Industrial Park

In accordance to the Law of Ukraine on Industrial Parks (official site in Ukrainian and unofficial English translation ) an industrial park is a land plot with necessary engineering infrastructure and development concept adhering to the local zoning rules and specifying zones for industrial plants to be located on the plot. An industrial park should occupy a plot of at least 20ha and be under professional management of a management company. Industrial parks significantly cut time to market for industrial investors by making it easier to arrange a land lease and to obtain necessary permissions.

Industrial park’s management company is responsible for handling applications from individual investors for production plots, checking conformity with the industrial park’s concept and supporting investors during the plot’s development and maintenance. Management company rents the industrial park land plot from the respective owner (in case of Novyi Rozdil – Novyi Rozdil City Council). In its activities, management company follows guidelines developed in the industrial park concept.

 Concept

Land Plot

Novyi Rozdil Industrial Park is located on the 46,4ha land plot that was formerly used by a state-owned sulphur mining company and is being recultivated in 2014-2015 within an EU-funded project.

Focus Industries Selection Criteria

Industrial parks are being set up in accordance to the concept that defines industries of focus and outlines development stages of the industrial park. This enables potential residents to benefit from the proximity to potential clients and suppliers and to improve competitiveness of all companies along the supply chain as a result. It also helps management of the industrial park to focus its efforts on attracting investors from industries of focus.

Market growth potential in Ukraine and Eastern Europe, potential for competitive advantage over other industrial parks in the region, availability of resources for respective industries, salary increase potential and suitability of the land plots of the Novyi Rozdil Industrial Park to the industry requirements were key criteria for selecting focus industries for the industrial park (more information on selection criteria).

Industries Analysis

To identify anchor or focus industries for Novyi Rozdil Industrial Park, several industries were analized, Incl. chemical, pharma, and tolling manufacturing (more information on focus industries analysis).

Based on the study’s findings, production of eco-friendly materials, products and technologies and provision of related services were defined as core focus areas for Novyi Rozdil Industrial Park (more information on focus industries).

Focus Industries

Products for Resource Efficiency:

  • Products helping decrease energy use: insulation materials, smart home appliances, industrial solutions for energy efficiency etc.
  • Machinery and products for alternative energy industries. Products helping decrease water use: meters, drip irrigation systems, filters etc.

Post-Use Materials and Products:

  • Production from postindustrial materials: processing industrial waste, waste construction materials etc.
  • Production from post-consumer materials: processing packaging, post-consumer wood, autos etc.
  • Processing waste of electrical and electronic equipment.
  • Secondary and tertiary recycling.

Bio-Based Materials and Products:

  • Biochemicals: bioplastics, hosphate free detergents, biopharma, biopackaging etc.
  • Organic fertilizers, bio-based crop protection products.
  • Organic cosmetic products.
  • Bio-based glues, dyes, paints etc.
  • Products from sludge.
  • Bio-based construction materials etc.

Investment Business Cases 

Energy Efficiency

Improving energy efficiency in Industry Ukrainian national energy policy.

The country is using 0.4kg of oil equivalent for USD 1 of GDP. This compares badly with 0.19kg used by the US and 0.14kg – by Japan and Germany. Energy used for 1 output item by the Ukrainian industry is still 3.8 times higher than the EU average (2012, State Energy Efficiency Agency of Ukraine).There is a strong potential for introduction of new energy efficient technologies in food, construction materials, primary processing and mining industries in Ukraine, esp. among SMEs. It would not only improve their efficiency but would also boost their competitiveness on internal and external markets. State support programmes, e.g. green tariff for renewable energy supply, are also available and growing.

 Private Sector Energy Efficiency

Consumers from 2014 and is set to continue reducing energy subsidies for private sector. This decision has created an immediate business case for energy efficiency in private sector. As of 2014, there are 6.5 mln of private houses in Ukraine with total of 622 mln sq.m. and 255 thousand of apartment buildings with total of 464 mln sq.m. 80% of those building require energy retrofitting, according to the State Energy Efficiency Agency of Ukraine.

Such massive demand for energy efficiency by both private owners and associations of property owners in apartment buildings generates demand for relevant products and technologies.

Processing Waste of Electrical and Electronic Equipment

With EU Association Agreement signed in June 2014, Ukraine has undertook a legal obligation to introduce EU Directives on waste of electrical and electronic equipment (WEEE), batteries and accumulators into its national Law. These EU Directives prescribe polluter-pays principle whereby importers and producers or respective equipment pay for such equipment recycling. Thus, a business case for WEEE processing industry is being created in Ukraine.

There are 450 mln t of solid waste generated in Ukraine annually (2012). Out of that 0.1% or 450 thousand t are hazardous waste, incl. WEEE. 4.500 t p.a. of AA batteries end up in landfills annually in Ukraine. Currently there is no operational system for WEEE recycling in Ukraine. EU is providing technical assistance to set up a national WEEE system in Ukraine.

Processing Packaging

Post-use packaging processing is an example of the industry where a business case for investment exists. Annually, over 2 mln t of post-use packaging materials are entering waste stream in Ukraine instead of being recouped and recycled. Between 0,7 and 1 mln t of paper, 0,6 mln t of glass and 0.6 mln t of polymers are lost annually as waste in Ukraine. Only 4% of packaging materials are recycled while 96% end in landfills, often illegal.

There is a lack of technological capacity for processing multiple polymer types in Ukraine. With Ukraine adopting EU rules, requirements for packaging recycling and processing will continue being tightened, thus creating a stronger business case for packaging processing.