At the end of 2023, Polish investments in Ukraine reached a cumulative value of $780 million, according to the Centre for Eastern Studies (OSW). This figure accounts for 2.6% of total foreign direct investments (FDI) in Ukraine, placing Poland 10th among foreign investors in the country.
Data from the National Bank of Ukraine (NBU) reveals that total foreign direct investments in Ukraine (excluding debt instruments) rose to $38 billion in 2023, marking an 11.4% increase year-over-year. However, this follows a significant decline in 2022, when investments dropped by $13.7 billion, or 28.6%, from the previous year.
Despite ongoing tensions in bilateral relations, including trade restrictions and occasional border blockades from Warsaw, OSW experts noted that Polish businesses in Ukraine have not faced interference from Ukrainian tax authorities or other regulatory bodies in the past two years.
Among the most significant Polish investments in Ukraine are companies in the manufacturing sector. Cersanit operates a sanitary ceramics factory in Zwiahel, Barlinek has a flooring production plant in Vinnytsia, and Fakro, a window manufacturer, runs a facility in Lviv Oblast. By the end of 2022, Polish investments accounted for 4.1% of the Ukrainian manufacturing industry.
The financial sector also plays a crucial role, with PKO BP’s KredoBank ranking 14th among Ukraine’s largest banks. In the insurance sector, PZU Ukraina is the sixth-largest by assets, while PZU Strachuwannia Żyttia ranks third in life insurance. Overall, Polish investments made up 5.4% of the FDI in Ukraine’s financial sector by the end of 2022.
In retail, the LPP group, which owns brands such as Reserved, Cropp, House, and Sinsay, controlled about 10% of Ukraine’s clothing market in 2023. Polish investments in wholesale and retail trade accounted for 2% by the end of 2022.
Despite the ongoing war, new investments in Ukraine are primarily being made by companies already operating there before the invasion. In 2023, Cersanit completed a new production line, valued at €20 million, increasing its production capacity by 20%. LPP, with over 100 stores in Ukraine at the end of 2023, plans to double its presence by the end of 2024, focusing on its Sinsay brand.
Fakro, despite suffering significant damage from a kamikaze drone attack on its Lviv factory in September 2023, which caused losses estimated at PLN 30 million, has no plans to withdraw from Ukraine and is even considering building new production lines.
Cyprus remains the largest foreign investor in Ukraine, accounting for 32.5% of FDI, followed by the Netherlands (28.3%) and Switzerland (8.2%). Much of this investment is believed to be returning Ukrainian capital. Other significant investments include Unilever’s €20 million cosmetics factory in Bila Tserkva and Bayer’s €60 million expansion of its seed production plant in Zhytomyr Oblast.
Looking ahead, OSW experts predict that post-war Ukraine will see significant investments in residential construction, road infrastructure, renewable energy, agriculture, and the food industry. These sectors are expected to play a pivotal role in the country’s recovery and future growth.