Zaporozhye region
The area: 27 200 sq. km.
The population: 1,918 mln inhabitants.

Zaporozhye region is considered to be one of the most attractive regions of Ukraine for investing due to its industrial potential, natural resources, own energy resources, highly developed scientific and technical potential, well developed transport infrastructure and developed banking system, access to the markets of Ukraine, CIS, Europe and Asia countries.

The geographical location

Zaporozhye region is situated in the south-east of Ukraine. Due to its strategic position the region is equidistant to both European and Asiatic markets.

Its area is 27 200 sq. km, i.e. 4.5 % of the Ukrainian territory. It stretches for 208 km. from the north to the south and 235 km. from the east to the west. The southern borders of the region are washed by the Azov Sea with its coastline of more than 300 km.

The distance from Zaporizhzhya to the capital of Ukraine Kyiv-city is 715 km by railway and 618 km by motorways.

Through the territory of the region flow 109 rivers, including important Ukrainian transport artery the Dnipro River which is the third biggest river in Europe.

Dnipro River is the main source for: water supply of regional industrial objects, including such giants as Zaporizhzhya nuclear power station and Zaporizhzhya heat power station; drink water supply for the 50% of regional population (90% in perspective); irrigation, etc. Except this The Dnipro river is used as an energy source (Dniprivs'ka hydro electro power station), transport way, and precious health resort and recreation resource.

The source of the Azov sea (in particular its northern part) is valued as a fishery, tourist and health resort area.

By the amount of the natural recourses Zaporizhzhya region takes one of the leading places in Ukraine. According to The State resource balance it is accounted for 25 types of minerals, it's investigated 131 layers, 114 layers are taken stock of by The State balance, and 36 of them are in operation. Rich sources of iron and manganese ores, granites are concentrated in the region. The share of the region in total Ukrainian stocks of mineral raw materials is: pegmatite - 88.06%, apatite - 63.42%, manganese ore - 69.1%, iron ore - 10%, secondary kaolin - 22.9%, fireclay - 8.6%.

Zaporozhye region supplies for the internal and external markets iron ore, kaolin, refractory clay, molding sand, construction and facing stones. The prospects of developing of new minerals (gas, graphite, gold and diamonds) are determined today.

The region has promising gas layers, and one of the main is Azov gas layer.

One of the biggest through world the Bol'she-Tokmaksky layer of manganese ore is found on the territory of Vasilyevsky and Tokmaksky areas. According to geological data the ore reserves compose 70% of the Ukrainian ones. The average contents of manganese in the ore is 25.8% (for the comparison: on the Nikopol' layer - 23 %).

The region is mostly plain. The soils are predominantly fertile "black earth" varieties.

The climate is moderate-continental and is characterized by the clear defined droughty. The average annual temperatures are: summer + 22 C0, winter - 4.5 C0. The average number of sunny days is 225; the average annual precipitation level is 448 mm. Such climatic conditions are favourable for the development of agriculture, health resorts and tourism.

The infrastructure and communication

Zaporozhye region has a developed transport system.

Motorways (total length - 6683 km) connect all urban and rural settlements. Through the region run a number of strategic routes: Odessa - Melitopol' - Novoazovsk, Kharkov - Simferopol - Sevastopol, Borispol' - Dnepropetrovsk - Zaporozhye. The major regional industrial centers have railway links with other parts of Ukraine, CIS and European countries.

The large part of cargo and passenger transportation is possessed by motor and railway transport. The number of agencies providing international auto transportations is constantly increasing.

A large navigable artery - the Dnipro River, which flows from the north to the south, plays an important role in the Zaporozhye transportation system.

The significant part of freight flow in the region passes through Zaporozhye River Cargo Port, which specializes in processing of industrial cargos.

Berdyansk seaport (on the Azov Sea) is a marine gate to Zaporozhye region. Terminals and other portal equipment allow to receive and store all kinds of cargoes (except liquids) and to serve all types of ships including river and ocean ones. The cargo can be delivered by the railway from the port to any region of Ukraine.

An important role in the regional transport system is played by Zaporozhye regional international airport, which takes one of the leading places in Ukraine by the passenger turnover. Zaporozhye airport is one of few profitable airports and constantly increases its service range. Also there is Berdyansk international airport.

All kinds of communication are developed in the region. Zaporizhzhya has wide telephone network. Mobile and paging systems are developing actively. The digital telephone station was implemented in Zaporizhzhya. Internet is available in online mode. There are several powerful e-mail servers.

The role and place of the region of the state economy

Zaporozhye region is one of the Ukrainian regions that make a basis of its economic and intellectual potential.

The basis of the regional industry is formed by metallurgy and power generating complex, which produces 13% of Ukrainian total steel and rolled metal, 12% of the cast-iron, 70% of automobiles through Ukrainian total index, 29% of the electric energy and almost total amount of primary aluminum and titanium sponge.

The region is the leading center of domestic aircraft engine production, carrying out of passenger automobiles, transformers and other high-technological products which are the firm Zaporozhye sign, world quality and reliability brand.

The regional industrial potential fortifies itself by a significant quantity of branch scientific research, drawing and designing institutes which are entirely capable to render the definite assistance in the realization of the innovation development state policy.

The Zaporozhye region economy is in the state of stable increase.

The resulting industrial production index of 2003 reached 132% against the basic 1990 year. The increase index for 8 months of 2004 composed 19% (the highest index among industrial regions of Ukraine). The high dynamics in the base industrial branches remains.

The machine building development to which belongs the leading part in the guarantee of scientific and technical progress is speeded up. The output increasing in this branch exceeds by 2.5 times the average level in the industry and comprises more than 47%. The absolute leader of machine building is Limited JSC "Zaporozhye automobile plant" with foreign investments that in the present year has increased the production volume by 80%.

The production output of the metallurgical complex for 8 months of the present year composed almost 13%. The metallurgical enterprises of region are realizing the large-scale technological reconstruction. The structure of metallurgical complex is being improved on level with the increasing of production competitive ability and production amount. In particular, the increase rates of the merchant bar stock output are higher than cast iron ones.

The important factor of industrial increasing is the making more active the international economic activity.

From the beginning of the year the export of goods has increased by 37% in comparison with the corresponding period of 2003. The tendencies of export increasing of products with higher degree of working out, and also science-intensive production are strengthened.

The high dynamic of developing of definite branches that make their activity in the internal market is provided. The production volume in the light industry has increased by 37% in comparison with the corresponding period of 2003, and in the foodstuff industry - by 20%.

The volume of the retail turnover stably increases: by 33% in the actual measurement, 21% in the comparable prices, that fact indicates an increase in demand and in buyer ability of population.

The important part of regional economy is the agricultural complex. 379 economic communities, 81 cooperatives, 2409 farms are privately managed. The infrastructure of agricultural market intensively develops. It is used the leasing system in order to realize the technical modernization in the agriculture.

The central place in the plant-growing structure is taken by grain growing. In the present year the gross yield of grains (without corn) has composed 1738.0 thousand tons, that is almost 4 times more than last year with the average productivity of 27.19 c/ha.

It is possible to establish a stable increase of the investments into the fixed asset as the basis for the technical renovation realization of the main production capacities and innovation development.

Due to all financial funds in the 1st half of 2004 about 880 mln hrn are worked out, that is by 22.8% more than in corresponding period of 2003. The implementation of the special-purpose programs of the house-building are activity continuing: "Rural yard", "Accessible habitation to young Zaporozhye family".

The building of the social sphere units, housing and utilities economy, water and gas supply objects of the rural areas are constantly continuing.

At that foreign investments are one of the essential financial sources.

The Zaporozhye region takes the forth place among the Ukrainian regions for direct foreign investment amount. In the region economy 6.5% of total attracted foreign investments are worked out ($478 mln, including $476.1 mln of direct foreign investments).

The stable increase in the real sector of the region economy is connected with the positive dynamics of the social development rates.

The Zaporozhye region takes the third place in the Ukraine (after Kiev and Donetsk region) for the salary level.

In January-August 2004 the average monthly salary composed 641.9 hrn along the region and increased in comparison with the corresponding period of 2003 almost by 24%. During August the nominal salary amount composed 680.56 hrn, which is by 76% more than the established living minimum for the labor force.

The stable situation on the labor market remains.

By September 1st 2004 the registered unemployment level has composed 2.9% and has been reduced by 0.5 percent points by the beginning of the year. 1more than 16 thousand new work places have been created, from which 8.1 thousand are in the economy branch, 7.9 thousand - in the other branches.

The industrial potential of the region

The metallurgical complex of the region is represented by the world-famous enterprises of ferrous and non-ferrous metallurgy, such as: JSC "Zaporozhstal", JSC "Dneprospetsstal", JSC "Zaporozhye aluminum plant", JSC "Zaporozhye plant of ferroalloys", JSC "Ukrgraphite", "Zaporozhye titanium and magnesium plant".

Zaporozhye metallurgical plant "Zaporozhstal" is one of the largest metallurgical enterprises with full production cycle being in the list of 80 world largest metallurgical enterprises, published by International Iron and Steel Institute (IISI).

The main production of the plant is hot- and cold-rolled sheet iron with thickness 0.5-7.0 mm of carbon, low-alloyed, alloyed and stainless steel.

To provide the different branches of the Ukrainian industry and to make the expansion for sale markets in 2003 the new metal production types are developed at the plant: the locked rectangular bent profile 140?110?7 mm, bent special profile 94?86?25?5 mm, the tin plate of the hot-dip tinning of 0.22/0.25?512 mm in the cylinders for the canning industry, five types of consumer goods of the stainless steel, other types of metal production. In the present year 3 types of new corrugated profile are developed.

In the 1st half-year of 2004 the enterprise has considerably exceeded the production plan with respect to the output amount.

The special attention in the enterprise is paid to the production modernization and the technical reequipment. Due to the of inventions', rationalizing suggestions' and licenses' implementation in the 1st half of the present year the economic effect in the amount of 37.6 mln hrn has been obtained.

Electrometallurgical plant "Dneprospetsstal" is the only Ukrainian producer of special iron and forgings of special kinds of steel, such as stainless, tool, high-speed, bearing, and also of heat-proof alloys on the nickel basis. The plant has the 70-years work experience. It produces about 800 kinds of steel, including more then 50 kinds of tool steel.

In the present year JSC "Dneprospetsstal" actively increases the production amounts. In this case the production and economic indexes are improved; the level of profitability was stabilized. For 8 months of 2004 the output amounts have composed 965 mln. hrn., that is 209% to the corresponding period of 2003. The production amount of rolled metal in comparison with the definite period of 2003 has composed 160.4%, steels - 155.8%.

"Zaporozhye aluminum plant" (JSC "ZAlK") - the only Ukrainian manufacturer of primary aluminum, alloyed alloys on its basis and crystalline silicon - has a strategic value for the state economy and security and is the monopolist at the state level.

The plant industrial capacities give the opportunity to produce about 110 thousand of metallurgical goods per year. The plant is "first-born" in the production development of many cast alloys on the aluminum basis that are used in automobile and agricultural machine building.

JSC "ZAlK" is the investment attractive and in 70% export oriented enterprise that makes the state income of more than $130 mln annually.

For 8 months of 2004 the industrial production amount has increased by 18.6% in comparison with the corresponding period of 2003.

The enterprise continues to work on the reconstruction of: 5 decomposers with the installation of the mechanical mixing up equipment, the development of utilization production of gas-scrubbing construction slimes, the putting into operation of water-reverse systems in the electrothermal shop and silicon-converting substation.

In the 1st half-year of 2004 11.9 mln hrn has been invested into the measures' realization for the technical development of the enterprise. During the year the realization of organizational and technical measures and scientific research works directed on the production development with the total expenditure amount of 31,3 mln hrn is provided.

Zaporozhye plant of ferroalloys is one of three ferroalloys producers in Ukraine, the monopolist in the ferrosilicon production (47.7% of the Ukrainian market) and the only Ukrainian producer of ferromanganese and metal manganese.

Ferro alloys have stable demand on the internal and external markets. Due to the high quality of production the plant has the wide geography of permanent users. In 2002 the plant was certified according to the international system ISO9001:2000 "System of the quality management"; Quality system was certified by transnational company Bureau Veritas Quality International (BVQI). Also the goods quality is marked off by the diploma of the State committee on standardization, metrology and certification.

The search for the engineering solutions directed toward the improvement and the automation of technological processes, the improvement in the working conditions are constantly conducted in the enterprise.

In the 1st half-year of 2004 the enterprise has invested 10.4 mln hrn into the restoration of production capacities and the equipment replacement; that is 2 times more than the last year level. The raising of the product realization level in 6 months of the present year by 11% has become the sum of such policy.

JSC "Ukrgraphite" is the Ukrainian chief producer of the graphitized electrodes for electric steel smelting in electric furnaces, thermal and other electrothermal manufactures, fettling materials on the basis of carbon for the enterprises of machine building, chemical and other industry branches.

The product's users are more than 120 enterprises in 18 countries through all over the world.

The plant goods are marked off by the National quality mark "The highest test".

"Zaporozhye titanium and magnesium plant" is the only Ukrainian manufacturer of sponge titanium. The project plant capacity is 20 thousand tons per year. The plant is an export-oriented enterprise. The basic users of the plant production are Russia, Belarus, Kazakhstan, Great Britain, Germany, Switzerland, Japan, India, etc.

Within the innovation project realization the technology of the titanium slag smelting has been optimized in the enterprise. The annual economic effect from the introduction of this technology composes 133 thousand hrn.

Within the implementation of the Complex program of the nonferrous metallurgy development for the period up to 2010 (it is affirmed by the decision of the Cabinet of Ministers of Ukraine, 18.10.1999 ?1917) it is provided 34.3 mln hrn to invest into the technical reequipping of the spongy titanium production.

Among the major achievements in the regional mining and metallurgical complex it is necessary to note the miner's work of the limited JSC "Zaporozhye iron-ore plant" - the main supplier of iron ore for our metallurgical plants.

The length of the passes at the plant composes more than 300 km. the plant widely realizes the modernization and technical reequipping of highly productive self-propelled technology on the mining works.

During August the enterprise obtained its 100-millionth ton of iron ore.

JSC "Azmol" is one of the most powerful Ukrainian enterprises for the output of chemical and petrochemical goods. The main types of the enterprise goods are: the lubricating oils - universal, automobile, industrial, railroad and special; the cutting fluid; the synthetic, mineral and motor oil, hydraulic, for the refrigerators, special.

The goods of JSC "Azmol" enjoy a constant demand in Ukraine and the CIS-countries and other foreign countries of the world.

The machine building development to which belongs the leading part in the guarantee of scientific and technical progress is speeded up. The output increasing in this branch exceeds by 2.5 times the average level in the industry and comprises more than 47%.

The absolute leader of machine building is Limited JSC "Zaporozhye automobile plant" with foreign investments that in the present year has increased the production volume by 80%.

Because of state support, active economic, administrative policy it was possible not only to increase the production volumes, but also to obtain the possibility of strategic partnership with the grandees of the world automobile construction - such companies as: DaimlerCrysler, General Motors, Adam Opel, Renault and others, to approach the scale program of the production modernization. The plant manufactures "Tavria" and "Slavuta", Opel Astra, VAZ-21093 and VAZ-21099; in 2004 the production of the passenger automobiles Opel, SKD "Meriva" and "Signum" have been put into operation.

In eight months of the present year 77.4 thousand units of passenger automobiles are output, that is by 1.8 times more in comparison with the definite period of 2003. The expected total output volume of enterprise in 2004 composes 85000 automobiles.

During September 2004 the visiting session of branch board for questions of industrial policy in the machine-building complex of Ministry of Industrial Policy of Ukraine has been carry out at the enterprise.

The successful activity of Zaporozhye automobile plant was noted at the board session as a positive example of enterprise which could adapt to the market conditions, enlarge nomenclature and production volumes.

Limited JSC "Zaporozhye automobile plant" became the winner of ІV Ukrainian competition to the title "The best employer of the year". Such a victory is the evidence of the social responsibility of the enterprise.

JSC "Motor Sich" is one of the world largest and the only enterprise in Ukraine that produce, test, track in the operation and repair 55 types and modifications of economical and reliable engines for 61 types of aircraft and helicopters of different designation, exploited in 109 countries of the world. Among them are the most powerful turbojet engines for the largest in the world aircrafts: An-124 "Ruslan", An-225 "Mriya" and An-70, helicopter engines, industrial gas turbine engines and others.

Quality system was certified by transnational company Bureau Veritas Quality International (BVQI) for compliance to requirements of the international standard ISO 9001 for production and servicing of engines, gas-turbine drives of the D-336 type and for engineering of gas-turbine power stations with the accreditation area in the USA. In 2003 the primary certification of the BVOI company quality system was carried out to correspond to the requirements EN ISO of 9001:2000.

The investment activity of JSC "Motor Sich" is directed to development, preparation for the series production of aircraft engines for modern types of planes, helicopters and ground-based technology transportation. In the 1st half of 2004 more than 14 mln hrn of its own funds has been invested by the enterprise for these purposes.

In 2004 the enterprise plans to invest into the technical production development about 50 mln hrn.

JSC "Zaporozhye transformer plant" produces practically all types of the oil, air-immersed power and distribution transformers of the general and special designation, which are used on the nuclear, thermal and hydroelectric power stations, the distributors and the substations of power systems. The plant has commercial relations with 80 countries of the world.

Zaporozhye transformers are installed on the largest industrial complexes of the CIS-countries, East Europe, India, Turkey, Iraq, Argentina, China, Egypt and many other countries; at the thermoelectric power stations with generating blocks to the ultimate capacity of 1200 MW; on all nuclear power stations of the CIS-countries, Baltic countries and East Europe.

Transformer equipment with the trade mark "ZTR" successfully works on the powerful electric lines with a voltage of 110-750 kV including transcontinental LEP "Asia-Europe", trans-European line "Ukraine - central Europe".

The programs of technical policy reformation with respect to main production expansion and renovation are developed and achieved step by step. In the 1st half of 2004 the plant has mastered the manufacture of 6 new transformers.

For 8 months of 2004 the industrial production volume has doubled in comparison with the definite period of 2003.

Energy complex

The regional energy complex is the most powerful in Ukraine. The enterprises of the regional power generating complex work out 30% of the electric power of Ukraine. In 8 months 2004 the regional energy complex has worked out more than 34.2 bln kWh.

The biggest European nuclear power station is situated on the territory of Zaporozhye region, which capacity is 6000 M. Zaporozhye nuclear power station (ZNPS) is modern, high-tech enterprise which ensures safe and non-polluted energy production. Each fifth kWh in Ukraine is produced at its energy blocks.

In 2001 the dry depository of the worked out nuclear fuel was built at Zaporozhye NPS, this act solved the problem of its storage for 50 years. The main effect of its usage is the saving of the most powerful in Europe nuclear power station consisting of the Ukrainian acting power stations.

Regional agricultural potential

Zaporozhye region is one of the largest manufacturers of agricultural products and food stuff in Ukraine.

The regional area of agricultural lands is 2247.5 thousand hectares, or 5.4% of the total Ukrainian agricultural area.

An active reforming in the agricultural branch, a fundamental rebuilding of land and property relations created the conditions for private entrepreneur development and for production increase. There are 379 economic communities, 81 cooperatives, 2409 farms. All these structures own 1904.6 thousand hectares of arable lands. The infrastructure of the agricultural market is developing rapidly. There were created 22 agricultural trading houses, 62 wholesale markets, 54 operating cooperatives, 178 stores with definite trade marks, 8 credit unions, 535 storing up and 637 veterinary centers.

Planting takes the leading part in the agricultural structure. Its average share is 61.5%, while cattle-breeding composes 38.5%.

The central place in the plant-growing structure now and in a long-term perspective is taken by grain growing, which is a basis for the development of other agricultural branches, and especially cattle-breeding.

The main crop of Zaporozhye region is sunflower. In 2003 the share of the region in the total volume of sunflower production in Ukraine was 13.2% that corresponded to the second place in Ukraine.

There are favorable conditions in all agroclimatic areas for cultivation of vegetables, melons and gourds.

Poultry and swine-breeding were defined as the priorities in the development of cattle breeding for the next three years.

The regional foodstuff and processing industry are well developed. The foodstuff industry keeps the fourth place among other industry branches by production volume and reached 7.2% of the total regional output volume.

There are 546 enterprises successfully operating in the region, which share in state production of main foodstuff types fluctuates from 3 to 30%. 87% of enterprises, which belong to the sphere of small-sized business, are focused on supplying the local demand with the food products (mini-bakeries, oil mills, dairies, grit cutters and others).

The goods of its own production that are able to compete successfully with the foreign ones increasingly appear in the domestic market. They are produced from the natural nonpolluting raw material and use great demand in the foreign countries.

The main factors of the positive dynamics in the enterprises' development have been purposeful and goal-directed efforts for the introduction of modern technologies and equipment. The modern materials are used for designing and packing of the enterprise output.

Definite enterprises, located in Zaporozhye region, are among the leaders due to the output volume, i.e. "Pology oil-extracting plant", "Zaporozhye oil-fat mill", "Zaporozhye meat processing factory, "Melitopol meat processing factory".

JSC limited "Pology oil-extracting plant" is one of the largest Ukrainian and CIS enterprises that processes oil cultures. The specialists of the enterprise mastered the processing of sunflower, soy, rape and palmcrist seeds. On the base of these seeds the enterprise produces high-quality soy-been, rape-been and castor oils.

All the enterprise's products are labeled by the "Slavia" trade-mark, which is certified by UkrSEPRO standards and rewarded by the golden medals and such titles as "The best probe", "European quality", "The best trade-mark" at different international forums and exhibitions.

The enterprises of the regional food industry are of interest of foreign investors with respect to capital investment. Thus, by July 1st 2004 the specific weight of direct foreign investments into this branch in the total amount of direct foreign investments into the region economy has composed 16% and increased in comparison with the definite period of 2003 by 8.2 percent points.

Such enterprises as JSC "Zaporozhye brewery-nonalcoholic industrial complex "Slavutich", "Zaporozhye factory of nonalcoholic drinks", Ltd "Maskom", LAIC "Khortitsa" are marvelous examples of profitable investment into the foodstuff industry and regional agriculture.

JSC "Zaporozhye brewery-nonalcoholic industrial complex "Slavutich" is a leader of the regional foodstuff industry. This enterprise is one of the five largest Ukrainian brewery manufacturers. The modern "Slavutich" is the most popular Ukrainian beer trade-mark with international quality.

The "Slavutich" share in total volume of regional production accounts for 3.1%, and its share in the total foodstuff production volume is 32.5%.

Due to investing by "Baltic Beverages Holding" Co in 1996 JSC "Slavutich" doubled its production volume.

In the fourth quarter 2003 the enterprise with foreign investments liqueur-alcoholic industrial complex "Khortitsa" began its activity that specialized in the production of vodka, nalivka, nastoyka, liqueurs, juices etc.

The investments by Danish company "Image Holding" account for $20 mln.

"Khortitsa" is the only Ukrainian industrial complex that was built according to the exclusive project at special place of a plain relief. "Khortitsa" is equipped with the outfit of well-known producers (engineering system "REHAU", pumps "GRUNDFOS", elevators "TOYOTA", highly reliable bottling lines "ITAL PROJECT"). Seven times water recycling system are carried out at the industrial complex.

In 2004 the plant plans to get the 30% position of Ukrainian alcoholic market.

The agricultural complex of the region can be estimated as extremely attractive for the investment involving. The fundamental components of the investment attractiveness of the agricultural complex are the fertile lands, the inexpensive and qualified labor resources, the significant capacities of the processing branch, the advantageous geographical location for product export.

The most attractive and profitable areas of the agricultural complex for the foreign investment are:

·       the introduction of the highly productive technologies of the agricultural crops cultivation;

·       the modernization and the renovation of the enterprises which deal with storage of grain and another agricultural production;

·       the development of agricultural machine building;

·       the production development of the effective facilities of agricultural plant protection and veterinary preparations.

Building

Building industry plays a significant role in the renovation of the fixed capital, new technologies, and the main thing is in the solution social and economic problems of the population vital activity.

Building industry share accounts for 2.8% in the regional gross added value.

Zaporozhye region has a powerful field of industrial building, which can supply its own region and neighbors with high-quality building materials. The building complex accounts for 1192 enterprises and organizations of different proprietorship types, 82.7% of them are involved in building business of the region.

For 6 month 2004 enterprises and organizations of all proprietorship forms worked out 978.7 mln hrn of capital investments, including 881.2 mln hrn - into the fixed capital, that is by 22.8% more than the level of the definite period of 2003.

Zaporozhye region was one of the first regions, which attracted foreign investors in order to realize a project of water supplying and recycling.

The Credit agreement was concluded between European Bank of Reconstruction and Development (EBRD) and municipal enterprise "Vodokanal" in March 1999 for 28 mln hrn of credit funds in order to realize the project "Zaporozhye program of investment and development of water supplying and recycling system". In October 1999 Ukrainian government ratified abovementioned agreement with the low "About ratifying of Guarantee agreement ("Zaporozhye program of investment and development of water supplying and recycling system") between Ukraine and EBRD". According to the Credit agreement the region was granted with the credit with a dead term of 2015. Nowadays 60.29% of agreed credit amount were used.

International economic activity

The Zaporozhye region is one of the Ukrainian leaders by the foreign trade volumes. The majority of products of Zaporizhzhya industrial leaders such as joint stock companies "Zaporozhstal", "Dneprospetsstal", "Zaporozhye productive aluminum plant", "Zaporozhtransformator", "Motor Sich" is directed to foreign markets.

Zaporozhye region is definitely indicated as export directed area. The specific weight of regional foreign trade turnover composes more than 10% of Ukrainian one, in this case the region ranks the fourth among Ukrainian regions by export volume of goods (7% of the Ukrainian total export) and the eighth by import volume (3.8%).

For 7 months 2004 the regional foreign trade turnover reached $1912.9 mln, 66.3% of which is export ($1269.1 mln). From the beginning of the year the export volumes have increased by 37% in comparison with the corresponding period of 2003.

The positive balance tendency of export-import operations had continued constantly. By the end of 7 months 2004 the positive balance of foreign trade turnover accounted for $625.2 mln.

Recently commodity structure of export has being changed dynamically by increasing of science intensive and highly technological production of large scale processing. This process brings geographical diversification of foreign trade.

The main export items are ferrous and nonferrous metals, electric equipment, mechanisms, chemical industry products etc.

In comparison with the appropriate period of 2003 the export of energy resources, oil and its products increased by 2.6 times, mechanical equipment, machines and mechanisms - by 40.7%, ferrous metals - by 35.9%, ferrous metal products - by 29.9%.

Foreign trade relations are maintained with partners from more than 116 countries all over the world. The most important partners in the area of international economic relations are Russia, China, Turkey, Germany, Poland, Hungary, USA and Belarus.

During present year Zaporozhye region was visited by many representatives of diplomatic missions and business communities of foreign countries (the Russian Federation, Belarus, China, Japan etc.). There were arrangements reached concerning further development of international relations of our region, creation of joint ventures, foreign investment engaging to the region economy results of these visits.

Investments in the region

In the region economy 6.5% of total attracted foreign investments are worked out.

For 6 months 2004 about $27.28 mln of direct foreign capital were invested into the region economy.

By July 1st 2004 the amount of direct foreign investments has accounted for $476.1 mln, that is by 19.5 times more than by the definite period of 2003.The region takes the forth place among the Ukrainian regions for direct foreign investment amount and the third place for direct foreign investment per citizen ($252.6).

The following branches are the most investment attractive: mechanical engineering (37.94%), metallurgy and metal processing (27.7%), foodstuff industry (16.0%), wholesale and retail trade (8.8%), mining industry (4.7%).

Among companies with foreign capital the most effectively operate JSC "IVECCO - Motor Sich", one of which founders is Italian company "IVECCO" (the volume of foreign investments is $8.1 mln); JSC "Brewery and non-alcoholic industrial complex "Slavutich", which was invested by the Swedish company "Baltic Beverages Holding AB" ($20.0 mln.); CJSC "Zaporizhzhya iron ore factory", which was invested by the Slovakian company "MINERFIN" ($20.6 mln.); liqueur-alcoholic industrial complex "Khortitsa", which was invested by the Danish company "Image Holding" ($20 mln).

For today according to the proposal the Representative of Germany economy in Ukraine it is considered the question to realize the investment project of "METRO Cash & Carry" company - the international group "Metro" is the fifth company as for its wholesale volumes. This project provides for the investment in the amount of 20 mln euro and 400 workplaces' creation.

Credit policy

By July 1st 2004 4 regional banks, 54 banking organizations of other regions, 444 departments-out-of-balance have worked out in the region; moreover the network of branches and departments constantly increases.

The nowadays activity of the regional banking sphere is characterized by the definite increasing of banking operations volumes, including volumes of the physical persons deposits, and also by the improvement of the credit portfolio quality.

From the beginning of the year the total assets of regional banks and banking organizations increased by 21.1% and by July the 1st 2004 composed almost 4.6 bln hrn.

The increase in the credit debts into the region economy for 6 months of 2004 composed 23.8% (among the Ukraine - 19.4 %), in such cases on the short-term credits - 6.1%, on the long-term - 50.8% (among the Ukraine - 30.6%). In this case, the share of the long-term credits in the total volume of crediting since the beginning of the year has increased from 39% to 47.8%.

The banks of region occupy 6th place among other regions of the Ukraine for the volumes of the credit investments.

For 6 months 2004 the crediting volumes of the real economy sector have composed 2.85 bln hrn, including: 1.49 bln hrn - the short-term credits (52.2%), 1.36 bln hrn - the long-term credits (47.8%).

According to the branch structure the greatest volumes of bank resources are directed to the development of the industry enterprises - 1030.6 mln hrn (41.4% of credit portfolio of entrepreneurs), trade - 785.7 mln hrn (31.5%), agriculture - 438.6 mln hrn (15.4%).

With the resource potential formation the banks of Zaporozhye region increasingly more orient toward to the citizen's contributions. For 6 months 2004 the average amount of the contributions per citizen in the region has increased by 26.5% and composed 659.0 hrn.

Business development

Development of small-sized business is the powerful additional factor, which positively influences the growth of regional economy. Its progress leads to the elimination of disproportions in some markets, creation of additional workplaces and reduction of unemployment. Its development also enforces the competition, fastens the saturation of the market with goods and services.

During years region had formed favorable trend for development of small-sized business.

There were 10.7 thousand of small enterprises operating in the region during 2003 year (109.7% comparing with 2002).

Among small-sized business enterprises with personnel up to 10 persons prevail and make 78.9% of total number of small enterprises.

Their total volume of product and services in 2003 reached 5.2% of total volume of product and services produced in the region (1251.8 mln hrn). The production volume growth rate is 123.7%. In some branches the share of small-sized enterprises in the volume of production is much higher.

There are very few changes in branch distribution of the small-sized enterprises: 16.4% of them operate in the sphere of real estate and servicing to juridical bodies, 14.5% - in industry, 10.1% - in construction, 4.6% - in agriculture, 3.7% - in transportation and communication etc.

About 64.2% of all small-sized enterprises have joint ownership, 32.5% are private.

In 2003 the amount of gross investment into the fixed capital of small enterprises composed 209.7 mln hrn (132% comparing with 2002), 55.2% of them was directed into the new equipment purchasing, 17% - into the capital building.

Besides the legal persons almost 81 000 entrepreneurs operate in the small-sized business (111.5% comparing with 2002 year).

The majority of the businessmen - physical persons - operate in the markets, the number of the businessmen who provide services (repairing of home appliances, custom repairing, shoe-making) is also increasing.

During agriculture complex reforming many inhabitants which were granted by the land lot choose farming as a form of operating. There are 2 500 of farmers operating in the region.

To provide efficient entrepreneurship Zaporizhzhya region created appropriate infrastructure. As an example, there is The Regional fund for support of entrepreneurship over the Zaporizhzhya region, which founders are Ukrainian found for support of entrepreneurship and Zaporizhzhya regional state administration. Main aim of its activity is to provide for entrepreneurs the possibility of usage of state financial and informational resources.

There are 6 credit unions in the region.

Tourism

Zaporozhye region is not only one of the main centers of economic, technological and intellectual potential of Ukraine, but it is also a distinctive historical and cultural region.

Zaporozhye region possesses the significant recreation and health resort resources. The favourable climate of the South of Ukraine, the wonderful coastal views of the Dnipro River, the sources of mineral water and therapeutic mud, warm the Azov sea draw tourists. Such cities as Berdyansk, Primorsk, and the village Kirillovka have the status of health resort.

The monuments of nature and history create the favourable conditions for all kind of mass recreation, especially tourism. Different recreation centers, campgrounds, sport areas (about 400) are located on the territory of the region.

The attractive basis of our region in tourist sphere lies in the historical legacy, such as historical and cultural center "700 years-old Zaporozhsky Dub", barrows in the village "Belen'koye", architecture monuments in the villages "Velikaya Znamyanka" and "Balki", steppe reservation "Kamennaya Mogila" and in the natural conditions, which support development of many kinds of modern tourism.

7 reservations and 6 cultural monuments of 300 regional which protect natural places are of the national importance. In the present year the services of tourist organizations were demanded by more than 27 thousand of tourists and 18 thousand of excursionists.

Since the beginning of the year more than 40 consultations on the registration of tourist activity licenses have been given.

Taking into account the unique natural and therapeutic factors, the development of recreation infrastructures, treatment and tourism are the promising directions for the attraction of foreign investments.

Zaporozhye lives its rich cultural life. The Zaporozhye symphonic orchestra being acknowledged as one of the best through world, theatrical associations of the region gladden by their works. The festival and concert life of the region is filled with different events. The international cultural relations of Zaporozhye region are enlarged each year.