1. GENERAL CHARACTERISTICS OF THE KHMELNITSKY OBLAST

The Khmelnitsky Oblast is located in the western part of Ukraine in the Volinska and Podilska highlands. This Oblast borders on the Chernivtsy, Ternopil, Rivno, Zhitomir and Vinnitsia Oblasts. The area is 20.6 thousand square kilometers or 3.4% of the total area of Ukraine.
Population. 1,517,000 people live in the Oblast, 51.3% urban and 48.7% rural. The average density of population is 74 people per 1 square kilometer. There are 13 cities, 24 towns, and 1,471 villages in the Khmelnitsky Oblast. The transport system is quite developed. The most important railways and roads go through the territory of the Khmelnitsky Oblast. There is also an airport which meets the requirementstor the international airport status. The administrative center of the Oblast is the City of Khmelnitsky - Its area is 5.2 thousand hectares, its population is 257,800 people. Distance to the capital of Ukraine -Kyiv - is about 400 km.
The Khmelnitsky Oblast is one of the most progressive in Ukraine in market reforms development. It was the first Oblast to start the process of smallscale privatization, and held the first privatization auction in Ukraine. By thebeginning of 1995, there were 705 privatized businesses registered in the Oblast.
Since January 3, 1995, the Khmelnitsky Oblast has taken part in a new, experimental, mass-privatization campaign, being one of only five Oblasts taking part. We invite foreign investors to take part in the privatization of state-owned enterprises.
The highly fertile black soil of Ukraine is probably the most promising natural resource in the Khmelnitsky Oblast. Agricultural production and processing account for more than half of Oblast GDP. We are seeking cooperation with foreign investors to provide new technologies and managerial expertise to improve crop yields, and harvesting. The Oblast boasts of a number of meat, poultry, dairy, vegetable and fruit processing plants and plans to expand the variety and improve the quality of these products for domestic consumption, as well as for export. For example, foreign investments are necessary for the construction of a tannery. More than 900,000 pig hides and 35,000 cattle hides are currently exported each year. The Yarmonlintsy food processing plant, the first enterprise to be privatized in Khmelnitsky Oblast, is actively seeking foreign investment for technology upgrades to its fruit drying vegetable, fruit, and jam canning, and cookie production, as well as for new products to develop in its domestic and export markets. Thought largely agricultural, Khmelnitsky Oblast contains a number of manufacturing complexes with highly skilled work force that can be of interest to foreign investors, among them:
1) Production Association <Advis> specialized in the manufacture of spare parts for tractors and automobiles andcompressors for diesel machinery.
2) Krasilivsky Machine-Building Plant - manufactures tractor loaders, hydraulic lifters, auto-tanks and equipment for agricultural products processing. There is additional space for extending the production.
3) The Private Stock Company <Imtex> - involved in areas as diverse as nail manufacturing, the manufacture of moldings and castings; sales, service and repair of photocopies, computers, fax machines and other equipment.
4) Production Association <Delta> specialized in manufacture of plastic products and masticated rubber for footwear. <Delta> has large amounts of land and production space for different manufacturing concerns. A large portion of the Oblast's manufacturing sector was concentrated in defense industry. Currently these facilities are operating far below capacity and seek opportunities to convert to civilian production. Defense conversion is one of the highest priorities in the Khmelnitsky Oblast. Former defense plants are actively working to attract capital for technology upgrades and to convert production lines for civilian use. Two plants, <Neva> and <Novator>, produce on-board navigational, digital communications, and service equipment for ground and airborne radar systems. These enterprises require foreign investments to master production of medical and electronic equipment and communication means.

There are about 300 industrial enterprises, 3,800 small businesses and cooperatives in Oblast. 41 joint ventures have been created, among them more than ЗО - with foreign investments, including such countries as: Germany, Turkey, Cyprus, Switzerland, Poland, Bulgaria, the Czech Republic and Hungary. Khmelnrtsky Oblast is a very rich mining region, and is the only region in Ukraine and the former Soviet Union with deposits of saponite clay, a rare material with several special properties. For example, as an additive to live stock feed, Saponites can increase cattle and swine daily weight grow, and when applied to soil, can increase crop yields. Experiments have shown that Saponites also have the ability to reduce the level of radioactive isotopes (Cesium-137 and Strontium-90) in the soil. Estimated reserves of Saponites are over 100 million tons. There is a necessity for partnership with foreign investors for extraction and processing of Saponites. Foreign investment is also sought to mine and cut red granite. There are also deposits of lime-stone, chalk, gypsum, flint, phosphorites, graphite and onyx in the Oblast depths.

Another of Khmelnitsky's untapped resources is tourism. The Oblast is blessed with a number of natural and historical attractions, but lacks the resources to properly develop them into world-class tourist destinations. The most significant places are:
1) Kamianets-Podilsky. This city is located in the southern part of the Oblast, dating back to the Early Kiev-an Rus' of the 11th century and, after Kyiv and Lviv, has more historical and architectural buildings than any other city of Ukraine. The central significant monument of the city is the medieval fortress, which is considered to be one of most interesting and attractive in
Eastern Europe. Kamianets-Podilsky, <a flower on the stone> is worth foreign investors' attention, and with help, can be turned into one of the best tourist objects in Ukraine, on a world level.
2) Medjibizh. An urban settlement, located in the central part of the Oblast. Here is the tomb of Baal Shem Tova, the founder of the Jewish doctrine of Hassidism. Now his tomb is a very famous and significant place among tourists of Israel, America, Canada and many other countries. Medjibizh is famous for the remains of a big fortress of the 16th century, almost unknown outside the Oblast. Foreign investors' help is necessary to build a hotel, restaurant and a service complex in Medjibizh, which will give the possibility to serve the growing number of tourists.
3) Resorts. The Khmelnitsky Oblast can boast of a large quantity of deposits of high quality mineral water, which are the basis for many resorts. There is a need for foreign investments, both for the further development of resorts potential of these places, and for introducing facilities for bottling and sales of mineral waters.
4) Dniester River.[photo1] [photo2] This river is one of the biggest, cleanest and most picturesque rivers in Ukraine. The Dniester reaches the widest places (up to 1 km) along the southern border of the Oblast. The unspoiled natural beauty
makes it an ideal place for tourism and rest. Investments are also needed for initiating and development of tourism and recreation zones. It is necessary to remember the beneficial geographical position of the Oblast. Transport communication will
soon become even better: the construction of the high-speed railway <Kyiv-West> and highway, <Western Europe-Kyiv>, is being designed, which will go through the Khmelnitsky Oblast.

Khmelnitsky Oblast is a gateway to both the East and the West and is easily accessible from all major cities in the NIS and Eastern Europe. Khmelnitsky also has an operational airport. Cargo transport is also available by rail and road to all major cities. There is also direct passenger train service from Khmelnitsky to Moscow, Kiev and Odessa.

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(c) 1998 KhmelnitskInfocom