If the prophetic writing “The Song of Igor’s Military Campaign” holds
you in a firm grip, if the mere mentioning of a centuries-blessed
Chernigov, Novgorod-Severskiy, Lyubech and Baturin makes your heart
leap, please remember – this is a glorious history of our Polesskiy
land.

If you’ve fallen in love with and managed to perceive the unique gift of
sculptor Ivan Martos, composer Leo Revutsky, wise truth of Mikhail
Kotsyubinskiy’s literary works, if you can’t but admire Pavlo Tychina’s
poetic gift and Aleksandr Dovzhenko’s genius, then you will surely
acknowledged how plentiful and rich in talented people this God-blessed
land is.

If you’ve ever paid a single visit to a glamorous Trostyanets and
enchanting Kachanovka, the quiet flow of the picturesque Desna River has
excited your admiration, you have surely become intimately linked with
Chernigov land.

If you find our selected potatoes and health-giving milk delicious, if
clothing made of polesskiy silk (flax) or trendy fabrics of the renowned
“Checkseal” Company appeal to you, if you are aware of a high-quality
tyre cord and reliable fire-fighting machinery, up-to-date telephone
exchanges and melodious bandores – please remember that all the above
mentioned and lots of other essential and valuable things are produced
by my relentless and skillful countrymen.

I hope you would find data about the past and present of the region, its
specific features and prospects most informative and worthy of your
attention.

GENERAL INFORMATION

Chernigov region is situated in the northern part of Ukraine, in
woodland and forest and steppe topographical zones. It has a unique
economic and geographical position, which is determined by proximity to
the borders of the three states – Ukraine, Russia (199 km of state
border line), Belarus (227 km of state border line) and affinity to the
capital city – Kiev.

Such location accounts for the multinational pattern of its population,
which is made up of more than 90 nations and ethnic groups. However,
Ukrainians prevail.

Chernigov region is a territory with advanced agriculture and powerful
industrial potential. Woollen fabrics, wallpaper, chemical fibers and
threads, cord fabric, protein skin, fire engines, equipment catering the
demands of agricultural, industrial and oil-producing complexes provide
by far an incomplete list of the Chernigov brand products of nation and
worldwide acclaim. More than one third of national production of flax, a
considerable part of potatoes, grain, milk and meat are produced in
Chernigov land.

Access to most attractive markets, highly trained personnel, special
investment conditions in the region’s northern part, powerful industrial
potential and the riches of our land offer good opportunities and make
the region a lucrative area for investment.

Ancient Chernigov land boasts of host of historical and architectural
landmarks of XI-XII and XVII-XIX centuries. More than 200 of them are of
worldwide significance.

People is the greatest asset to Siverskaya land. Owing to their tireless
hardworking labour the past heritage is being preserved, the present is
being created on a larger scale, the future is in making.

Area –31.9 thousand square km (5.3 % of Ukraine’s territory)

Administrative centre – Chernigov

Administrative territorial divisions – 22 districts,

3 cities of regional subordination

Population – 1225.2 thousand people

Density of population – 38.4 persons/square km

Distance from Chernigov to

— Kiev – 140 km

— Kharkov – 514 km

— Lvov – 678 km

— Moscow – 760 km

— St. Petersburg – 1061 km

— Minsk – 413 km

— Warsaw – 821 km

— Berlin –1416 km

Interstate motorways

— Odessa – Kiev – St. Petersburg

— Kiev – Moscow

Oil and gas mains

— Dashava – Moscow

— Gnedintsy – Kremenchug

Economy of region

External economic links

The region maintains trade relations with 81 countries worldwide and
exports goods to 58 countries. The region’s foreign trade turnover in
2002 amounted to 326.0 mln USD. Major trade partners: Russian Federation
(100.8 mln USD), Germany (56.6), Lithuania (17.7), Brazil (15.9), USA
(15.5), Belarus (12.2), Poland (11.4), Spain (8.7), Turkey (7.8),
Slovakia (6.1) and the UK (5.9).

FOOD-PROCESSING INDUSTRY AND PROCESSING OF AGRICULTURAL PRODUCE

Food-processing and processing of agricultural produce is the dominant
industry in the region. It includes 105 industrial enterprises producing
half of the region’s industrial output. Besides, foodstuffs are produced
by the structural subdivisions of non-industrial organisations and
small-scale enterprises, the share of which makes 10% of regional
volume.

Major enterprises of branch:

OJSC “Belkozin”;

CJSC “Chernigov meat-packing house”;

CJSC “Condensed milk factory “Bakhmachkonservmoloko”;

OJSC “Chernigov dairy”;

Nezhin factory-farm corporation “Polesye”;

OJSC “Chernigov foodstuffs factory “Yasen”;

OJSC “Chernigov confectionery factory “Strela”;

OJSC “ Chernigov macaroni factory”;

JSC “Chernigov distillery “Chernigovskaya vodka”;

CJSC “Chernigov brewery “Desna”;

JSC “Tobacco company “O.A.O.-Priluki”.

LIGHT INDUSTRY

The region’s light industry comprises about 40 enterprises with more
than 14% of the total workforce employed in the region’s industry .
Light industry manufactures 5% of the total industrial output.

Textile industry is the key branch of the industry with 65.8% of the
total light industry output; the share of ready-to-wear clothes and
footwear manufacture makes 31.8% and 2.4% accordingly.

Major enterprises of branch:

Concern “Checkseal”;

OJSC “Chernigov sewing factory “Elegant”;

CJSC “Production and trading firm “Siveryanka”;

CJSC “Chernigov shoe factory “Bereginya”.

CHEMICAL INDUSTRY

Today region’s chemical industry consists of 4 enterprises producing
chemical fibers and threads, wide range of paintwork materials and raw
material for them, cable elastron, phenoplastic, tiles, polyethylene
pipes for agriculture and variety of plastic consumer goods.

The open joint-stock company “Chernigov “Khimvolokno” is the leader
among the region’s chemical industry enterprises. The volume of its
production amounts to 80% of national chemical industry output.

Despite various difficulties the industry personnel manufacture hi-tech,
world rate competitive products, meeting the demands and conditions of
both home and foreign markets.

Basic enterprises of branch:

OJSC “Chernigov “Khimvolokno”;

CJSC “Nifar”;

OJSC “Plastmass-Priluki”.

FUEL AND ENERGY COMPLEX

The region has considerable deposits of petroleum and natural gas. 21
fields are tapped. Annual production amounts to 450 thousand tons of
petroleum and 165 mln cubic meters of gas, which makes 12% and 0,8% of
nation’s production.

Power production amounts to 750 mln kilowatt-hours per year, thermal
energy — 2282,2 thousand Gcal per year.

Major enterprises of branch:

Priluki enterprise “Chernigovneftegas” subsidiary of OJSC “Ukrneft”;

Gnedintsy gas processing works, subsidiary of OJSC “Ukrneft”;

OJSC Power Supplying Company “Chernigovoblenergo”;

Gas supplying and installation OJSC “Chernigovgas”.

AGRICULTURE

About 40% of the region’s workforce are employed in agriculture.

The territory of the region is divided into two zones – wood lands and
forest steppe. They occupy two thirds and one third of the region’s area
accordingly.

Pattern of agricultural lands:

— Long-term plantations;

— Fallow land;

— Pastures;

— Hay fields;

— Arable land.

Pattern of sown area of basic kinds of agricultural produce:

— Grain and bean – 55.3%;

— Fodder – 28.5%;

— Potatoes – 10.9%;

— Technical – 5.3%.

Distribution of agricultural lands among land-tenure subjects:

— Agricultural enterprises – 61.2%;

— Lands of individuals – 36.3%;

— Farms – 2.5%.

Major enterprises of branch:

“Priseymovye”, private and leasehold agricultural enterprise;

“Zhuravka” Ltd;

“Zemlya i volya” Ltd;

State owned enterprise “Chernigovskoe”;

Ponltry farm “Prilutskaya”;

Private agricultural enterprise “Peskovskoe”.

INVESTMENT

1. Investment in region’s economy

The region’s location at the junction of three states (Ukraine, Russia,
Belarus), rich natural resources, automobile, railway and waterway
networks, affinity to the capital, political stability, a rather low
risk level, significant industrial, scientific and technical potential,
export orientation of economy, availability of inexpensive highly
skilled workforce, access to the markets of Ukraine and NIS countries,
advanced bank system altogether make Chernigov region attractive to
foreign investment.

More than 40 enterprises with the foreign investments work in different
spheres of the region’s economy: wholesale and retail trade, industry,
construction, services.

The biggest of the above mentioned enterprises are: the joint-stock
company “Tobacco Company “O.A.O-Priluki ” (Ukrainian-British)
manufacturing tobacco products, closed joint-stock company “Chernigov
Brewery “Desna” (Ukrainian-Belgium) and open joint-stock company “Nezhin
Brewery” (Ukrainian-Luxembourg) producing beer and soft drinks,
“Checkseal-Ariadna” Ltd. (Ukrainian-American) manufacturing drapery,
“Soyuz Company” Ltd. (Ukrainian-Latvian), “TRIAL” Ltd.
(Ukrainian-American), engaged in wholesale and retail trade.

2. Territories of priority-driven development

According to the decree of the President of Ukraine “On a special regime
of investment activity in territories of priority-driven development in
Chernigov region” issued May 27, 1999 a zone of investment attraction
was set up in seven northern districts.

The special regime of investment activity offers significant privileges
to the Ukrainian and foreign investors:

— Exemption from taxes on import (transmission) into the customs
territory of Ukraine for implementation of investment projects for the
period up to an object’s commissioning (but not more then for 5 years);
exemption from import duty on raw materials, a number of materials,
defined by the Cabinet of Ministers of Ukraine, equipment and spare
parts (except for the excisable goods); exemption from VAT for equipment
and spare parts (except for the excisable goods).

— Three-years long exemption from taxes on income and the part of profit
from the investments’ realisation on the basis of business accounting,
guaranteed for newly established, restructured and upgraded operating
enterprises.

In case the investment in a business equals to not more than USD 500
thou., the profit received from the investment projects’ realisation is
taxed with 50% of the current rate of the taxation beginning from the
fourth until the sixth year.

The indicated preference is applied since the moment of the first profit
earning;

— Excluding from the gross revenue of an enterprise with the purpose of
taxing the investment sum received from implementation of the investment
project as:

— Money resources;

— Material wealth;

— Intangible assets, the price of which in convertible currency is
confirmed according to the laws (procedures) of the investor’s state or
accepted international trade customs as well as by an expert evaluation
in Ukraine, including copyright authorised in Ukraine, the right on
inventions, industrial samples, goods and services marks, know-how,
etc.;

— Exemption from ground rent for the period of land’s developing
(planning of territory, construction of infrastructure objects etc.),
but not more than for five years.

3. Investment Priorities

The basic investment needs of economy of the region concern, first of
all, upgrading of the processing and light industries, creating hi-tech
capacities for processing agricultural raw materials: potatoes,
vegetables, manufacture of macaroni, butter, mineral water,
warmth-saving construction blocks, promotion of tourism and recreational
facilities.

First of all, it concerns upgrading of meat processing enterprises,
sugar factories, introduction of new technologies of flax fibre
processing, manufacture of packing materials to satisfy the needs of
regional enterprises, technical re-equipment of some manufacturers: OJSC
«Checkseal» – the most powerful Ukrainian manufacturer of woollen and
semi-woollen, coat, suit and dress fabrics, wood processing and
corresponding waste-recycling enterprises, OJSC “Khimvolokno” textured
threads manufacturer, OJSC “Chezara” – production of medications.

The region’s economy hasn’t taken advantage of large deposits of chalk,
bishofite, recreational opportunities yet.v

4. Direct foreign investment

Total amount of direct foreign investment makes USD 61.3 mln.

5. Major investors of region

19 countries of the world have made investment into the regional
economy:

— Food-processing industry and processing of agricultural produce – 79%

— Construction – 8%;

— Wholesale and retail trade – 7%;

— Communications – 3%;

— Agriculture – 3%.

6. Pattern of foreign investments

USD 48,5 mln were invested in enterprises of the food-processing
industry and processing of agricultural produce which still remain most
attractive for making investments in the region. USD 4.6 mln were
invested in construction enterprises, USD 4.2 mln – into wholesale trade
and commission business, USD 1.9 mln – into communications.

— UK – 57%;

— Belgium – 23%;

— Virgin Islands – 6%;

— The Netherlands – 4%;

— Canada – 4%;

— Cyprus – 3%;

— USA – 3%.

7. Most attractive investment projects

OJSC “Checkseal”;

OJSC “Chezara”;

OJSC “Khimvolokno”;

OJSC “Khimtekstilmash”;

CJSC “Card board-polygraphic factory”;

Subsidiary enterprise of General tourist agency;

OJSC “Siveryanka”;

OJSC “Nezhin vegetable oil extracting factory”;

OJSC “Bakhmach meat packing house”;

Gnedintsy gas-processing plant;

Private production and commercial enterprise “Intransavtostroy”;

Subsidiary enterprise “Smolintorf”;

CJSC “Novgorod-Severskiy factory of building materials”;

Private enterprise “Prodinvest”;

CJSC “Planeta-Inks”.

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