Sumy region is situated in the North East of Ukraine and is adjacent on
the North and East to the Russian Federation region of Bryansk, Kursk
and Belgorod.

The region shares a national border with Russia that is 498 kilometers
in length. On this border, there are three customs check points for
railroad transport (Volfino, Pushcarnoe and Zernovo) and five automobile
check points (Bachevsk, Katherinovka, Ryzhevka, Yunakovka and Velyka
Pysarivka).

From the South, South East and West, Sumy region borders upon the
Kharkiv, Poltava and Chernigiv regions of Ukraine. The distance from
Sumy to Ukraine’s capital city, Kyiv, is 350 kilometres away by train
and 359 kilometres away by the most efficient road connection.

The total geographic area of the region equals 23,880 square kilometers.

The topographic nature of the region and the availability of large
tracts of undeveloped land-space allow it to expeditiously and
effectively deal with any development proposal, no matter what it needs
for immediate use and growth potential.

Sumy region belongs to the Dnipro river basin and its hydrographic
network is relatively dense, one kilometer of river per five square
kilometers of land area. The total length of rivers in Sumy region is
5,400 kilometers. In addition, there are 33 large lakes and more than
1600 ponds and water storage impoundment with a total amount of almost
130 million cubic meters of water capacity. The surface water area of
Sumy region comprises 4.7 percent of the total inland surface water of
whole Ukraine. Because of the large water capacity and the lack of
pollutants in Sumy waters, it is possible to meet both the potable water
needs of the region’s population while also providing an almost
inexhaustible supply of water for industrial processing and other needs.

The region’s forest area totals some what 448,500 hectares. There is
enough soil and weather diversity in the region so that there are wide
variations in the available forest products types ranging from products
suitable for paper producing all the way to the hardwoods for furniture
making and other similar needs. Thus, furniture manufacturers with an
interest in development in this region would find that they could meet
almost all of their forest product needs within the region itself with
minimum haulage costs.

Within the region’s system of land reservation, there are 182 reserved
places and objects totaling about 156,000 hectares. This includes
national nature parks, monument parks, and some limited areas
specifically reserved because of the nature of rare trees within their
confines. The entire reserved and protected forest areas total about 6.5
percent of total region land area.

In a number of cases, the implementation of projects that might have led
to further ecological degradation has been avoided by concerted actions
of the population and the government. The positive nature of the region
ecological situation is demonstrated by the following.

The region has available 294 deposits containing 21 different kinds of
mineral deposits that are considered to be sufficient for economically
feasible exploitation. The most promising among those natural and
mineral resources are crude oil, natural gas, oil mining by-product and
peat. There are 21 deposits of crude oil that are believed to hold 34
million tons of crude oil recoverable in an efficient and profitable
fashion (representing almost a quarter of all reserves of Ukraine), 18
deposits of natural gas (the reserves exceed 72 billion m3), 17 deposits
of oil mining by-product (comprising 35 percent of the nation-wide
availability), and 111 deposits of peat with reserves of almost 55
million tons. Also, the region has substantial non-metallic mineral
resources: phosphates, immovable and potash salts, brimstone, quartz,
Cretaceous, gypsum, chalkstones, marl, glass spigot products, refractory
and high-melting clays, mineral paints, building spigot products and
rock.

The labour force consists of about 820,000 persons, about two-thirds of
the entire population, however total employment is just 627,000 persons
working in all spheres of economic activities. This includes 21 percent
in industries, 31 percent in agriculture and forestry, 8 percent in
education, culture and the arts, 5 percent in trade, transport and
communications, and 4 percent in the building trades. About 70 percent
of all people work in collective and private fields of economy.

INDUSTRIES

Sumy region has advanced industrial potential.

The industry is a leading sphere of regional economy. Here is annually
created almost half of gross added cost, 30% of working people are
engaged there. About 40% of petroleum (from total amount in Ukraine)
produced in region, including a gas condensate, and 7% of gas, about 30%
of a sulphuric acid, 6% of pumps centrifugal, 12% of footwear, 5,5% of
utensils porcelain.

Positive changes in Sumy region have been observing for last four years.
For 1999-2002 years volume of industrial manufacture has increased
almost by 17%, or on the average till 4% annually.

In structure of an industrial production mineral industry is for 29%,
about 65% production of a manufacturing industry, in it 27,1% –
mechanical engineering, 22,6% a food-processing industry and processing
of agricultural products, 9,6 a% – chemical and petrochemical industry.

The enterprises of a non-state ownership are produced about 85% of
production.

Innovative activities are developing. In an industry 66 new progressive
processes are implemented. Quality of the goods considerably has raised.
The high awards for production of the following joint-stock companies:
«Shostka city dairy plant», «Konotopmyaso», «KraftFoodsUkraine», «Romny
dairy plant», «Okhtyrka cheese plant» and «Gorobyna» Ltd have received.

«Progress-Invest» Ltd was created as a result of combining on corporate
basis of a number of the food industry enterprises, where on the basis
of modern technological equipment, modern information technologies, the
realizations of innovative and investment projects, automation of
productions and management, marketing research were achieved high
results of financial and economic activities.

AGRICULTURE

Priority for Sumy region in plant growing is the following: grain, sugar
beet, sunflower, potatoes. With the purpose of agricultural manufacture
efficiency increasing a number of scientific companies exceeded.
Ivanovskaya research station successfully works to improve the grades of
a winter wheat. High-quality seeds of sugar beet are delivered to the
customers of joint-stock company «Vorskla» (Trostyanets). Agricultural
firm «Sumynasinnya» is well known in Ukraine and in Western Europe as
the supplier of high-quality seeds for long-term grasses.

In livestock breeding the specialization is as following: breeding of
large horned dairy and meat cattle, pigs.

At the present stage development of agrarian manufacture is impossible
without functioning the ramified agrarian market. Therefore there are

1200 points on milk collection;

243 points on meat collection;

481 points on collection of vegetables, oil, sugar, grain;

In Sumy works agro industrial stock exchange.

SMALL BUSINESS

The formation of active business environment during last years assisted
preservation of positive tendency of small and average business
development in region.

Now in region work 5319 small enterprises. For the last three years
their quantity has grown 1,8 times. For the same period the employment
in sphere of small business has grown almost in 1,5 times, working
places given up to 46,2 thousand persons.

3810 small enterprises or 71,6% from total are engaged in industrial
activities. 9,8% in total amount of manufacture revenues from small
business, the share of allocations is 11,9%.

Description of economic activities Quantity of the enterprises,% Number
of the workers, % Scope production (works, services)%

Industries 15,4 20,7 24,2

Construction 9,2 13,9 16,2

Trade and public catering 44,6 33,5 26,5

Transport and communication 3,2 4,7 6,3

Agriculture 9,5 9,5 10,2

FOREIGN & ECONOMIC ACTIVITIES

The ground of the balanced development of economy in Sumy region is a
formation of a modern market infrastructure, creation of high developed
and competitive industrial complex, activization of foreign trade.

The geography of foreign trade is very wide and comprises of 90
countries, where the basic part belongs to ten countries.

The most essential export deliveries are executed for Russian
Federation, China, India, Turkmenistan, Germany, Belarus and Iran.

The greatest import revenues from Russian Federation, Turkmenistan,
Germany, Belarus, Cote-d’-Ivoir, the United States of America,
Switzerland, Ireland, the Netherlands.

Commodity structure of export and import

The commodity structure of foreign trade is based on regional industrial
potential. Obvious is a prevalence of the agrarian sector.

The bases of export commodity are as follows: machines and equipment
(56,5% of total amount), chemicals, vehicles and spare parts, livestock
production, timber.

The most shares of total amount of import are the following: mineral
products, food, machines and equipment, chemicals.

INFRASTRUCTURE OF REGION

Land market

In the region the following arrangements have been executed:

further deepening of reforming of the land relations;

Implementation of the Land Code of Ukraine; 

Improvement of the new forms of managing on land;

Increasing of land use efficiency and protection.

It was used 220,8 thousand land shares (83%) on the area 841,6 thousand
hectares on rent conditions; 155,2 thousand hectares of a stock and
reserve fund, 6,9 thousand citizens used their own land shares
independently.

The important place in provision of the population by food takes private
country economy, horticulture. In 2002 to this purpose was used 154,1
thousand hectares of land.

The special attention is allocated on organizations of distribution of
the state certificates to the proprietors of the land shares. The state
certificates are issued for 186,8 thousand land shares (67,3%), and the
further certification is in process to cover 82,3 thousand land shares.

Transport

The region has the advanced transport system. It is crossed with an
interstate highway Kiev-Moscow. The major railways: Kiev-Moscow,
Kiev-Kharkov, Dnipropetrovsk-St.-Petersburg.

The large railway junctions: Konotop, Vorozhba, Smorodino. Operational
length of railway makes 920 km, highways does about 7,3 thousand km.
There is a regional airport in Sumy.

The following gas pipelines cross the territory of region: Urengoy –
Pomary – Uzhorod, Yelets – Kursk – Sumy – Dykanka, Kursk – Sumy – Kiev,
Sumy – Konotop, Belsk – Sumy, Kiev – Bryansk, and oil pipelines:
Michurinsk – Kremenchug, Malaya Pavlovka – Okhtyrka.

Telecommunication systems

Four operators work in the regional market of a telecommunication; the
major of them is Sumy branch of JSC «Ukrtelekom». About 500 telephone
stations, 24% of which are digital work since in region work, that
provide the extended services to the customers using their technical
parameters.

The cellular communication is provided by two operators: JV «UMC» and
CJSC «Kyivstar GSM».

The share of electronic mass media in information space is increasing.
There are 33 companies and organization having the licence to broadcast.
Two of them: Regional State Television Company and Radio Company
«Vidikon» cover practically all population of Sumy region.

The volumes of computer communication through international information
network ІNTERNET grow.

FINANCE AND CREDIT SYSTEM

The important role in activization of investment activities belongs to
the bank system.

Today the bank system in region is presented by 43 branches (19 of
regional level and 24 subordinated). The majority of commercial banks,
which the main offices are in Kiev, Kharkov, Dnepropetrovsk and Lutsk
have sufficient resource base for realization of crediting.

Major banks of region: branch of National bank of Ukraine, branches:
«Ukrsotsbank», JCB «Pravexbank», joint-stock company «Ukrinbank», JB
«Kreditbank», JSC Bank «Big-energy», central branch of «Prominvestbank»,
JCB «Nadra», CB «Privatbank», regional department of joint-stock postal
& pension bank «Aval», regional department of state savings bank of
Ukraine, branch of » Microfinancial bank «CB «Volodymyrskyi» Ltd has
begun working on January 2003. The bank develops as an universal banking
establishment, which carries out a complete scope of bank services.

TOURISM

Sumy region is a treasury of historical and cultural monuments. It is
one of the most saturated historical and cultural heritages of Ukraine.
Tourist potential is inexhaustible. Sumy region borders with so called
«Wild Field», where the culture of many peoples and epoch from times
Kiev Rus` was synthesized.

The history of Putivl, Glukhov, Romny follows from depth of years, which
enrolled in the list of major historical cities of Ukraine. The above
cities have huge unused historical and cultural potential for tourism
development. They are a part of tourist route «A Necklace of Slavutych».

Indoubtedly, the unforgettable impressions stay after visiting Glukhov –
one of most ancient cities of Ukraine, which dated back to 1152. It is
former capital of Getmans Ukraine, native land of the outstanding
figures.

The unlimited recreational opportunities of Sumy region, including
ecological purity, will satisfy any tastes of the tourists.

EDUCATION

Technical training

After termination of comprehensive schools the schoolchildren continue
training in Technical colleges and special educational establishments.
In region there are 35 Technical colleges, in which 16,3 thousand
schoolchildren have studies.

       

High education

In the Sumy region there are the following high schools: four
universities (Sumy National Agrarian University, Sumy State University,
Sumy Pedagogical University, Glukhov State Pedagogical University) and
Ukrainian Academy of Banking.

Concerning qualitative structure of the teachers: there are 134 Doctors
of Sciences and 745 Candidates of Sciences.

High schools cooperate with high schools of Austria, Germany, and Great
Britain. The universities of Germany consider projects on the framework
agreements about the international cooperation in the field of education
and science.

PHYSICAL CULTURE AND SPORTS

The advanced material base assists on development of physical culture
and sports movement in Sumy region. It was constructed Stadium
«Yuvileynyi» on 25 thousand places that meets the requirements of UEFA;
the modern arena of the Ukrainian Academy of Banking was put into
operation; it was reconstructed a ski base of Olympic preparation
«Dynamo».

Almost 1,5 thousand enterprises, educational institutions, and
organizations in Sumy region carry out the physical training. Over 163,9
thousand people are the active participants, that makes 12,4% of the
population of region.

CULTURE AND LEISURE

Sumy region – is the area of high traditional culture of the Ukrainian
people. This is a
tradit??????????????????????????????????????????????????????????????????
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3

??????????????????????$??O?The basic activities in region are provided
by 2 theatres (Theatre of Drama and Musical Comedy named after Schepkin,
Regional Theatre for children and youth), Regional Philharmonic Society,
674 clubs and 615 libraries, 35 musical schools, 11 state museums,
School of Art and Culture named after Bortnyanskyi, Regional Centre of
National Creativity.

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