In the last few years, despite the difficult conditions within the country, Ukraine is trying to increase exports, and the EU is considered a priority zone for international trade. At the beginning of 2018, Prime Minister Volodymyr Groysman announced the export results of the previous year. He noted that the level of sales of domestic goods and services abroad in 2017 increased by 16%, with the EU's share in total exports from Ukraine amounted to 40.5%. In general, in 2017 the amount of domestic exports increased to $ 52.3 billion.
Of course, the contribution of individual Ukrainian companies to the total export varies greatly. There are small farmers selling products of their own labor abroad, and there are industrial enterprises of national scale, which turnover and export is measured in tens of billions of hryvnias. Therefore, who exactly are these “export giants”, what and to which countries they have sold during 2017, according to YouControl analysts?
Top 20 Ukrainian exporters: who are they?
The top 20 Ukrainian exporting companies have made a powerful contribution to the overall performance of domestic international trade. Only in 2017, their export volume reached almost UAH 400 billion, or $ 15 billion, that is, almost 30% of the total figure for the country.
The main Ukrainian exporters relate primarily to the heavy industry and the agricultural sector. In particular, six of the 20 companies have the production of iron, steel and ferroalloys their main activity, four - wholesale trade in grain, unprocessed tobacco, seeds and animal feed, three more - mining of iron ore.
The list of top exporters is quite interesting from different points of view. All of them are major players in their markets. Most of them are included in financial-industrial groups (FIG), such as Istvan, Glencore, ISD, MHP, SCM, Privat, Nibulon, etc. However, the current financial stability (FinScore index) of some of them leaves much to be desired, because it is characterized by the letters C and D, that is, they have a high risk of bankruptcy. However, for this there is another explanation.
“The lower FinScore scores are typical for profit generating companies within large business groups. This is due to the fact that other related companies, which can often be located outside Ukraine achieve the profit with significantly better indicators of financial stability (and hence FinScore),” said Roman Kornilyuk, a financial analyst at YouControl.
Partly confirms this idea the fact that most of the top exporters of 2017 or 2018 had from 10 to 2 thousand transactions with low-tax jurisdictions or offshores recognized in the world or in Ukraine. And in some enterprises, even the founders and shareholders are persons or companies from offshore companies.
The geography of the twenty exporters is also well-known. Basically, they belong to the industrial and agrarian east and south of Ukraine, as well as to the center of business in the country - Kyiv, in particular:
7 companies from Kyiv city and the region;
6 - from Dnipro and the region;
2 - from Mykolaiv and the region;
2 - from the Donetsk region;
2 - from Zaporizhia;
1 - from the Poltava region.
It is significant that three of the 20 companies are now under sanctions from the Russian Federation, and the beneficiary of one of the companies, on the contrary, fell under the sanctions of the National Security and Defense Council and the US Treasury (the owner of the Mykolaiv alumina refinery, the odious Russian billionaire Oleg Deripaska).
Export routes: Europe and Asia
The main buyer of goods produced by the top exporters of Ukraine, was Switzerland, which is now included in the "gray" list of offshore companies of the European Union. Perhaps such a powerful stream of domestic exports to this country is connected exactly with the latter fact. In general, companies from Switzerland were among top 3 importers of Ukrainian goods. Moreover, for 12 exporting companies, buyers from this country were in first place in terms of trade volumes. The volume of trade with Switzerland is several times higher than with the United Arab Emirates, Russia, Poland and the Netherlands, which are also among the top 5 countries.
Note: The EU’s “gray list” includes countries that do not yet meet EU requirements, but have shown that they are ready to change and follow tax transparency and fairness.
It is also significant that one of top five importing countries is Russia. And this is despite the war and other conflicts.
In general, in addition to the five names mentioned, such countries as Germany, Luxembourg, China, the Virgin Islands, Lithuania, Hong Kong, Lebanon, Belarus, Singapore, the United Kingdom, Kyrgyzstan and Estonia were among the most active importers of Ukrainian companies’ products.
For the first 9 months of 2018, similar to the vector of the top exporters of 2017, total sales of Ukrainian goods were made in the EU and Russia. Candidate of economic sciences, teacher of Zaporizhzhya National University Kostyantyn Denysov told about this:
“In the regional context, the EU remains the largest buyer of our products (42.3% of all domestic exports). The main reason for this is the Free Trade Zone Agreement, as well as the decision of the European Commission on the abolition of certain restrictive measures against Ukrainian metallurgists. The top 5 countries in terms of exports are Russia (7.9%), Poland (7.0%), Italy (5.8%), Turkey (5.4%) and India (4.7%), moreover, for example, Russia mainly buys ferrous metals, chemistry, and engineering products in Ukraine. The enterprises of these industries traditionally focused on the market of Russia and the CIS due to its geographical, cultural and mental proximity. In addition, there they do not face tough competition from local producers, as is the case in the EU or North America markets. Poland also buys ferrous metals, ore, electrical machines and wood.”
Demand for metal, transport and agricultural products
The main product, which Ukrainian top exporters sold abroad, was flat rolled carbon steel without electroplating or other coatings, semi-finished products and other steel products. This suggests that the domestic metallurgy takes one of the first places in the total export volume. However, among the top 3 export categories, the goods of the agricultural sector have a big weight. It is, in particular, oil and grain.
Among agricultural products, importers purchased Ukrainian wheat, barley, rapeseed, and poultry meat. However, among the categories with the greatest demand from abroad were more interesting examples. For example, Poltava Mining and Processing Plant actively sold tires and pneumatic rubber tires. Motor Sich exported turbojet engines, turboprop and other gas turbines, as well as control or measuring instruments. The Central Mining and Processing Plant supplied abroad rail cars for the carriage of goods. Mykolayiv Alumina Refinery exported beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium, rhenium and talium, as well as products made from these metals.
Obviously, the trend for a large volume of exports from Ukraine of the above-mentioned top categories will be continued. For the three quarters of 2018, other countries have already imported Ukrainian:
non-precious metals and products from them for $ 9 billion;
plant products, including cereals, for nearly $ 7 billion;
machinery, equipment, electrical equipment, etc., worth $ 3.5 billion;
fats and oils of animal and vegetable origin worth more than $ 3 billion.
These are quite significant indicators with a total export volume of 34.5 billion dollars for January - September 2018.
In general, we can say that the twenty selected companies play an important role in the international trade of Ukraine. And this is despite the fact that some enterprises have “sins”, in particular, cooperation with offshore companies, and some have questions regarding their financial condition or their founders and shareholders belonging to offshore companies.
Read original article at YouControl