News

26 November 2015

Local partnerships a key to success in business in Ukraine.

Ukraine is facing a big challenge in reviving its struggling economy and business leaders me in Odessa on October 8-10 November as the Black Sea Economic Forum, to discuss strategies. Uaproperty.com reports on what was discussed by the representatives of large Ukrainian companies and foreign investors.

On the first day of the forum there was a discussion about the development of port facilities, rail infrastructure, deregulation processes in the marine industry, attracting investment. The second day was entirely devoted to the problems of tourism development in Ukraine. During both days, emphasis was placed on the importance of finding reliable local partners for successful business in Ukraine.

Whilst Ukraine has well publicised problems with war and corruption, it can also be said that many foreign investors have found success in doing business in Ukraine. It was noted that finding good local partners was very important. This enabled the foreign investor to minimise costs and work more easily with local and national regulatory requirements.

As the Forum was held in Odessa, there was discussion of cruise ships and tourism. The head of the administration of the port of Odessa, Mikhail Sokolov, noted that the cruise industry has a huge impact on the economies of developed countries. The direct economic effect of cruise ship tourism this year in European countries will be 15.5 billion Euros. Over 22 million cruises were made worldwide in 2015, which is 3.5 percent more than in 2014

It was noted that cruise ship tourists coming to the city spend not less than 100 Euros. As a rule, almost all the passengers visit the port of visit, and 70% make tours. These funds, as the European experience shows, are used for the development of urban infrastructure.

The recent and continuing problems in Crimea and the East of Ukraine have damaged tourism in Ukraine. Prior to this year, the port of Odessa took up to 100 thousand, with ability to handle to 150,000. On October 8 was completed the cruise season 2015, and Odessa had gone only 13 ships, as against 28 in 2014. This is the lowest since Ukraine's independence, said Mr. Sokol.

The cause of this situation was identified as the unstable situation in the east of the country, plus the exclusion of Crimean ports from the ships’ route and the call of the vessel only in the port of Odessa, which undermines the economics for the cruise operators

In facing these challenges, the Port Authority is taking concrete steps to promote Odessa in the world cruise market. Since 2011, Odessa has been in the prestigious Association of Ports, MEDCRUISE, and this is being maintained. In fact, a representative of the port is on the board of directors of the association. At the recently held MEDSRUISE session in Zadar, Croatia, it was decided that the next Assembly of the Association will be held in Odessa in June 2016 "It is important for the city and the whole country event. Along with a positive image in the foreign media, the world, which we hope will be established in the country, the Assembly MEDSRUISE will contribute to the revival of cruise tourism in our city "- summed m.Sokol.

More generally, all parties understood that closer cooperation between the public and private sectors is a key factor contributing to economic growth in the future. And the foreign investor is strongly welcomed. There are many opportunities to meet unmet demand from Ukrainian consumers. It was recommended to work in partnership with a local person or company who has expertise in the area of business.

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