BRDO: Ukrainian market of metal structures has the potential to grow by 500%

25-05-2017

Ukraine is among the top 10 countries producing metal, but it spends over 1 billion hryvnas to purchase building metal structures abroad. 80% of Ukrainian metal are sold as a raw material, and only 20% are used to make finished products. One of the reasons of this situation is regulating this sector with outdated Soviet rules that do not allow the market to develop and introduce modern technologies in construction. According to the Better Regulation Delivery Office, 32 of 59 regulatory acts require to be updated and 7 of them have signs of being illegal.

The government, business, community and expert circles representatives were engaged in finding solutions to the problems of regulating the market of metal constructions at the roundtable “Iron standard: metal structures between yesterday and tomorrow” as part of the Public dialogue #PRODialogue on May 25.

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“The market of metal structures is one of the most technological sectors in the country. We should develop a roadmap on the market deregulation and the opening of European markets, introduce modern technologies and attract investors in the short term,” the Vice Prime Minister, Minister of Regional Development, Construction, Housing and Utilities of Ukraine Hennadiy Zubko said when opening the event.

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The market of metal structures is a sector with considerable added value for the economy and great potential for growth. Today, there are 830 enterprises working in the market. They create 20 thousand jobs and generate 2.6 billion hryvnas of value added per year. And this is just 20% of market facilities, which are currently used in Ukraine.

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“Ukraine is facing the urgent task to reform the system of market regulation and improve the business climate. This will allow to harmonize the legislation with European standards in the framework of the Association Agreement with the EU and open the international market for Ukraine. There are a lot of work to be done with mandatory participation of all parties, but the reforms are worth it,” the manager of the EU Cooperation Programmes Berend de Groot believes.

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According to the analysis conducted by the BRDO, the system of existing market regulation is a barrier to introduce new technologies and provide producers with access to international markets. In Ukraine, the surplus of steel production is 500% compared to consumption, but its export potential is limited by the need to certify products under international standards.

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“The existing regulation creates artificial barriers for the market development and create excessive burdens for businesses. Cleaning the regulatory environment and eliminating inconsistencies in rules in terms of professional certification of experts and providing free access to base standards and government regulations will reduce financial costs of business owners by 39 million hryvnas per year,” the head of the BRDO Construction sector Olena Shulyak said presenting rolling review results of regulation quality for the market of metal structures in terms of effectiveness, corruption risks, favorable business and practicability.

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The event was also attended by the Deputy Minister of Regional Development, Construction, Housing and Utilities of Ukraine Lev Partskhaladze, the Deputy Head of the State Regulatory Service of Ukraine Oleh Miroshnichenko and about 100 business, community and expert circles representatives. The discussion results will be considered and for the basis to develop legislative changes in the market of metal structures.

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For information:

The Ministry of  Economic Development and Trade together with the State Regulatory Service initiated public consultations as an essential element of the regulatory reform to make the rules for businesses more effective and clear and the process of their adoption – transparent and public. The independent BRDO analytical center is organizing public consultations and developing analytical materials in the framework of the EU4Business/FORBIZ initiative.

The Public Dialogue between the government and businesses is aimed at improving the state regulation and the business climate in the country.

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