June 1997

by Shawn Levsen

Odessa, Ukraine's fifth largest city, with a population of 1.1million, has been called Ukraine's "southern window to Europe." Historically, Odessa's location on the Black Sea; its proximity to Moldova, Romania, and Bulgaria; and its role as a major port have exposed it to the wider world and made it more receptive to foreign business. Not surprisingly, the Odessa oblast, or region, attracts almost 13 percent of all foreign investment in Ukraine, and has the second-highest level of foreign investment of any region in the country after Kiev, according to the Ukrainian Ministry of Foreign Economic Relations.

The Odessa region is the location of four Black Sea ports, which are open year-round. These include the ports of Odessa and Yuzhniy in the city itself; Ilichevsk, about 10 kilometers west of the city; and Belgorod-Dnestrovsk, beyond Ilichevsk. The Port of Odessa is one of Ukraine's major points for the export of chemicals and metals. Container traffic into the port is also increasing substantially. A number of Western firms are involved in port modernization projects in the Odessa region.

Local Industry
Local industry has suffered since the breakup of the Soviet market, with total output falling 70 percent from 1990. There are a number of notable exceptions to this overall decline, however. OdesKabel, a local manufacturer of fiber optic cables, has been approached by a number of Western firms with investment offers, but so far has maintained its autonomy and increased international sales. The 61Komunar shipyard, in neighboring Mikolaevsk oblast, has shipbuilding contracts lasting until the year 2001. The region is also home to the Black Sea Shipping Company (BLASCO), one of Ukraine's most important shipping companies, but also one of its most troubled enterprises.

U.S. and other Western companies have also found opportunities in the Odessa region. CERES International of Wilmington, North Carolina has been providing stevedore services at the container port for several years. An American-Ukrainian joint venture, Interwindows, is evaluating the production of more energy-efficient building materials. S&T Holding, the Ukrainian representative of Hewlett-Packard, will soon open an office in Odessa in response to increased demand for U.S. products. McDonald's hopes to have a restaurant opened in the city by the end of the year. Germany's Daimler-Benz has recently announced it intention to take part in reconstruction of the city's airport and harbor facilities.

Tourism
Tourism is another sector that holds promise in the future. The oblast offers 175 kilometers of beaches, and there are literally hundreds of resorts along the coast. The city itself has one of the most highly-regarded opera houses in Ukraine. Cafes line the many promenades and Marazlivska Boulevard--long a popular shopping and recreational thoroughfare in then center of Odessa, has come alive in recent years. For more information, contact the Odessa oblast Department for Foreign Economic Relations at: 011 380 (482) 280-533 (voice), 011 380 (482) 218-071 (fax), or by e-mail at: dfer@paco. odessa.ua. For a list of contacts in Odessa, call the BISNIS Fax Retrieval System and order document #6768.

Shawn Levsen covers Ukraine for BISNIS.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)