One of Ukraine’s largest business associations, the Dnipropetrovsk Chamber of Commerce and Industry (DCCI) works to increase the competitiveness of local businesses and attract international investment. Its staff of more than 100 people with a wide range of expertise, provides important services, connections and information to the thousands of enterprise that it assists, as well as to the government and other important players in the region’s business community. Here, its president Vitalii Zhmurenko, outlines the organization’s many activities and how it is building bridges between local needs and entrepreneurs and German businesses and investors
The DCCI works to increase the competitiveness of local businesses and to attract international investment. Can you tell me more about your core activities?
DCCI is a reliable system partner of about 3,000 enterprises in the Dnipropetrovsk region. We offer more than 20 types of services, including certification of the product origin, merchandising and legal expertise of various assets, translations in more than 40 foreign languages, customs brokerage services, bar-coding of goods, patent and licensing activities, consultations in the field of public procurement and participation in tenders, export-import certification, energy efficiency and ecology, issue of information summaries and price certificates, confirmation of reliability and status of business partners of our customers, preparation of economic analytics, organization of business events, development and implementation of the widest range of educational programs for entrepreneurs and the creation and distribution of specialized information resources for business. Today we are one of the few system business associations in Ukraine operating in market conditions and on the terms of voluntary membership of business entities in our organization.
We are fully staffed with in-house experts, trainers, analysts, lawyers and interpreters, as well as specialists invited on contractual terms. The DCCI employs more than 100 people, making us one of the largest business associations in Ukraine. We are a reliable friend and partner of more than 1070 enterprises, of the regional agencies in the implementation of specialized programs of the region and have more than 90 current agreements on cooperation signed with foreign business associations and trade development organizations from 40 countries. The network of our service branches covers all the major cities of Dnipropetrovsk region.
We are one of the few regional Chambers of Commerce and Industry in Ukraine with more than 10 years of experience of implementing grant projects for Ukrainian business, with the support of technical assistance programs of the EU, UNDP, Germany, Norway, Great Britain, the Netherlands and the United States, Canada, and more. Our joint efforts save time and money for hundreds of companies and thousands of specialists in our region. We also help the government of Ukraine and specialized national organizations within the framework of common technical assistance projects, having advised on the necessity of changes in the legislative and regulatory environment and bottlenecks to the harmonization of the laws of Ukraine and EU.
What makes the Dnipropetrovsk region attractive for international investors?
Dnipropetrovsk region is a powerful industrial region of Ukraine. It possesses high-quality labor resources (the supply of workers here is much better than in Western Ukraine and many investors understand that), with the ideal location in terms of logistics and interregional infrastructure, and abundant natural resources. Not to mention the ores, we also have two million hectares of fertile black soil. Our region is the main contributor to the country’s state budget, and the regional leader in terms of attracted foreign investments, assimilated own-capital budget funds, and decentralization processes. We also have a proactive network of organizations to support foreign investors.
Even the fact that our region is next to the temporarily occupied territories of Ukraine in Donetsk and Luhansk did not deter foreign investors; instead, it made us stronger. We lost in the trade with our neighbor but became more competitive, understandable and acceptable for our Western, Middle Eastern and Asian partners.
In association with the Chamber of Commerce and Industry of Magdeburg, You’ve established the German-Ukrainian Cooperation Bureau. What was the reason for this move?
Searching for new sales markets, development of cooperation between the members of our organizations, and communication between the technical universities of Magdeburg, Dnipro and Zaporizhia all formed the basis for establishing the German-Ukrainian Cooperation Bureau at the DCCI. The work of the bureau is jointly financed by us and our colleagues.
What are the bureau’s main activities?
Today, we advise our members about the opportunities to develop economic cooperation, prepare analytic reports, and strengthen the dialogue of educational institutions and universities. After 2014, Ukraine, as well as Germany, faced a shortage of personnel of certain specialties. We are studying the experience of the dual vocational training system in Germany. Our partners in Saxony-Anhalt, in turn, are looking at the prospects of working with us, studying the needs and possibilities of cooperation between German enterprises, Ukrainian businesses and educational institutions. Once or twice a year we organize business missions according to profiles of topical interests of our member companies, trying to use all our capabilities to explore and strengthen the links between the leaders of Saxony-Anhalt and Dnipropetrovsk regions.
The bureau also helps us to maintain the working relationship with other partners in Germany, such as the Chambers of Commerce and Industry of Potsdam, Leipzig, Düsseldorf, Stuttgart, and Freiburg, using additional sources of support. This could be, for example, the German Society for International Cooperation (GIZ)’s, assistance for the green modernization of the Ukrainian economy, with which we actively worked from 2015-2018.
The biggest benefit of this work is promoting awareness and mutual confidence, allowing our business to implement specific projects. Owing to efforts of the bureau, we have brought a large investor – float-glass manufacturer – to the region. We also produce seeding machines and fertilizer distributors in cooperation with German suppliers of electronics and pneumatic cylinders. We are constantly looking for points of contact in the fields of metal processing and molding, tool-making facilities, production of automotive components and elements of pipelines, geo-technologies for environmentally friendly and efficient mining operations, and agricultural engineering. With the support provided by GIZ, we also trained about 3,000 students –environmental, power engineers and energy auditors for the regional enterprises – and organized instruction courses for energy auditors based on the experience of the German dual system where students received practical training at enterprises in the use of instruments and computer equipment provided by the GIZ project. Now, we are starting to work with GIZ under the U LEAD project, which will improve the situation of solid municipal waste management in the territorial communities of the region.
Tell more about the opportunities to invest in or to cooperate with the agricultural sector in Dnipropetrovsk.
Dnipropetrovsk region possesses 2 million hectares of first-class fertile soil. So, one cannot definitely say that we are an industrial region. We have a favorable climate and good conditions for the irrigation of certain crops. I think we will further augment our potential in agricultural production providing the goods with high added value, including organic products. There are serious domestic investors that operate agricultural enterprises, sell to raw material giants, and many free niches, so medium-size foreign investors will also come to us. The question is: who will come first to the promising areas which require investments?
Dnipropetrovsk region, being one of the largest consumers of fuel and energy in the country, will have its own energy strategy by 2035. What opportunities are offered in this regard for German investors or enterprises?
Traditionally, German products and new technologies in the power generation sector (including renewable power) are among the most competitive in the world. They are expensive but reliable. The Ukrainian consumers are well aware of the German manufacturers of industrial automation equipment, electrical products, boilers, biogas equipment, inverters, pumps and many other products. At the same time, production facilities, municipal infrastructure and energy producers of Ukraine require system upgrading. Today in Ukraine the emphasis is placed on energy efficient modernization, improvement of the ecological situation, development of alternative energy, and harmonization of industry-specific legislation with EU laws. This process is assisted by the Government, MFO and banks. Business entities and citizens are motivated by green loans, green tariffs, and the package of legislative acts is prepared in order to create more competitive conditions in the alternative energy market. Most importantly, fossil fuels, gas and petroleum products have become more expensive. We are now beginning what Germany has already done.
Industry and production are also the key strengths of the regional economy and the direction of the majority of German investments here. How many German manufacturing companies operate in the region?
There are more than 45 enterprises with German investments registered in the region, including the metallurgical giant ArcelorMittal Kryvyi Rih, BÖHLER, the Verkhniodniprovsk Auto-Repair Plant, Linde Gas Ukraine, Meffert Ganza Ukraine, Elme MESSER Gaas, and Alvarium Ukraine. Besides, at least 120 representative offices or Ukrainian distributors of German companies are working in the region, according to our estimates. There are such plants as Heidelberg Cement-Kryvyi Rih, CAPAROL, the Multiply glass unit plant GlasTroesch (EUROGLASS), and a representative office of the Ukrainian division of Siemens.
The region is the financial, industrial and geographical center of Ukraine, generating about 11 percent of the national GDP. It is safe, has enough skilled workers, industrial enterprises, and a good base for training of engineers and technical experts. The region is also carrying out large-scale projects to improve of the ecological situation and infrastructure.
Last year, you had a personal meeting with Wolfgang Mössinger, Consul General of the Federal Republic of Germany in Donetsk, to discuss further cooperation with the German Government. What were some of the results of this meeting?
We meet periodically with the Consul General. Mr. Mössinger is a very wise man and experienced diplomat with broad-based knowledge. Germany is the biggest key partner of Dnipropetrovsk region in many social and economic projects, including those related to the problems of resettlement and adaptation in the region of displaced persons from the occupied areas. Germany is our partner and arbiter in the process of the peaceful settlement of the situation in Donbass.
The region cooperates closely with the various German technical assistance programs. The CCI takes part in a number of such projects. We are concerned with the outflow of young people to Europe. We talked about it and discussed the future projects in the light of expected reform in the field of vocational education in Ukraine, using the experience of the German dual education system for the effective training of technical professionals. Our delegations visited the German educational centers, communicated with the relevant experts of enterprises, CCI, officials, and students.
Last year the Chamber of Commerce and Industry held the workshop for the local manufacturers in the region interested in promoting the international trade. How important is the EU market for the Dnipro exports?
Today, Dnipropetrovsk region exports make up more than one-third of Ukraine’s product exports to EU countries. Trade turnover of Dnipropetrovsk region with Germany in 2017 increased by more than 18 percent. Now our biggest exports to the EU and Germany are mainly semi-finished products for metallurgy. Our main imports are high-tech equipment, means of production and components, medicine, industrial chemicals, and motor cars. Today, our major trading partners are EU countries, in particular, the Visegrád Four (Hungry, Poland, the Czech Republic and Slovakia), North Africa, Middle East countries, China, Russia, and the United States. However, we see prospects for increasing exports to the EU, especially agricultural products, components for the automotive industry and transport engineering, clothes, IT services, furniture, building materials and accessories.
Which of the many reforms in Ukraine, in your opinion, have had the biggest impact on the business environment in the region?
Solving of the problem of the VAT refund, deregulation, the digitization of services of the state institutions, the openness and transparency of data, and the allocation of a large share of the regional budget for the infrastructure projects have all been important. In 2019, we expect progress in strengthening the protection of shareholders, the improvement of the mechanism of single window and time of customs clearance, the simplification of land registration, including that for the energy infrastructure, the improvement of the situation in banking sector, an increase in the budget and forms of SME focused support, and dynamic and positive changes for the customers and contractors/suppliers in the power markets and Ukrainian railway market.
What would you like to say in conclusion to our German audience?
Ukraine is a big European country, in which irreversible changes have occurred. In spite of external challenges and hybrid military activity, Ukraine has managed to keep progressing in terms of its economic and social situations. Paying a high price in blood, it secured peace and stability for 22 regions of Ukraine, and for part of Donetsk and Luhansk regions. Widespread presence of German expertise and European technical assistance in Dnipropetrovsk region, good infrastructure, a culture of support, open dialogue between our two nations, the natural wealth of the region and its unique geographical position can give an additional impulse to your business here, allowing you to optimize the costs for high-quality production and enter new markets. The DCCI, the German-Ukrainian CCI, and the Consulate General of FRG are located in Dnipro, and our regional and municipal institutions and governmental agencies are willing to share their expertise and business contacts in Ukraine and Germany with you. We are ready to help proactive German businesses find solutions and opportunities to run advanced business in our young, developing country. Welcome, and see you in Dnipro.