The engineering industry: industry and current trends

The machine building industry of Ukraine is traditionally considered as the leading sector and the engine of the economy. Major high-tech enterprises auto and aircraft manufacturing, metallurgy, energy, military and other fields.

History development of the industry

The story Begins engineering in Ukraine in the XIX century. The development of large deposits of coal in the Donbass and the development of metallurgy required the use of industrial equipment, tools, structures. For agriculture also requires more sophisticated tools and partial mechanization.

The First factory of agricultural machinery was opened in 1840 in Msieve. Large enterprises were the Alexandrovsky plant in Ekaterinoslav (now Dnepropetrovsk), the plant Hughes in Donetsk, the factory "Dnipro" in Kamenskoye (now Dneprodzerzhinsk), locomotive workshops in the Kharkiv and Luhansk. Before the revolution in the total industrial production of the Russian Empire, Ukraine's share was 25 %.

A New breath to the engineering industry gained with the advent of Soviet power. The region was invested into the construction of large enterprises. In particular, the Kharkov turbine plant (1929), Kharkov tractor plant (1930), Dnipropetrovsk electric locomotive plant (1934), Kyiv armored plant (1935), etc. After the war, the big development was the high-tech machinery industry: aviation, aerospace, automotive, military, heavy industry, instrumentation and others.

General characteristics

The trend of engineering development in Ukraine says dismantle and rebuild the entire structure of the industry. On the background of violations of the relations with Russia (formerly the main partner) and empowerment of exports to Europe in large enterprises emerge as problems with the export of traditional products, and some prospects of production diversification in the future.

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The question "describe branch structure of mechanical engineering of Ukraine” there is a precise answer. Machine-building complex of Ukraine includes more than 20 specialized branches and 58 sub-sectors. In fact, the country presents all the existing types of machines. According to official data, the structure was 11 267 enterprises, 146 of which are large, 1 834 – average, 9 and 287 – small. The structure employs about 1.5 million workers.

Analysis of volume of production

According to the State statistics Committee, the production volume of machine-building complex in 2011-2013 against the background of the entire industry are as follows (see table):

According to statistics, even before the crisis of 2014 was a decline in the production volumes of the industry from 10 to 8.7 %. If you compare the engineering industry of Ukraine and the world, by volumes of sales (in percent relative to the entire industry) the indicators are very different – this ratio is much less than in developed countries. This trend characterizes the chaotic development of machine-building complex.

Analysis of export and import

In Recent years, the export of engineering industry products mainly accounted for the CIS countries, mostly to the Russian Federation and Kazakhstan. The decline of investment activity in core markets has led to a reduction of exports of the industry.

According to the state statistics Committee of Ukraine in 2011-2013, the Republic exported to other countries more than half of the manufactured products. However, the previous increase in demand for products of Ukrainian enterprises in the global market and export orientation of the machine-building complex of the country in 2015 was followed by stagnation of the industry.

Products of engineering industry of Ukraine, whichimport foreign partners (2014):

• Motors and pumps (total revenue - $3 billion).
• Electrical equipment (2.7 billion $).
• Railway transport (0.8 billion $).
• Road transport (0.3 billion $).
• Air Transport (0.2 billion $).
• Instrumentation (0.2 billion $).
• Court (0.1 billion $).

Centers of machine building in Ukraine

Traditionally, the majority of industry enterprises are located in the Central and Eastern part of the country. They gravitate to the biggest cities and the Donbass industrial region. The largest engineering clusters are Kyiv, Dnipropetrovsk and Kharkiv.

The Main factories of the machine-building (Ukraine):

• Aerospace and aviation industry: Kiev («Antonov»), Zaporozhye («Motor Sich»), Dnepropetrovsk («Pivdenmash»).
• Automotive industry: Zaporozhye (ZAZ, “IVECO-Motor Sich»), Kremenchug (KrAZ), Cherkasy («Bogdan”), Lutsk (LUAZ), Kyiv (“Corporation”).
• Transportation engineering: Kharkov (HZTM them. Malyshev plant them. Ordzhonikidze).
• Shipbuilding: Nikolaev (“Ocean”, the Plant. 61-Guo kommunara), Kherson (Kherson shipyard).
• Heavy machinery: Mariupol ("renamed"), Kramatorsk (Novokramatorsk machine-building plant), Donetsk (NPK “Mining machines”), Sumy (NPO. Frunze), Kharkov (“Electrotyazhmash”, “Turboatom”), Kyiv («Bolshevik»), Dnepropetrovsk (“support”).
• Railway transport: Dneprodzerzhinsk (“Dneprovagonmash”), Kremenchuk (Krukovka carriages), Lugansk (“the company”).
• Electrical and instrumentation: Zaporozhye (“Institute”), Odessa (“Telecard-Device”).
• Household appliances: Donetsk ("NORD").
• Metal: Kharkov (HARP).

Automotive industry

Has Rich tradition of automotive engineering of Ukraine. The industry produced a full range of military and civilian products. It covers a broad range of organizations involved in the development, production and sales of vehicles passenger cars commercial vehicles and trucks, buses, trailers, motorcycles, mopeds, special vehicles, spare parts and accessories.

According to the concept of automobile industry development, by 2015 it was supposed to produce up to 500,000 cars, up to 45 000 trucks, 20,000 buses. In practice, the share of industry in the industrial production in recent years is only 0.8-0.6% and in the establishment of the national gross domestic product – less than 0.4-0.3 %. The automotive engineering industry is characterized as undeveloped, and its contribution to the national economy is insignificant. In the structure employing less than 0,1 % of all workers in the country.

In the segment, “cars” is mainly present SKD foreign brands of the middle class (In) with low level of localization and created on the territory of Ukraine on the value added. In General, in the Ukrainian automotive industry employs about 100 plants, the largest of which are:

• CJSC ZAZ.
• OOO KrASZ.
• CJSC “Eurocar”.
• The Corporation «Bogdan”.

Heavy mechanical engineering of Ukraine

This is one of the most developed sub-sectors of the country, characterized by a large number of enterprises, the existence of a “strong” engineering school, traditions of production. Products willing to buy abroad, both Eastern and Western partners. Produce: excavators, loaders, ladles, ingot molds, converters, self-propelled tamping, drilling, tunneling, foundries, machinery, elevators, machinery for crushing, sorting, crushing, processing, mixing of soils, ores, stone and other mineral substances.

Aviation industry

The Industry has more than 60 companies, which account for a quarter of the workforce of the entire national machinery. Based on five large enterprises. The capacity of the aviation industry allows to increase the volume of development and production of aircraft, in particular:

• Regional passenger and transport aircraft;
• Aircraft engines and components;
• Avionics based on the use of satellite systems of communication, navigation and surveillance;
• Helicopters and aircraft of small aircraft, in particular unmanned.

Future developments include:

• Planes “An” of various modifications.
• Production of aircraft engines.
• Helicopters.

Other industries

Machine tools ensures the development of all branches of engineering, their industrial culture and technological progress. Machine-tool plants (lathes and semi-automatic machines, rough boring machines) are situated in Kharkiv, Lviv, Kiev, Berdychev, Odessa, Cherkasy, and Dnipropetrovsk. Heavy machine tool plant operates in Kramatorsk (automatic lines).

Instrumentation plays an important role in accelerating scientific-technical progress. Leading companies on the development of electronic technology in the country are industrial enterprises “Momentum” in Severodonetsk and“machines” in Kiev. A wide range of electrical and other devices produced in the Kyiv, Kharkiv, Ivano-Frankivsk, Lviv, Sumy, Cherkasy, Zhytomyr, Lutsk.

Agricultural mechanical engineering of Ukraine provides farmers with the necessary equipment. Enterprises of this sector are located in areas of consumption of finished products. Produces powerful tractors of the Kharkiv tractor plant. Kirovograd plant «Red star" produces the drill. Beet building complexes in Dnipropetrovsk and Ternopil, combine harvesters – in Kherson ("Slavutich") and Alexandria (“LAN”), corn – in Kherson, tillage machine – in Odessa, Kiev, Berdyansk, Slavyansk. Mechanical engineering for livestock and fodder production is concentrated in Uman, Ukraine, Novograd-Volynski, Nizhyn, Coloma, White Church.

The Shipbuilding industry in Ukraine is concentrated in the big sea (Black sea, Azov sea) and river (the Dnieper river) ports. Ships built in Mykolaiv and Kherson, river and sea – in Kiev. Shipyards work in Odessa, Mariupol.

Transport machinery manufactures locomotives and cars. Centres of locomotive construction are Lugansk, Kharkov (diesel locomotives), Dnepropetrovsk; car – Stakhanov, Dneprodzerzhinsk, Kremenchug. Rail tank cars are made in Mariupol. Transport in major cities are working locomotive repair factories.

Engineering in the context of European integration

Experts have predicted what could buttmachineboys of Ukraine to integrate with Europe. The signing of the Association Agreement between Ukraine and the European Union facilitate the movement of goods flows between countries, from 1 January 2016. As of April 2014, the introduction of the EU unilateral trade preferences for Ukraine has contributed to the increase in exports of engineering products and to reduce the negative balance of foreign trade with the countries of Europe-building products.

According to statistics from the state statistics service of Ukraine, the share of mechanical engineering in 2014 accounted for 18.3% of exports and 23.8 % of merchandise imports, and for the first half of 2015, 11.7 % and 20.8 %. In 2015, the trend of reduction of goods turnover of the industry. At the same time, in the overall structure of exports of engineering products share in the EU increased from 30.4 (2014) to 43.4 % (first half 2015).

Stats & trends

The Trend of engineering development in Ukraine shows that not all industries have adapted to the new economic realities. In foreign markets, the greatest demand is boilers, machinery, electric units, nuclear reactors. Their total share in the structure of sectoral exports to the EU countries is 40 %. Among the major importers appear (2014):

• Hungary (in the amount of 270,6 million $).
• Germany (239,8 million $).
• Poland (207,9 $ ).
• Czech Republic ($80 million).

Perspectives

Ukraine, mechanical engineering which is quite developed, still needs high-tech equipment, machines and components of foreign production. Increase of imports of passenger cars, tractors, combine harvesters, household appliances, heavy engineering products. The largest volumes of products imported from

• Germany (worth 577,9 mln $).
• Poland (255.1 million $).
• Italy (160,9 million $).
• Czech Republic (116,8 million $).
• France (101.4 million $).

Practice shows that the signing of the Association Agreement gives more benefits than risks. Further development depends on how quickly the engineering industry will switch from the topic of the risks on opportunities.

Risks

A Significant barrier to increase the volume and improve the structure of mutual trade turnover in the engineering industry is the existence of technical barriers to trade between Ukraine and foreign partners. Risks associated with the possibility of partial loss of individual machine-building industries, worked mainly on the Russian market and their technical regulations. Especially vulnerable are high-tech industries: in aviation, military, shipbuilding, and space exploration.

Industrial enterprises whose products have higher added value, we need to develop the ability to respond quickly to changes in the external environment, to create products, forward the customer demands. This can be facilitated by changing the business model, the transition to the process model management tasks. For the most flexible companies typical model, combining main processes: management of product lifecycle, development of new products, customer relationship management, managing sales and order support processes. In any case, the engineering industry can expect a big change. What they will be - time will tell.