Small and medium business development program is implemented in Illichivsk
A chewing gum factory, the first of its kind in Ukraine, has been opened in Illichivsk. It is a private company with 90% Ukrainian capital. Town Mayor Valery Khmelniuk, who was present at the opening of the factory, was bursting with pride. As a result of the 14-month project, a modern factory, Neptun, with the output capacity of 1200 cases of chewing gum per month has taken the place of a dilapidated department store. The factory owners are explicit about their plans to squeeze Turkish-made chewing gum from the Ukrainian market. Khmelniuk stated that the opening of the factory is only part of the plan to develop small and medium business, or SMBs, in the town. Neptun owners consider it feasible to sell the chewing gum produced by up-to-date German equipment at the retail price of ten kopiykas apiece. The town council expects some 5-6 modern enterprises to start working in Illichivsk soon. The owners of the factory plan to use domestic ingredients, except for chicle, the main component of chewing gum.
All that forms the image of a changing Illichivsk. If the town has been previously known for its port, with the emergence of new companies the town will become the center of SMBs. The strategy of the authorities to increase the role of small modern businesses in the town is supported by the businessmen. One of the new companies is the shoemaking Imperiya Company which exports some of its production to Russia and Germany. Faced with a lack of hides, the authorities decided to start leather production locally by setting up a new leather plant in Illichivsk. The same went for quality laces and shoe polish. The lace and polish plants are to be completed this year, as a plant to produce exterior dyes. All these projects are funded by investors, not the town budget. An interesting fact is that investors can be found and the authorities forecast up to $28 million in investment this year.
The interest shown by investors for Illichivsk projects is not accidental. The town leaders give every assistance to entrepreneurs, starting from legal support and credit, to building roads to newly-emerging businesses. The policy of seeking investment is paying off, as first quarter industrial growth reached 115% and average monthly pay grew by 60 hryvnias since early 2000 reaching 413 hryvnias.
All these measures contribute to the formation of a stable town budget which can be supplemented by both new SMBs and already operating ones, town officials believe. The commercial port handled a record 1.2 million tons of freight in March alone, Khmelniuk stresses, with the turnover up by 8% which is 15 to 20% over last year’s. Even at minimum market tariffs, first quarter profits have doubled.
With 56% of Illichivsk residents employed in the public sector last year, the same amount is now working in the private sector.” And this trend will continue, the Mayor predicts. Incidentally, 70% of mass consumption goods in the developed countries is made by SMBs. That is also what is going to happen in Illichivsk, the mayor is convinced.
