LVIV, Ukraine – The contrast with the country's war-torn east couldn't be starker: Lviv, Ukraine's biggest western city with a population of over 800,000, is peaceful, forward-looking, and developing fast.
Given its close proximity to European Union member Poland – some 70 kilometers – and policy support from municipal authorities, Lviv is a popular destination not just for adventurous foreign tourists and information technology companies, but also for car part manufacturers, agricultural enterprises and commercial real estate developers.
Tourists flock to Lviv for its historical architecture, cozy cafes and homemade chocolate. Its cobble-stoned city center is protected by UNESCO as a heritage site. Despite Russia’s ongoing war against Ukraine, the city’s legislature expects 2 million tourists to visit the city by the end of 2015, or 17.6 percent more than last year.
To accommodate and make their stay comfortable, local authorities are constantly improving infrastructure. The European Bank for Reconstruction and Development has loaned €70 million for street repairs, utilities, improving public transport, and upgrading trams and the heat supply system. Lviv’s Electron Corporation will provide the new trams and trolleybuses.
Then there’s the city’s constantly developing IT sector, which has 15,000 programmers and sector-related employees. Lviv is also home to the Lviv IT Cluster, Ukraine’s largest community of IT businesses that brings together 34 companies.
In April, Lviv put its geographical closeness to the EU to good use when adopted an Open Skies policy to increase incoming and outgoing flights. Currently, the only direct flights from Europe are from Vienna, Munich, Rome, or Warsaw. Those flights aren’t daily.
While the roads around Lviv are still in poor condition, local authorities next year expect to build the region’s first toll road – from Krakovets near the Polish border to Lviv.
To put Lviv on the radar of foreign companies, the city held an investor’s day on Nov. 19. “Our slogan is ‘Lviv, Open to the World’ and it is absolutely right for those who live here and who do business here… and for new investors,” Olha Syvak, the chief investment officer at Lviv City Council, said at the conference.
Over the last few years the city has welcomed Fujikura, a Japanese manufacturer of electrical and telecommunications systems. Also having arrived is vegetable producer Galicia Greenery from the Netherlands, and Czech-based property developer CTP.
Fujikura came in September and is already having a positive impact on the city’s economy. The company has plans to invest €6 million to make car parts such as, fuse boxes, cables, and circuits.
“We found in the region of Lviv well-educated people, people with the will to work… This is also logistically very convenient because this is on the cross-border to the EU (European Union),” Jorge Garcia Puente, vice president at Fujikura Automotive Europe, told the Kyiv Post in a Skype interview on Oct. 27. “Our customers are just on the other side of the border.”
In less than a year, Fujikura expects to hire 1,500 employees and open a 12,000-square-meter manufacturing unit. Three hundred have been hired so far and are currently training in Europe.
Dutch vegetable grower FoodVentures has planted itself in Ukraine’s rich soil and local markets. Since June, its Galicia Greenery factory has been producing vegetables such as lettuces in Busk, Lviv Oblast. It also supplies local restaurants and supermarkets.
Mikel Honders, the commercial director of Galicia Greenery, said that FoodVentures entered the Ukrainian market because it doesn’t grow its own lettuce. Visiting a supermarket, he saw that 80 percent of the vegetables were imported, so he couldn’t buy fresh ones. “We don’t import pizza from Italy, we bake it here,” he said about domestic production.
The son of a farmer who had a 50-hectare tomato farm in the Netherlands, Honders manages a farm with 15 workers in Lviv Oblast. The workers, all local residents, use a Dutch growing technique they were taught in Holland.
They currently farm only one out of the 20 hectares they plan to cultivate in the future. Galicia Greenery also has plans to grow tomatoes and peppers. Similar farms were already started in Georgia and under development in Turkey.
Another foreign investor is property developer CTP. It specializes in building high-tech business parks in Central Europe. So far, CTP has built 2.8 million square meters of class-A properties in over 50 strategic locations, mostly in the Czech Republic, Slovakia, and Bulgaria.
The developer’s CEO, Remon L. Vos, said at Lviv Investor’s Day that his firm plans to invest up to €65 million in the building of an industrial park in Lviv. It will be used for logistics and light manufacturing, and offer units of 1,500 square meters to rent. The park will be located on the outskirts of the city near the M10 highway that heads towards the Polish border.
Another Dutch building company, Multi, which specializes in building shopping centers has already built the Forum Lviv shopping mall near the city center. The total area of 69,000 square meters houses retailer, restaurants, entertainment venues, a cinema, and an underground parking garage. According to Syvak, Multi and EBRD invested €92 million in this shopping center.
“We developed and realized the shopping center (project) under exceptionally difficult circumstances,” said Jaap Blokhuis, the CEO of Multi Corporation, on the company’s website. “We truly believe that it’s one of our greatest achievements and a milestone for Ukraine as a country.
Kyiv Post staff writer Yuliana Romanyshyn can be reached at [email protected]. Kyiv Post staff writer Ilya Timtchenko contributed to this story.
