Orange Revolution acts as beacon to investors
By Tom Warner
Published: February 16 2005 02:00 | Last updated: February 16 2005 02:00

Standing between rows of transmission shafts on the expansive shop floor of a Ukrainian truck factory, Stefan Laxhuber, a German fund manager, watches intently as workers bolt the different pieces that make up a drive train on to big steel frames gliding slowly down the production line.

Some of their processes are very modern, and some are not," observes Mr Laxhuber. He was one of about 20 western European fund managers who recently took an excursion into Ukraine's industrial hinterland guided by Concorde Capital, a local brokerage keen to encourage foreign investment.

They hope to be in the vanguard of a new wave of foreign investment in Ukraine, long one of the most overlooked markets of eastern Europe.

They are betting that Ukraine's new pro-western president, Viktor Yushchenko, will move quickly to implement the sweeping economic liberalisation he is promising. Concorde calls it "Investing Orange", after the Orange Revolution that helped to bring Mr Yushchenko to power.

The fund managers' first stop was AvtoKraz, a factory in Kremenchuk, central Ukraine, which makes super-heavy trucks that look as if they could have driven out of the 1970s. The company is growing quickly thanks to the recovering regional economy and a contract to supply 2,000 trucks to the Iraqi army.

Mr Laxhuber started buying Ukrainian equities in 2003, and since then they have doubled or tripled in value. "I'm looking to increase the Ukraine weight in my fund," he says.

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