V.V. Bochinskaya

Scientific supervisor: senior teacher L.V. Rassolova

Donetsk National University of Economics and Trade

named after M. Tugan-Baranovsky

Openness is a direct way to investments

Modern investors operate in conditions of having an alternative. Investment companies can choose between lot of investment proposals in different spheres of economy. The choice depends on the quality of project elaboration, what perspective sales markets are, which knowledge and technologies the applicant possesses, and how real his financial demands are. The project Prolnvest conducted by Ukrainian Market Review monthly promotes search of potential investors.

Market relations in Ukraine are dynamically developing. Competition is getting tougher, consumers become more demanding, and there remain less free niches on the market. Necessity to improve business processes at enterprises, to develop production, to improve competitiveness of issued output, and to master new markets keeps emerging in such conditions. Investments are needed to this end. And the issue arises in the respect: where should we get them? Only businessmen that are able to exercise strategic investments in their activities would become successful at present.

The task for analysts of investment Company Comfort- Invest was to evaluate investment proposals submitted in the frames of the project and to select the most worthy of them. It was not a simple task, because there was limited information (only questionnaires of brief resume were presented). Moreover, all projects were of different scale and were implemented in different spheres of economy.

54 projects were presented for consideration of Investment Company Comfort – Invest specialists. Though form of application was very brief, it was possible to pick up main information from them (sense of the project and brief list of financial indices). Meanwhile, even this information was incomplete in some cases. Therefore we selected a number of criteria in accordance with which primary screening was conducted.

All submitted projects were analyzed with the purpose to find out:

▪ the most complete and understandable statement of the proposal essence;

▪ presence of information on volume of investments and payback period; and

▪ reality of the project implementation (whether the project is not an idea, but its actual operation has been started or there are prerequisites for start of activities, for example, documents for land ownership were obtained, or pre-project preparation had been completed., etc.).

A special heed was paid to the latter issue from the among mentioned. Each project is unique and it is very difficult to make decision on financing without information on sales markets and based on merely general information. Projects which exist not as a mere idea have been at least assessed and elaborated, therefore parameters of such project can be considered more or less close to reality.

31 projects selected at this stage were divided into groups by kinds of activity. It appeared that each of them relates to one of three directions of business activities: construction, tourism, and industry.

Five companies dealing with production of construction materials and two projects connected with construction of residential and commercial real estate objects were included into the first group. «Tourist» group became the most numerous. Eighteen applicants proposed to construct, renovate, or provide services in the sphere of tourist infrastructure.

The third group is represented by industrial objects. Enterprises of mining complex (crushed rock quarries and other companies mining raw stock for construction) and two industrial enterprises (projects in ferrous and non- ferrous metallurgy) represent the group.

Analysis of projects within each group became the next stage of screening. The aim was to find out the most presentable proposals in each group.

Expert methods, in particular, method of expert assessments and brainstorming technique, were applied for analysis. These methods make it possible to take into consideration to the maximal possible extent opinion of highly- qualified specialists in the sphere of finances and investments under conditions of limited information and to determine the projects, meeting expectations of investors.

As a result of brainstorming technique, at the first stage of analysis experts defined here criteria influencing decision- marking process on investing:

1. Reality of the project (existing sales markets, sound investments, payback period).

2. Attractiveness of the project for investors(period of project accomplishment, dividends, risks).

3. Positive influence on regional economy (number of new jobs, budget revenues, innovation).

The weight of each mentioned criteria was equal for marking a decision (1/3). Then experts defined attractiveness of each project. As a result, each project was integrally evaluated.

Projects in tourist sphere were conditionally divided into the following groups: small hotels close to highways; updating of existing tourist centers in resort area, construction of 5*hotels on expensive resorts, and construction of tourist objects. Experts noted attractive investment opportunities of the following projects: construction of hotel and tourist complex in the town of Pochayev, tourist complex in Zaletshitskiy district near Chernovtsy (Private company Kromvel), construction of cove tourist complex at Ai-Petri plateau, construction of 5* hotel C&C Trade in Yalta, completion of construction and commissioning of boarding house Neva in Alushta, and construction of Lazurnyi Aqua Park (Garant LLC) near Odessa. Each of these six projects is interesting in their own way, because they are implemented in picturesque corners all over Ukraine, which are popular with tourists.

The project of plasterboard particles in Chernovtsy region (OJSC Mamalygovskiy gypsum plant) should be singled out of submitted construction proposals. The project is characterized with presence of sales markets (major part of such output is exported at present), affordable financial indices, and social attractiveness (it is envisaged to create 80 new jobs).

A number of investment projects to construct or upgrade crushed rock quarries in Zhytomir region were submitted for consideration of Investment Company Comfort – Invest experts. The region has a powerful mineral and raw stock base for crushed stone production. Search of this output consumers is often the main problem of the business. Project of crushed rock plant construction and production of cubical crushed stone (project of Malodivlinskiy granite quarry LLC) is interesting in this respect. In particular, cubical crushed stone is used for construction of high quality highways.

Only two industrial project were among those which were analyzed. Both of them deserve out attention. These companies operate on the market for long and their production was recognized by consumers not only in Ukraine, but beyond its borders as well. Investment project of OJSC Khartsyzsk Tube Plant and OJSC Chistye metally (Pure metals) are directed at development of production and augmentation of output sales volumes meeting demands of clients.

Two large investment construction proposals were not selected as the best. Volumes of investments to these projects are not sufficiently substantiated. Problems can arise with further operation of objects. Therefore drafts of commercial and residential real estate construction have to be additionally worked on.

The project of hotel and tourist complex construction in Pochayev (Ternopol region) was named the winner of rating after long analysis.

Les’s mention reasons, why the project was selected by our experts. First of all, experts of Investment Company Comfort – Invest liked the idea of the project. In fact, tourist flows are growing each year and the problem of corresponding infrastructure development is getting more and more acute. Therefore we think that this project is rather claimed and promising. Services of tourist complex would be in stable demand because it is in close proximity to outstanding monuments of culture and arts. Lack of competition (there is no hotel complexes of such format near to it) would also promote a lot visitors. Moreover, good financial substantiation, interest of the applicant in the project, and proposal of profitable mechanisms in work with investors are facts in favor of this proposal.