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Overview of best prospect sectors, major infrastructure projects, significant government procurement’s and business opportunities.

Agribusiness – Commercial Service-Kyiv (CS Kyiv) holds a positive long-term view on sales prospects for U.S. agricultural machinery and equipment manufacturers in Ukraine.  The reason for this is that even though Ukraine is a major global producer, its agricultural sector is under-equipped and much of its existing agricultural machinery is outdated.  Overall, 30 percent of agricultural machinery needs to be replaced.  This need is concentrated among 10 percent of Ukrainian companies that need to replace from 70 to 80 percent of their machinery fleet. Sub-sector best prospects include:

  • Tillage equipment (cultivators, plows, disc harrows)
  • Livestock breeding
  • Grain storage
  • Irrigation infrastructure
  • Mineral fertilizers
  • Plant protection products

Defense Equipment – The Russian-backed separatist conflict in the east exposed the Ukrainian armed forces’ lack of sophisticated defense equipment and need of a thorough overhaul.  Unfortunately, domestic producers are incapable of providing several crucial weapons systems.  In the government’s 2017 budget, the Ministry of Defense received approximately $ 2.4 billion.  Of this amount, roughly $241 million is for the procurement of weapons and military equipment, and $2 billion is for training and operations.  Because of Ukraine’s acute need to reduce its dependence on Russian defense and military equipment, Ukraine seeks to diversify its equipment supplies by purchasing equipment from the U.S. and other Western countries.  Sub-sector best prospects include:

  • Anti-aircraft warfare and air defense systems
  • Unmanned Aerial Vehicles (UAVs) and autonomous vehicles
  • Electronic warfare and communication equipment
  • Trainer aircraft and helicopters
  • Engineering vehicles, including armored recovery vehicles, excavators, trenches
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Education – With nearly 5.7 million students in a country the size of Texas, Ukraine is among the largest and most talented international student markets in Europe.  Between 2009 and 2015 the number of Ukrainians studying abroad increased by 129 percent to reach 59,648 students studying in 34 countries. According to the most recent Open Doors Report of the Institute of International Education, 1,680 Ukrainian students went to the U.S. to study in 2015-2016, which is 8.3 percent more than in 2014-2015.  CS Kyiv strongly recommends that U.S. schools and universities explore Ukraine as a diversity market.  Sub-sector best prospects include:

  • Higher Education (particularly universities offering business education)
  • Secondary Education

Food Processing & Packaging Equipment – Harmonization of product standards with the European Union (EU) is underway and this, combined with Ukraine’s eventual accession to the EU, will fundamentally and positively affect Ukrainian trade in processed food.  With increased trade and price competition, local producers will need to improve their competitiveness by upgrading and modernizing processing and packaging capacities.  These changes will provide multiple opportunities for U.S. equipment suppliers.  Sub-sector best prospects include:

  • Vegetable products/processing (including oils)
  • Confectionary products/processing
  • Dairy products/processing
  • Meat processing

Medical Equipment – According to the BMI forecast, the Ukrainian medical device market will record double-digit growth over the 2015-2018 period, but it will expand moderately in U.S. dollar terms due to local currency depreciation.  In 2016, the Ukrainian medical device market was worth $288 million, a 3.7 percent increase over 2015.  Market growth is driven by extra funding allocated by the government for the purchase of cardiology equipment as well as an ongoing World Bank project approved in March 2015.  Importers supply about 90 percent of the medical device market. Sub-sector best prospects include:

  • Diagnostic imaging equipment (ultrasound, computer tomography, magnetic-resonance tomography)
  • Laser surgery devices
  • Stents, pacemakers, and other equipment used in the treatment of heart conditions
  • Orthopedics & prosthetics
  • Dental equipment and materials
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Oil & Gas Equipment – Ukraine’s oil and gas industry plays a significant role in the country’s national energy security strategy, which aims to make Ukraine less dependent on oil and gas imports.  The goal of increasing domestic production creates significant opportunities for U.S. companies in supplying equipment and technology.  Sub-sector best prospects include:

  • Drilling rigs
  • Pumping equipment
  • High-efficiency oil and gas exploration and drilling equipment
  • Valves, pumping equipment, compressors
  • Exploration and production services
  • Reverse gas supply services

Safety & Security – Ukraine’s safety and security market is currently undergoing unprecedented structural change due to multiple challenges, including the recent economic recession, the conflict in eastern Ukraine, and a nationwide crime spike. During the recession, which began in 2014 and ended in 2015, buyer purchasing power decreased, and low-cost suppliers from Asia flooded the market.  In an environment of market contraction and cost-based competition, demand for relatively expensive western safety and security equipment exists primarily in the niche of advanced technology solutions where low-cost suppliers are uncompetitive. Sub-sector best prospects include:

  • Document readers
  • Biometric readers
  • Explosives and drugs detectors
  • Fire suppression equipment
  • Advanced video surveillance cameras with video analytic capabilities

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