REGIONAL CORNER: VOLYN OBLAST

by Shawn Levsen

The Volyn Oblast in northwestern Ukraine is quietly integrating itself into the
international economy and offers a variety of opportunities for U.S. companies.  It
has a diversified economy based on agribusiness, machine building, and
motor-vehicle and agricultural equipment manufacturing.  The oblast has a variety
of extractable mineral resources, as well.  Volyn enterprises already trade
extensively with neighboring countries, and seek foreign investment to expand their
operations.

Access to the West
Volyn serves as a  bridge  from Ukraine to other European countries, especially
those lying to the West.  Foreign food-processors use Volyn as a production site for
exports to both the NIS and Central Europe.  The regional capital of Kovel serves as
both a road and railway hub with easy access to Brest, Belarus, on the main
highway route between Moscow and Western Europe; Lublin, Poland; and the
Western Ukrainian cities of Rivne, and Lviv.  The oblast covers 20,000 square
kilometers, and is somewhat smaller than the state of Maryland.  Roughly half of
its one million inhabitants live in urban areas, the two largest being Kovel and
Lutsk.  

Major Volyn industries include food processing, motor vehicle and agricultural
machine building, and textiles.  Due to its location, international trade also plays an
important role in the regional economy.  In 1994, Volyn exported $33.7 million
worth of goods to 32 countries, and enjoyed a trade surplus of $11.7 million. 
Although there is a growing banking network, countertrade accounted for 46.9
percent of the region s foreign trade in 1994.  Some of the enterprises taking
advantage of international trade are the Kovel Meat Processing and Packaging
Factory, the Lutsk Automobile Factory, and Kovelsilmash, which produces
agricultural machines and equipment.  

Investment Opportunities
Since 1994, 66 foreign investments totaling $3.2 million have been registered with
the local government.  Investments have come from Poland in consumer goods and
transportation services; Germany in the clothing industry and high technology; the
United States in food processing and beer brewing; and Latvia in consumer goods. 
Additional opportunities exist not only in these areas, but in minerals extraction;
the manufacture of ball bearings; sugar- beet processing, which is currently being
privatized, and in other agribusiness ventures. 
Volyn s leading mineral resources are copper and phosphorate.  Deposits of both
have been recently discovered, and the Ukrainian Government is expected to
announce an international tender for development of the region s Tursko-Lukivsky
copper field in the northern part of the oblast.  The region also possesses 23 million
cubic meters of clay deposits suitable for the production of brick and tile.  Cement,
which is constantly in short supply, is another area in which the local authorities
hope to increase production.

The agricultural sector is especially promising.  Volyn farms produce sugar beets,
flax, and assorted fruit and vegetables.  There is also considerable interest in the
region in the breeding of beef cattle and milk stock.  For more detailed information
on Volyn Oblast, including contact information for Volyn enterprises and a list of
project proposals, call the BISNIS FlashFax and order document #6740.

Shawn Levsen covers Ukraine for BISNIS.

**Produced by the Business Information Service for the Newly
Independent States (BISNIS)