From Cobblestones to Helicopters

For many industrial giants of Sumy region, last year became a year of large orders, recovery and intensification of production, construction of new workplaces. The time of growth replaced the crisis downturn: in 2011, industrial production in Sumy region grew by 7.7% to UAH 18 billion, while across Ukraine this indicator grew by 7.3%. By industrial potential in the rating of Ukrainian regions, the region moved from 23rd place (for the first quarter of 2011) to 11th place (by year-end). This is a serious leap!

What does this industrial potential consist of?! It’s more than 200 main enterprises reporting to statistical authorities, of which 50 are large. Mechanical engineering accounts for 28.4% of the total volume, food industry — 20.5%, chemical industry — 15%, extractive industry (oil, gas, quartzites) — 11%, light industry — 1.5%, other production – in decreasing order. Every third working-age resident of Sumy region is employed in industry — that’s 72,600 people. Industry provides about 80% of revenues to budgets of all levels. The average salary in industry in Sumy region is UAH 2,557. In 2011, industry contributed UAH 5.8 billion in taxes, mandatory payments and fees to the consolidated budget of the region, which is UAH 2.5 billion (1.8 times) more than in 2010. Local budgets received UAH 514.5 million – 45% more than the previous year.

We will not list all the largest industrial enterprises, but will name only those that implemented new major projects last year. There are seven of them. The largest was the construction of the test stand at JSC “Sumy Plant Nasosenergomash” (investment volume $20 million, 120 jobs created). Now the tests conducted allow Sumy pump manufacturers to confirm the parameters of their equipment in natural conditions that are simulated on the stand.

At PJSC “Kraft Foods Ukraine,” a biscuit shop with a capacity of 40,000 tons per year was launched (400 jobs). LLC “Guala Closures Ukraine” built a new shop for the production of closure systems (40 jobs). LLC “Kerameya” launched a new line for the production of paving stones (30 jobs). At LLC “Motordetal-Konotop,” another melting furnace of the foundry with a capacity of 4,000 tons of casting per month and an additional carousel pouring line were installed. They produce high-quality cylinder liners for engines, which are purchased by Volvo, Mercedes, and Italian shipbuilding companies. All Belarusian tractors also use cylinder liners produced by LLC “Motordetal-Konotop.”

At PJSC “Sumykhimprom,” a section for packing and shipping iron sulfate from the iron oxide pigments workshop was created. At the Bugrevatovske oil field of “Okhtyrkanaftogaz,” reconstruction of the complex collection point was carried out, where water and impurities are separated from oil to avoid additional processing (about UAH 90 million invested).

Of course, for many enterprises, a major problem is the high cost of energy resources, which will continue to grow in the future. Fortunately, for mechanical engineering enterprises of Sumy region, the share of gas is only 3-5% of production costs. But for “Sumykhimprom,” Sumy Porcelain Factory, all food industry enterprises that use furnaces, gas is of decisive importance. Most enterprises are trying to implement energy-saving technologies, but this requires huge investments that are often nowhere to be found. Currently, energy costs of Sumy industrialists are 2.5-3 times higher than at similar enterprises in Europe. Despite the constant shortage of free money, local enterprises will be forced to reduce energy consumption. As they say, life will force them!

Another key problem faced by all industrialists without exception is the shortage of qualified workers. Many enterprises are ready to pay specialists high wages from the start. For example, a machine operator can receive from UAH 5,000 per month. But demand far exceeds the supply available on the labor market. The rapid rise in the regional economy has exacerbated the problem of shortage of qualified workers. Universities are now urgently introducing more engineering specialties, enterprises are selecting candidates for serious positions among students, but due to insufficient qualifications or unwillingness to meet employers’ high requirements, not many remain working at enterprises. The personnel training market today is quite capacious, but enterprises most often solve personnel problems on their own.

The Main Department of Industry and Infrastructure Development of Sumy Regional State Administration monthly monitors the situation at the main industrial enterprises of the region. Department Head Sergey KRESTENKOV says that the forecast for industrial development in Sumy region in 2012 is favorable and at year-end is 105.7%. The largest project to be implemented in Sumy region is again connected with the Nasosenergomash plant: its Russian investors intend to build a new modern foundry worth about UAH 100 million.

Dmytro Lytovchenko