This is a best prospect industry sector for this country. Includes a market overview and trade data.
Ukraine’s safety and security market is currently undergoing structural change due to multiple challenges, including a recent economic recession and the Russian-backed separatist conflict in eastern Ukraine. An uptick in crime in certain segments has increased demand in business-to-consumer markets for safety and security equipment and services.
The country’s economic recession, which began in 2014 and ended in 2016, led to decreased buyer purchasing power, a slump in the construction sector (a major demand driver for safety and security equipment), and an influx of low-cost suppliers. Under these conditions, the smallest safety and security service providers exited the market, and only the largest players remained. The recession and decreased buyer purchasing power also led to an influx of low-cost competitors, particularly in Kyiv, where some regional protection service companies moved in and initiated price dumping. In an environment of market contraction and cost-based competition, today the demand for relatively more expensive western safety and security equipment exists primarily in the niche of advanced technology solutions where low-cost suppliers are uncompetitive.
The primary segments of Ukraine’s safety and security industry are fire safety and technology; protection services; alarm systems; and video surveillance systems.
Fire Safety and Technology - Fire safety and technology is the most developed segment in Ukraine’s safety and security sector. It consists of four sub-segments; fire alarm systems, fire suppression systems, automatic fire detection software, and fire notification and evacuation systems. According to Ukraine’s State Emergency Service, there are 2,300 small and medium-sized companies currently working in fire safety and technology, making this segment fragmented and competitive. Growth trends in this segment strongly correlate with trends in the construction of commercial real estate, which has been in decline since 2013.
The most influential organization in this segment is the Certification Center of Ukraine’s State Emergency Service, which controls all aspects of licensing. In Ukraine, all fire prevention equipment and services are subject to licensing and certification. Depending on a facility’s fire risk category – high, medium, or low – businesses are provided with various license types. Government building codes also regulate the design, installation, operation, and maintenance of fire security systems.
Protection Services - The real protection sector in Ukraine is around 600 security companies, with about 70-80 security companies in Kyiv. All other companies are “single-day companies” that protect one single object. In contrast to the fire safety and technology segment, Ukraine’s protection service segment is highly concentrated and dominated by the government. Though the number of companies in this segment has increased in recent years, a few large companies (e.g. companies with $20 million or more in annual revenues) still dominate. While these large primarily Kyiv-based organizations make up only 15 % of market participants, they control 80 % of sales. The government, which is included among these large organizations, controls 30 % of the market, making it the single largest market participant. In 2019, the government protected over 160,000 properties and had 750 response teams. Other major companies are Yavir-2000, Protection Holding, and Venbest. Yavir-2000 covers 61 localities, has 112 response teams, and 35,000 clients. Venbest has 2,500 staff, 150 response teams, and manufactures technical solutions. Protection Holding works primarily with large industrial enterprises.
Physical protection of properties declines each year, with more automated surveillance and warning systems prevailing. The demand for protection services is influenced by crime rates and income levels.
In Ukraine, all protection services are subject to licensing, which is regulated by “The Law of Ukraine on Protection Services.” Licensing falls under the aegis of Ukraine’s Ministry of Interior, which requires all companies and individuals working in this segment to be licensed and to demonstrate compliance with all regulations related to providing protection services.
Video-Surveillance - The exact size of the video surveillance segment cannot be calculated using traditional methods due to difficulty in obtaining reliable statistical data from the government. Like the protection service segment, the video surveillance segment is highly concentrated, but unlike protection services, the primary players are foreign private companies. The most popular equipment in this segment includes analog cameras, which still prevail over digital surveillance cameras in the Ukrainian. Decreased consumer purchasing power has benefited low-cost Asian producers of multifunctional systems that combine video surveillance, access control, fire, and burglar alarm systems. There are no regulations or licensing requirements in this sub-segment, as long as the video surveillance systems and services are used for surveillance production processes.
The Ukrainian safety and security market is served by a diverse mix of domestic and foreign suppliers. The following systems are produced locally: counter-espionage systems, data protection systems, optical registration devices, systems for the technical safety of buildings, fire alarm systems, signal receiving equipment, radiation detectors, and cryptographic security units. Foreign companies supply equipment and systems for personal protection, perimeter security, CCTV and video surveillance systems, access control systems, screening equipment, and fire protection systems. French, German, Polish, Israeli, Japanese, Chinese, and Taiwanese companies are active in the market. Competition from low-cost suppliers from China is growing but there are serious concerns about the security and integrity of Chinese systems.
- Document readers
- Biometric readers
- Explosives and drugs detectors
- Fire suppression equipment
- Advanced video surveillance cameras with video analytic capabilities
Industry experts have a positive long-term outlook on the development of Ukraine’s safety and security sector. They predict that Ukraine will enter a permanently heightened security state similar to Israel’s that will drive demand in the safety and security sector. Experts also anticipate further market consolidation, during which only the largest and most capable companies will prevail.
The State Service of Emergencies of Ukraine
The Ministry of Internal Affairs of Ukraine
Ukrainian Security Industry Federation (USIF)
Ukrainian Union Fire and Technological Safety (UFTSU)
Ukrainian Security portal
CZX Ukrainian Federation of Security Specialists
Arms and Security 2022, Kyiv, Ukraine
Firetech Kiev 2022, Kyiv, Ukraine
BEZPEKA 2021, Kyiv, Ukraine