Unleashing Ukraine's Industrial Potential: A Lucrative Opportunity in Machinery Engineering

Ukraine’s manufacturing base, historically focused on heavy industry, has a significant impact on the country’s economy. Machine production serves as a vital growth driver, contributing to Ukraine’s economic progress. The light machinery industry in Ukraine encompasses various essential products, including turbo propellers, gas turbines, pumps, and insulated wires and cables for vehicles. Similarly, the heavy machinery industry covers vehicles, railway and tramway locomotives, as well as their parts and components. The industrial machinery sector in Ukraine is dominated by an extensive network of machine-building companies. These companies play a crucial role in producing a diverse range of products such as mining equipment, railway rolling stock, farm equipment, turbo propellers, gas turbines, machine tools, aircraft engines, and instrumentation for light industry and the food sector.

With 6,682 business entities operating in mechanical engineering, this sector accounts for approximately 5.4% of the total number of business entities across all industries. Around two-thirds of the business entities in the mechanical engineering sector are enterprises, with a count of approximately 5000 enterprises recorded. This represents 10.7% of the total number of enterprises across all industries and 1.3% of the total number of enterprises in the economy.

Ukraine benefits from a highly trained labor force, with approximately 10,000 students graduating from machine-building faculties at domestic universities and colleges annually. In terms of employment, the mechanical engineering sector in Ukraine provides jobs for 363,100 individuals, making up 15.6% of the total number of employees in the industry and 4.4% of the overall employment figure in the economy.

The development of this sector plays a crucial role in driving GDP growth and ensuring stability for the country. Ukraine possesses significant reserves of raw materials and a well-established metallurgy sector, positioning it favorably to meet high levels of production demand.

Market Potential

The industrial machinery sector in Ukraine is dominated by a vast network of machine-building enterprises engaged in producing mining equipment, railway rolling stock, farm equipment, turbo propellers, gas turbines, machine tools, aircraft engines, and instrumentation for the light and food industries. With significant reserves of raw materials and a developed metallurgy industry, Ukraine can effectively meet substantial production needs. Most machine-building enterprises are strategically located near raw material supply bases, benefiting from Ukraine’s well-developed transport infrastructure, which allows easy access to major export markets in Europe, Asia, and the Middle East.

Ukraine holds the potential to emerge as a regional leader in complex and science-intensive engineering services, including industrial automation, complex engineering, and programming in the field of industrial high-tech, along with industrial design in electrical, mechanical, and electronic fields.

In 2019, Ukraine’s exports of industrial machinery reached $5.4 billion. Unfortunately, the COVID-19 pandemic significantly impacted the machine building sector, causing an 18.5% year-on-year decline in 2020. However, post-COVID-19 economic recovery in 2021 saw a positive turnaround, with selective segments of the machine building sector showing signs of growth. In January-March 2021, the industry slowed the decline to 1.6% year-on-year, while equipment production increased by 6.4%, and non-automotive transportation goods output rose by 3.5%.

The interests of the Ukrainian industrial automation community are well represented by the Association of Industrial Automation of Ukraine (APPAU), with 54 members, including manufacturers, control system integrators, engineering companies, IT firms, IT integrators, machine-building enterprises, and local universities. The association’s national movement, “Industry 4.0 in Ukraine,” unites over 80 members, aiming to promote and educate the local market in 4.0 technologies such as IoT, big data, A.I., robotics, additive manufacturing, and Vr/AR.

The Ukrainian Machine Building Industry holds enormous potential for development, with significant efforts underway. One major highlight of 2020 was the creation of the movement ClusteRISE by the Association of Industrial Automation of Ukraine, empowering regional elites to drive real economic transformation in their respective regions. Despite recent reorientation of Ukraine’s industrial machinery to other markets due to political reasons, the country’s production and export potential remains significant, offering considerable opportunities, including the potential privatization of large state-owned enterprises involved in heavy machinery production.


Machine–building is a combination of many industries, the interaction between which gives grounds to talk about the existence of the same complex. In total, about 60 structural divisions are allocated to the engineering industry. The enlarged units, which are divided into smaller subdivisions, include heavy, transport, agricultural, energy, electrical, and technological engineering.

The leading positions in the structure of machine–building before-war period were automotive production (36.8%) and machinery and equipment not belonging to other groups (35.5%). The analysis of the more detailed structure of machinery, which is presented in the reports of the State Statistics Service of Ukraine, suggests that the leaders of this branch were the production of electric motors and transformers (6.7%), general–purpose machinery and equipment (10%), railroad cars and locomotives (9.2%), motor vehicles and trailers (13.9%).

Placement of machine–building enterprises is determined by the influence of many factors – consumer, raw material, labor resources, etc. Since there are quite a lot of machine–building sub–sectors, they can be classified according to the location of enterprises. For example, enterprises in the production of electrical engineering, devices, aircraft, rocket and space technology in their placement are guided by skilled personnel. Instead, the placement of such subsectors as shipbuilding, agricultural machinery is determined by the influence of the consumer factor.

The development of scientific and technological progress, globalization processes, the effect of market factors make adjustments to the placement of mechanical engineering enterprises, cause the transformation of its branch structure, the change of the specialization of individual enterprises, the peculiarities of forming cooperative ties in the composition of industrial units etc.

In 2019, Ukraine’s imports of industrial machinery amounted to $13.3 billion, accounting for 22% of the country’s total imports, highlighting a robust domestic demand for high-quality industrial machinery. The mechanical engineering sector in Ukraine comprises 13 key segments, contributing to 90% of the added value in this industry:

  • Air and space aircraft, related equipment
  • General-purpose machines and equipment
  • Other special purpose vehicles
  • Units, details, and accessories for vehicles
  • Electric motors, generators, transformers, electrical equipment
  • Other general-purpose machinery
  • Railway rolling stock
  • Machinery and equipment for agriculture
  • Military vehicles
  • Wires, cables, and wiring devices
  • Tools and equipment for measurement, research
  • Home appliances
  • Other electrical equipment

These segments are in need of automation to enhance competitiveness, reduce costs, and adapt to changing customer demands. Although the specifics may vary among segments, automation is vital for growth. Machine building plays a crucial role in Ukraine’s economy, with many core engineering skills successfully transitioning to civilian machine building, enabling the country to preserve production capabilities. Innovating and embracing digitalization can help companies in this sector stay competitive.



This report was made by Ukrainian Marshall on July 20, 2023

Ukrainian Marshal is a team of experienced managers from Ukraine and the West that helps with the reconstruction of the country. Many head of states are visiting Ukraine with a lot of promises, funds from international organizations are presented, but most projects need private initiates to get alive. Our team is visiting many cities, understanding local needs and analyzing investment projects in production, logistics, agriculture, real estate, green energy, food, retail and many more industries.

We help to find international investors and to give those investors the right management support. Ukraine is moving towards European Union, many legals changes are on its way and corruption is considerably getting less. Despite the horrible war in parts of the country, now we see the right moment for international investors to come to Ukraine. It is important to create new jobs in Ukraine – for this reason we help Ukrainian producers to find new customers and international companies to settle down in Ukraine with very favorable economic opportunities. Soon, we will start our own Ukrainian Investment Fund where smaller investors will have the chance too to participate in the coming boom of the country.


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