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Overview of Sumy Oblast
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Sumy oblast is rich in mineral resources. Among them are oil (30.5% of the total oil reserves of Ukraine), natural gas, peat, as well as the non-metallic minerals like phosphates, rock and potash salt, gypsum, lime, marl, glass sand, mineral paints (mainly ochre), construction sands and stone.
The region is crossed by 165 rivers with the total length of 5444 km. All of them belong to the Dnipro basin. The "enchanted" Desna, the legendary Seim, Sula, Psel, and Vorskla are the biggest rivers of the oblast. Water of these rivers is used for local foundry production, chemical and textile industries.
The forest area accounts for 387,000 ha. There are different wood species in local forests. Coniferous stands make up 43%, hardwoods - 45%, softwoods - 12%.
Historical & Cultural Background
The first settlements in the area of the present-day Sumy region appeared about 15 centuries ago. This is proved by the remains of settlements in Shostka, Konotop, Seredyno-Budsky, Krolevets and Putyvl districts. The Sumy lands were part of Kievan Rus in the IX-XIII centuries and were the arena of internecine feuds.
At the turn of the 20th century the oblast was an agricultural area. Local enterprises mainly produced such products as sugar beets, hemp, mint. The first sugar mills appeared in 1831. Within the period of 1836-1840 nine sugar mills were commissioned while in 1858 their number grew to 19. Other kinds of industrial works were set up as well. The cloth factory was established in the town of Romny, paper mill - in the Krolevets district, china works - in the Glukhivsky district, powder plant in the town of Shostka (1859).
Industry
In 1999 metal-working and machine-building accounted for 35.7% of local industrial output, food industry - 20.9%, fuel industry – 22.3%, chemical and petrochemical industry – 12.0%.
More than 130,000 persons are engaged in local industry.
The industrial works, located in the oblast's centre (the town of Sumy) manufacture more than 40% of all oblast's products.
At the end of 1997 over 300 self-financing industrial works functioned in the oblast, quite a few of them are well known in Ukraine and abroad.
Among them is the Sumy inter-sectoral scientific and industrial association named after Frunze. This is a big enterprise producing equipment for oil, gas and chemical industries. In 1996 the enterprise celebrated its 100 years foundation anniversary. Today it boasts the state-of-the-art equipment and production processes. This is a flexible and quickly adaptable enterprise, which functions smoothly during the transition to market economy.
The industrial joint-stock company (IJSC) "Sumykhimprom" is one of the biggest chemical plants in Ukraine. Utilising advanced technologies and high-tech facilities, it manufactures highly-competitive products. Today the plant is able to produce over 50 types of industrial goods, which include mineral fertilizers, fodder additions, mineral pigments, water treatment coagulants, wide range of consumer goods. All of them are of great demand in Ukraine, the CIS, Europe, Asia and America.
The joint-stock association "Selmi" is engaged in serial production of scientific devices, high-tech equipment. It boasts the unique scientific and technological potential, rich experience in development and manufacture of high and super-high vacuum systems, electronic and ionic-optical units, radio electronic facilities.
The Konotop OJSC "Scientific-Industrial Association "Chervony Metalist" produces automatic facilities for mining equipment, underground rail vehicles, devices for controlling the content of methane and carbon monoxide in detonating gas. The research and design departments have been set up at this enterprise to diversify the range of products manufactured for mining industry.
The Shostka industrial amalgamation "Svema" is one of the enterprises of the chemical and photo industry of Ukraine. It is a unique plant in this country which produces light-sensitive materials and magnetic media for such fields as health protection, radiobroadcast and television, space exploration, computation, printing and so on. This enterprise is the only one in the CIS producing certain types of light-sensitive materials and magnetic tapes for defence purposes and space exploration
JSC "Naftaprommash" is one of the main machine-building enterprises in the system of State Neftegasprom in terms of production of oil & gas industrial equipment. Main directions of industrial activity are development and production of chisel and oil & gas industrial equipment, antenna engineering for radio-relay and satellite communication, equipment for processing of agricultural production, building machines and gears.
JSC "Nasosenergomash" produces complex pump equipment: centrifugal pumps for water-supply and drainage in municipal services, for melioration & irrigation, oil-extracting industry, free vortical pumps for agriculture, food and pulp & paper industry, municipal services; vacuum pumps for various industries and agriculture. The company has its own design base, production well equipped with modern technologies, and test benches. This allows to constantly improve serial production, develop and master production of new machines meeting the increasing market requirements.
Konotop branch of the JSC " Motordetal - Pravex" specializes in production and distribution of a large range of sleeves for cylinder units of internal combustion engines for trucks and cars.
JSC "Konotopmyaso" is one from the largest modern meat processing firms in Ukraine, which combines thirty-years' traditions with modern technologies, its own know-how and mutually advantageous cooperation, introduction of the progressive solutions and willingness to implement new projects related to re-structuring of production, introduction of new technological processes, technologies, and products. The JSC "Konotopmyaso" produces 216 kinds of food and technical products, 11 kinds of medications. In the company's production structure a significant place is taken by boiled sausages, frankfurters, non-share sausages. Frozen meat is sold in large volumes.
JSC "Kraft Jacobs Sushard Ukraine " is an example of good Ukrainian taste. Eleven chocolate and sweets lines produce more than 70 tons per day. Recently, the range of products has been renewed by 70% through development of brand name product line. "Corona" chocolate can be considered a large triumph, as it has won the glory of a "truly black chocolate " and is in the greatest demand with adults.
AgricultureThe agriculture of the Region includes 1280 firms and organizations, including 559 agrarian firms. Besides there are 889 individual farms.
The soil and climatic conditions of the Sumy Region are favourable for development of land cultivation and cattle breeding. Growing of grain crops, sugar beets, potatoes, flax, and hemp, as well as meat and dairy cattle breeding are advanced.
The main attention in the agricultural sector of the Sumy Region is focused on the revival of soil fertility, introduction of resource saving technologies in all agricultural branches, use of high-yield varieties and hybrids of plants and scientifically grounded seed farming, increase of the level of selection and breeding in cattle farming, increase of ecologically pure production (specialists of the Sumy State Agrarian U have developed new sorts of potatoes with the minimum contents of nitrates on high agrophone, such as "Molodizhna", "Psilska", and "Zlagoda").
Main directions of scientific research at the Sumy State Agrarian University include selection and seed farming of agricultural crops, development of agro-methods of protecting black soils against erosion and increasing their fertility, improvement of cattle breeding techniques, development and introduction of veterinary substances for sanitation of premises, preventive maintenance and treatment of animals, development of new technologies for renovation of buildings and constructions, development of theoretical and methodical base for agricultural product quality control, reforming of the property and forms of managing in agrarian sector, development and manufacturing of food processing equipment.
Science
The Sumy Region also has a large scientific and technical potential, which is shown by 26 scientific organizations. Among them 7 scientific organizations of the academic profile, 10 scientific organizations of a branch profile, 5 higher educational establishments, and also 4 research subdivisions on industrial firms act.
Aggregate number of the experts engaging scientific and technical activity is 3,5 thousand people. Among them - doctors of sciences - 90, candidates of sciences - 741. The developments of the experts of the Sumy Region are embodied in life not only on Ukraine, but also for it by limits.
Transport and Communications InfrastructureDistance from Sumy to Kiev by railway a road - 350 kms, motor transport -366кms, from Sumy to Moscow - accordingly 78
0 km and 720 km. Length of highways with hard cover is 6 400km. Through the territory of the Sumy Region there passes an interstate line Kiev - Moscow, railway mains: Kiev - Moscow, Kiev - Kharkiv, Dnipropetrovsk _ Sanct-Petesburg. Length of railway paths - 920 kms. Large railway junctions: Konotop, Vorozhba, Smorodino.On territory of area pass trunk gas pipelines: Urengoi - Pomary - Uzhgorod, ЕLetz - Kursk - Sumy - Dikanka, Kursk - Sumy - Kiev, Sumy - Konotop, Belsk - Sumy, Kiev - Bryansk and oil pipelines: Michyrinsk - Кremencyk (trunk), Is small Pavlivka - Okhtyrca (republican value.).
External Economic and Investment ActivityThe external economic ties play an important role in the economy of the Sumy region. They act one of the main stabilizing factors of economy of the region. Production of firms of the Sumy Region is known in many countries of the world. This was promoted by activity directed on increasing of quality of production, learning of new seller's markets, development of the strategy of promoting of production on the international markets, taking part in the international exhibitions and conferences, fairs and investment forums.
As results of 1999 the external economic turn-over of firms of area has made 432,4 mln. USD, including export – 164,1mln.USD, import – 268,4 mln.USD. In comparison with 1998 the external economic turn-over was increased at 17,4 %. This increase has taken place because of the of enlarge of import of goods, especially powerbearers.
In a documentary structure of export of area predominates the export shipments of production of engineering – 46,2 % from total volume. The significant part of export is belongs to deliveries of chemical production – 24,1 % (including dyes and pigments –15,2 %, fertilizers - 3.5%) and production of agriculture 15,2 % (dairy production and grain cultures). But export shipments of sugar and liqueur-vodka items have decreased.
Export flows last year were directed to countries of CIS – 78,4 %, where leading positions -57 % of export belongs to Russia, to countries of Europe – 10,6 %, Asia: 6,7%, America 3,4 % of Africa -0.9 %.
The documentary structure of import is characterized in significant volume of import of fuel and petroleum – 66,7 % (oil – 34,6 % gas – 32 %), machines and equipment –8,6 %, products of chemical production –6,4 %, production of food industry-4,3%. There is a problem of in the region introduction of technologies in production and mastering issue of powersaving equipment. As for the geographical structure of import of the goods into the Sumy region, large part of imported production is from countries of CIS – 75,2 %, thus from Russia – 50,7 % of import, from countries of Europe –21,8 %, Asia – 1,1 %, Africa -1.3 %, America – 0,6%.
The geography of the foreign trade partners of the area in 1999 has extended up to 74 countries of the world. The firms of the area conduct to search new seller's markets for their production. So, Romny factory "Talan", releasing special footwear and clothes, earlier worked only with Russia. In the given moment the firm masters the goods markets of countries of Africa, exports production to Algeria and Nigeria. With Holland the Sumy Region always had economic ties: JSC Sumy Scientific productive amalgamation named Frunze exports production of chemical engineering, for almost a decade in the region works joint Ukrainian-Dutch firm " Mockveld marketing ". For a past year these connections were considerably extended. The group of the businessmen from the Sumy Region has visited Holland, where they were acquainted with features of agricultural production and processing of agricultural production, firms of a light industry of the country. The delegation of the businessmen of Holland at the Sumy Region was submitted by the chiefs of the famous firms "Egymar B.V.", "Norchart B.V.", "Promobil Trading", "Multifresh Holland". In a course of meeting of the chiefs of firms of a textile industry of area with the representatives of the Dutch corporation "Caprioni International B.V.". The agreement on joint activity with the consequent investment in textile firms of area was reached.
It is necessary to mark growth of trade with countries of CIS and Baltic on 33,1 %. As the strategic foreign trade partner there is Russia, that as a whole foreign trade turn-over between Ukraine and Russia in comparison with a 1998 has decreased on 1.9 bil.USD. Among firms of the Region which have significant external economic turnovers with Russian Federation are: JSC "Sumychimprom", JSC Sumy Scientific productive amalgamation named Frunze , Shostka productive amalgamation "Svema ", joint venture "Ukrrosmetal", joint venture "Ukrtechnosintez". The problem of the development of trade and economic cooperation with Russian Federation always had the special value for the Sumy region, first of all to offspring, that the area is on boundary with Kursk, Belgorod and Bryansk regions.
The Sumy area has the agreements on problems of trade and economic cooperation with 11 regions of Russian Federation, namely with Kursk, Belgorod, Bryansk, Arkhangelsk, Vladimir, Kaluga, Nizhniy Novgorod, Orenburg, Rostov, Sverdlovsk, areas and republic of Tatarstan. Last year in Region the Trading House was created, where the business circles of the Sumy and Belgorod region are represented.
Investment activity
Volume of the direct foreign investments enclosed to the economy of the area in 1999, has made 11.4 mln.USD, that is 3.4 mln.USD more than in 1998. And as a whole, for 01.01.2000 years in the Region were introduced foreign investments on the sum of 31.2 mln.USD.
Money of the foreign investors have enabled enterprises of the region not only to support and to update production, but also to make production, which corresponds to world standards. So in an outcome of the international tender the world famous corporation " Kraft Jacobs Sushard " bought 82 % of the pact of the shares of chocolate factory "Ukraine", Trostyanets. For today from mandatory 23mln.USD of the investments, which should act for five years, in development of chocolate business by the investors is enclosed 25 mln.USD. The official document which is indicative of passing of certification of the prestigious world standard of a control system by quality under the code ISO 9002 is handed to the factory, thar is the first among the manufacturers of chocolate in Ukraine.
Due to the foreign investments at a rate of 1.8 mln.USD, which have acted from the USA is Romny АТZТ " Slobozhansky building ceramics ", the firm adjusts issue of a ceramic universal brick widely used in construction. As for today pro
duction of the firm uses increased demand not only in Ukraine.The investment introduced by the irish corporation " Aliter Investment " LTD in Okhtyrca joint venture "Romgas" at a rate of 1.1 mln/USD, works on a perspective - promotes construction gas processing plant near Romny.
Firms and the organizations of area have developed about 200 investment projects and proposals on renovation of production, introductions of new technological processes and technologies, production of new kinds of production.
Pursuant to regional comprehensive programmes are developed or the investment projects of regional value are developed: " Intensification of cultivation of the sugar-beet in the Sumy area " associations "Sumyzucor", projects of an oil-extracting industry: "Introduction of technology of production and transportation of the highly tought oil" and "Construction of the gas processing plant on Anastasiev oil & gas field" JSC "Okhtyrcaneftegas", "Construction of the installation on processing of gas at Kachaniv" Kachaniv gas & oil processing plant.
The program "Native house " (construction of dwellings for farms) will be realized. The customer is created by the Oblderzhadministration state firm "Fund of an investment of objects of a social orb and industries ". The investments in volume of 7 mln. are necessary for this program. USD annually. The program provides issue of long credits, material and organizational support individual person building, farms, firms for production and processing of agricultural production. The program will promote revival of village and increase of production of agricultural production.
The regional value for the solution of a problem of powersaving and ecology has the project " Serial issue of gasfilling compressor stations for use of gas as motor fuel. " (customer – JSC STVK "Sumygolovpostach"). The cost of the project is 1691 000 USD, term of implementation - 3 years.
JSC Romny plant " Polygrafmash" has developed the project on organization of production beet-harvesting combine BK 6 " Camomile ". It the parameters of quality of cleaning of root crops exceed parameters of other combines, that is important for the Sumy area, where the crops of a sugar-beet take the large area of agricultural grounds. Besides the load-carrying aggregates of a combine BK -6 can be used for other agricultural activities. And also the project "Production of cultivators for development of a ground under advanced crop production technologies " is developed.
International ecological activity
Broad cooperation the region carries out in an orb of protection of the environment. The Sumy Region in 1996 was the first in Ukraine who became the member of European union of municipalities and cities ecological - oriented development, having signed an European charter " Territories and cities for ecological development ". The same year area became the member of international advice of the urban ecological initiatives (except the Sumy Region Ukraine is represented there by cities of Kiev and Lviv). By faculty of economy and the ecologies of the Sumy state university were conducted scientific developments on protection of an environment within the framework of the international project of the program TACIS. Within the framework of same program on JSC "Sumykhimprom" the project on power management was realized. At the request of government Flandria (Belgium), the Sumy regional state administration with the participation has executed scientific areas the project on development of two international tutorials " Economy of nature use " and "Environment and health ", on Russian and English languages. The science officers of the Sumy area constantly cooperate to the representatives of scientific circles of the countries - members of EU, have particular achievements, which were submitted only by the Sumy region in the collection "Best ecological initiatives of the world ", with the project "Green potential: experience of gardening of territory of region " and alongside with it, have a particular potential for further cooperation. The perspective of development of foreign economic relations of the Sumy area is connected first of all to increase of volumes of agricultural production and products it of processing, due to engaging of the investments in this orb and effective utilization of powers of a food-processing industry. It will allow to increase first of all production of the conventional goods of the Ukrainian export (sugar, spirit, sunflower oil). The solution of existing problems of a light industry is possible provided depositing the foreign investments and activity of firms of an orb with raw material delivered foreign customer. Perspective for firms of area there are markets of Asia and Africa, to which concern a plenty of less developed countries. These regions are the most perspective for sales of production of a machine-building complex. The main efforts of firms of the region in development of two-sided trade with countries of Europe will be directed on increase of volumes of export, finished products, production of engineering, highly technological production, services.