on 20-21 August 2008

Chernihiv Region

If the prophetic writing “The Song of Igor’s Military Campaign” holds you in a firm grip, if the mere mentioning of a centuries-blessed Chernigov, Novgorod-Severskiy, Lyubech and Baturin makes your heart leap, please remember – this is a glorious history of our Polesskiy land.

If you’ve fallen in love with and managed to perceive the unique gift of sculptor Ivan Martos, composer Leo Revutsky, wise truth of Mikhail Kotsyubinskiy’s literary works, if you can’t but admire Pavlo Tychina’s poetic gift and Aleksandr Dovzhenko’s genius, then you will surely acknowledged how plentiful and rich in talented people this God-blessed land is.

If you’ve ever paid a single visit to a glamorous Trostyanets and enchanting Kachanovka, the quiet flow of the picturesque Desna River has excited your admiration, you have surely become intimately linked with Chernigov land.

If you find our selected potatoes and health-giving milk delicious, if clothing made of polesskiy silk (flax) or trendy fabrics of the renowned “Checkseal” Company appeal to you, if you are aware of a high-quality tyre cord and reliable fire-fighting machinery, up-to-date telephone exchanges and melodious bandores – please remember that all the above mentioned and lots of other essential and valuable things are produced by my relentless and skillful countrymen.
I hope you would find data about the past and present of the region, its specific features and prospects most informative and worthy of your attention.

GENERAL INFORMATION

Chernigov region is situated in the northern part of Ukraine, in woodland and forest and steppe topographical zones. It has a unique economic and geographical position, which is determined by proximity to the borders of the three states – Ukraine, Russia (199 km of state border line), Belarus (227 km of state border line) and affinity to the capital city – Kiev.

Such location accounts for the multinational pattern of its population, which is made up of more than 90 nations and ethnic groups. However, Ukrainians prevail.

Chernigov region is a territory with advanced agriculture and powerful industrial potential. Woollen fabrics, wallpaper, chemical fibers and threads, cord fabric, protein skin, fire engines, equipment catering the demands of agricultural, industrial and oil-producing complexes provide by far an incomplete list of the Chernigov brand products of nation and worldwide acclaim. More than one third of national production of flax, a considerable part of potatoes, grain, milk and meat are produced in Chernigov land.

Access to most attractive markets, highly trained personnel, special investment conditions in the region’s northern part, powerful industrial potential and the riches of our land offer good opportunities and make the region a lucrative area for investment.

Ancient Chernigov land boasts of host of historical and architectural landmarks of XI-XII and XVII-XIX centuries. More than 200 of them are of worldwide significance.

People is the greatest asset to Siverskaya land. Owing to their tireless hardworking labour the past heritage is being preserved, the present is being created on a larger scale, the future is in making.

Area –31.9 thousand square km (5.3 % of Ukraine’s territory)
Administrative centre – Chernigov
Administrative territorial divisions – 22 districts,
3 cities of regional subordination
Population – 1225.2 thousand people
Density of population – 38.4 persons/square km

Distance from Chernigov to
- Kiev – 140 km
- Kharkov – 514 km
- Lvov – 678 km
- Moscow – 760 km
- St. Petersburg – 1061 km
- Minsk – 413 km
- Warsaw – 821 km
- Berlin –1416 km

Interstate motorways
- Odessa – Kiev – St. Petersburg
- Kiev – Moscow

Oil and gas mains
- Dashava – Moscow
- Gnedintsy – Kremenchug

Economy of region

External economic links
The region maintains trade relations with 81 countries worldwide and exports goods to 58 countries. The region’s foreign trade turnover in 2002 amounted to 326.0 mln USD. Major trade partners: Russian Federation (100.8 mln USD), Germany (56.6), Lithuania (17.7), Brazil (15.9), USA (15.5), Belarus (12.2), Poland (11.4), Spain (8.7), Turkey (7.8), Slovakia (6.1) and the UK (5.9).

FOOD-PROCESSING INDUSTRY AND PROCESSING OF AGRICULTURAL PRODUCE

Food-processing and processing of agricultural produce is the dominant industry in the region. It includes 105 industrial enterprises producing half of the region’s industrial output. Besides, foodstuffs are produced by the structural subdivisions of non-industrial organisations and small-scale enterprises, the share of which makes 10% of regional volume.

Major enterprises of branch:
OJSC “Belkozin”;
CJSC “Chernigov meat-packing house”;
CJSC “Condensed milk factory “Bakhmachkonservmoloko”;
OJSC “Chernigov dairy”;
Nezhin factory-farm corporation “Polesye”;
OJSC “Chernigov foodstuffs factory “Yasen”;
OJSC “Chernigov confectionery factory “Strela”;
OJSC “ Chernigov macaroni factory”;
JSC “Chernigov distillery “Chernigovskaya vodka”;
CJSC “Chernigov brewery “Desna”;
JSC “Tobacco company “O.A.O.-Priluki”.

LIGHT INDUSTRY

The region’s light industry comprises about 40 enterprises with more than 14% of the total workforce employed in the region’s industry . Light industry manufactures 5% of the total industrial output.

Textile industry is the key branch of the industry with 65.8% of the total light industry output; the share of ready-to-wear clothes and footwear manufacture makes 31.8% and 2.4% accordingly.

Major enterprises of branch:
Concern “Checkseal”;
OJSC “Chernigov sewing factory “Elegant”;
CJSC “Production and trading firm “Siveryanka”;
CJSC “Chernigov shoe factory “Bereginya”.

CHEMICAL INDUSTRY

Today region’s chemical industry consists of 4 enterprises producing chemical fibers and threads, wide range of paintwork materials and raw material for them, cable elastron, phenoplastic, tiles, polyethylene pipes for agriculture and variety of plastic consumer goods.

The open joint-stock company “Chernigov “Khimvolokno” is the leader among the region’s chemical industry enterprises. The volume of its production amounts to 80% of national chemical industry output.

Despite various difficulties the industry personnel manufacture hi-tech, world rate competitive products, meeting the demands and conditions of both home and foreign markets.

Basic enterprises of branch:
OJSC “Chernigov “Khimvolokno”;
CJSC “Nifar”;
OJSC “Plastmass-Priluki”.

FUEL AND ENERGY COMPLEX

The region has considerable deposits of petroleum and natural gas. 21 fields are tapped. Annual production amounts to 450 thousand tons of petroleum and 165 mln cubic meters of gas, which makes 12% and 0,8% of nation’s production.

Power production amounts to 750 mln kilowatt-hours per year, thermal energy - 2282,2 thousand Gcal per year.

Major enterprises of branch:
Priluki enterprise “Chernigovneftegas” subsidiary of OJSC “Ukrneft”;
Gnedintsy gas processing works, subsidiary of OJSC “Ukrneft”;
OJSC Power Supplying Company “Chernigovoblenergo”;
Gas supplying and installation OJSC “Chernigovgas”.

AGRICULTURE

About 40% of the region’s workforce are employed in agriculture.

The territory of the region is divided into two zones – wood lands and forest steppe. They occupy two thirds and one third of the region’s area accordingly.

Pattern of agricultural lands:
- Long-term plantations;
- Fallow land;
- Pastures;
- Hay fields;
- Arable land.

Pattern of sown area of basic kinds of agricultural produce:
- Grain and bean – 55.3%;
- Fodder – 28.5%;
- Potatoes – 10.9%;
- Technical – 5.3%.

Distribution of agricultural lands among land-tenure subjects:
- Agricultural enterprises – 61.2%;
- Lands of individuals – 36.3%;
- Farms – 2.5%.
Major enterprises of branch:
“Priseymovye”, private and leasehold agricultural enterprise;
“Zhuravka” Ltd;
“Zemlya i volya” Ltd;
State owned enterprise “Chernigovskoe”;
Ponltry farm “Prilutskaya”;
Private agricultural enterprise “Peskovskoe”.

INVESTMENT

1. Investment in region’s economy
The region’s location at the junction of three states (Ukraine, Russia, Belarus), rich natural resources, automobile, railway and waterway networks, affinity to the capital, political stability, a rather low risk level, significant industrial, scientific and technical potential, export orientation of economy, availability of inexpensive highly skilled workforce, access to the markets of Ukraine and NIS countries, advanced bank system altogether make Chernigov region attractive to foreign investment.

More than 40 enterprises with the foreign investments work in different spheres of the region’s economy: wholesale and retail trade, industry, construction, services.

The biggest of the above mentioned enterprises are: the joint-stock company “Tobacco Company “O.A.O-Priluki ” (Ukrainian-British) manufacturing tobacco products, closed joint-stock company “Chernigov Brewery “Desna” (Ukrainian-Belgium) and open joint-stock company “Nezhin Brewery” (Ukrainian-Luxembourg) producing beer and soft drinks, “Checkseal-Ariadna” Ltd. (Ukrainian-American) manufacturing drapery, “Soyuz Company” Ltd. (Ukrainian-Latvian), “TRIAL” Ltd. (Ukrainian-American), engaged in wholesale and retail trade.

2. Territories of priority-driven development
According to the decree of the President of Ukraine “On a special regime of investment activity in territories of priority-driven development in Chernigov region” issued May 27, 1999 a zone of investment attraction was set up in seven northern districts.

The special regime of investment activity offers significant privileges to the Ukrainian and foreign investors:
- Exemption from taxes on import (transmission) into the customs territory of Ukraine for implementation of investment projects for the period up to an object’s commissioning (but not more then for 5 years); exemption from import duty on raw materials, a number of materials, defined by the Cabinet of Ministers of Ukraine, equipment and spare parts (except for the excisable goods); exemption from VAT for equipment and spare parts (except for the excisable goods).
- Three-years long exemption from taxes on income and the part of profit from the investments’ realisation on the basis of business accounting, guaranteed for newly established, restructured and upgraded operating enterprises.

In case the investment in a business equals to not more than USD 500 thou., the profit received from the investment projects’ realisation is taxed with 50% of the current rate of the taxation beginning from the fourth until the sixth year.

The indicated preference is applied since the moment of the first profit earning;

- Excluding from the gross revenue of an enterprise with the purpose of taxing the investment sum received from implementation of the investment project as:
- Money resources;
- Material wealth;
- Intangible assets, the price of which in convertible currency is confirmed according to the laws (procedures) of the investor’s state or accepted international trade customs as well as by an expert evaluation in Ukraine, including copyright authorised in Ukraine, the right on inventions, industrial samples, goods and services marks, know-how, etc.;

- Exemption from ground rent for the period of land’s developing (planning of territory, construction of infrastructure objects etc.), but not more than for five years.

3. Investment Priorities
The basic investment needs of economy of the region concern, first of all, upgrading of the processing and light industries, creating hi-tech capacities for processing agricultural raw materials: potatoes, vegetables, manufacture of macaroni, butter, mineral water, warmth-saving construction blocks, promotion of tourism and recreational facilities.

First of all, it concerns upgrading of meat processing enterprises, sugar factories, introduction of new technologies of flax fibre processing, manufacture of packing materials to satisfy the needs of regional enterprises, technical re-equipment of some manufacturers: OJSC "Checkseal" – the most powerful Ukrainian manufacturer of woollen and semi-woollen, coat, suit and dress fabrics, wood processing and corresponding waste-recycling enterprises, OJSC “Khimvolokno” textured threads manufacturer, OJSC “Chezara” – production of medications.

The region’s economy hasn’t taken advantage of large deposits of chalk, bishofite, recreational opportunities yet.v

4. Direct foreign investment
Total amount of direct foreign investment makes USD 61.3 mln.

5. Major investors of region
19 countries of the world have made investment into the regional economy:
- Food-processing industry and processing of agricultural produce – 79%
- Construction – 8%;
- Wholesale and retail trade – 7%;
- Communications – 3%;
- Agriculture – 3%.

6. Pattern of foreign investments
USD 48,5 mln were invested in enterprises of the food-processing industry and processing of agricultural produce which still remain most attractive for making investments in the region. USD 4.6 mln were invested in construction enterprises, USD 4.2 mln – into wholesale trade and commission business, USD 1.9 mln – into communications.
- UK – 57%;
- Belgium – 23%;
- Virgin Islands – 6%;
- The Netherlands – 4%;
- Canada – 4%;
- Cyprus – 3%;
- USA – 3%.

7. Most attractive investment projects
OJSC “Checkseal”;
OJSC “Chezara”;
OJSC “Khimvolokno”;
OJSC “Khimtekstilmash”;
CJSC “Card board-polygraphic factory”;
Subsidiary enterprise of General tourist agency;
OJSC “Siveryanka”;
OJSC “Nezhin vegetable oil extracting factory”;
OJSC “Bakhmach meat packing house”;
Gnedintsy gas-processing plant;
Private production and commercial enterprise “Intransavtostroy”;
Subsidiary enterprise “Smolintorf”;
CJSC “Novgorod-Severskiy factory of building materials”;
Private enterprise “Prodinvest”;
CJSC “Planeta-Inks”.