Three new major projects in two years: a village community in Zakarpattia becomes a logistics hub

What is the problem?

Most Ukrainian communities need investments for economic development. Zakarpattia is no exception. Many communities in the region have deficit budgets.

What is the solution? 

To effectively establish contacts and cooperation with investors, communities develop investment passports. This work requires a systematic professional approach and expert support. The U-LEAD with Europe Program provided expert assistance to Zakarpattia communities, particularly the Bativska community. The development of the investment passport helped the Bativska community to identify the development of the logistics hub as one of its priorities.

The investment passport of the community is a document that contains information about the main advantages, conditions, and opportunities for investment, an overview of the main sectors of the economy, labor, and other resources of the community.

To develop it, the community must:

• inventory all your resources that may potentially interest investors,
• assess the strengths and weaknesses,
• assess the needs and potential,
• determine the competitive advantages,
• determine the priority areas of development,
• present this data in a systematic form with accurate proposals for investors.

For the first time, the leadership of the Bativska community had to consider the development of an investment passport in 2021. Then, an investment forum was held in the Berehove district with the participation of district communities, regional leadership, and foreign partners.

"When we received an invitation to this event, we realized that we do not have such a document that would concentrate all the information about our community that is important for potential investors," says Gabriella Galambos, deputy head of the Batyovo village.

Even before that, the community was constantly faced with the fact that there was a lack of such visual information when communicating with potential investors. At first, they tried to take on this work on their own.

"When thanks to the U-LEAD with Europe Program, we got the opportunity to develop a real investment passport with expert support, we were thrilled," says Galambos. She was involved in the work on the passport in 2021 and already in 2022.

Galambos emphasizes: "From our experience, I can say that it is crucial to have expert professional support. The expert literally led us by the hand. It was non-stop communication and methodological recommendations: what should be included, what should not be included, what should be paid attention to. When we developed the document ourselves, although we brainstormed, certain aspects attractive to investors could be missed."

Galambos shares her fresh experience. It is worth looking at all the resources available in the community.

"It may seem to you that this object is not attractive for an investor, but in fact, it may not be so. Thanks to the expert support of U-LEAD, we communicated with other communities, found out who has what kind of work experience, and this helped us pay attention to some non-obvious things," says the deputy head of the settlement.

It will be very effective to communicate with the private sector. This is how you can highlight real estate objects, warehouses that are not used, and land plots that may have some natural resources. 

Galambos adds: "The owners are ready to make contact and communicate. They are also happy if we can help them, for example, attract some small investors."

It is worth looking for tourist potential. For this, raise archival documents and communicate with people of respectable age in settlements of the community. The settlements have united into a community, but each has some highlight, perhaps not yet known to the general public, Galambos believes.

Cooperation of the U-LEAD with Europe Program with the Batyovo settlement council began even before the creation of the community, in 2017. The community was formed in 2020 and to this day actively participates in all educational programs offered by U-LEAD with Europe, says Mykola Siusko, the head of the Zakarpattia regional office of the U-LEAD with Europe program.

Siusko lists:

• in 2021, the community underwent a comprehensive training program Business-friendly community, where they learned more about how to properly build a dialogue and cooperate with businesses, what business support tools exist, and how to implement them;
• at the same time, the community received expert support in developing a capable network of educational institutions;
• developed an investment passport in 2022;
• in 2023, it began training on developing the Community Development Strategy and the actual development of this document.

"The community managed to develop, in my opinion, a high-quality document," says Siusko about the community's investment passport.

What was the guarantee of this?

First, this community stands out because it is open to new ambitious ideas.

"They conducted a detailed analysis of their potential and are not afraid to develop ambitious and atypical projects," says Siusko.

Secondly, the community has really good prerequisites for business development.

Siusko lists: "It has a very favorable geographical location near the border with Hungary, a good railway junction, free land plots for the location of enterprises. Few people in the Zakarpattia region can boast of this because two-thirds of the region is mountainous. They also have natural resources, such as thermal water deposits."

Thirdly, local authorities and community residents are proactive.

"The head of the community and his deputy in this area are very proactive — they always communicate with investors. For example, when the war started, they immediately began to think and offer land to accommodate the potential construction of housing for internally displaced persons," Siusko shares. "There is a ready-made project for such a town, and they are currently looking for resources for it. Active residents of the community created the Zdybanka youth space. For a rural community, such active community centers are a rarity."

How does it work?

The most important advantage is a convenient geographical location because the Bativska community is on the border.

Galambos clarifies: "We are very close to Hungary, Slovakia, Romania, and Poland. Also, our community is located within the 5th International Crete transport corridor."

It is also very important that the M25 international route passes through the community, and there is also a checkpoint Dzvinkove – Lonya on the border with Hungary. "Batyovo railway station is a significant hub station. We have a wide and narrow track connecting us with Europe, and it is, of course, passenger and cargo transportation," Galambosh told Rubryka.

There is a land bank, natural resources, business infrastructure, and human capital.Batyovo railway station

Therefore, the investment passport contains proposals in various directions: the creation of the Batyovo industrial park, several plots of land for the location of industrial facilities, and the possibility of building recreation centers based on thermal water sources on the community's territory.

"When we were developing the investment passport, we studied the Bativska community's local conditions in more detail. On the one hand, there is good potential here in the direction of industrial development. On the other, there are also prerequisites for developing the tourism industry," says the head of the Zakarpattia regional office of the U-LEAD with Europe program.

Galambos says that work on the development of the logistics direction began even before the war: "After the start of a full-scale war, we understood even better that this is a critical aspect because, unfortunately, the enemy destroys our transport logistics, blocks the sea routes. We understand that now we have to work as hard as possible to make it possible to create proper logistics for investments and business."

To date, the community has already developed three large production and transshipment complex projects already approved by the relevant ministry, which are currently under construction.Construction works at the BF Terminal site. Photo from Viktor Mykyta's official Facebook page

In 2022, the Bativska community attracted two enterprises that work in agriculture, which are newly created enterprises, not relocated ones. In 2023, the construction of a woodworking enterprise began. "For the rural community to open three enterprises in the last two years, even though the war is going on in the country, is, in my opinion, very good results," says Siusko.

Galambos emphasizes that success was contributed by:

• simplified procedure for the creation of production and transshipment complexes approved by the state,
• support of district and regional administrations,
• understanding and a common vision of the deputy corps and executive committee members.

In addition, it was very important to establish high-quality communication with the investor.

"It is unlikely that an investor with cash will come to someone now and say: 'Oh, let's build something, open or launch something here,' Unfortunately, It doesn't work that way. This is a long-term job that requires communication and openness. We felt it ourselves," says the deputy head of the village.

The third major project, the BF TERMINAL production and transshipment complex, whose investors are PJSC Korostensky Zavod MDF and LLC Ukrainian Holding Sawmill Company, creates almost three thousand jobs.

Viktor Mykyta, the head of Zakarpattia RMA, visited the facility at the end of May, when the construction of the workshops began, emphasized: "It is important that this case is not only about the economy but also about the social and humanitarian components.

Together with investors, we created a community development concept where the company will direct funds for constructing kindergartens and schools." Within the Zakarpattia RMA program's framework on providing housing for new enterprise employees, housing estates with appropriate infrastructure and much more will be built.

At the same time, the community will direct the funds received from the personal income tax of enterprises to the development of road infrastructure and the improvement of medical services.

"Thank you to the Bativska community for the initiative, effective management, and quick, well-considered solutions," Mykyta says.

The launch of the first phase of this enterprise is expected at the beginning of 2024. However, the project caused an ambiguous reaction among Zakarpattia representatives of the woodworking industry due to fears that big business would crush smaller enterprises. In response to this, the head of the Zakarpattia RMA gave the following argument in one of the interviews:

"The medium-density fibreboard (MDF), manufactured in Batyovo, is made from wood chips, chips, and sawdust. The tree is cut down, the branches are trimmed, the top of the trunk goes to commercial wood, and the plant processes the waste into еру MDF. They are not competitors of Zakarpattia woodworkers — they will take their waste and process it, maybe even pay for it. That is, there are no problems. We fought for this project for four months, and it could be in Lviv."

Photos provided by the Batyovo council