12771
Ukraine Industry Seeking Ties With West
World Economy

Ukraine Industry Seeking Ties With West

Volodymyr Kuzovkin’s office is less than 50 miles from the European Union, but for him and his factory, the EU is a world away.
Despite Ukraine’s desperation to integrate with Europe, a desire so strong it sparked the protests that ousted pro-Russian President Viktor Yanukovych last year, much of Ukrainian business remains wedded to Soviet-era practices even as it is buffeted by a very modern economic crisis, AP reported.
Ukraine is hoping to improve links between its heavy industry and European markets to help the economy recover. But for companies like Kuzovkin’s Lviv State Jewelry Factory in western Ukraine, the challenges are huge.
Trade with EU countries is not picking up. Business with oil-rich ex-Soviet states in Central Asia has tapered off because of uncertainty over the war in eastern Ukraine. And the local economy is in shambles – skilled workers are going to the front, inflation is soaring and loans are so hard to come by that some companies are considering bartering goods.
The national currency, the hryvnia, has lost almost three quarters of its value against the dollar in 12 months. The effects of that are particularly acute for manufacturers like the Lviv jewelry plant, which must buy gold and silver at ever-higher prices.
The factory has slashed production by half in the last year because it cannot afford the precious metals, Kuzovkin said. The price at which the factory buys gold has tripled in 12 months, he adds, with similar rises for silver and diamonds.
In a room used for producing thin silver chain, only one machine of six is operating. Kuzovkin said the factory would need “dozens more people” to work at full capacity. He had plans to expand production before violence flared in the east, but those have been shelved due to the war.
With much of Ukraine’s heavy industry based in the east of the country now either under rebel control, the historically poorer west and center of the country must now shoulder more of the burden of helping Ukraine out of economic crisis.
The machine-building plant called Bolshevik, located in the west of the capital Kiev, has been a major employer since Tsarist times and its website proudly displays honors awarded to it by the Soviet government, but now it too is struggling to adapt.
The company focuses on exports to the US and Europe and imports little, which would typically allow it to prosper from the weak Ukrainian currency, but acting Chief Executive Roman Biloskorskiy says he had been forced to cut production.
“We only have sales contracts in foreign currency now,” he said. However, he said that while he was open to barter offers, trading the factory’s output of items such as drill bits for supplies, the situation was not yet serious enough to force a full-scale switch to swap deals.

Short URL : http://goo.gl/NREXsS

You can also read ...

Saudi Arabia Facing Uphill Battles
Saudi Crown Prince Mohammed bin Salman’s Vision 2030 scheme...
The popular Tesla Model S is due to sell by the end of this month in China, at which point the price will go up about $20,900.
More than a week has passed since the US and China fired the...
Switzerland has the smallest ratio with 7.2% of GDP.
The shadow economy in Jordan accounted for 17.38% of the GDP...
The bankruptcy of investment bank Lehman Brothers on September...
The Bank of Italy revised its growth estimates down to 1.3% for 2018, and to 1% for 2019.
Italy's already weak growth forecasts were revised downwards...
Airbus, AirAsia Discussing $23 Billion Deal
The Malaysian airline, already the second-biggest customer for...
German Cabinet Warned of Economic Risks
The chief of Germany’s central bank, Jens Weidmann, warned the...
Pakistan Raises Key Interest Rate
Pakistan’s central bank on Saturday raised interest rates by...

Trending

Googleplus