreed documents about the further development of the cooperation.

The Protocol of Intentions about the cooperation was signed with a number of cities of Warmino-Mazurske province of Poland was signed during he Second Forum of Partner cities of Ukraine and Poland.

Poland is one of the most important economic partners of the region. For the last years the increase of the foreign trade turnover between Rivne region and Poland (compare 9.1 million dollars in 2000 with 11 million dollars in 2001 and 31.7 million dollars in 2002). According to the taxation authorities there are 23 Ukrainian-Polish Joint Ventures. The foreign trade ties with Poland are maintained by about 70 firms of different forms of property.

A number of agreements with Orenburg, Briansk, Rostov and Astrakhan regions of Russia were signed in the frame of Ukrainian-Russian cooperation; an official delegation of the heads of Trade and Economy mission and the Consular office of Russian Federation visited Rivne. We have trade and economic ties developing at the level of interregional cooperation with Murmansk, Nizhniy Novgorod and Novgorod regions of Russian Federation. There are 41 enterprises with the share of Russian capital registered in Rivne region. The amount of Russian Federation investments into he province’s economy comes to 11.1 million dollars.

The analysis of the dynamics of foreign trade with Russia proves the stability of economic ties between the enterprises of the region and those of Russian Federation.

The statistics for the last 3 years show that Russian Federation maintains the position of one of main trade partners of Rivne region.

The actual situation of trade was discussed during the meeting of representatives of business circles, enterprises and agents of economic activity of Rivne region with the Trade Representative of the Embassy of the Russian Federation in Ukraine. The Parties exchanged business-like suggestions. The Russian Party announced the agreement about the creation of Ukrainian-Russian Investment Centre and its regional representative office in Rivne and about assembling specialized trucks “GAZEL” on production and technical facilities of the region.

In pursuance of the resolutions of the mixed Ukrainian-Russian commission for the activation of trade and economic cooperation, the base of electronic addresses of business institutions and enterprises of Rivne region interested in bilateral cooperation was made up.

In the network of bilateral long-term economic cooperation between Ukraine and Byelorussia for 1999-2008 and in pursuance of measures foreseen by the Program, the governing body analysed the situation of foreign trade operations between the region and Byelorussia.

Traditional goods of local producers prevail within the structure of foreign trade operations with Byelorussia: stone, crushed stone, chemical fertilizers, raw basalt, Portland cement, polished chipboard, agricultural and industrial products.

Three Ukrainian-Byelorussian joint ventures operate in the region. There were no Byelorussian investments into the economy of the region.

Commercial and Economic Representation of the Embassy of Ukraine in Byelorussia presented suggestions of the Chief Administration for Agriculture and Foodstuff about establishment of mutually beneficial economic ties between the producers and consumers of agricultural products.

The Byelorussian Party has not yet confirmed their willingness to sign the prepared projects of Agreement about trade, cultural, scientific and technical cooperation between Brest and Rivne regions.

The Administration has constantly taken organizational measures to involve the enterprises and firms of the region in the specialized forums, exhibitions and seminars taking place in Byelorussia.