ECONOMIC ASPECT OF UKRAINE

FMCG industry provides a large range of consumables and accordingly the

amount of money circulated against FMCG goods is also very high. The
competition among FMCG manufacturers is also growing and as a result of
this,

investment

in

FMCG

industry

is

also

growing

specifically

in

INDIA/GUJARAT, where FMCG industry is regard as the fourth major sector

with total market size of US$13.1 billion.
Some general FMCG product categories include food and dairy products,
glassware, paper products, pharmaceuticals, consumer electronics, packaged
food products, plastic product, printing and stationery, household products,
photography, drinks etc. and some of the examples of FMCG products are
coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and
cigarettes, watches, soaps etc.
A terrible quarter
In the first quarter of 2015 Ukraine's real GDP fell by a mammoth 17.2% year
on year, according to modify data from the State Statistics Committee (SSC).
This was superior than in the final quarter of 2014, when real GDP dropped
by 14.8% year on year. It was also the genuine fall since January-March 2009,
when output fell by 19.6%.
Real household spending fell by just under 21% year on year in the first
quarter of 2015. This triggered a precipitous decrease in the volume of retail
trade turnover, which decline by almost 24% year on year, compared with a
fall of 8.6% in 2014 as a whole.
Retail trade turnover in Ukraine fell by 23.1% in January-August 2015 yearover-year, to UAH 647.8 billion, Ukraine's State Statistics Service reported on
its website.

Overall economical change also affect the FMCG sector of Ukraine.

So econo,ical information and data is given in following table

Ukraine Economy Data

2011

2012

2013

2014

2015

45.5

45.4

42.9

42.8

42.7

3,586

3,813

4,195

3,063

2,038

163

173

180

131

87.0

5.5

0.2

0.0

-6.6

-9.9

15.7

8.4

6.9

-8.3

-20.2

Investment (annual variation

in %)

8.5

5.0

-8.4

-24.0

-9.3

Industrial Production (annual

variation in %)

8.0

-0.5

-4.3

-10.1

-13.0

Retail Sales (annual variation

in %)

13.7

13.7

5.6

-9.8

-21.0

7.9

7.5

7.2

9.3

12%

Fiscal Balance (% of GDP)

-1.8

-3.6

-4.3

-4.5

-1.6

Public Debt (% of GDP)

36.4

36.7

39.9

69.4

79.4

Population (million)
GDP per capita (USD)
GDP (USD bn)
Economic Growth (GDP,
annual variation in %)
Consumption (annual variation
in %)

Unemployment Rate

2011

2012

2013

2014

2015

14.2

13.1

17.5

5.4

4.0

Inflation Rate (CPI, annual

variation in %, eop)

4.6

-0.2

0.5

24.9

43.3

Inflation Rate (CPI, annual

variation in %)

8.0

0.6

-0.3

12.1

48.5

Inflation (PPI, annual variation

in %)

19.0

3.7

-0.1

17.1

36.0

Policy Interest Rate (%)

7.75

7.50

6.50

14.00

22.00

-45.2

-38.5

-8.6

28.8

-37.8

Exchange Rate (vs USD)

8.01

8.05

8.24

15.82

24.03

Exchange Rate (vs USD, aop)

7.99

8.08

8.15

12.02

21.95

Current Account (% of GDP)

-6.3

-8.2

-9.2

-3.4

-0.2

Current Account Balance (USD

bn)

-10.2

-14.3

-16.5

-4.6

-0.2

Trade Balance (USD billion)

-18.0

-21.9

-22.1

-7.1

-3.3

Stock Market (annual variation

in %)

Stock Market (annual variation

in %)

2011

2012

2013

2014

2015

Exports (USD billion)

62.4

64.4

59.1

50.6

35.4

Imports (USD billion)

80.4

86.3

81.2

57.7

38.7

Exports (annual variation in %)

31.9

3.3

-8.3

-14.5

-29.9

Imports (annual variation in

%)

41.3

7.3

-5.8

-29.0

-32.8

International Reserves (USD)

31.8

24.6

20.4

7.5

13.3

External Debt (% of GDP)

77.3

78.0

78.9

96.2

137

ENVIRONMENTAL ASPECT OF UKRAINE

Ukraine's environmental problems include the nuclear contamination which

resulted from the 1986 Chernobyl accident. One-tenth of Ukraine's land area
was affected by the radiation. According to UN reports, approximately one
million people were exposed to risky levels of radiation through the spending
on food. Approximately 3.5 million ha (8.6 million ac) of agricultural land and
1.5 million ha (3.7 million ac) of forest were also contaminated.
Compared to its neighbours, Ukraine has a very low Environmental
Sustainability Index (ESI) (ranking 108 out of 146 countries; Esty et al. 2015).
This is primarily due to the high energy and pollution-intensity of its industry,
pressure on ecosystems due to intensive agriculture, water stress on part of
its territory, and insufficiently developed environmental institutions.
Pollution from other sources also poses a threat to the environment. Ukraine
releases polluted water, heavy metal, organic compounds, and oil-related
pollutants into the Black Sea. The water supply in some areas of the country
contains toxicindustrial chemicals up to 10 times the awareness considered
to be within safety limits.

ECONOMICAL ASPECT OF INDIA/GUJARAT

FMCG industry provides a wide range of consumables and accordingly the
amount of money circulated against FMCG products is also very high. The
competition among FMCG manufacturers is also increasing and as a result of
this, investment in FMCG industry is also increasing, specifically in
INDIA/GUJARAT, where FMCG industry is regarded as the fourth largest sector
with total market size of US$13.1 billion. FMCG Sector in INDIA/GUJARAT is
estimated to grow 60% by 2014. FMCG industry is regarded as the largest
sector in New Zealand which accounts for 5% of Gross Domestic Product
(GDP).
With the presence of 12.2% of the world population in the villages of
INDIA/GUJARAT, the INDIA/GUJARAT
rural FMCG market is something no one can overlook. Better focus on farm
sector will boost rural incomes, hence providing better growth prospects to
the FMCG companies. Better infrastructure facilities will improve their supply
chain. FMCG sector is also likely to benefit from increasing demand in the
market. Because of the low per capita consumption for approximately all the
products in the country, FMCG companies have immense possibilities for
growth. And if the companies are able to change the mindset of the
consumers, i.e. if they are able to take the consumers to branded products
and offer new generation products, they would be able to produce higher
growth in the near future.
At

present,

urban

INDIA/GUJARAT

accounts

for

66%

of

total

FMCG

consumption, with rural INDIA/GUJARAT accounting for the remaining 34%.

However, rural INDIA/GUJARAT accounts for more than 40% consumption in
major FMCG categories such as personal care, fabric care, and hot
beverages. In urban areas, home and personal care category, including skin

care, household care and feminine hygiene, will keep growing at relatively
attractive rates. Within the foods segment.

Economic contribution:

Employment

The FMCG sector is one of the larger employers in the country. The total
salary outlay of the sector on direct employment is estimated at
approximately 6% of turnover, i.e. US$ 1.5 billion(Rs. 7,000 Cr.).
There are approximately 12-13 million retail stores in INDIA/GUJARAT, out of
which 9 million are FMCG kirana stores. Thus the sector is responsible for the
livelihood of almost 13 million people5.

Fiscal contribution

Cascading Multiple Taxes (Import duty, CENVAT, Service Tax, CST, State VAT,
and Income Tax) are paid at multiple points by the FMCG sector. On an
average therefore, almost 30 % (and much more for liquor and tobacco
categories) of the revenue of the sector goes into both direct and indirect
taxes. At an estimated size of $25 billion (Rs. 120,000 cr.), that would
constitute a contribution to the exchequer of approximately US$ 6.5 billion
(Rs. 31,000 cr.).

INDIA/GUJARAT FMCG sector recorded 16% sales growth in last fiscal year
and it is expected it would further progress in the forthcoming years.
The FMCG sector is a 4th largest sector of INDIA/GUJARAT economy with
market size of more than 60,000 cr. The INDIA/GUJARAT Territory is very large
and number of customers is also very high.

ENVIRONMENTAL ASPECT OF INDIA/GUJARAT

The environmental analysis includes weather, climate and climate change,
which may especially change industries such as FMCG, etc.
For ice cream, the main environmental impact of production is due to the
energy consumption.
The environmental impact depends on the energy mix, which varies per
country.

Engage local governments, ministries, and FMCG associations to

promote sector development & reform.
Promote efficient consumer
regulation.

goods

product safety

and labeling

support innovative approaches to increase/promote local supplier

industry (e.g., tax incentives for local procurement).

Raise the profile of related development issues and challenges with

governments and regulators.

Contributes to an efficient, enabling operating environment which

companies can invest and expand in. Creates a more unbiased
marketplace to support socio-economic development. Supports local
industry development.