Ukraine’s light industry today is a powerful diversified complex manufacturing consumer goods and employing nearly 150 ths. people. It is a socially important economic segment focused at end consumer. With potential capacities of light industry companies, the industry is capable to produce wide range of goods, which can satisfy the entire demand of the domestic market. Light industry enterprises being located in every region of Ukraine concentrate some 7% of the total number of industrial and production potential and 2.4% of production assets.
At the moment light industry of Ukraine embraces more than 10 ths. companies including 2.5 ths. companies in textile industry, approximately 6 ths. enterprises in the sphere of ready-made garments and furs, as well as about 1.5 ths. of companies producing leather articles and leather footwear. Practically all companies of light industry are privatized and merely less than 1% of them is owned by the state.
The industry consists of 17 sectors, possesses powerful production potential capable to produce wide range of consumer goods and industrial use articles, and is aimed at improvement of a life style. At the same time, light industry is connected with adjacent industries and services entire national economy.
The list of domestic market leaders is headed by multi-field trade and production concern Textile-Contact firm, whose main business is the production and sales of all types of fabric, artificial fur, knitted fabric, applied materials, and accessories (more than 20 ths. articles). The company produces such a wide range thanks to large orders for cotton, wool, and semi-wool fabrics, as well as for beddings for internal use by several government ministries and institutions.
Textile-Ukraine Corporation is another fast-growing union with industrial, research, and financial potential. The corporation was registered in December 1999. The development of the corporation was encouraged by large financial partners from Russia. The corporation embraces 27 enterprises from all over Ukraine, which manufacture almost the entire spectrum of light industry articles. Dominant exporters for the past several years have been JSC Ukraina (Zhitomir), which sells its articles to Germany, the Czech Republic, Slovenia, Croatia, Hungary, and Poland; Cherkassy Silk Works, shipping silk fabrics to the USA, Denmark, the Czech Republic, and Hungary; as well as OJSC RivneLen (Rivne Flax), and CJSC VOZKO (Voznesensk).
CJSC Lyubava Knitwear Enterprise of Cherkassy and UkrAmTex Company (Brovary) are other enterprises with successful experience of designing new clothes articles and selling them abroad. Almatti trademark is the largest producer of high-quality outerwear. Each year Almatti offers more than 100 models of coats, jackets, and suits of various silhouettes and styles to women.
Textile industry
Out of companies representing textile industry, more than 140 are running foreign trade. Their exports of male and female overcoat, suits, blouses, shirts, as well as industrial outwear, underwear, gloves, and mittens are destined for countries of Europe and the CIS. The pattern of clothing industry is presented at Figure 1.1.
Figure 1.1. Export and import of sewing articles in monetary terms in 2007, USD
The largest amount of sewing articles in 2007 were destined to Germany (40%). Approximately 9% of articles were shipped to France, 7% each to Italy and Poland, as well as 5% each to the Netherlands, and Hungary. The largest share in 2007 in export belonged to female suits and skirts, coats and jackets, as well as male suits and trousers.
In aggregate export of sewing articles constituted approximately USD 561.8 mn.
Production of sewing industry was represented by different articles: different textile and leather headwear, headwear from fur and artificial fur, outwear (coats, jackets, short fur coats from artificial fur and textile), as well as undercoats, suits, children’s wear, underwear, and mittens.
Imported ready-made textile garments mostly satisfy demand of Ukrainian consumers. Almost one half of supplies destines from China.
Knitwear industry
Export and import in knitwear industry is to some extent different from the sewing industry pattern.
Figure 1.2. Export and import of knitwear in 2007 in monetary terms, USD
The largest supplies of Ukrainian sewing articles (in value) in 2007 were destined to Denmark (23%) because the majority of give-and-take contracts were concluded with companies of this state, Germany (17%), Lithuania (13%), Hungary (12%), Russia (8%), Italy (7%), France, and Poland (6% to each). See Figure 1.1.
T-shirts, sleeveless sports shirts, and other underwear, sweaters, slipovers, female suits and skirts, shirts, and blouses were mostly exported.
In aggregate export of sewing articles exceeded USD 133.3 mn in 2007.
Similar to situation with sewing articles, there are a lot of imported knitted wear on the market. Practically half of knitted wear import in 2007 fell for China. Hosiery (pantyhose, stockings, socks, and knee-highs), sweaters, slipovers, T-shirts, and sleeveless sports shirts were mostly imported.
Production of knitwear in Ukraine is presented by manufacturing of underwear (underwaists and polo shirts) – roughly 24 mn pcs and outwear (sweaters, jackets, and slipovers) – approximately 10 mn pcs. In addition, hosiery, sportswear, and children’s wear was produced.
Footwear industry
In accordance with different estimates, footwear market in Ukraine amounts to 100-170 mn pairs with growth of 10-12% per year. Ukraine still did not catch up with the states of European Union by sales of footwear. The index in Western Europe is 6-8 pairs of footwear per capita, while the figure is merely 2.7 pairs per capita in Ukraine.
Export of footwear industry at the moment is stipulated by mainly give-and-take operations or order production. In particular, the largest production volumes of the industry were exported to Italy (approximately 32%), Poland (20%), Russia (16%), and to less extent to Hungary (8%), Germany (6%), and Belarus and Romania (4% to each). See Figure 1.3.
Figure 1.3. Export and import of footwear in monetary terms in 2007, USD
Components for footwear manufacturing, genuine leather shoes, rubber, and plastic footwear were mostly exported in 2007. The gross amount of export in 2007 amounted to USD 143.5 mn.
Import of footwear to Ukraine almost totally is based on deliveries from China (around 69% of the total footwear import in 2007). For many years China remains to be the largest world exporter of textile articles, garments, and footwear, watches, bikes, and sewing machines, etc. Therefore it tops the list of importers in the sphere of light industry practically all over the world.
There are several factories in Ukraine at the moment working on tolling schemes. These are companies in Uzhgorod, Zhitomir, and Kiev. Their output is mainly exported to Romania, Slovakia, and Poland. In fact, these companies just assemble shoes from components. Kharkov, Dnepropetrovsk regions, and town of Brovary in Kiev region are other places of shoe production concentration. A lot of smaller companies are located at the territory of former large enterprises on lease terms. Hence, by results of 2007 the largest amount of footwear was produced of genuine leather (some 17 mn pcs), textile materials and artificial leather – more than 11 mn pcs, and there were less of rubber footwear and shoes of polymer materials – approximately 2 mn pcs.
The investment attractiveness of light industry enterprises in terms of the allocation of capital (such as finance, equipment, or raw stock) lies in the fast return on investments – thanks to short production and sales cycles, quick updating of the product mix, the availability of local raw resources (wool, linen, raw leather) and the potential capacity of the Ukrainian market.
High competitiveness of the national light industry leading enterprises, growing average income, and historical maturity of Ukraine’s light industry allow it to get significant opportunities. Light industry in Ukraine is seriously prospective for further development even with strong competitors on the market.
The Ministry of industrial policy of Ukraine developed a number of measures in 2007 aimed to improve state regulation of light industry development, support of innovation and investment projects, improvement of production structure taking into account development of global light industry markets, development of domestic raw stock basis, effective customs tariff policy, certification of products and introduction of quality management systems, as well as scientific and technical support of technological refit at light industry segments. Besides, earlier the Cabinet of Ministers of Ukraine approved the concept of the State program of light industry development for the period till 2011. The corresponding regulation of the government No.673 is dated December 27, 2006.
ABOUT UKRAINE
