Germany's Leoni AG, an automotive wiring manufacturer, said it will build a $40 million production facility in western Ukraine. The venture represents one of the largest single direct foreign investments the nation has seen since independence..
city of 80,000 in western Ukraine.
At an estimated cost of $40 million, Leoni’s new venture represents one of the largest investments by a German company in Ukraine and one of the largest single direct foreign investments the nation has seen since independence..
Leoni, which currently employs around 17,000, is one of the world’s largest manufacturers of wire, cable and wiring systems.
When completed next year, the 33,000‑square‑meter plant will offer nearly 5,000 new jobs in a region where good‑paying employment is harder to find than in regions with better industrial bases.
Ukrainians workers at Leoni’s facility will produce cables for the Opel Astra, which is scheduled to enter mass production in 2004, the company said.
The company produces equipment used by DaimlerChrysler, General Motors, Audi, Volkswagen and Porsche. Contracts with international automakers helped the company earn revenue of more than 1 billion euros last year.
Leoni is already soliciting bids from construction firms interested in building the Stry plant. But the company says it won’t wait until the factory is finished to begin producing cables in Stry. It plans to begin hiring workers soon to produce 42,000 cable sets. Production will begin in mid‑year using rented premises.
When the factory is completed, the company said it expected that 700,000 becoming more interesting to German companies.”
Zillikens believes that Leoni’s investment will significantly boost Germany’s cumulative investment in Ukraine, which totals about $300 million.
He said he expected at
| Deputy Ihor Ostash |
least $80 million in German investments this year, up from about $40 million last year.
Leoni officials said that a cheap and ready workforce, and proximity to Western European auto manufacturers were factors contributing to the company’s decision to build a production line in Stry.
But Leoni officials said the final decision to settle in Stry was sealed thanks to “strong support from the local government and municipal authorities.”
The Stry plant will be Leoni’s largest facility on foreign turf.
Leoni already operates 60 facilities in more than 22 countries, including Romania, Hungary, Slovakia and Poland. The firm said that 80 percent of its production facilities lie outside Germany.
Parliament deputy Ihor Ostash, a native of the Stry region, is one official who lobbied hard to land the German investment.
“This investment will be very good for Stry. It’s hard to find a good‑paying job there,” Ostash said.
Government figures show that only about 4 percent of the city’s population is out of work, but the true unemployment figure is believed to be much higher.
Moreover, many of the jobs available are part‑time and incomes are unsteady.
Leoni has not revealed exactly how much it will pay its workers.
Ostash, however, said he believes that Leoni will pay workers close to $100 per month, with a handful of management jobs paying higher wages. That’s only a fraction of what Leoni would have to pay German workers in Stry’s labor market.
Ostash said he hopes that other foreign companies might find western Ukraine similarly attractive.
