Far from Russia's war in eastern Ukraine, Lviv -- 500 kilometers west of Kyiv -- is attracting a range of foreign investors.
French company Nexans is the latest to put down roots in western Ukraine.
The cable-producing company on Feb. 12 started renting 5.9 hectares of land in Brody city on a 49-year lease. Rent payments will bring Hr 280,000 to the city budget annually.
Lviv Oblast Council says Nexans plans to invest Hr 120 million in building and production, employing around 2,000 workers. Construction of a factory is expected to start in spring, and it should start operating in the first quarter of 2017.
“There are no obstacles to completing the building early,” Lviv Oblast Governor Oleh Synyutka said in a statement.
A world leader in the cable industry, Nexans, which was founded in 2000 as a subsidiary of French telecoms company Alcatel, operates in 40 countries and employs around 25,000 workers.
Nexans venture into Ukraine started in 2010, when it opened a representative office in Ukraine in 2010 to support clients in the local market and to promote the company.
Nexans also operates Elektrocontact Ukraine, a subsidiary enterprise in Peremyshlyany, a city in Lviv Oblast. It makes wiring for BMW, other German vehicle manufacturers, and General Motors. The company plans to develop further and build another facility in Peremyshlyany.
Since gaining independence in 1991, Ukraine has attracted European and Asian investments primarily because of the country’s close proximity to the European Union, the size of its domestic market, and its well-educated workforce. After the Russian war against Ukraine devastated the industrial eastern region Donbas, investors looked more closely at western Ukraine.
Japan’s Fujikura, another automobile parts maker, invested in constructing a factory in Lviv in 2015. The company with 130-year history, which has 52,500 employees worldwide, is hoping to employ 3,000 Ukrainians over the next three years. It is now actively recruiting workers via job-seeking websites.
Speaking to the students at the Ukrainian Catholic University in Lviv on Feb. 27, Lviv Mayor Andriy Sadoviy said that he had been talking to Fujikura about the factory for five years. He spoke with middle and top managers, and they visited Lviv before taking a final decision, he said. Fujikura froze the project in November 2013 after the start of the EuroMaidan Revolution, but later resumed the work on it – even after the start of Russia’s war against Ukraine in the east of the country.
Another automotive wiring manufacturer, Germany’s Leoni AG, has a factory in the town of Stryi in Lviv Oblast, manufacturing cables for carmakers Opel, Volkswagen, Porsche, and Lamborghini. Since 2003, Leoni has invested €65 million in its Ukrainian facilities, which employ at least 5,000 people.
Sadoviy told the Kyiv Post that Lviv is better at attracting foreign investments than other cities because of his personalized approach, as “money does not come to cities, but to people.”
“When an investor comes to the city, I guarantee him security, fair play, and maximum respect and assistance,” he said. “But we have to guarantee this not just to investors who come from other countries – we should also love those who are already here.”
He recalled how local businesses were angry when the U.S. fast food corporation McDonald’s decided to open a restaurant in Lviv in 2004 – and how quickly the cafes around it raised the level of their service because of the competition.
“We have to do everything possible to make investors with more experience come here, because they bring their culture of doing business with them,” Sadoviy said.
