It is currently hard to predict an end to the full-scale Russian invasion of Ukraine, but the business community has adapted remarkably well to the uniquely challenging circumstances of the war, with many companies moving from survival mode in 2022 to pursue more ambitious agendas in the current year. The same trends can be seen among international companies present in Ukraine and entering the Ukrainian market, with the number of new investment projects in the country gradually increasing.

Russia’s ongoing invasion inevitably casts a long shadow over the Ukrainian investment climate, creating high degrees of uncertainty and volatility that encourage a wait-and-see attitude. At the same time, business activity continues throughout the Ukrainian economy and certain specific segments remain particularly attractive for potential investors.

Renewable energy is one of the most promising sectors of Ukraine. The technology and IT sectors are also thriving, thanks to a young and highly skilled workforce and the country’s expanding startup ecosystem. Ukraine’s rich agricultural heritage as Europe’s breadbasket and the country’s unrivalled fertility mean agribusinesses will always offer interesting investment opportunities. Logistics and construction are also likely to attract growing interest, with efforts to repair the devastation caused by Russia’s invasion meaning that the infrastructure sector will be an investment focus for many years to come.

During the past nineteen months of wartime conditions, Ukraine has continued to attract investment, with a range of international brands demonstrating their faith in Ukraine. In summer 2022, Kingspan Group confirmed plans to invest USD 300 million in a new Building Technology Campus in Ukraine that will manufacture advanced insulation products and district heating solutions. “This investment sits at the crossroads of three crises: the climate crisis, the energy security crisis, and the crisis caused by the Russian war against Ukraine,” commented Kingspan Group CEO Gene Murtagh. “The new Building Technology Campus we are planning will make positive contributions on all three fronts, supporting Ukraine as it rebuilds its economy, meeting demand across Central and Eastern Europe for energy efficient buildings, and helping Europe to reduce reliance on oil and gas imports.”

In addition to Kingspan’s eye-catching investment, many other companies have demonstrated their readiness to invest in Ukraine since the onset of Russia’s full-scale invasion. According to data from the National Bank of Ukraine, foreign direct investment during the first quarter of 2023 exceeded USD 1.1 billion. This is a very encouraging figure, particularly when the current security realities are taken into consideration.

In 2022, Poland’s Cersanit launched a new ceramic tile production line in Ukraine in an investment that was facilitated with support from UkraineInvest. The first stage of the project involved an investment of USD 20 million and created 200 new jobs. Plans are in place to invest a further USD 70 million in the development of additional production facilities. Meanwhile, multinational steel manufacturer ArcelorMittal has confirmed plans to invest a total of USD 130 million during the current year, a slight increase in the USD 120 million invested in 2022.

In spring 2023, German multinational pharmaceutical and biotechnology company Bayer announced a nearly USD 65 million investment in its corn seed production facility in central Ukraine. Prior to the war, the company made a significant investment of more than USD 200 million to establish corn seed production in the country. “We stand with Ukraine. That was the case before the war broke out, and it’s even more so since then. Bayer has been active in Ukraine for many years and is committed to the country, its people, and farming communities,” stated Bayer’s Head of Public Affairs, Science and Sustainability Matthias Berninger.

In June 2023, Carlsberg Ukraine unveiled a new production line at its Kyiv brewery that will increase production capacity of canned products by 80%. The upgrade is part of a USD 43 million annual investment in 2023. “This new production line has a symbolic importance that goes far beyond the beverage industry in Ukraine. It is a sign that an important global player and industry leader, Carlsberg, has faith in Ukraine and is ready to invest in Ukraine at a time when Ukraine’s epic struggle against Russian aggression is still ongoing,” commented Danish Ambassador Ole Egberg Mikkelsen.

About the author: Sergiy Tsivkach is Chief Executive Officer at Ukraine’s investment promotion office UkraineInvest.

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