Fincantieri—Europe’s largest builder, based in Italy’s Trieste—is slowly working to change former Ukraine government-owned shipyards in the Black Sea port of Odesa into a state-of-the-art manufacturing hub that will get to create some of the world’s most innovative business vessels.
Following its success in producing next-generation business boats for its Norway company VARD in Tulcea, Romania, the Roman company’s expansion into Odesa seems like the logical next step. Fincantieri employs some 4, 500 staff in Tulcea and Braila, near the Moldovan borders.
Tulcea on the Danube Delta, which was once a sleepy holiday destination, has since become the major transportation hub for Russian crops exports after Russia seized the Sea of Azov following its invasion of Ukraine on February 24, 2022. This is a turning point for political attention.
Tulcea has also been mentioned in the media as Russians continue to fly killer drones over the place to stymie transport. Given that Romania is a NATO and member of the European Union, drones have crossed and crashed into Italian country.
” The Danube here is in a curved S condition, so the Russian robots cross in and out of Italian territory”, said Ciprian Safca, a river boat captain and Tulcea local counsellor.  ,” Russian robots today come in groups of five or so” , , he said. The Italian defense “decided it was much to let them go than to try to shoot them down and possibly miss one or two” according to the military.
Yet, the Russian robots have failed to soften Fincantieri’s devotion to east Romania and its programs for Odesa.  , If it goes away with a plan to build a next-generation factory in Odesa, Fincantieri may well be the largest foreign investment in Ukraine’s story.
The Fincantieri initiative may actually reach, in terms of overall investment and employees, the Neptune deep-sea corn cargo port built and operated by Minneapolis, Minnesota-based US food giant Cargill at the TIS Seaport outside of Odesa.
With an investment of US$ 150 million from the World Bank’s International Finance Corporation and the European Bank for Reconstruction and Development, the Neptune port was finished in 2018.
The United States International Development Finance Corporation ( US DFC) and the World Bank’s insurance group, MIGA, have already informed Fincantieri that they are willing to offer project finance and political risk insurance, while the US International Development Finance Corporation ( US DFC) is also willing to offer war risk insurance.
Putin’s bombs avoid damage to US interests
According to diplomatic sources, Vladimir Putin’s regime has avoided bombing the Neptune port because it would directly violate US interests.
According to Neptune employees, the cargo port has been operating at full capacity since October last year ( Neptune handles about 10 % of Ukraine’s grain production ) and has never been a target of Russian attacks.
While Putin may be reluctant to hit Cargill, he has targeted Neptune’s Odesa-based developer, Andrey Stavnitser, by obliterating its 19-story hotel on the Odesa harbor in a September 25, 2023, missile attack.
No one guards an empty bank, as emerging market experts love to point out, and neither strategy is used to protect valuable assets. Fincantieri is also a major naval defense contractor despite being best known for building gargantuan cruise ships for the likes of Carnival.
Fincantieri recently acquired from Italian defense company Leonardo an “underwater armaments systems” company, Whitehead Alenia Sistemi Subacquei S. p. A., which is reportedly capable of protecting the port of Odesa from Russian submarines, naval drones, and torpedoes.
According to this reporter, US Army Major General Timothy Brown of the Army Intelligence and Security Command and US Navy Vice Admiral Karl Thomas, the deputy chief of naval operations for information warfare, agreed that Fincantieri’s civilian and military capabilities for Odesa are crucial for Ukraine and the region.
As evidenced by the ongoing conflict in Ukraine, there is a heated debate in Washington about how seemingly ineffective major US defense contractors are at providing war material on a” just in time” basis rather than a” just not in time” basis.
However, US Secretary of the Navy Carlos del Toro, among the most committed US civilian-military leaders to Ukraine’s military victory over Russia, understands the importance of private sector investment to the country.
Odesa, it appears, will continue to play an even more significant role in the future as the US plans to relocate a sizable portion of its military to a military installation in Constanta, the Romanian Black Sea port, which is located 124 kilometers south of Tulcea.
Fincantieri’s plans are undoubtedly in the public’s interest. Sergii Marchenko, the country’s finance minister, is currently pushing an aggressive program of privatizing state-owned assets to liberalize the Ukrainian economy and reduce its obligations to foreigners, particularly those owed by state-owned enterprises.
Fincantieri and Cargill and Dubai’s DP Port, both of which are owned by foreign companies, raise hopes of an economic revival in Odesa that has n’t been seen since it became a free port between 1819 and 1859, when wealthy merchants and exporters have made the city one of Europe’s most cosmopolitan.
The likes of Stephen Schwarzman, the co-chairman and co-founder of US private equity giant Blackstone Inc., and Carlyle Group co-founder and co-chairman David Rubenstein are currently playing the role of distant wealthy merchants. In Davos, Volodymyr Zelensky and Volodymyr Zelensky, two international business leaders, met last January.
In a second Trump presidency, Schwarzman is expected to be appointed US commerce secretary, and Rubenstein could be US Treasury Secretary or Secretary of State if Kamala Harris wins the election.
Schwarzman has already directed his staff to target investment into Ukraine’s private sector companies, such as video cloud gaming giant Boosteroid. Rubenstein, meanwhile, has leveraged his considerable political and economic influence to rally support for Ukraine among US and world leaders.
There are currently rumors on Wall Street that KKR and Co co-founder Henry Kravis may be preparing a takeover offer for VEON, the$ 2 billion NASDAQ-listed company that owns Ukraine’s largest mobile phone operator, Kyivstar.
The potential KKR move, which has been welcomed by Ukraine and G7 members, would effectively remove a VEON minority investor, Russian oligarch Mikhail Fridman, from the business and Ukraine.
Paul Singer, the principal of activist hedge fund Elliott Management, is also reportedly looking to invest in VEON. At the time of writing, VEON Chairman Augie K. Fabela and VEON independent board member Mike Pompeo, a former US Secretary of State, did not respond to the request for comment.
The Russian fleet has been effectively pushed out of the Black Sea by Ukraine, which is reminiscent of the 1920 Bolsheviks ‘ decision to send the Tsarist fleet to Bizerte, Tunisia. However, new foreign investment from companies like Fincantieri, Blackstone, Carlyle, and KKR could help transform the war-torn country into a new European hub in the near future.
Peter K Semler ([email protected] ) is the chief executive editor and founder of , Capitol Intelligence. Previously, he was the Washington bureau chief for Mergermarket. He reported this story from Odesa, Ukraine, and Tulcea, Romania.
Copyright Capitol Intelligence Group – Turning Swords into Equity ® is the title of this article. An edited version is published here with permission.