Engineering industry

The engineering industry is a rather wide subdivision of heavy industry, which deals with the manufacture of transport means, equipment, industrial engineering, professional equipment, as well as consumer goods and defence products.

Table 1. Sales volume of engineering products on the Ukrainian market for January – August, 2009 (without VAT and excise taxes)

Engineering industry, including	UAH, mln	Structure, %
Manufacture of machinery and equipment	16 347.3	39%
Manufacture of transport means and equipment	14 053.5	34%
Manufacture of electric, electronic and optical equipment	11 425.0	27%
Total	41 825.8	100%

The manufacture of hydraulic drives is considered one of the priority areas in industrial engineering being used at strategic sites, such as: hydroelectric power stations, aircraft engineering, etc. At present, the ways for this subindustry to develop are: the purchase of licenses and technological equipment abroad or the formation of its own scientific potential and production capacities with the help of branch institutes and specialized design offices.

The segment of railway coach manufacturing is also a promising branch of the Ukrainian engineering industry. Permanently, the sales market has been represented by customers from the Baltic States, the Russian Federation, Belarus, Iran and Kazakhstan, with an 80% share of the Russian Federation in export supplies. However, the crisis has integrated corrections into the sales of the production of domestic railway coach manufacturers. Thus, the share of supplies to the Russian Federation has decreased, while the shares of export to the Baltic States, Belarus and Kazakhstan have increased. Moreover, several Ukrainian manufacturers plan to export products to Turkey, Mongolia, Morocco, Oman and Australia. Today, the Ukrainian special purpose railway coaches, mainly, railway tank-cars and grain carriers, are most in demand on the international market.

The power-engineering segment remains promising and in demand, as it supplies enterprises of the fuel and energy industry, metallurgy and chemical industry. One of the evolutionary factors for this industry is the production cost level: At the end of 2008, the cost of commercial metal used in power engineering dropped two-fold. Domestic power engineering has wide sales markets both in Ukraine and abroad. Traditionally, power-engineering equipment is supplied mostly to Russian and Middle Eastern power energy monopolies, which require infrastructure projects of power station reconstructions. The economic recession has influenced the activity of the largest clients to some extent. Thus, today, there is a trend toward promoting projects in power engineering in Far Eastern countries. The search for new foreign clients and the conclusion of new contracts, in turn, result in the need to increase business transparency, improve consolidated figures, and apply marketing technologies and outsourcing.