The shortage of professional staff at construction sites in Ukraine is up to 50% in both technical and labor specialties, while salaries are showing positive dynamics, according to a survey of developers conducted by Interfax-Ukraine.
“The need for people on construction sites is only increasing as the construction market is gradually recovering, work is ongoing, and construction volumes are increasing. But the war continues, as does mobilization into the Armed Forces, so this certainly affects the labor market. In general, we can state that the level of workers employed in construction is about 40% of the pre-war level,” said Dmitry Novikov, Marketing Director of City One Development.
According to him, the most sought-after specialties include welders, operators of tower cranes and specialized construction equipment, and high-rise mountaineers. In addition, there is a shortage of ordinary construction workers and general laborers, Novikov noted.
According to Olga Pylypenko, Executive Director of Kovalska Group, more than 70% of the group’s vacancies are for workers, most of them concrete workers, reinforcing steelworkers and electricians.
“Today, the number of workers is already about 50%. Given the overall drop in demand, this labor force is in a fragile balance that can be upset if construction volumes increase,” she explained.
The lack of labor at Intergal-Bud’s construction sites was felt again in the fall after the start of the full-scale war, said its commercial director, Anna Laevska.
“At the beginning of the full-scale war, we felt a shortage of workers at construction sites, but the situation was resolved quickly enough. And until May 2023, there was practically no labor shortage. But in the last few months, we have been noticing a shortage of construction workers. We observe a shortage of all specialists,” the expert said.
According to her, the company’s construction volumes allow it to increase its staff by a third, but due to the shortage of personnel, it has to restructure its teams.
According to the Greenville Group, the staffing situation has somewhat leveled off compared to last year, but the group also experienced a labor shortage and began to re-staff construction teams.
“Currently, the shortage is 40% – all of them are highly qualified specialists. Among the scarce specialties on the market are electricians, crane operators, monolithic workers, handymen, and facade workers,” said Natalia Dubyk, project manager of the Greenville group of companies.
At the same time, Alliance Novobud managed to increase its staff at construction sites by expanding the types of work performed by its own labor force. In addition, the company noted an increase in female demand for construction jobs.
“Construction is mostly a male sphere, but amid the difficult situation with the search for workers and the overall economic situation in the country, there is some growth in interest in working on construction sites from women. Most often, these are painting professions related to interior decoration,” said Oleksandra Kachan, HR Director at Alliance Novobud.
The interviewed developers noted the positive dynamics of changes in the salaries of builders. Thus, Intergal-Bud and the Greenville Group of Companies estimated the salary growth in October 2023 at 15-20% compared to spring, and Kovalska Group – up to 25%. In general, developers expect further salary growth next year, provided the economic situation is stable.
At the same time, City One Development expects the shortage of personnel in the construction sector to increase after the war ends.
“Even after the specialists who are currently serving in the army return to work, it will still not be able to cover the shortage of personnel and compensate for the demand for professional construction specialists,” Novikov said.
A similar opinion was expressed by Oleksandr Nasikovsky, co-founder and managing partner of DIM Group. According to him, encouraging Ukrainians to get technical education should become a priority of government policy.
“The deepening deficit in certain highly skilled professions is due, in particular, to the low demand for technical education from young people. Today, there is an acute shortage of monolithic workers, crane operators, painters, and electricians. Encouraging Ukrainians to master construction specialties should be a priority for both the government and private businesses. The vocational education system must undergo radical changes. It will be useful to involve private players who are ready to create a kind of corporate training institutions and facilitate the acquisition of various professions by those who are willing,” the expert said.
Foreign investors are looking for transparency, openness and willingness to cooperate in companies. This helps build trust and break down myths about corruption and instability.
This was stated by Marina Cheban, Head of the Legal Department of DIM Group, in an article for thepage.ua.
“While diplomats and politicians are discussing government investments, businesses should actively explore opportunities for existence and development in the new environment. An important aspect of successfully attracting investment from foreign companies is establishing partnerships with foreign investors. Foreign investors are looking for transparency, openness and willingness to cooperate in companies. This helps to build trust and break myths about corruption and instability,” she emphasizes.
Maryna Cheban shared an example of a successful partnership with a foreign investor company and attracting investment in the LUCKY LAND residential complex, which is notable for its scale and comprehensive social facilities. Foreign investors are interested not only in profit, but also in social issues and meeting the needs of the population. In particular, this applies to residents who migrated due to the war. The social aspect, along with well-thought-out planning and various services, creates a comfortable living environment, which makes the complex liquid and extends the product’s life cycle.
“At the moment, we cannot disclose the name of our partner and the size of the investment, but we can say with certainty that foreign investors are looking for long-term investments that bring passive income in the future, which means millions of dollars for construction and an example for other investors that the Ukrainian real estate market is potentially interesting to invest in. For the Ukrainian market, the cases of cross-border partnerships are an opportunity to share experiences, bring best practices, as well as a strategic opportunity to develop and create a positive image for the cumulative effect of building the Ukrainian real estate and development market,” Cheban said.
However, according to Cheban, attracting foreign investors to Ukrainian residential projects is not an easy task, and risk management plays an important role. An important step is project due diligence, which allows investors to understand all aspects of Ukrainian legislation, urban planning regulations, and other norms. Risk management includes a detailed analysis of risks that may arise, including military, political, tax, and economic factors. It is important for Ukrainian companies to demonstrate openness, trust and a deep understanding of the risks involved in attracting foreign investment. This is an important step for Ukraine’s development and building a safe investment environment.
DIM Group was founded in 2014 and consists of six companies covering all stages of construction. To date, it has commissioned 12 buildings in six residential complexes with a total residential area of over 218 thousand square meters. Six residential complexes of “comfort+” and “business class” categories are under construction: “New Autograph, Metropolis, Park Lake City, Lucky Land, etc.
Kormotech, Ukraine’s largest manufacturer of cat and dog food, will implement a number of investment projects in Ukraine and Lithuania, where it has production facilities, as part of the development of its production capacities in 2023-2024, said the company’s beneficiary Rostyslav Vovk during a Business Breakfast with Forbes Ukraine on Wednesday.
According to him, Kormotech completed a 25% expansion of the company’s factory in Lithuania in the second quarter of 2023. In addition, in the third quarter, it will put into operation a new line at a factory in Lviv region for the production of wet fodder.
“EUR8m was invested in it (the new line at the factory in Lviv region), which allowed us to expand the plant’s production capacity by 65%. If earlier its capacity was 17,000 tons (of fodder – IF-U) per year, now it will be 27,000 tons,” he said.
In addition, according to the information of the company owner, at the end of 2023 Kormotech will start construction of a new factory in Lithuania, in which it will invest more than EUR60 mln.
“This factory will have the same capacity as our two factories in Ukraine. It will be plus 40 thousand tons. We should reach the launch of the first line in the middle of 2025,” Vovk emphasized.
UBC Group (Kharkiv), a commercial and industrial holding company operating in the field of refrigeration equipment and promotional products, has started construction of the second stage of a 5,000 sq m refrigeration equipment plant in Vinnytsia, according to Andriy Ocheretnyi, deputy mayor of Vinnytsia.
“This will create about 200 new jobs in Vinnytsia. The main work is scheduled for 2024. Currently, the project documentation is being finalized and preparations for the expert review are underway,” he wrote on Facebook.
In addition, a solar power plant with a capacity of 600 kW has been launched at the Green Cool plant. The solar panels were built in two stages. The first was completed in August and the second in September. In total, the company has installed 1080 solar panels.
“They will ensure the consumption of our own electrical installations and minimize the load on the power grid of the whole country. We are already talking about 100% replacement of our own consumption of electricity generated by renewable energy sources between April and September,” said Ocheretyanyi, adding that Green Cool sets “a great example of working towards green energy.”
The deputy mayor of Vinnytsia reminded that Green Cool, which operates on the basis of the Vinnytsia Refrigeration Engineering Cluster Industrial Park, produces refrigeration equipment that is exported to more than 20 countries. In 2023, the manufacturer expanded its sales geography and launched exports to North Africa and Latin America.
“This enterprise is one of the most powerful in the machine-building industry in the Vinnytsia community. More than 800 people work here and the staff will continue to expand,” the official added.
As reported, UBC Group’s business in 2022 decreased by about 43% due to the war. The group moved one of its plants from Kharkiv to Vinnytsia, which took about 400 vehicles. It was launched in May last year, but the number of employees there was about 300, compared to 1,000 in Kharkiv. The second plant in Kharkiv is gradually starting to operate, but the number of employees there has also decreased significantly.
For relocation, UBC Group built the first phase of its refrigeration equipment plant in Vinnytsia on an area of 20,000 square meters. Investments in its construction amounted to EUR 18 million. The first phase of the plant’s capacity to produce refrigerators with glass doors and ice cream chests was 60 thousand units per year.
During the construction phase, UBC Group announced a further expansion of the production building to 35 thousand square meters. The second stage will produce refrigerated cabinets, and with it, the group will reach a capacity of 150 thousand units per year. Capital investments in the second stage will amount to about EUR 10-12 million.
Prior to the Russian military invasion, UBC Group, which has been operating in the market for over 20 years and supplies products to 120 countries, had several divisions.
UBC Cool was engaged in the development and production of refrigeration equipment for beverages and food at the UBC Cool plant in Dergachi and the UBC Green Cool plant in Vinnytsia.
UBC Promo specialized in the development and production of promotional materials under the Promo brand at its plants in Kharkiv and Dergachi.
UBC Engineering was engaged in providing installation and commissioning services in the food and processing industry, UBC Service in providing maintenance and refurbishment services, UBC Distribution in selling products and services of the group of companies, UBC Armature in designing and installing equipment and processes, and distributing industrial valves and consumables.
UBC Group also owns the Ukrainian Beer Company (Kharkiv) and the Stargorod brewery restaurant chain in the CIS and Baltic countries.
The owner of UBC Group is Igor Humennyi.
Centravis Production Ukraine, a part of Centravis Ltd. holding company, took part in the construction of the International Thermonuclear Experimental Reactor (ITER) by shipping 1,300 meters of seamless stainless steel pipe for the reactor’s retro-reflectors.
According to the company’s press release on Friday, ITER is considered one of the most complex projects mankind is currently working on.
The project itself was started back in the 1980s. It was discussed and prepared for a long time. Finally, the reactor began to be built in 2020 in the south of France. The project involves 35 countries. The facility is planned to be launched in 2025, and it will reach full capacity in 2035.
According to the plan, ITER will produce clean energy through fusion.
Back in the 50s of the last century, scientists suggested that mankind is able to repeat the fusion of hydrogen isotope nuclei, as in the Sun, and get a lot of energy (1 g of thermonuclear fuel can replace 11 tons of coal).
In addition, no debris is left behind after fusion and it has low radioactivity. This type of plant can be four times more efficient than modern nuclear power plants and safer. But to get such energy, special conditions need to be created. In particular, the temperature is 10 times higher than in the core of the Sun.
“Projects like ITER are created for the future of mankind and it is an honor for us to join the cohort of its executors. We are working to ensure that there are more such orders,” said Centravis CEO Yuri Atanasov, who was quoted by the press service.
Earlier “Centravis” took part in the projects on construction of a new nuclear power plant Hinkly Point C in the UK, the largest fresh water storage in the UAE and others.
Centravis was founded in 2000 and is among the top ten largest seamless stainless steel pipe manufacturers in the world. Its main production facilities are located in Nikopol (Dnepropetrovsk region), in 2023 the company opened a branch in Uzhgorod.
The company employs more than 1400 people.
The geography of the company’s supplies exceeds 50 countries of the world. Currently “Centravis” has offices in the USA, Germany, Italy, Switzerland, Poland, United Arab Emirates. “Centravis” cooperates with Benteler Automotive, Buhlmann Group, Webco – with different companies on different continents.
Centravis Ltd. holding was established on the basis of CJSC “Nikopol Stainless Pipe Plant”, service and trading companies of LLC “Production and Commercial Enterprise “YUVIS”. Its shareholders are members of the Atanasov family. Centravis Ltd. owns 100% of shares of Centravis Production Ukraine PJSC.
Ukraine’s Alfa Development Group is completing the construction of new warehouse real estate projects with a total area of about 244 thousand square meters, with commissioning scheduled for 2023-2024, said Maxim Onufrienko, CEO of the group.
According to him, the construction of the second and third phases of the Oleksandrivskyi logistics center (Chubynske village) with a total area of 115.2 thousand square meters is being completed in Kyiv region. Completion of the second stage (12.6 thousand square meters) is scheduled for October 2023, and the third stage (40.7 thousand square meters) – in March 2024.
“This is a multi-mode warehouse complex, which means that there is both freezing, refrigerators, and dry storage. I must say that we have already leased 50% of the second stage, scheduled for commissioning in October 2023, and signed contracts with customers. This confirms the growing demand for warehouse real estate in Kyiv,” Onufrienko said at RAU Expo 2023 in Kyiv on Tuesday.
Other projects in the Kyiv region, he said, include the Dudarkiv warehouse center with a total area of 45.5 thousand square meters, scheduled for commissioning in January 2024. About half of the first phase’s area (23.1 thousand square meters) has already been leased.
In addition, the construction of a logistics complex with a total area of 159.6 thousand square meters is underway in Chaiky village. The completion date for the first (19.5 thousand sq. m) and third (27.2 thousand sq. m) phases is March 2024, and the second phase (23 thousand sq. m) is May 2024. After that, the project envisages the implementation of two more stages.
In Dnipro region, Alfa Development Group is building two projects: the Shynnyi Industrial Park (Dnipro) and the Peredovyi warehouse center (51.3 thousand square meters, Chumakivska village council).
“Shynnyi is the first industrial park in Dnipro. We started it in early 2022, before the war. We negotiated with Ukrposhta, but this is still a thing of the past. So now we are building an industrial park. The construction plans for January 2024 include 130 thousand square meters, of which 34% have already been signed with a major client,” said Onufrienko.
In addition, a warehouse complex in Kropyvnytskyi with a total area of 14.2 thousand square meters is planned to be commissioned in October 2023.
The group also has a facility in Odesa, Odesa Logistic Park, which was damaged during Russian shelling.
“In Odesa, we have two warehouse complexes, one dry warehouse with a total area of 38 thousand square meters and a cold logistics facility with 27 thousand square meters. We had an arrival in Odesa, after which we have half of the dry warehouse left, which we are reconstructing. In September, we will complete 14 thousand square meters, which is almost half. We restored the refrigerators back in May,” said the CEO.
Next year’s plans also include the construction of a new logistics complex in Lviv with an area of 50 thousand square meters. Onufrienko told Interfax-Ukraine that the warehouse will be put into operation in 2024.
The expert noted that all of the company’s facilities are equipped with generators in case of power outages in the face of Russian aggression. In addition, shelters are being built at the facilities and new fire safety systems are being installed.
Alfa Development Group was founded in 2005. It holds one of the leading positions in the warehouse real estate market of Ukraine. Its portfolio includes 16 completed facilities with a total area of over 326 thousand square meters.
