Ukraine Announces Foxconn Investment Plans, Company Remains Mute

KHARKIV, Ukraine -- The Kharkiv Regional State Administration announced on August 9 that Foxconn Electronics (the registered trade name of Hon Hai Precision Industry) is about to start working in the Kharkiv region.

Foxconn PC Case

When asked to comment on Foxconn’s potential investment in Ukraine and other emerging markets, spokesperson Edmund Ding responded that the plans are “still in a very early stage, although some countries are particularly interesting to the company for its future expansions in Europe,” adding that, “we are only doing some preliminary study and investigation on this subject.” Ding also mentioned that Russia is “one of the countries we try to learn more about.” He declined to comment any further.

According to the announcement on the State Administration website, the deputy head of the administration, Yaroslav Yushchenko, the nephew of recently elected Ukrainian president Viktor Yushchenko, has met with Foxconn representatives to discuss land allocation for Foxconn’s facilities as well as the issues of finding qualified workers and procuring raw materials such as metals.

The website also mentioned that on another day, Kharkiv governor Arsen Avakov said that Foxconn planned to invest more than US$150 million in the Rogan industrial zone. In mid-July, the Ukrainian minister of transportation and communication Yevhen Chervonenko said in China that Foxconn stated its willingness to build a modern facility in Ukraine to produce electronics goods, according to the Ukrainian national news agency Ukrinform. Other media sources cited the minister as saying that Foxconn will invest about US$60 million in Ukraine.

According to the Russian business daily newspaper Vedomosti, citing the Moscow office of Foxconn, the company is planning to produce PC cases in Ukraine. These cases will be shipped to other Foxconn facilities in Europe for assembly and sales to Hewlett-Packard (HP) and other major brands, the Moscow office told the newspaper. In Europe, Foxconn already has production facilities in Scotland, Ireland, Finland, Hungary and Czech Republic.

Foxconn’s choice is evidence that political changes are making the investment climate in Ukraine more attractive than in Russia, Vedomosti quoted IDC’s regional director for Russia and the CIS region Robert Farish. Some local experts agreed with him, while others were more sceptical about the idea of manufacturing mass-market products anywhere outside of China or South-East Asia, according to Vedomosti.

The director general of HP in Russia Owen Kemp, earlier this year, told Vedomosti that Foxconn will most likely focus its facility in Ukraine on production for export, but the business environment and customs processes in Ukraine are no better than in Russia.

Sergey Eskin, the CEO of the Russian PC assembler Depo Computers and senior vice president of the IBS group (Depo is a part of this group ranked third in the list of top Russian IT companies in 2004 issued by CNews Analytics), was quoted by the Vedomosti article as saying that his sources are expecting Foxconn to produce not only cases, but also motherboards in Ukraine.

With a population of 1.4 million, Kharkiv is the second largest city in Ukraine and one of the country's main industrial, cultural and educational centers. It is situated in the northeast of the country (about 470km from the capital Kiev and 40km from the border between Ukraine and Russia). The Rogan industrial zone will occupy 2,156 hectares of land and include about 100 industrial and infrastructure sites, according to the Kharkiv Regional State Administration website. The main investors are expected to be Italian businesses and state institutions, governor Avakov pointed out on the website.

Source: DigiTimes Daily


Michael said…
I hope this investment plan is good. But I will suggest one thing, as current market scenario is not good, before investing take some kind of guide and supervision from some good resources. My suggestion is go to and go through all information listed there. You may also ask your own queries there.

Have a good luck.
shelly said…
Oh!! Yes Investment plans are good in my point of view and I am surprised and impress to read this"The Kharkiv Regional State Administration announced on August 9 that Foxconn Electronics (the registered trade name of Hon Hai Precision Industry) is about to start working in the Kharkiv region." It is so impressive..
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