Business Ukraine 07/2018

issue 07/2018

SWITZERLAND IN UKRAINE

BUSINESS UKRAINE MAGAZINE 07/2018: The cover page of this month’s special Swiss issue features Kyiv’s IQ Business Center, one many prominent Ukrainian buildings and landmarks to feature construction technologies provided by Sika Ukraine. Sika is part of a Swiss business community that has thrived in Ukraine in recent years, helping Switzerland to emerge as the country’s number seven foreign investor.

Rebranding Ukraine: from Post-Soviet Problem Child to Garden of Europe In late September, Poland became the first country from the former Soviet Bloc to join the world’s leading nations as an officially recognized “developed market”. This leap in status is a huge achievement for the Poles themselves. It may also signal the start of a shift in Western attitudes towards the lands that lie behind the old iron curtain. For the past quarter of a century, the Warsaw Pact nations have been Europe’s poor relations, while the former Soviet republics beyond them have wallowed in even greater obscurity. Poland’s rise to the ranks of the global elite demonstrates that these stereotypes are neither entirely accurate nor permanent. This should offer inspiration to Ukraine, which remains the most misunderstood of the nations to have emerged from the geopolitical wreckage of 1991.

As things currently stand, Ukraine cannot come close to Poland’s economic achievements and dare not even dream of reaching the sunlit uplands of “developed market” status. Nevertheless, Polish progress strikes a powerful blow against the once rigid west-to-east hierarchy and creates room for further reinvention elsewhere in the region. This is exactly what Ukraine needs as it seeks to rebrand itself on the global stage and shake off the lingering label of post-Soviet problem child.

Ever since the early 1990s, outside perceptions of independent Ukraine have tended to focus almost exclusively on the country’s Soviet and Russian inheritance to the exclusion of all other historical influences. More often than not, international audiences have treated Ukraine as part of Russia itself, seeing it as an ambiguous imperial appendage with no discernable culture, history, or identity of its own. Even today, Ukraine’s century-long independence struggle remains practically unknown, while the legacies of long periods when swathes of modern Ukraine experienced Ottoman, Habsburg and Polish rule fail to register entirely. The result is a Kremlin-friendly caricature of Ukraine that reduces the Ukrainians themselves to footnotes in their own history and leaves the country practically indistinguishable from the rest of Russia. Quite apart from

representing a grotesque historic injustice, such misconceptions have very real negative implications for the country’s future. They cloud Ukraine’s European credentials and obscure its vast investment potential by overemphasizing the Soviet and Russian dimensions of a complex and diverse heritage.

Given the dramatic changes since 2014 both within Ukraine itself and in the country’s relationship with Russia, the time has surely come for a major rebranding. If it succeeds, Ukraine would not be the first former Soviet republic to shake off the post-Soviet tag. That honor belongs to the Baltic States, which have cleverly reclassified themselves from eastern to northern Europe while exchanging the negative associations of the post-Soviet brand for the infinitely more appealing New Nordic identity. Ukraine is in the process of attempting to follow the Baltic example and has recently launched the country’s first international brand campaign. However, the “Ukraine Now” slogan of this campaign does little to create a coherent new identity.

If Ukraine wishes to borrow directly from the Baltic playbook, it could always try rebranding itself as Southern Scandinavia. However, even the Viking origins of Ukraine’s Kyiv Rus ancestors would be unlikely to rescue such efforts from ridicule. Instead, the most plausible and appealing brand associations lie in Ukraine’s unrivalled agrarian importance. The country’s historic role as the breadbasket of Europe is surprisingly unknown to modern audiences, yet it has the potential to make a vivid impression on the outside world. It would also be poetic justice. For centuries, Ukraine’s fertility has been a curse attracting rival conquerors from every direction. This has transformed the Garden of Europe into the continent’s bloodiest killing fields. It would be entirely appropriate if it now served as the basis of Ukraine’s emergence from the post-Soviet shadows.

About the author: Peter Dickinson is the publisher of Business Ukraine magazine and a nonresident fellow at the Atlantic Council

5

8

Switzerland’s global trade reach and emphasis on innovation make it a natural partner for commodity-rich and reform-minded Ukraine, says Swiss Ambassador to Ukraine Guillaume Scheurer As the Ukrainian economy continues to bounce back from the lows of 2014-15, the country’s international trade figures are featuring some eye-catching increases. Swiss-Ukrainian bilateral trade has been among the largest gainers in recent years, with total turnover in goods and services in 2017 climbing by 43.8% year-on-year to reach USD 2.8 billion. This impressive performance reflects the broader strength of the Swiss-Ukrainian economic relationship, with Switzerland currently ranked as the seventh largest foreign investor in Ukraine.

A significant portion of the burgeoning bilateral trade between the two countries is rooted in Switzerland’s pedigree as a gateway to global commodities markets. Numerous Ukrainian agricultural and industrial producers have chosen Switzerland as their entry point to global markets, allowing them to benefit from a number of advantages including access to world-leading Swiss specialists, financial services, and a dense network of Free Trade Agreements. Swiss Ambassador to Ukraine Guillaume Scheurer says that in many ways, this relationship highlights the complementary qualities that make the Swiss and Ukrainian economies so compatible. “Ukraine is a superpower in the agricultural industry and Switzerland is a champion in the commodity trading arena. This creates the basis for a natural partnership between Ukraine and Switzerland.”

This natural partnership goes far beyond Switzerland’s convenience as a shop window for Ukrainian commodities. Ambassador Scheurer notes strong export growth in both directions, and singles out the diversity of Switzerland and Ukraine’s current bilateral trade as a source of considerable optimism going forward.

“What we are seeing today is a highly diversified trade without dependence on any single sector. Instead, there is growth across the board in a wide range of product categories. This is a very positive trend as it helps to create a resilient trade structure.”

Alongside this growing trade, many of Switzerland’s largest multinationals have established strong presences in Ukraine and rank among the country’s major international corporate investors. For a country of just over eight and a half million people, Switzerland has what many would consider a disproportionately large investment

footprint in Ukraine. Ambassador Scheurer says this is actually par for the course for the alpine nation. “It is something of a Swiss tradition to establish itself as a top ten investor in foreign markets. It is the same in countries like Germany and the US. There is simply no other recipe for Switzerland because of our relatively small domestic market.” He adds that the list of Ukraine’s ten biggest taxpayers typically includes two or three Swiss companies.

Ukraine’s Swiss business community has remained largely intact throughout the turbulence of the past five years, with very few departures despite the crisis conditions unleashed in the country’s economy by the events of early 2014. “They stayed on, and now they are growing again,” says the ambassador. He acknowledges that the Ukrainian business climate is still often troubling and cites ongoing problems with the judiciary, state bureaucracy and customs services, but stresses that the improvements he himself has seen since his arrival in Ukraine in October 2015 have nevertheless been striking. “When I first took up my position in Kyiv, much of my time was devoted to addressing the problems of Swiss companies operating in Ukraine. Now the feedback I receive from the business community is much more positive. Naturally, there are exceptions.

However, in general terms we are seeing far greater responsiveness from state officials. I would also like to extend special thanks to the office of the business ombudsman, which has really made a difference and helped to improve the business climate.”

Ambassador Scheurer says that while he takes pride in the impressive trade and investment stats of Swiss businesses in Ukraine, it is not possible to understand the true impact they have on the Ukrainian economy in terms of mere numbers alone. He sees Swiss traditions of innovation as a key export that is particularly well suited to the contemporary Ukrainian environment, with its heightened receptiveness to change and need to overhaul decades of often deeply engrained inefficiencies.

The ambassador says he regularly encounters examples of imported innovation when visiting Swiss companies in Ukraine. He claims this leads to a tangible sense of what he terms as “Swissness”, even when there are no actual Swiss members of staff. “Whenever you enter a :

switzerland in ukraine

Switzerland in Ukraine

“Ukraine is a superpower in the agricultural industry and Switzerland is a champion in the commodity trading arena. This creates the basis for a natural partnership between Ukraine and Switzerland”

www.bunews.com.ua

9

: Swiss company in Ukraine, you can feel the Swissness. In most cases,

both the employees and the management will be exclusively Ukrainian, but it is still possible to identify a specifically Swiss philosophy in terms of innovative thinking, productivity, efficiency and the core values the company has. It is also about demonstrating faith in colleagues. The end result is a business model that is capable of increasing productivity and quality.” According to the ambassador, this Swissness factor is evident wherever Swiss companies are doing business around the world. However, he adds that the receptiveness of Ukrainian colleagues has generated particularly enthusiastic reviews within the Swiss business community in Ukraine.

In Switzerland itself, Ukraine is now far less of an unknown quantity that it was just five years ago. Ambassador Scheurer gained firsthand experience of Ukraine’s Revolution of Dignity during trips to Kyiv while based in Vienna as part of Switzerland’s OSCE delegation in 2013 and 2014. He says that the tumultuous events of that revolutionary winter made a significant impact on Swiss public opinion and led many to rethink their understanding of Ukraine’s place in Europe. “The Revolution of Dignity was a real turning point in terms of how Ukraine was perceived in Switzerland. The dignity, courage and humor of the demonstrators on Maidan, especially given the tragic circumstances as the protests escalated, forced Swiss audiences to take a fresh look at the country. It was both a starting point and a tipping point.”

In the past few years, Ukraine’s undeclared but ongoing war with Russia has largely dropped off the media radar in Switzerland,

10

much as it has elsewhere in Europe. The ambassador say this might not necessarily be an entirely bad thing, arguing that Ukraine needs to build an international profile that goes beyond lurid headlines of conflict and crisis. “In terms of perception, modern Ukraine’s starting point on the international stage was a positive one. Images of people fighting for freedom and democracy during the Revolution of Dignity really resonated with Swiss audiences. Now Ukraine needs to share more of its success stories with the outside world.”

He points to the 2017 Eurovision Song Contest and the 2018 UEFA Champions League Final as good examples of how successful events hosted in Ukraine can help shape positive perceptions, and advocates greater efforts to harness the country’s significant soft power potential. The Swiss Embassy is already engaged in supporting Ukrainian cultural diplomacy via events like the recent appearance of Ukraine’s New Era Orchestra at Switzerland’s prestigious Septembre Musical festival. Later this year, the Embassy will also be helping to coordinate a book tour of Switzerland by Ukrainian literary celebrity Serhiy Zhadan.

Ambassador Scheurer is a great believer in the effectiveness of soft power and sees it as an area where Ukraine could make significant progress. He is cautious of raising expectations and calls for patience, but says the signs are encouraging. “It takes a very long time to change perceptions of an entire country. It might not necessarily be a question of generations, but it does not happen overnight.

What we can say now is that perceptions are changing slowly, but they are changing positively.”

Ukraine | Russia | Kazakhstan | Belarus | Poland | Germany | Uzbekistan | Armenia

Whatever you plan in Ukraine: We are your trusted partner!

We offer you all the back-office services you need Market Research Business Setup Accounting Outsourcing and Reporting Taxation IT/ERP Systems Transfer Pricing Due Diligence and Internal Audit Legal Services Compliance Services Legal Address and Office Rent Interim Management

Yuri Donets General Director +380 / 44 / 490 55 28 kyiv@schneider-group.com schneider-group.com

Pechersk Lavra in Kiev, Ukraine/ iStockŠtomch

Expert Recruiting and Outstaffing

business set-up in Ukraine Scan this QR-Code to learn more about it!

switzerland in ukraine

Building on a century of Swiss-Ukrainian diplomatic relations Ukraine’s newly appointed Ambassador to Switzerland Artem Rybchenko seeks to build business bridges

About the author: Artem Rybchenko is the Ambassador of Ukraine to Switzerland Ukraine’s newly appointed Ambassador to Switzerland Artem Rybchenko took up his position at the end of August 2018. As he settled into his new posting, Ambassador Rybchenko shared his first impressions with Business Ukraine magazine and spoke about the prospects for developing deeper economic cooperation between Ukraine and Switzerland.

You have arrived in Switzerland as the head of Ukraine’s diplomatic mission at a time when the two countries are marking the centenary of diplomatic ties. What can you tell us about the events of 1918?

This year, Ukraine and Switzerland celebrate one hundred years since the establishment of bilateral relations. Ukraine’s first diplomatic mission to Switzerland began on 10 October 1918. The former Healthcare Minister of the Ukrainian People’s Republic, Yevmen Lukasevych, chaired that original mission. At the same time, the former Minister of Public Communications of the Ukrainian People’s Republic, Yevhen Sakovych, went to Geneva to serve as Consul, while Oleksandr Vilinskyi became Consul General in Zurich. Economic contacts have always played a prominent role in bilateral relations between Switzerland and Ukraine. This was also the case one hundred years ago, with the establishment of diplomatic relations leading to the launch of a number of common economic projects including the “Ukrayina” trade association chaired by financier Mr. Biaren. The most successful projects were in the light industry and financial sectors.

12

As you settle into your new ambassadorial role, what do you see as the priorities for Swiss-Ukrainian relations?

It is important to recognize that our Swiss partners are expecting to see evidence of the successful and systematic implementation of reforms in Ukraine. This relates specifically to the process of decentralization, where Swiss experience and funding have played significant roles. For Ukrainian diplomats, it also means adopting a more integrated approach to the international promotion of reforms currently taking place in Ukraine.

We need to be more vocal about the results of the reforms we are implementing.

For instance, at the beginning of September our Embassy organized an economic roundtable to acquaint ourselves with representatives of the Joint Chamber of Commerce of Switzerland, the Ukrainian Chamber of Commerce and Industry in Switzerland, and a range of other potential partners. While hosting the event, I realized that most of the participants were not aware of specific reforms underway in Ukraine and knew little of their results. They were interested to learn of the business opportunities presented by Ukraine’s new currency legislation and the liberalization of capital flows. Information on Ukrainian visa-free travel to European destinations including Switzerland was also of interest. This allows Ukrainians interested in cooperation with their Swiss colleagues to travel without obstacles.

How can Ukraine promote itself as a destination for Swiss investments?

It is vital to present a positive image of Ukraine as an investment destination. We are now seeing considerable investment progress in Ukraine and this helps diplomats to attract the interest of potential international investors. A number of positive developments in recent months highlight the effectiveness of cooperation between President Poroshenko’s team, the Ukrainian government, the National Bank of Ukraine, the country’s Investment Council, and other bodies engaged in investment attraction. These include the USD 200 million investment of Bayer into a Ukrainian seed factory and the USD 450 million agreement with Norway’s NBT to construct a major plant in the renewable energy sector. We have recently received confirmation regarding the launch of IKEA in Ukraine. This autumn, leading low cost airline Ryanair begins flights from

Ukrainian airports. Swedish clothing retail giant H&M recently opened its first store in Ukraine.

The first General Electric locomotive arrived in the country in September. Then there is the signing of the biggest agricultural sector contract in Ukrainian history, covering the sale of selected Mriya Holding companies to Saudi Arabia’s Agricultural and Livestock Investment Company. It is very satisfying to see leading Swiss media outlets reporting on these investment stories from Ukraine. Such positive coverage sends out a very strong signal to foreign capital and to potential Swiss investors.

Do you plan any specific initiatives in order to promote better business links between Ukraine and Switzerland?

In my opinion, the development of successful mutual relations requires mechanisms that create possibilities to develop partnerships. As Ambassador, I have decided to create a platform under the auspices of the Embassy to help facilitate communication between business representatives from both countries. The goal is to launch this platform by the end of this year.

Unfortunately, there is still lack of trust in the Ukrainian business system. I hope this platform will become a place for strategic dialogue where all parties will feel secure.

Switzerland is now Ukraine’s number seven investor. How can Ukraine and Switzerland maintain the growth dynamic in bilateral economic ties established in recent years?

Ukrainian-Swiss relations stand on firm foundations. It is important to build on this historic basis of friendly and businesslike relations and to use existing achievements to support further mutually beneficial processes in the future. The October 2018 visit of a Swiss economic mission chaired by the State Secretary of the Swiss State Secretariat for Economic Affairs Ms. Marie-Gabrielle Ineichen-Fleisch to Ukraine is a great example of what I mean.

Ms. Ineichen-Fleisch first visited Ukraine in the early years of the country’s independence.

This new visit now takes place precisely 100 years after the initial establishment of diplomatic relations between the two countries.

I am sure that Ukraine and Switzerland will maintain the fruitful and dynamic relations they currently enjoy. High-level visits like this will contribute to the process.

Acquiring and protecting assets in Ukraine for foreign investors

Debt restructuring Investment attracting

M&A

Support of business expansion and penetration new markets (Ukraine, Austria)

Assets portfolio management

Anti-crisis asset management

Direct investment

Financial consulting

UKRAINE AUSTRIA

VIENNA

KYIV

Tuchlauben 7 1010 Vienna, Austria

Volodymyrska Str. 4 01001 Kyiv, Ukraine

Tel: +43 1 925 7575

Tel: +38 044 364 5203

Email: office@vi-partners.com

Email: info@vi-partners.com

vi2partners.com

switzerland in ukraine

Switzerland is Ukraine’s seventh largest investor Swiss companies have kept faith with Ukraine and helped bilateral trade reach record highs If you enjoy a glass of Ukrainian wine anywhere in the world, there is a good chance that you are also taking a sip of Swiss entrepreneurial history. The story of how winemakers from Switzerland first arrived on the Ukrainian Black Sea coast in the early years of the 1800s is merely one part of a longstanding economic relationship that has linked Ukraine and Switzerland for centuries. Ever since Swiss immigrants started producing wine using the fertile southern Ukrainian soil, the economic ties between the two countries have gradually expanded and evolved from traditional trade towards more sophisticated commercial cooperation in a range of increasingly innovative goods and services. Thanks to robust growth in recent years, Switzerland is now the seventh largest investor in Ukraine. There is enough untapped potential to suggest that this upward trend will continue.

The years 2013 and 2014 represent a major turning point for Ukraine in many ways. The Revolution of Dignity and subsequent events continue to have profound social and economic consequences for the country. The political crisis that has emerged as a result of these developments has had a very negative effect on Ukraine’s economy.

This is reflected in Swiss-Ukrainian bilateral trade figures, which decreased 10% in 2015 and only started to grow again in 2016.

This critical time revealed the strength and resilience of economic relations between Ukraine and Switzerland. Some Swiss companies were directly affected by the conflict in the eastern part of the country and others found themselves indirectly hit by the severe recession that gripped the entire Ukrainian economy. Nevertheless, not a single Swiss company with active production sites in Ukraine chose to withdraw from the country. On the contrary, we have seen increasing investments and growing commitment from Swiss companies active in Ukraine.

Direct investments almost doubled between 2013 and 2017, allowing Switzerland to emerge as the seventh largest investor in Ukraine with investments amounting to over USD 1.5 billion. Today, key Swiss actors in Ukraine like Nestle, Sorbes Ukraine, Geberit, Swiss Krono, Philip Morris Ukraine and Japan Tobacco International are leaders in their respective fields and hold significant market shares of up to 30%.

Looking at the latest figures from Ukraine’s state statistics office, 2017 saw our total bilateral trade increase to USD 1.7 billion. This is a significant improvement on the figure of USD 1.1 billion for the previous year and represents a growth rate of 71%. Such numbers would certainly have left those pioneering Swiss vineyard entrepreneurs from hundreds of years ago speechless. While this astonishing growth is derived to a large extend from commodity trading handled via Switzerland but originating from and going to Ukraine, the statistics for physically traded goods are by no means any less promising. Although the numbers involved are more modest, they reflect strong and diversified trade exchanges between Ukraine and Switzerland.

Ukraine is not currently dependent on any single dominating export to Switzerland. Clothing together with jewellery and household goods made from

precious metals are the main trade categories going to Switzerland, with each accounting for around 16% of overall Ukrainian exports to the country in 2017. In the opposite direction, Swiss exports to Ukraine are dominated by a single industry. With a share of 35%, pharmaceutical products were Switzerland’s main exports to Ukraine last year. However, the remaining share of trade is strongly diversified. Machines, precision instruments and alimentary products each accounted for 10-15% of trade from Switzerland to Ukraine in 2017.

Looking at growth rates, we can observe very strong increases across all product categories. While trade from Switzerland to Ukraine grew by 16.5% last year, trade from Ukraine to Switzerland rose by 41.1%.

A similarly positive trend was also recorded with trade in services, which reached a total trade volume of USD 950 million in 2017. With services imports worth USD 742 million, Switzerland is currently the third largest buyer of Ukrainian services. Strong growth rates across all sectors and a highly diversified trade structure are good news, making bilateral economic relations resistant to potential slowdowns in specific industries.

The Swiss companies active in Ukraine are mostly big international corporations who are experienced in doing business abroad. Small and medium-sized enterprises, the backbone of the Swiss economy, still face difficulties in gaining a foothold in the Ukrainian market.

Despite many reforms over the last few years, the business environment in Ukraine remains challenging. High levels of red tape, a partly unpredictable judiciary and law enforcement system, and an unstable taxation system are the most striking impediments for business. Swiss start-ups with great ideas and new technologies are instrumental for the innovation and dynamism of the Swiss economy. Unfortunately, the current business environment in Ukraine often dissuades them from choosing the Ukrainian market to expand their business.

Fortunately, we are witnessing positive steps with important reforms.

At the same time, Ukraine’s economy is transforming itself from heavy industry towards light industry and a growing service sector. This development may well be the best way to unleash Ukraine’s enormous economic potential and can help make the country more attractive to investors. Swiss innovation, in combination with Ukraine’s fertile soil and rich human capital, represents a clear win-win situation for both countries. This combination has been bringing success since the nineteenth century and can continue to produce positive results for long into the future. The ability to make the most of these possibilities will depend largely on the implementation of current and future economic reforms.

To put it bluntly, there are no guarantees that the Swiss winemakers of bygone days would still decide to start their business if they were confronted with the Ukraine of today. It is therefore more important than ever for Switzerland to stand by Ukraine and to support its political and economic development in order to further strengthen our friendship and economic partnership. Let us therefore raise our wine glasses in toast like our forefathers and say “Budmo!” for the future of Ukrainian-Swiss trade ties.

About the author: Simon Pidoux is Deputy Head of Mission at the Swiss Embassy in Ukraine

14

Building Swiss-Ukrainian bridges

Ukrainian Society in Switzerland president Andrej Lushnycky discusses the bilateral relationship What are the key activities and objectives of the Ukrainian Society in Switzerland?

The Ukrainian Society, founded in 1945, is the oldest and largest representative organization of Ukrainians, people of Ukrainian origin, and friends of Ukraine in Switzerland. We are a federally recognized tax-free Swiss association based in Fribourg with a representative office in Kyiv. We also have branches in Zurich and eastern Switzerland in Basel, Bern and Geneva. The Society is a member of the Joint Chamber of Commerce Switzerland and organizes Ukraine-related cultural events in Switzerland including music concerts, art exhibits, photo exhibits, and readings with authors. For example, we just recently collaborated on the concert tour of the incredible New Era

About the interviewee: Andrej Lushnycky is president of the Ukrainian Society of Switzerland and Honorary Consul of Ukraine in Switzerland Andrej Lushnycky is a key figure on the Ukraine-Switzerland relationship and recently received the Swiss Embassy’s annual Tell Award in recognition of his contribution to bilateral relations. He spoke to Business Ukraine magazine about his efforts to strengthen ties between the two countries and explained why the increased media coverage of Ukrainian issues in recent years has helped Swiss audiences to overcome longstanding stereotypes and gain a better understanding of the real Ukraine.

What is your connection to Ukraine and what are your current roles in Switzerland?

Like many older generations of the Ukrainian diaspora, my family originally came from western Ukraine. This was the post-WWII period and they were fortunate enough to have had Austrian and Polish documents, so they were not forcibly returned to the Soviet Union (i.e. to the Soviet gulags) following their internment in DP camps. After having spent time in the US and Italy, I arrived in Switzerland almost 30 years ago. It has since become home for me with my wife, children, friends, work and advocacy here. I have the honor to serve as president of the Ukrainian Society of Switzerland and as Honorary Consul of Ukraine in Switzerland. In addition to my community work for Switzerland and Ukraine, I am also the Executive Director of the American College Program at the University of Fribourg. I am also in the service of the Interfaculty Institute of Central and Eastern Europe at the University of Fribourg as the Senior Associate on Ukraine.

16

Orchestra from Kyiv. In addition, the Society is the co-founder and co-organizer, together with the renowned Ukrainian pianist Alexey Botvinov, of the Odessa Classics in Bern event, held annually in March at the same time that we organize the Ukraine Forum at the Swiss parliament in cooperation with the Swiss-Ukrainian Parliamentary Friendship Group. The Ukraine Forum invites international experts to the Swiss parliament to inform Swiss MPs as well as other government agencies, Think Tanks, IOs and NGOs on what is transpiring in Ukraine.

In the past few years, the Ukrainian Society has successfully facilitated economic and business ties between Switzerland and Ukraine. For example, we provided local assistance in the organization of Ukraine House, an amazing window into contemporary Ukraine that took place during the 2018 World Economic Forum in Davos at the beginning of the year. On 25 October, there will be a Ukraine Business Round Table held in Zurich. Raising awareness about historical events and advocacy by co-organizing conferences and contributing to publications in Switzerland and abroad is also part of our mission. Additionally, the Ukrainian Society is a sponsor of educational initiatives in Switzerland. We run a part-time Ukrainian language school in Zurich and Geneva, and have regular contact with Swiss educational institutions. Of course, we cannot understate our collaboration with the Ukrainian Embassy in Bern and the Ukrainian Mission of the UN in Geneva. Lastly, we collaborate regularly with the Swiss Embassy in Kyiv. Ukraine is extremely fortunate to have one of Switzerland’s leading ambassadors, Guillaume Scheurer, who is currently serving alongside his remarkable embassy team in Kyiv.

How have perceptions of Ukraine evolved in Switzerland since the 1990s and what have been the most resonant events in this process?

Ukraine is now a known entity throughout most of the world. Previously it was an alien and unknown land, seemingly too distant and too foreign for anyone to care about. Nowadays, everybody I meet who travels to Ukraine comes back enamored by the people, the landscapes, the culture, the cuisine, and the perceivable sense of renewal of an ancient yet modern values-based European society. The Revolution of Dignity was the most resonant event in recent years. The events in late 2013 and early 2014 in Kyiv and across Ukraine generated an outpouring of support for the country from people throughout Swiss society. The Holodomor (manmade famine in 1930s Ukraine) is becoming a more closely examined topic in Swiss schools. Most Swiss are horrified when they learn that such a tragedy took place and that it remained censored for so many years. Much like Ukrainians, Swiss people feel a very close connection to their land, to their agriculture, and to their

What are most common misconceptions about Ukraine that you encounter among Swiss audiences?

The misconceptions in Switzerland are unfortunately the same as the usual fallacies that one sees around Europe. This includes the erroneous notion that all eastern Slavs are Russian and that all aspects of culture in Eastern Europe are of Russian origin. You can add rampant and incorrigible corruption in Ukraine, pollution and poverty to the list of negative stereotypes.

Generations of propaganda, ignorance and indifference have led to this situation. However, amazing organizations like the Ukraine Crisis Media Center (UCMC) have contributed greatly to correcting these false perceptions.

People are often astounded to learn of everything that Ukrainians have accomplished throughout their history, typically without receiving due credit or recognition as Ukrainians. Recently the UCMC prepared the “Inspiring Ambassadors of Ukraine” series and “50 Inventions bestowed by Ukraine on the world”. I highly recommend both.

How prominent is Russian messaging in the Swiss information space and what challenges does this present for Ukraine?

Fake news is easy to spread internationally as most publications nowadays do not have the funding or the time for proper investigative journalism.

Add the fact that most people consume their news content online and you have a very disturbing picture. Unfortunately, certain Swiss journalists and politicians have fallen under the spell of Russian disinformation, with considerable money splashing around to impress and to gain influence. False

www.bunews.com.ua

narratives and false equivalencies abound, often under the cloak of having to remain neutral. The fact of the matter is that if one person says it is raining and another person says it is not, it is not actually so difficult to look out of the window in order to identify which person is being factual and which person has another agenda. Thankfully, some Swiss and other international news publications now have offices and reporters based in Kyiv instead of Moscow, where it remains too easy to control and falsify information. In addition, organizations like the UCMC have made an enormous contribution by bringing credible journalists together and providing platforms for factual and impartial reporting.

switzerland in ukraine

community. They are shocked that Stalin’s Communist regime could have committed such a horrendous act against Ukrainians for their attachment to their culture, history and land.

What do you see as the strategic priorities for the Swiss-Ukrainian relationship over the coming few years?

There are many interconnected priorities. These include continued support for the rule of law and providing a level playing field for Swiss businesses who want to invest in Ukraine and provide much needed foreign direct investment for job creation. Tied to this is the promotion of human rights and fundamental freedoms, which are both pillars of modern Swiss society.

Of course, the number one priority for everyone should be convincing the Russian Federation to respect international law. This is not only a threat to Ukrainians. It is a huge challenge for the entire international community. The bilateral Swiss-Ukrainian agenda for the next few years looks quite broad.

Fortunately, there are many competent and motivated people working hard on both sides. In fact, after my discussions with diverse Swiss and Ukrainian partners, I repeatedly come away with the feeling that what is driving the Swiss-Ukrainian relationship is not solely traditional bilateral relations, but rather an instinctive and reciprocal sense of kinship, affection and admiration between the two nations.

17

Swiss construction materials giant helping to build a better Ukraine Sika has been involved in many of the highest profile construction projects in modern Ukrainian history The May 2018 opening of the Beskyd Tunnel in western Ukraine was widely hailed as a historic breakthrough that brought Ukraine closer to the European Union. The 1822m tunnel was among the largest and most

18

strategically important infrastructure projects undertaken in Ukraine in recent years. It was also one of the many to feature the involvement of Swiss-based chemical and construction industry giant Sika.

:

switzerland in ukraine Waterproofing work underway inside the Beskyd Tunnel using Sika technologies. The Beskyd Tunnel, which cuts through the Carpathian Mountains and significantly improves Ukraine’s transport links with the European Union, is one of a host of major Ukrainian infrastructure and construction projects featuring the participation of Swiss-based Sika www.bunews.com.ua

19

: Sika Ukraine, the local branch of Sika Group, pro-

vided waterproofing solutions for the Beskyd Tunnel project, a particularly fitting role given Switzerland’s longstanding tunnel construction expertize and Sika’s own company history, which began in 1910 with the invention of a waterproofing agent named Sika-1 designed to address the problem of waterproofing tunnels. “The Beskyd Tunnel was a very symbolic project for us,” says Sika Ukraine General Manager Aleksandr Panchenko. “We actu-

ally won the tender for the tunnel in 2016 at the same time that the world’s longest railway tunnel, the Gotthard Base Tunnel, was being unveiled in Switzerland.” While the Beskyd Tunnel strengthened Ukraine’s connections to the EU in a very direct and concrete manner, many of the other Ukrainian projects Sika has contributed to are also very much part of the country’s transition towards contemporary European standards.

Aleksandr Panchenko has been with Sika since

the very beginning of the company’s activity in Ukraine. Beginning in 1998, he initially served as the official representative of Sika Poland in the country before eventually overseeing the establishment of a separate Ukrainian branch in 2004. He calls Sika “a full range supplier of construction materials, from basement to roofing and at all stages of the construction process and renovation.” The company’s activities cover everything from concrete and waterproofing to refurbishing, sealing

“The Sika portfolio includes Boryspil and Lviv international airports, the Chornobyl shelter, the glass domes of Maidan Nezalezhosti, the Ukrainian capital’s Ocean Plaza shopping mall and downtown cycling stadium, and virtually every major football stadium in the country”

20

switzerland in ukraine

and bonding, roofing and flooring.

Over the years, Sika has been involved in many of Ukraine’s most high profile and well-known construction projects. The list includes Boryspil and Lviv international airports, the colossal shelter to enclose reactor four at the Chornobyl Nuclear Power Station, the iconic glass domes of Maidan Nezolezhosti (Independence Square) in central Kyiv, the Ukrainian capital’s Ocean Plaza shopping mall and downtown cycling stadium, cooling towers of heating stations and virtually all the major football stadiums in Ukraine including the Olympic Stadium. According to Panchenko’s estimate, 99% of the country’s modern trams, trolleybuses and buses use Sika technologies, while the company has participated in the construction and refurbishment of over 1000 bridges throughout Ukraine.

He jokes that Sika is the most visible yet invisible company in the country. “Nobody sees us but we are absolutely everywhere in Ukraine.” As he runs through the long list of Sika activities, Panchenko says it is impossible to identify any single project www.bunews.com.ua

as being particularly important or significant for the company’s development in Ukraine, arguing instead that they have all played a role in the process.

“It is like asking a mother to choose their favorite child. For us, all projects are equally important.”

The company’s bulging portfolio has helped the Sika presence in Ukraine to grow from just seven employees back in 2004 to today’s team of 40 staff.

Employees regularly undergo training in Switzerland and a number of other European countries, with training trips generally lasting for three to four days and taking place several times a year. The company currently has three offices in Ukraine, with the Kyiv headquarters alongside regional representative offices in Lviv and Dnipro. Growth has not always been entirely steady. The turbulence of the 2008 financial crisis and the Russian attack of 2014 both jolted Sika’s otherwise impressive Ukrainian progress. However, the past few years have witnessed a return to stable gains, with the company’s revenues in Ukraine climbing by 15%17% annually since 2016.

Panchenko says Sika Ukraine’s connection to Switzerland goes beyond the immediate advantages of technical knowhow. He believes this Swiss association actually helps shape the way the company does business in Ukraine. “We try to bring a Swiss philosophy to everything we do. Within our company, this concept of “Swissness” is evident in hundreds of different little details. You can see it in terms of good timekeeping and punctuality. It helps guide our future planning and encourages us to analyze and learn from our mistakes. It means embracing the idea of perpetual education and training, together with developing and maintaining relationships. Perhaps more than anything else, it is about building trust.”

Sika Ukraine

Gloriia Business Centre 9B Smolna str., 03022 Kyiv, Ukraine Phone: +380 44 492 94 19 https://ukr.sika.com/

21

Nestlé invests in Ukrainian quality and competitiveness Swiss giant Nestlé sees reforms as key to continuing the company’s Ukraine investment success story Swiss consumer goods giant Nestlé has been present in Ukraine since the early 1990s and has expanded over the past two decades to become one of the largest multinationals operating in the country. After initially focusing on imports, the company soon branched out into local production and currently has three major production facilities in Ukraine (Lviv confectionary factory Svitoch, Torchyn ketchup, sauces and mayonnaise production plant, and Kharkiv-based noodles producer Mivina).

Ukraine is also home to the largest Nestlé Service Center in the world which is located in Lviv and employs over 1200 staff – around one-fifth of the total number of Nestle employees in Ukraine.

As well as producing for the Ukrainian domestic market, Nestlé also exports a significant portion of its Ukrainian production to EU and global markets. Meanwhile, the company sources the bulk of ingredients locally, enabling Ukrainian partners to gain official supplier status and tap into the Swiss multinational’s extensive global production networks. Recent figures reflect Nestlé’s significant Ukrainian footprint. Over the past three years, the company’s Ukraine investments have totaled around CHF 300 million, while annual revenues in 2017 were approximately UAH 7 billion.

This expanding investment profile has helped to make Nestlé a positive example of foreign direct investment (FDI) in Ukraine and proof that it is entirely possible to prosper in the contemporary Ukrainian business environment. “In my opinion, Nestlé in Ukraine is a tremendous investment success story,” says Nestlé managing director for Ukraine and Moldova Ansgar Bornemann, who has been with the company for fifteen years and took up his current Kyiv position in 2015.

Despite this upbeat overall appraisal of Nestlé’s Ukraine experience, Bornemann is frank about what he sees as the need for further reform of the Ukrainian business sector. The German executive acknowledges the unprecedented reform progress made by the Ukrainian authorities since the 2014 Revolution of Dignity, but also expresses undisguised disappointment over the slow pace of anti-corruption efforts and notes the damage this does to outside perceptions of the country’s investment attractiveness.

Bornemann says he fell in love with Kyiv as soon as he arrived in the city, and he speaks on Ukrainian issues with obvious engagement.

Nevertheless, he readily admits that the concern he expresses for Ukraine’s post-Maidan transformation is far from purely altruistic.

“Colleagues sometimes ask me why I speak out on the need to combat corruption and promote the rule of law. As a food producer, they wonder what is in it for me,” he says. “The simple fact is that Ukraine needs to attract much more FDI. This is the only way to generate the kind of GDP growth that would lead to real prosperity for ordinary Ukrainians. Unless we see genuine progress in combating corruption, FDI will remain significantly lower than it should be or could be. This keeps GDP growth down and reduces purchasing power, which makes it harder for Nestlé to expand in Ukraine. So we actually have a very direct interest in the future of the reform process.”

While Nestlé has much to gain from the growing prosperity of Ukrainian domestic audiences, the company’s focuses in Ukraine include the production of food products for export. Between 20% and 30% of all Nestlé production in Ukraine is bound for export to international 22

markets, with most items ending up in the EU due to the logistical convenience of Ukraine’s nearby location. The scale of Nestlé’s export activities in Ukraine is testament to the high quality standards the company has been able to achieve at its Ukrainian production facilities. The company has even won the right to produce premium Nestlé items for EU markets that are not yet on sale in Ukraine, underlining the progress made in establishing a strong reputation for the highest international standards.

Quality is only one of the many competitive advantages Ukraine currently enjoys as a production base for export to EU markets. Bornemann emphasizes the appeal of Ukraine’s landmark EU Association Agreement with its free trade component, citing favorable tax and customs conditions in particular. He also points to the combination of highly qualified and cost-competitive personnel as one of the key factors that makes Ukraine attractive as a production base. “Once we had introduced our global Nestlé corporate standards at the Ukrainian facilities we acquired, we found that quality levels and production costs made them highly competitive. This opened up major opportunities for us to export to other European markets and beyond.”

Then there is the entire issue of ingredients. Given Ukraine’s reputation as the breadbasket of Europe, it comes as no surprise to learn that Nestlé currently sources around 70% of all the ingredients used in Ukraine locally. This is well above the global average for the company.

An unusually high proportion of local supply means a considerable additional boost for the Ukrainian economy. It also provides attractive opportunities for individual local partners, who not only benefit from Nestlé’s custom but also earn the right to a place on the company’s global list of approved suppliers, thus creating the possibility of supplying Nestlé producers around the world.

Making the cut is no simple task. Before they receive the seal of approval, all potential suppliers must go through an audit in order to demonstrate that they meet Nestlé’s corporate expectations, which are globally standardized and often more stringent than locally applicable legislation. In addition to quality controls on the ingredients themselves, suppliers must also meet ethical standards on issues such as the use of child labor and care for the environment. Regular subsequent audit checks guarantee that companies maintain these standards, making it a significant ongoing commitment for interested parties.

Nestlé’s local sourcing and Ukrainian production are part of the company’s long-term strategy and Creating Shared Value approach in Ukraine, and Bornemann says he sees reason to be optimistic about the direction the country is moving in. He points to the growing economy and highlights currently modest Ukrainian per capita consumption levels that are still significantly lower than in other countries located in Ukraine’s neighborhood. “Given Ukraine’s size and population, the growth potential of the domestic market for food manufacturers is clear,” he states. “As we see further development and more wealth creation, standards of living will rise and consumer habits will move in broadly the same direction as what we have already seen in Central Europe.”

Talk of rising living standards inevitably brings us back to the subject

switzerland in ukraine

About the interviewee: Ansgar Bornemann is Nestlé managing director for Ukraine and Moldova of improving the Ukrainian investment climate. As well as addressing corruption and rule of law issues at home, Bornemann would like to see Ukrainians doing more to promote the country on the international stage. He argues that potential investors receive an often onesided and negative impression of the country due to international media coverage that tends to focus exclusively on major news stories dealing with conflict and corruption. The German executive regards himself as an unofficial ambassador for Ukraine and says he would like to see others within the Ukrainian business community adopting similar attitudes. Ultimately, he says, the Ukrainian authorities need to acknowledge that they must compete for the attention of investors against a host of rival nations throughout the Central and Eastern Europe region who are equally eager to attract investment and often enjoy significant head starts in terms of business-friendly reforms. Nestlé’s experience shows that Ukraine can be competitive, but the country needs to be much more proactive in promoting itself.

“It is time to recognize that international investors have choices,” he observes.

While keeping an eye on the progress of Ukraine’s post-Maidan reforms and watching out for any improvements in the investment climate, Bornemann is also keenly observing the changes taking place in www.bunews.com.ua

Ukrainian society as a whole. He identifies the rise of the millennial generation as particularly encouraging and sees their markedly more globalized tastes for products such as breakfast cereals as a promising sign for food producers like Nestlé. “We are currently witnessing a generational shift in Ukraine,” he says. “This is why I firmly believe that visa-free travel is so fantastic for Ukrainians. As they travel more and experience different cultures, their tastes will evolve to include things like new Italian spaghetti dishes and other delicacies they encounter elsewhere. Local favorites will remain part of the menu, just as they do all over the world. I am sure Ukrainians will be enjoying borsch and shashlyk for many decades to come, but other foods will also appear. This gives companies like Nestlé a wonderful opportunity to be part of this process.”

The scale of Nestlé’s investments in Ukraine is perhaps the strongest possible testament to the company’s faith in the future of the country. Recent investment into the development of production facilities in Kharkiv speaks volumes for the long-term commitment the Swiss multinational has made to the Ukrainian market. The expectation is that Ukraine will remain a highly competitive production base for international export while also boasting an increasingly attractive domestic market.

23

Swiss National Day in the Historic Heart of Kyiv Diplomats, politicians, members of the international business community and friends of Switzerland gathered in September at the Saint Sophia Cathedral Complex in the heart of historic Kyiv for a special Swiss Night celebration to mark the alpine nation’s national day. Guests enjoyed an array of authentic Swiss cuisine dishes as well as live music courtesy of Ukrainian singer Khrystyna Soloviy and Swiss sax maestro Roland Graf. The highlight of the evening was the official presenta-

24

tion of the Swiss Embassy’s annual Tell Awards, presented each year to personalities in recognition of their efforts to strengthen bilateral relations between Ukraine and Switzerland. The 2018 recipients were Ukrainian Crisis Media Center co-founder Nataliya Popovych and Andrej Lushnycky, who serves as president of the Ukrainian Society in Switzerland and Honorary Consul of Ukraine in Switzerland.

(Photography: Dmytro Korenev, Sergiy Bechko)

switzerland in ukraine

25

www.bunews.com.ua

THE NIBULON STORY

How a Swiss global platform helps Ukraine to feed the world

The history of NIBULON is a history of Ukrainian business success, the triumph of genuine European values, and the creation of mutually beneficial international partnerships. It demonstrates the possibilities of investing in Ukraine’s economy and the necessity of doing so. This means investment in the development and introduction of innovative approaches to help ensure global food security.

The story began in 1991 at the dawn of Ukrainian independence. NIBULON, along with the whole country, steadily overcame economic stagnation, inflation and unemployment.

At every stage of its development, NIBULON succeeded in strengthening its positions on both domestic and global markets. The company has overcome all obstacles and gained the respect of international partners by consistently conducting itself in a transparent and trustworthy manner.

Over the years, NIBULON has earned the trust of first-class European banks, foreign financial institutions and global partners. In order to invest more effectively in the company’s home country Ukraine, NIBULON opened its first subsidiary in the Netherlands in 2004. Two years later, a second subsidiary opened in Switzerland. NIBULON Founder and General Direc-

tor Oleksiy Vadaturskyy says this has helped him to realize the huge potential of the company and to attract reliable international financial partners.

“I am convinced that NIBULON would not have achieved so much success if, more than 15 years ago, Swiss officials had not arrived at NIBULON’s office in Mykolaiv and invited us to open an enterprise in Switzerland while helping us to understand the peculiarities of doing business in this country. I remember that day very well and I appreciate how important it was for us as a company and for the Ukrainian economy as a whole. From that day on, a part of my heart has been in Switzerland. Our Swiss office is a window on the entire global economy. We became successful in Switzerland. Thanks to our hard work, we gained access to the best financial institutions in the world and won the trust of many banking institutions. We established ourselves at the center of international trade and commerce. We would not have achieved all this if we were not Swiss at heart.”

NIBULON has become one of the driving forces behind the development of an independent and modern Ukraine economy, leading the implementation of the best European standards

within the Ukrainian business community. In 2017, Oleksiy Vadaturskyy received the William Tell Award from the Embassy of Switzerland in Ukraine in recognition of his considerable contribution to strengthening relations between Ukraine and Switzerland.

NIBULON is a leading Ukrainian investor and an example of a socially responsible business, with leadership positions in both investment and the export of grain and oilseeds. The company has invested about USD 2 billion into the Ukrainian economy.

NIBULON is currently implementing a new investment program, carrying out a logistics revolution, and redirecting its grain cargoes to the waterways of Ukraine. Since 2009, NIBULON has built a large network of terminals and elevator complexes along with a modern cargo fleet. The company sees this as a tangible contribution towards the sustainable development of Ukrainian agribusiness and future global food security. According to Oleksiy Vadaturskyy, Ukraine is capable of agricultural commodities production in order to solve the problems of global hunger. Today the whole world looks towards Ukraine, which has the potential to grow much more.

As part of its investment program, NIBULON works with many international financial institutions such as EBRD, EIB, IFC, and leading Western banks. The Swiss Embassy plays a key role in supporting cooperation with leading international financial institutions including EBRD and EIB, creating a real bridge between Ukraine and the rest of the European community while also offering support in Ukraine.

NIBULON’s cooperation with Switzerland is an important contribution to the fight for a corruption-free business environment and towards the development of a civilized and transparent market in Ukraine.

Promoting sustainability in Ukraine Interview: Philip Morris Managing Director for Ukraine, Caucasus and Moldova Michalis Alexandrakis

When did Philip Morris enter the Ukrainian market?

Philip Morris international was one of the first foreign companies to come to Ukraine. It is hard to believe, but it is been almost quarter a century since Philip Morris began its operations in Ukraine in 1994.

We began as a representative office with less than a dozen people all working in one office. Very soon, we acquired Kharkiv tobacco factory.

It was located in the very center of the city.

Was it a modern factory?

Not really. You would not call it a modern factory. Actually, we had to invest heavily into it and to expand vertically and horizo ntally in any possible direction. That expansion continued until we realized that it was impossible to fulfill our needs. Ultimately, we had to move to new facilities.

Did you buy another factory?

We actually built a new factory from scratch. The company bought a land lot at the old training ground of the Kharkiv tractor plant. It is located a little outside of Kharkiv in what was planned to become as a dedicated industrial zone. Other than this dedication, the land lot had literally nothing. We built all the communications and utility lines ourselves including gas, water, sewage, and electricity.

What year was that?

We commenced the factory in 2004. It was, and continues to be, one of the most technologically advanced in the country. Our colleagues use very little manual labor. For example, a few years ago they used to move the master cases to pallets manually. Today this is a fully automated process.

28

What makes this factory special?

I would mention three things. Firstly, our priority is the labor safety of the people who work there. We received recognition from the State Labor authorities for outstanding results in labor safety. This is not easy since roughly 700 people work at the factory.

Secondly, our top quality standards. We currently export to 13 countries including Japan. The Japanese are probably the world’s most demanding consumers in terms of product quality. I am glad we are up to standard. Thirdly, I would mention sustainability. Just to give you one figure – 90 percent of our waste is recycled.

What investment have you put behind these and other projects?

Our investment exceeds USD 348 million up to the present date.

Do you engage in social projects?

We do extensively. We have our priorities. We have supported and continue to support some social establishments, helping to install alternative energy sources to provide them with heating and hot water. This is important because it is a clean way to receive energy. In our factory in Kharkiv, we are finishing a boiler system operating on pellets, a natural material for use instead of gas. We also have a number of “small” initiatives. For example, we encourage separate garbage collection throughout our offices and offer real coffee mugs to our employees instead of plastic and paper cups. These are small things but they change attitudes.

We are also very serious about ensuring sustainable business throughout our value chain. As a company, we implement the Sustainable Development Goals introduced by the United Nations. In

Do you really want to stop selling cigarettes?

We do as a company and I do as individual.

switzerland in ukraine

line with this commitment, we support the STALO project aimed at support of small and medium businesses in Ukraine by mentoring them and providing additional media coverage. We care about employee safety, diversity and education. I am proud to say that for four years in a row, we have been recognized as a Top Employer in Ukraine according to Top Employer Institute. But our biggest social project is to create a smoke-free future for Ukraine.

What brought you to this radical change?

Look, people are becoming increasingly more thoughtful about the effects on their health and on the environment of the products and services they are using. That is why people try to drink fewer fizzy drinks, use fewer aggressive chemical detergents, drive smaller and more efficient cars, and so on.

And what is your response to them?

We are very plain and clear: if you want to eliminate risks to your health, you should quit smoking. This sounds good, but many people continue smoking. According to the World Health Organization, in 2025 there will be over 1 billion smokers around the world. In order to address this issue, PMI decided to produce and provide less harmful products available to such smokers who would otherwise continue smoking. Scientists know that the biggest danger to health caused by cigarette smoking comes from setting tobacco on fire.

Hence, when you eliminate the burning phase, you significantly reduce the content of harmful components in the aerosol versus cigarette smoke. Our true ambition is to give every adult smoker a better and less risky alternative to conventional cigarettes and a product that does not bother the people around you. I have been using IQOS for the last five years. I am living through these changes and I can personally evaluate the benefits of using IQOS compared to smoking cigarettes.

Do you see a smoke-free Ukraine emerging in the near or distant future?

Good question. The example of Japan indicates that a 15% market share is within reach. Today we are very far from this number in Ukraine, but changes can happen rapidly. We see consumers are ready and we see interest from other companies. However, in this journey we also need the help of governments around the world to properly regulate reduced risk products and give people who would otherwise continue smoking a fair chance to move to a better life.

What are your priorities for the next three to five years?

I want to see fewer people who light up cigarettes. I want a smoke-free Ukraine to become closer, and I want Philip Morris to lead this change.

Finally, what gives you optimism in Ukraine?

The energy, the enthusiasm, and the positive attitude of Ukrainian people is what really inspires me! I am positive that with people like this, in such a rich country, the future will be prosperous and successful. Ukrainians will find their own ways to unleash all the power and energy of Ukraine! www.bunews.com.ua

29

Swiss-based agribusiness giant

finds fertile market in Ukraine

Emerging agricultural superpower Ukraine has become one of Syngenta’s most important global markets As Ukraine has emerged over the past two decades as one of the world’s leading agricultural superpowers, the growth of Swiss-based Syngenta’s business in country has mirrored this process. In fact, the agribusiness giant has actually outpaced the expansion of the Ukrainian market. “In 2001, we had an annual turnover of around USD 14 million in Ukraine. This has since increased by a factor of 26 (to more than USD 360 million). Over the same period, the entire Ukrainian crop protection market grew by 20 times, so you could say that we have outperformed the market,” offers Gebhard Rogenhofer, who was part of the Syngenta Ukraine team from 2001 and served as the company’s general director in Ukraine from 2011 until 2018.

As net sales have soared, the size of the Syngenta Ukraine team has also mushroomed. Back in 2001, the company employed just 24 people in Ukraine. This figure has since grown to 340 full-time staff, with an additional 130-140 people joining the company each year to cover the specific seasonal demands of the annual agricultural cycle.

30

The expansion of Syngenta’s business in Ukraine has helped to raise the country’s profile among top Syngenta executives back in Basel, while also increasing Ukraine’s importance within the multinational’s global network.

Roghenhofer says at the beginning of the 2000s there was relatively little recognition among top management of the agricultural powerhouse potential Ukraine represented. However, by the mid-2000s as the company’s Ukrainian business started to experience robust growth, attitudes towards Ukraine began to change as realization grew that this was a globally significant market. Ukraine’s increasing importance is also evident in purely monetary terms. At the dawn of the millennium, Ukraine ranked in the mid-thirties in terms of profits among the more than 90 countries worldwide where Syngenta operates. Today, Ukraine occupies eighth place. Rogenhofer says it is entirely feasible that Ukraine could climb further to sixth position within the next few years.

Syngenta focuses on seeds and crop protection, both of which are among the

switzerland in ukraine

key drivers fueling Ukraine’s ongoing agribusiness revolution. The company imports most of its crop protection products while producing up to 80% of its corn seeds and 30% of sunflower seeds in Ukraine. Syngenta manages a network of diagnostic labs across Ukraine together with a seed breeding station, seed care institute and crop protection research station. Total Syngenta investment in Ukraine since 2001 has been in the region of USD 50 million.

Rogenhofer argues that intensification has been the most important factor behind the growing Ukrainian yields of the past two decades, with the process feeding itself as rising revenues encourage Ukrainian farmers to reinvest in modern equipment, better seeds and more effective crop protection. He says the rapidly rising revenues Syngenta has experienced since the 2000s will inevitably experience a slight levelling off over the coming years, but predicts that the Ukrainian agricultural industry as a whole is capable of achieving major additional yield increases. “As a company, we have posted double digit growth virtually every single year except for the crisis period of 2008.

Even in those crisis conditions, our annual revenue remained stable. Looking ahead, we do not expect this growth to continue indefinitely at the same pace, but we do anticipate growth in the high single digits for the coming five years, which will allow us to remain slightly ahead of general market growth trends.”

Meanwhile, the Ukrainian agricultural industry as a whole will continue reaping the benefits of the modernization processes initiated since the early 2000s. “If you compare the kind of machinery in use on Ukrainian www.bunews.com.ua

farms in 2001 with what you’ll encounter now, it is like night and day,” says Rogenhofer. He observes that the Ukrainian agribusiness sector has become noticeably more open to innovation, with farmers more willing to use new products such as Syngenta’s recently launched corn hybrids. The company has also introduced a range of new financing tools for Ukrainian agribusinesses in recent years and now offers drone technologies as a way of improving crop monitoring. If this inclination to adopt innovative new products and technologies remains constant over the next decade, Rogenhofer sees further stellar growth ahead for the sector. “The average yield per hectare has doubled since 2001. Thanks to Ukraine’s extremely fertile black earth, we think yields could double again over the coming ten years.

This will require further innovation, better crop protection and the development of new seeds, but it is possible.”

Rogenhofer predicts this growth will cement Ukraine’s position as one of the leading agricultural producers on the planet, with major implications for global food security and for the Ukrainian economy. “In the coming years, the agribusiness industry will become increasingly central to Ukraine’s overall economic strategy. Major export crops like sunflower oil and corn already generate huge foreign currency revenues for the state. As yields grow, so will these revenues,” he observes. This will also serve to increase the country’s importance on the world stage. “Ukraine is one of a handful of nations that have a central role to play in international food supply. Without Ukraine, we might not be able to feed the world by 2040.”

31

32

Ukrainians can make major savings by addressing wasteful energy infrastructure in residential buildings Switzerland currently ranks among Ukraine’s major donors, with annual budgets since 2015 of approximately EUR 22.5 million. Priorities include support for Ukraine’s ongoing decentralization and healthcare reforms. Swissbacked initiatives also aim to create an environment for sustainable economic growth via SME financing, support for sustainable agriculture and development of Ukraine’s organic food market. Many of these projects are concentrated in medium-sized Ukrainian regional capitals Vinnytsia and Zhytomyr, which serve as convenient model cities for many of the innovations supported by Swiss government agencies.

An important focus of Switzerland’s Ukrainian donor initiatives in recent years has been energy efficiency, which currently accounts for approximately 30% to 35% of overall allocations. Together with the International Finance Corporation (IFC), Switzerland has been at the forefront of efforts to improve energy efficiency in Ukrainian residential buildings.

The need to address Ukraine’s energy inefficiency is immediately apparent to even the untrained eye. According to industry estimates, Ukrainian per capita energy consumption levels are currently around three times higher than European Union averages. This wasteful approach to energy usage is partly due to the absence of an ownership culture. For the past seventy or so years, most Ukrainians living in apartment buildings have been renting from the state. This has fostered a diminished sense of responsibility among apartment owners, with many people still considering it the job of the authorities to repair and modernize properties. There are signs that this mentality is changing, but the pace of this change is slow.

For decades, heating and gas deliveries to Ukrainian homeowners were subject to heavy state subsidies, creating low bills but placing a severe burden on the Ukrainian economy.

This situation has changed dramatically since the 2014 Revolution of Dignity, with post-revolutionary reforms targeting energy subsidies and moving prices up towards market rates.

The sense of shock among Ukrainian consumers has been palpable, with the issue of ballooning bills becoming a political hot potato for the government.

These rising costs have provided additional imwww.bunews.com.ua

petus to the drive for greater energy efficiency in Ukrainian multi-family residential buildings. It is encouraging more Ukrainians to form themselves into homeowner associations in order to introduce measures designed to reduce wastage and bring utilities expenses down.

The task of overhauling Ukraine’s residential landscape is vast to say the least. The country has an estimated two hundred thousand multifamily residential buildings, with most in need of efficiency upgrades. This would require a potential overall budget of approximately USD 17 billion in order to achieve, making it prohibitively expensive.

Nevertheless, progress is taking place. While initial enthusiasm for homeowner associations was modest, the post-2014 increases in communal tariffs have helped generate demand for cost-cutting measures. Thanks to this changing mood, Ukraine now has around twenty-eight thousand homeowner associations registered across the country. The process benefits from Swiss efforts focusing on three main thrusts: creating a legal basis for homeowner initiatives by lobbying the government, engaging with banks to create the financial framework for effective implementation, and providing the homeowners themselves with the kind of support and guidance that will lead to lasting changes in consumption habits and living standards.

Typical improvements include the replacement of windows, insulation of walls, and repairs to roofing. Meanwhile, the introduction

switzerland in ukraine

Swiss support for energy efficiency

of heating meters and heating substations is allowing more and more households to control their climate while monitoring their specific consumption, allowing them to pay for what they use rather than facing less transparent tariffs. The gains these measures create can be highly significant. The head of the homeowner association of one large Stalinera property on Kyiv’s left bank told Business Ukraine magazine that since introducing a raft of energy efficiency measures, residents of the building had seen their monthly bills reduced by up to four times compared to those of neighbors in similar properties which have not yet joined the efficiency drive. Unsurprisingly, this had generated considerable interest in the neighborhood. It has also succeeded in driving up property prices in the renovated building itself. The key challenge was to mobilize residents into communities. Once this proved possible, the homeowner association head recalled, numerous advantages soon made themselves apparent.

Nor are the benefits limited to the homeowners themselves. Swiss and IFC officials involved in the project stress the positive knock-on effect it can have for the wider Ukrainian economy. As residential communities seek to improve their energy efficiency and upgrade their buildings, they create considerable demand for entirely new goods and services. Given the sheer scale of the task facing Ukraine, the economic impact of the growing energy efficiency industry could also be suitably significant.

33

Ukraine serves as key hub for Swiss-based tech giant Luxoft is present in Kyiv, Odesa and Dnipro with around 3,900 Ukrainian engineers

About the interviewee: Dmitry Kushnir is Vice-President for Global Delivery Locations at Luxoft and the former head of Luxoft Ukraine Swiss-based tech giant Luxoft has placed a big bet on Ukraine’s booming IT sector. Since entering the Ukrainian market in 2005, the company has expanded from a few hundred employees in the Ukrainian capital to over 3,900 staff located in Kyiv, Odesa and Dnipro. This makes Ukraine Luxoft’s largest single engineering center, accounting for approximately one quarter of the company’s global engineering headcount.

Ukrainian executive Dmitry Kushnir is based in Switzerland as Luxoft’s Vice-President for Global Delivery Locations. Prior to taking on his current Swiss role, he oversaw much of the company’s expansion in his homeland as head of Luxoft Ukraine.

Kushnir says the international appeal of the country’s IT sector is obvious and believes the Ukrainian IT industry is well positioned to become even more globally competitive in the coming years.

“What we are seeing in today’s Ukraine is the evolution of a complete IT ecosystem, and all the indications are that it is sustainable,” he comments. “As well as software engineering service providers like ourselves, the market is also witnessing the emergence 34

of a strong startup segment. As new tech companies and startups achieve success, they are developing their own engineering capacity. The whole ecosystem is growing organically.”

This organic expansion depends heavily on the ability of Ukraine to continue producing IT professionals at rates that will sustain the dynamic growth of the past decade. According to Kushnir’s own estimates, the Ukrainian IT industry currently employees around 140,000 specialists. New recruits continue to enter the industry as they graduate from tech specialties in Ukrainian higher education, while the strikingly high salaries on offer in the industry will continue to entice older Ukrainians to retrain and seek new careers in IT. Even entry-level IT professionals can expect to earn salaries equivalent to around USD 1,000 per month or higher, making it one of Ukraine’s best-paying professions by some distance. This has led to the emergence of an entire segment of IT schools across the country, which is helping to create an IT talent conveyor belt capable of turning out 25,000 new professionals per year.

Looking ahead, Kushnir says Ukrainian tech companies would be wise to focus some of their attention on meeting rising levels of global demand for innovations like blockchain, big data and cloud technologies. He sees this as a way of playing to Ukraine’s strengths while allowing the country’s tech sector to continue along its current path of natural evolution.

The impact of this growth on the wider Ukrainian economy is already impressive and looks set to become even more profound. Kushnir expects the Ukrainian IT industry to generate about USD 4.5 billion this year. He believes the conditions are in place to maintain 12% to 15% annual growth rates over the next three to five years.

As it continues to gain ground, the expansion of the Ukrainian IT industry has created a new urban middle class of IT professionals with who are increasingly visible in all of Ukraine’s major cities.

This emerging generation of IT workers is driving the partial hipster takeover of Ukraine’s business centers and café scene, while also attracting much-needed foreign currency to the country.

Ukraine’s gadget store and barbershop proprietors can count on the continued custom of this IT demographic for the next few years at least. Kushnir believes that in the medium term, international demand for Ukrainian IT services will remain high enough to fuel current growth expectations within the industry. “When it comes to Ukrainian IT, quality is the number one factor that makes the country so competitive. Other factors such as cost, time zone convenience and cultural closeness to European and North American clients are also in Ukraine’s favor, but it ultimately comes down to the quality of the engineers and the quality of the work. In terms of quality and price competitiveness, it is still hard to beat Ukraine globally.”

18-19 October 2018 Ukraine, Kyiv. ะกEC Parkovy

www.forumkyiv.org

Creating the Future in a High-Tech World

2000

Over visitors

35

From countries

120

More than speakers

36

Swiss cheese and wine specialist Le Komora offers Ukrainians a little corner of Switzerland

For more than three years, Ukrainian fans of Swiss gastronomic culture have been able to enjoy authentic Swiss delicacies in Ukraine thanks to the Le Komora network of Swiss restaurants and culinary retailers. The first Le Komora outlet opened in Kharkiv in February 2015. Since then, the network has expanded to include two further restaurants in Kyiv and one in Poltava.

The restaurants feature distinctive traditional Swiss Alpine chalet design. Guests encounter atmospheric Swiss decor and timber furniture along with the paraphernalia of a skiing lodge high in the mountains. Visitors can choose to dine at Le Komora or stock up on imported Swiss treats including an extensive range of both cheeses and wines. The Le Komora network also stocks a wide selection of the accessories and implements used in the famous Swiss fondue process, with fondue selections and technologies to suit all tastes.

The inspiration for the launch of the Le Komora network in Ukraine came from Swiss national Peter Wermuth, who first came to Ukraine more than twenty years ago to introduce the Blasercafe coffee brand and has spent much of the intervening two decades introducing his Ukrainian friends and colleagues to Swiss culinary culture. Representatives of Le Komora say www.bunews.com.ua

their goal is to promote this Swiss gastronomic culture among wider Ukrainian audiences and to create a little corner of Switzerland in every major Ukrainian city.

Company officials directly oversee the selection and import of all menu items and fondue equipment to ensure quality and freshness. Thanks to this approach, the choice of Swiss cheeses available in Ukraine is both extensive and exclusive.

Le Komora clients can choose from a selection of different Appenzeller cheeses. Other popular options include delicious creamy Emmentaler AOP, the legendary Tête de Moine AOP, and the unique Mont Vully alt. Recent additions to the Le Komora menu include the classic alpine cheese Bundner Bergkase. Accompanying this unrivalled selection of Swiss cheeses is Ukraine’s largest range of Swiss wines.

The combination of cheese and wine served in a community atmosphere of shared dishes helps to create an uncomplicated and organic gastronomic atmosphere, with food prepared in an open kitchen in order to add to the impression of a natural dining experience. This simplicity is the essence of Swiss cuisine and a central element of Swiss family culture in general. It has proven very popular with Ukrainian audiences, fitting well

switzerland in ukraine

Swiss cuisine in Ukraine

with their own traditional agrarian embrace of organic and communal dining culture.

Le Komora is working to promote Swiss cuisine throughout the cities where the network is already present, participating in Ukraine’s popular “Street Food” festivals while also holding regular master classes to teach Ukrainian audiences how to properly prepare fondue dishes in the Swiss manner. The engaging and interactive style of fondue dining has also proven popular among corporate clients, with Le Komora reporting growing demand from Ukrainian companies for corporate parties where they offer to recreate the authentic flavors of Switzerland.

“Le Komora” Swiss dining in Ukraine 6/8 Kooperativna Street, Kharkiv Tel.: +38-068-6277270 2-4/7 Pushkinska Street, Kyiv Tel.: +38-066-5806917 30 Vasylkivska Street, Kyiv Tel.: +38-095-9018669

3 Konstitution Street, Poltava Tel.: +38-095-4866392 lekomora.com

37

Ukrainian orchestra flies the flag in Switzerland The New Era Orchestra’s Swiss festival debut is a big win for Ukrainian cultural diplomacy

About the interviewee: Tatiana Kalinichenko is the music director of the New Era Orchestra Ever since gaining independence in 1991, Ukraine has struggled to convert its immense soft power potential into a more positive image on the international stage. When it comes to the performing arts, few nations can match Ukrainian resources. Nevertheless, for much of the past quarter century, this side of independent Ukraine has remained firmly overshadowed by grim headlines about war, corruption and post-Soviet poverty.

That may now be changing as the post-Maidan mood of national renewal encourages Ukrainians to turn away from decades of navel-gazing and belatedly engage with the wider world. Since 2014, numerous individual Ukrainian cultural initiatives and state-sponsored showcases have begun to challenge the negative stereotypes undermining Ukraine’s international image.

At the official level, the country is now in the process of establishing the Ukrainian Institute as a global flagship for Ukrainian cultural diplomacy. Meanwhile, non-state efforts are also bearing fruit. Ukraine’s New Era Orchestra achieved an important soft power breakthrough in September 2018, becoming the first Ukrainian musicians to appear at Switzerland’s internationally 38

acclaimed Septembre Musical festival.

Staged annually since 1946 in Vevey and Montreux on the shores of Lake Geneva, the Septembre Musical festival enjoys a reputation for exclusivity and traditionally hosts many of the world’s top orchestras. Getting an invite to perform is no easy matter and Ukraine’s inclusion into the 2018 festival program relied heavily on the charm and tenacity of New Era Orchestra music director Tatiana Kalinichenko, who began a dialogue with festival director Tobias Richter in 2015. After two years of talks, Mr. Richter eventually came to Kyiv in person and invited the orchestra to convince him they were deserving of a place at the festival. This highly unorthodox audition proved successful and led to September’s landmark appearance in Switzerland.

For Kalinichenko, performing at the prestige Swiss event was a moment of supreme personal satisfaction and the culmination of years spent lobbying for such an opportunity. Since co-founding the New Era Orchestra in 2007, she has positioned the orchestra as a calling card for the country and the voice of contemporary Ukraine. A firm believer in the importance of soft power, she sees cultural diplomacy as a trump card that Ukraine must learn to deploy with much greater boldness and enthusiasm. “Cultural diplomacy is far more effective than traditional politics when it comes to changing public perceptions,” she reflects. The impression created by the orchestra in Switzerland was certainly a departure from the traditionally stale and sullied associations that linger around Brand Ukraine.

“Everyone commented on our youth and energy. We were received by festival audiences as a breath of fresh air from Ukraine,” says Kalinichenko. “This was our chance to introduce the new generation of Ukrainians who are changing the country. It was an opportunity to show people a vibrant Ukraine that is completely at odds with the depressing media coverage they may have encountered.”

The New Era Orchestra is certainly a suitable standard-bearer for the country. The orchestra has always made a point of its Ukrainian identity and boasts an all-Ukrainian lineup of musicians.

They also took the opportunity of their festival debut to introduce Swiss audiences to the work of a modern Ukrainian composer, playing compositions by Mozart, Vivaldi and Grieg alongside those of Ukrainian maestro Valentin Silvestrov. “You could say our entire performance was made in Ukraine,” quips Kalinichenko.

Music critic Anna Stavychenko, who collaborates with many of Europe’s leading classical music festivals including Bayreuth Festival, Salzburg Festival and Munich Opera Festival, confirmed that Kalinichenko’s optimist appraisal of her orchestra’s Swiss festival appearance was more than justified. “The Swiss debut of the New Era Orchestra successfully demonstrated the potential of the emerging generation of Ukrainian musicians,” Stavychenko wrote following the festival. “Tatiana Kalinichenko has gathered an all-star orchestra together that is able to grasp the subtleties of different styles and perform with great mastery of sophisticated musical language. This gives the New Era Orchestra a special freshness and marks them out as a serious new player on the European music scene.”

switzerland in ukraine

39

www.bunews.com.ua

Approaching a Year of Elections in Ukraine ing the interests of more than 3 million businesses. For more than a quarter of a century, AmCham Ukraine has been listening to the needs of business and conveying its voice in the political arena, taking action on legislative issues that impact business.

We continue to be a driver of positive changes with regard to doing business, working with the government, at all levels, to push for muchneeded reforms and do our best promoting Ukraine internationally as an attractive investment destination.

What is on our agenda?

Andy Hunder, President of the American Chamber of Commerce in Ukraine, Member of the National Reforms Council and National Investment Council, Treasurer of AmChams in Europe Ukraine is fast approaching a year of twofold elections in 2019 with Presidential elections expected to be held on Sunday, 31st March, followed by elections to Parliament later in October. The business community is watching closely and monitoring what impact the elections results may have on the investment climate.

The American Chamber of Commerce will be hosting a series of events in the run-up to the elections. We will provide members with insight and analysis on how the election results may influence the political and business landscape in Ukraine.

We held a first meeting with the Atlantic Council’s John Herbst, former US ambassador to Ukraine, and UkraineAlert editor Melinda Haring on What is the view of Washington on Ukraine approaching a year of elections?

This was a valuable event offering member companies’ representatives’ insight from key experts at the world’s leading think-tank on international relations. Think-tank professionals are always able to say much more that government officials as they are not constrained by policy and public speaking guidelines. Among many important points that were highlighted during the meeting one stood out in particular – there is general disappointment among international observers that the post-Maidan niche for a new political leader remains vacant and has not, yet, been filled.

We are planning a series of get-togethers with the candidates who will be running in next year’s election. Simon Sinek, a British-American author and motivational speaker once said: “Leadership is not about the next election, it’s about the next generation.”

Fighting for your business The American Chamber of Commerce in Ukraine is a part of U.S. Chamber of Commerce, the world’s largest business association represent-

AmCham Ukraine has a clear position on what needs to be done for Ukraine’s sustainable economic recovery – a roadmap with a list of priority steps that will help to ameliorate Ukraine’s investment climate, boost Foreign Direct Investment (FDI) and present Ukraine as a trustworthy investment destination. These are the messages we will be communicating to the political candidates.

Top of our list is macroeconomic stability, especially the continuation of cooperation with the International Monetary Fund (IMF), vital for investors already operating here and for potential investors eyeing Ukraine as a lucrative market. Predictability is what companies want to see.

Rule of Law is what investors seek in a country where they are working. Property rights, including IP protection, are pivotal for any investor.

Physical security of the people and possibility to transfer funds in and out of the country are also of major importance.

A fair and transparent privatization process and reform of Ukraine’s 3000 state-owned enterprises is of ultimate significance. A three-dimensional transparency of privatization – transparency of the asset up for sale, transparency of the buyer, and transparency of the privatization process itself is vital to a successful implementation. This will help to boost the efficiency of state-owned enterprises and swell revenues to the state budget.

In today’s economy, business must innovate and create in order to succeed. To ensure security of investment and innovation the effective protection of Intellectual Property (IP) Rights is fundamental for businesses, as by protecting IP, companies protect their key assets – talent, innovation and investment.

With the majority of member companies of the American Chamber of Commerce seeing growth over the past two years, we remain confident that Ukraine will continue its reform path and support of FDI throughout 2019, and beyond. We are looking forward to hearing from the Presidential and subsequently parliamentary candidates their strategies on economic growth. We look ahead to working together in making Ukraine a better place to do business.

39

MEMBERS’ NEWS AMAZON PAYS $1 BILLION FOR RING, TECH STARTUP WITH R&D CENTER IN UKRAINE Amazon, the world’s largest online retailer, acquired the smart home security startup Ring for $1 billion in February. The Ring’s technology, prototyped by U.S. inventor Jamie Siminoff, is now partly developed in Kyiv.

Using Ring’s video doorbell, customers can monitor entrances to their houses and talk to visitors remotely. The smart doorbell can even detect suspicious activity at the front door and warn the homeowners.

Ring Ukraine started back in 2016, when Kira Rudik (now COO of Ring Ukraine) convinced Ring to hire a small R&D team of 10 developers. By lot’s of hard work and self-sacrifice the group grew into a full-scale R&D center in Kyiv. Now the Kyiv office is the company’s leading tech center with a team of 700, which is set to double.

ALEX MCWHORTER APPOINTED CITIBANK COUNTRY MANAGER FOR UKRAINE On 17.08.2018 Alex McWhorter was approved by the National bank of Ukraine as Chairman of the Board of Directors, JSC “Citibank”.

Alex McWhorter is the Citi Country Officer (CCO) and Corporate Bank Head for Ukraine. He is responsible for Citi’s franchise in Ukraine including leading the business and protecting the franchise.

Alex joined Citi in New York in 2003 in Market Risk Management, before moving to Corporate and Investment Banking in 2007 covering the Power sector. He served as a Director in the Risk CAO office for over three years where his responsibilities included leading coordination of Citi’s CCAR efforts. Most recently, he served as UK Chief Risk Officer, and was responsible for the risk management of Citi’s UK legal entities as well as supporting the EMEA CRO on regional support and crisis management.

Alex holds a Master of Business Arts in Management from New York University, Stern School of Business, and a Bachelor of Arts in Economics and Psychology from Williams College, Massachusetts, United States.

OLIVIER LANGLET APPOINTED CEO METRO CASH & CARRY UKRAINE Mr. Olivier Langlet is appointed as CEO METRO Cash & Carry Ukraine, starting from July 2nd, 2018. as Martin’s successor.

Mr. Langlet brings more than 25 years of solid experience in Multiformat Retail. He joins METRO Ukraine from a position of CEO in training within METRO AG. Mr. Langlet started his career in Carrefour France as Department Manager and advanced through his career to the role of Chief Operating Officer in Belgium; in 2011 he joined REAL, Turkey as Managing Director; from 2014 Olivier worked as Chairman and CEO at Vindemia Group Company, a subsidiary of Casino Group in charge of retail business in the Indian Ocean. Olivier holds degree in International Business and Foreign relations from Enseignement Supérieur de Jemeppe University (Liège, Belgium).

WELCOMING NEW MEMBERS “It’s great honor to be a member of American Chamber of Commerce community because it brings prospects to business development in Ukraine and establishes transparent business opportunities for sustainable growth.”

“We are proud to become a part of AmCham Ukraine, as today is important time in Ukraine when a large international business needs to unite to establish a unified information and legal base. For such development AmCham Ukraine is an ideal business platform, which includes a variety of activities and events, networking and communications.”

Mark Sawchuk

Taras Dzhamalov

Country Manager

General Manager Ukraine

L’Oréal Ukraine operates in the Ukrainian market since 2004. The world leader in beauty, L’Oréal is present in 150 countries on five continents. L’Oréal has a portfolio of 34 complementary international brands which cover all categories of cosmetics: hair care, hair coloration, skin care, make-up and fragrance.

Lenovo is a US$43 billion global Fortune 500 company and a leader in providing innovative consumer, commercial, and data center technology. Highquality portfolio of secure products and services covers PCs, workstations, servers, storage, networking, software, smart TVs and mobile products like smartphones (including the Motorola brand), tablets and apps.

“American Chamber of Commerce spearheads change and innovation, engages in a dynamic dialogue with the government required to improve relationship between the business and the state, while offering many meaningful opportunities to improve Ukraine’s investment climate.”

“Ukrainian market represents both great opportunities and great challenges. Business community has strong need to share experience and learn from each other how to deal with challenges and seize opportunities in Ukraine. AmCham is a perfect place for this.”

Mykhailo Sokolov

Igor Bogdanov

General Manager

Managing Director

P&O Maritime Ukraine is a subsidiary company of P&O Maritime owned by the world’s largest port operator DP World Group. Provides towing services in the port of Yuzhnyy and Chornomorsk.

Containerships is a full-service logistics company providing safe, fast and environmentally friendly door-to-door container transportation in the Black Sea, Baltic Sea, North Sea and the Mediterranean.

B2G Dialogue ROUND TABLE “CONTINUOUS PROFESSIONAL DEVELOPMENT OF DOCTORS” Constant learning and experience gaining is crucial for healthcare profes- the Chamber Healthcare Committee held a Round Table discussing how to sionals in the era of personalised medicines and technologies. Recently, make this knowledge more affordable and valuable for doctors in Ukraine.

MEETING WITH REPRESENTATIVES OF NERC & OFFICE OF THE NATIONAL INVESTMENT COUNCIL During the meeting with NERC , Office of the National Investment Council and State Enterprise “Energorynok”, Chamber Member Companies had a chance to discuss possible improvements to the draft Power Purchase Agreement to foster compliance with international standards, liberalization of “green” electricity market and balance of interests of all stakeholders.

JOINT MEETING OF THE INFRASTRUCTURE & AGRICULTURAL COMMITTEES WITH VYACHESLAV YERIOMIN, OPERATIONS DIRECTOR OF PJSC “UKRZALIZNYTSIA” Chamber Members had a dynamic discussion with Vyacheslav Yeriomin, Operational Director of Ukrainian Railways (PJSC “Ukrzaliznytsia”). In focus – private traction, railcars distribution, closure of railway stations and theft on railway.

B2G Dialogue MEETING WITH ANDRA BRIGE, DEPUTY COUNTRY DIRECTOR, UNDP UKRAINE The Meeting was devoted to discussion of the development and implementation of the electronic system of accounting stocks of medical products, as well as possibilities of cooperation with MoH and UNDP and parties concerned regarding designing and implementation of the mentioned system.

MEETING WITH DENYS MATSUI, HEAD OF THE STATE-OWNED ENTERPRISE “ELECTRONIC HEALTH” The Chamber Healthcare Committee held the meeting with Denys Matsui, Head of the State Enterprise E-Health. The meeting participants discussed the ongoing status of the eHealth system, the roadmap of its development and current priorities.

MEETING WITH JUDGES OF THE SUPREME COURT The Chamber Members had an opportunity to discuss current issues in tax litigation with Mykhailo Smokovych, Head of Cassation Administrative Court within Supreme Court and Raisa Khanova, Secretary of Judicial

Chamber on Tax Disputes of Cassation Administrative Court within Supreme Court. In particular, the meeting was focused on the judicial practice regarding use of judgments under the Article 205 of the Criminal Code of Ukraine (“Fictitious Entrepreneurship”) as an evidence in tax disputes.

B2G Dialogue PRESENTATION OF THE INFOGRAPHIC REPORT “FOOD INDUSTRY IN UKRAINE” The American Chamber of Commerce in Ukraine presented the Infographic Report “Food Industry in Ukraine”, developed by the Chamber Member Company Top Lead. Now the current state of Ukraine’s food sector is explained in one simple document. The Presentation of analytical data was followed by an expert discussion devoted to challenges and opportunities of the food processing industry in Ukraine.

MEETING “WHAT IS WASHINGTON’S VIEW ON UKRAINE APPROACHING A YEAR OF ELECTIONS?” Ukraine is approaching an election year in 2019, with Presidential elections expected to be held on March 31, followed by Parliamentary elections later in the year. Chamber Members had an opportunity to hear from Ambassador John Herbst, Director, Eurasia Center, Atlantic Council and Melinda Haring, Editor, UkraineAlert, Atlantic Council what is Washington’s view on Ukraine approaching a year of elections.

Traditional Welcome Back Business Networking Cocktail The Chamber guests caught up with old and new business contacts, discussed the upcoming business season and spent a great evening with fellow Chamber Members. They enjoyed a warm evening in urban-style modern space with a glass of cocktail mixed especially for this occasion. Thanks to the event sponsor Air Malta all guests of Business Networking Cocktail had a great opportunity to win 2 round-trip tickets Kyiv – Malta – Kyiv.

EVENT SPONSORS

Guide to smart debt restructuring Experiences from the negotiation frontlines in the challenging Ukrainian NPL arena rental income based on currency-based contracts).

Underlying assets, or companies in case of an appropriation, are sellable to international buyers.

Meanwhile, the time horizon for realization should not be longer than one to two years. Accordingly, the following sectors look promising: IT, Food and Agriculture, Real Estate (standing assets), Logistics, and Light Industrial Production.

The NPL business is sometimes like a real-life Western movie, and this is especially true in Ukraine. It is exciting, not for the faint-hearted, and sometimes

About the author: Marc-Milo Lube is Managing Partner at VI2Partners investment company The 56% non-performing loan (NPL) ratio of the total countrywide loan book, together with an overall volume of close to USD 20 billion, make the Ukrainian NPL market deserving of an in-depth investigation from institutional investors as well as workout companies. Most of Ukraine’s NPL volume is concentrated within the corporate sector, which accounts for more than 80% of overall NPL volume. It is highly covered with underlying assets, making it particularly interesting for workout.

The Ukrainian government, the country’s National Bank, and supranational institutions all share a priority interest in the cleanup of this NPL portfolio, as it creates congestion in the credit system and slows down new loan issuing and economic growth. The dynamics in the sector will be high for the coming two to three years due to the ongoing restructuring of the banking sector. As a result, the rewards will also be high for successful players. This is a game of “Double or Quit”, be it through the acquisition of important individual corporate debt positions or entire NPL portfolios from big lenders.

The Ukrainian economy can be characterized by comparatively high political risk and political interference, as well as high inflation and lending rates and a chronic equity shortage. For this reason, NPL ratios are high and can be acquired at attractive prices. The prudent investor will prioritize NPL investments along the following criteria: debts show no or little political exposure, underlying cash flows are export oriented or are USD/EUR linked (e.g.

48

dirty. The human factor can add enormous complexity with greed, misplaced morality, chicken runs, compliance frameworks, criminal behavior and personal egos all taking their toll. Based on experience on all fronts of the spectrum in Ukraine, I have a number of lessons from successful NPL cases to share with lenders, investors and debtors.

Begin with a Realistic Endgame

All successful investments start by thinking through the endgame. This will also mean the readiness of the investor to work out a debt, repossess assets, re-structure or upgrade assets, operate or sell assets. Be careful on the timing side: factors such as non-liquid markets for certain assets, challenges to the enforceability of claims, the need to upgrade assets, and time delays from courts and authorities can all often prolong planned investment horizons in Ukraine.

Real Value and Underlying Assets

As the investor needs to be prepared to take over and operate or sell assets, it is critical during due diligence to understand the true value of the underlying assets of NPLs. In Ukraine, this also means understanding the true physical state of the assets and clarifying who is in control of assets and cash flows.

Focus on Negotiations

Always prioritize open and transparent negotiations, ideally moderated by a neutral party. This has proven to be the most efficient and fastest way towards conflict resolution. Prepare your negotiations by finding and using local allies and by building personal pressure on your debtors. Assume in principle a non-payment attitude and be bold and strong. Sometimes both parties have to get

bloody noses before a real negotiation process can start. Sometimes it never happens. In these cases, the winner will collect the whole lot, but often the value is then already negligible.

Beware of Compliance Restrictions

Debtors might fight back with legal, half-legal and sometimes criminal means to avoid payment. Legal and commercial loopholes sometimes allow for unprecedented situations. In case the reporting, legal or compliance regulatory frames do not allow for a solution, this part of the NPL investment should be rapidly divested or out-structured.

Avoid Moral Hazard and Bloated Egos

We have observed that lenders and investors lean towards punishing debtors for not being willing to pay back debt or to deny them a profitable debt restructuring. Debtors are prone to overestimating their own power and often driven by personal ego and pride. Better results are possible by focusing on win-win deals and face-saving solutions while forgetting morale or justice and staying unemotional.

Watch Out for Poison Pills

Some Ukrainian debtors are masters of deflection techniques. Be prepared for poison pills in your loan portfolio in the form of blurred property rights, complex corporate structures, side tracking and counter-attacks, out-structuring of key assets, abuse of authority and relationship networks.

Bad debt deals can be highly rewarding, especially in highly volatile economies like Ukraine.

Investors and debtors who are ready to invest in the appropriate planning, be disciplined in their execution, and ready to test unchartered waters, will be in line for the extra yields on offer in this market. The current market situation features a high volume of NPL, important market players who have to reduce their NPL positions, an improved regulatory framework and a positive economic outlook as well as increased integration into European Union markets. These factors will lead to an increase in the value of NPLs and their underlying assets. This makes Ukraine a very interesting market for financial investors, supranational lenders, and organizations who are ready to work out loans or loan portfolios.

Blockchain can help build the new Ukraine Blockchain technology is a perfect fit as Ukraine seeks to overcome bureaucracy and corruption

draconian measures, there are still regular corruption scandals. In Ukraine, corrupt practices are deeply rooted in society. This makes blockchain a potentially game-changing solution to what is an ingrained problem.

Crucially, blockchain technology works without human participation. This effectively removes the key weak point from the equation. Data related to blockchain is not stored in any one place but distributed among a variety of devices in encrypted form, reducing the possibility of accessing and manipulating this data to a minimum. Potential anti-corruption applications of blockchain technology in Ukraine include an open blockchain property registry (which would act as insurance against raiders), the automation of simple workflows (including obtaining things like business permits), and digital control of public expenditures (for budgets of all levels). These About the author: Andriy Dovbenko is the owner of EVRIS law firm “Blockchain? We need to fix the roads first. Now is not the time for new technologies.” Whenever I hear statements like this, I do not know whether to laugh or cry. In reality, there has never been a better time or place than today’s Ukraine for the introduction of innovations like blockchain. If competently implemented, this technology could help repair the country’s roads and solve many of the biggest challenges facing Ukrainian society.

Competitive Advantage for Emerging Economies

It is wrong to think that only the world’s most advanced societies can benefit from blockchain. On the contrary, this technology can offer developing countries a serious competitive advantage. Implementation does not require huge investment and benefits manifest themselves virtually immediately.

Why? Because the essence of this technology is decentralisation, and one of the main obstacles in developing economies like Ukraine is typically the notorious power vertical. Stubborn state machines, bureaucracy, and corruption are exactly what blockchain can overcome. Although the essence of this technology is not limited to crypto currencies, the example they provide demonstrates that it is possible to build effective interactions unencumbered by state control.

International organisations are already talking enthusiastically about the advantages of blockchain for young economies. The World Food Program (WFP), one of the UN’s key units, is using blockchain technology to distribute humanitarian aid to refugees more efficiently, particularly to refugees from Syria. Moreover, within the framework of a project in Pakistan called “Building Blocks”, the UN is testing this technology by organising deliveries and conducting all financial transactions through a blockchain-based platform. Representatives of the organisation are now arguing that these innovative new solutions can play a crucial role in overcoming global hunger.

Blockchain Beats Bribery

A key component of all corruption is the human factor. The temptation to get rich quick is, at times, so great that even the possibility of severe punishment does not stop bribes from being paid or accepted. Take China, for example, where corrupt officials can even face the death penalty. Despite these 50

three tools alone would suffice to tackle some of the top priorities in the fight against corruption. Similar technologies are already in use in the EU, but they generally aim to streamline processes. In Ukraine, the goal would be to help control processes.

From Healthcare to SMEs

Healthcare is another area where blockchain technologies offer potentially significant advantages. Most people tend to turn to their doctors rarely, so medical records are often lost. It can be difficult to replace these records.

This can have a negative effect on the efficiency of treatment. A nuance to consider here is the spread of wearable electronic devices like fitness bracelets. Today, many treat these devices as mere toys or, at best, as a way of providing information for coaches and fitness trainers. This may be overly dismissive. The creation of unified databases containing online files and information from fitness bracelets provides an opportunity for physicians to work in a more personalised manner. Blockchain is capable of keeping such detailed medical secrets while also preventing the manipulation of data.

This solution is already undergoing testing in the US by IBM in conjunction with the US Food and Drug Administration (FDA). Doctors are combining accumulated clinical research data, information on genetic features, and case histories together with information from smart gadgets in order to combat cancer by detecting the disease in its early stages. In the future, this experiment will expand to cover other kinds of medical considerations.

Another area where blockchain-based solutions can improve the automation of processes is the entrepreneurial world of Ukrainian small businesses.

Blockchain technologies can help by simplifying the flow of documents, reducing the risk of fraud through smart contracts, and making it more convenient to complete payments without bank commissions. Meanwhile, larger IT companies and international banks are also paying attention to the integration of blockchain-based solutions. The reason for this interest is simple: they are looking to secure their place in a world where the rapid rise of new technologies is threatening to make their traditional roles redundant.

Blockchain-related technologies are already beginning to transform the international business climate. There is huge scope for the innovative adoption of these technologies in Ukraine. The question now is how quickly Ukraine will embrace these processes. Blockchain technologies offer emerging economies like Ukraine the opportunity to catch up with the world’s most developed societies, but failure to adapt also means falling behind. If Ukraine fails to seize the moment, the mantra “now is not the time” could well become the epitaph of the entire Ukrainian economy. www.bunews.com.ua

tech

www.bunews.com.ua

51

energy

Corporate governance and energy investment Corporate governance reforms in Ukraine can help the energy sector attract international investors

A recent emerging market investor survey by the International Financial Cooperation found that emerging market investors are particularly concerned about the level and quality of corporate governance. Global energy market participants repeatedly emphasize that greater transparency and easier access to energy markets can drive the entry of foreign investors. Acceptable corporate governance practices play a very important role in this process as investors consider their investment decisions.

Ukraine is currently undergoing corporate governance reform.

This process is generating interest among investors, who are hoping to see an improvement in Ukraine’s corporate governance framework. What are the main concerns in the investment community and wider Ukrainian society? What can help build public trust in the Ukrainian energy business? What could encourage investors to commit? I believe the answers to these questions will lead us towards an awareness of the central importance of greater stakeholder engagement, improved governance culture, and heightened public trust.

Stakeholder Engagement

About the author: Olha Bosak is Director of the Center for Reforms of Oil & Gas Sector and Corporate Governance of SOEs at Naftogaz Ukraine Investments in energy production and sustainable energy supply infrastructure are powerful drivers of economic growth and quality of life improvements. However, this does not come cheaply.

Increases in oil and gas exploration and production, along with upgrades of transmission and distribution networks, require investments measured not in billions but in trillions of dollars. This means that the energy industry badly needs regular investment for its further development. All governments should encourage investment if they want their economies to become stronger.

Energy is one of the most valuable market segments in the world, but this is not enough in itself to guarantee investor interest.

Investors consider many factors before choosing to stash their money in the energy business. Many investors pay attention to future growth potential, likely current returns, and other income opportunities. For ethical investors, it is also vitally important to make sure that an energy business is responsible and transparent. This is why many investors now prefer companies with strong corporate governance systems. They are interested in how companies manage themselves and maintain relationships with their stakeholders.

52

Stakeholder engagement is crucial to the success of any business.

Energy companies must take into consideration the interests of their shareholders including business partners, customers, suppliers, employees, public authorities and local communities. To adhere to the principles of corporate governance means to act in response to stakeholder concerns, needs and expectations.

A meaningful dialogue with present and potential stakeholders can help to establish effective business-society relations. Professional and independent boards can allow for a direct shareholder involvement.

Today one can observe a positive trend towards the establishment of supervisory boards in Ukrainian energy companies. Ukraine’s national oil and gas company Naftogaz has a supervisory board consisting of four independent members and three representatives of the state. The national power company Ukrenergo is in the process of forming its supervisory board. Questions remain over whether the country’s legal framework can ensure the effective regulation of the powers, duties and responsibilities of boards.

These issues are currently under discussion in Ukraine’s parliament. Market participants expect amendments to certain legislative acts introducing improvements to the corporate governance of legal entities where the principle shareholder is the state.

One key issue for investors is internal control and risk management. Naftogaz Group is introducing internal controls that include such important areas as internal audit, risk management, : www.bunews.com.ua

energy

: financial control, compliance and investment management. In line

with this strategy, Naftogaz is the first state-owned company in Ukraine to develop and approve a Risk Appetite Statement. Such positive changes give rise to optimism that the replacement of old and inefficient statutory controls can yet become the dominant trend among Ukrainian SOEs.

Better Business Culture

The quality of the legal framework in a country is crucial for corporate governance, but so is the quality of the business culture within individual companies. Ethical investors pay significant attention to a company’s values. Management guru Peter Drucker famously says that culture eats strategy. In other words, even the most brilliant business strategy in the world will not bring success to a company if bad governance culture is in place.

Ukraine’s corporate culture features many inherited Soviet values and behavioral norms that are quite different to the contemporary European values and norms that determine how employees in the EU tend to behave. A company that puts systems before people operates differently from a company that puts people before systems. Ukrainian company executives should invest their transformation energies into building a new corporate culture in order to make sure they are fostering the kind of human dimension upon which every company must depend. Business leaders should work hard to shape employee values, beliefs and behaviors.

One of the key indicators that helps in the assessment of changes to corporate culture is how employees of a company deal with one another and their external counterparts. Building a corporate culture is primarily the responsibility of a company’s executives. The current trend within Ukrainian energy companies towards adopting corporate ethics codes is certainly a good sign for investors.

A code of corporate ethics establishes a new ethical framework in which employees operate. Any ethical framework is beneficial for a company if implemented effectively. It must also be credible.

The daily lives of business leaders must meet with the underlying principles of any ethics code.

Establishing Public Trust

During a time of global energy market transformation, the issue of public trust is becoming especially important. Everyone today is familiar with trendy sloganeering like “Shifting to low-carbon economies will satisfy your health and safety concerns”. People want to understand how and when energy decision makers, governments, regulators and energy companies are going to imple-

ment these tasks. Energy consumers want to be informed and engaged in the transition process.

Levels of public confidence in energy companies can differ from country to country. The causes of distrust may also be different.

A few years ago, an online survey by the Canada West Foundation detected that “while Western Canadians recognize the importance of the energy sector to the economy, there remains a high level of distrust of the oil and gas industry.” The main reason for this lack of trust was the perception that profit orientation was the only orientation of the energy industry. Based on the results of this survey, demonstrations of social and environmental responsibility can help energy companies to build public acceptance and confidence.

Much like their counterparts around the world, Ukrainian energy companies need to work on building public trust. One of the main criteria energy consumers and local communities use relates to the positive benefits they can receive and potential negative impacts on their lives. Meanwhile, many ethical investors use Environmental, Social and Governance (ESG) Criteria to screen potential investments. The energy industry enjoys a much better chance of successful development if it takes the demands and expectations of its main stakeholders into account. If state authorities and energy companies enjoy greater public trust, they are able to gain all-round support for different energy projects.

Attractive to Investors

A strong and effective corporate governance strategy is a critical factor in all investment decisions. Investors take a close look at how companies manage themselves and how they establish their relationships with their main stakeholders. A high level of transparency is very important since it can ensure that companies use high quality accounting, disclosure, compliance and auditing standards. One of the main challenges facing the energy industry worldwide today is trust. Investors increasingly focus on how good governance culture forms and how productive relationships with stakeholders develop.

High quality corporate governance can encourage investors to make their final investment decisions. This in turn means that strengthening governance practices can help Ukrainian energy companies attract investments and prosper in the global marketplace. The good news is that corporate governance reform is on Ukraine’s agenda. Positive results from this reform process can influence how investors behave when deciding whether to invest in the Ukrainian energy sector.

“Much like their counterparts around the world, Ukrainian energy companies need to work on building public trust” 54

www.bunews.com.ua

Primary Care2 AMC’s Functional Care Department Doctors who know you – treating root causes, not just symptoms Advanced diagnostic testing Personalized plans for diet, supplement advice, exercise, and stress reduction

www.amcenters.com

Kyiv Odessa Lviv Tbilisi Batumi Almaty Astana

+38 (044) 490 76 00

56

The loss of Orthodox authority over Ukraine would represent a geopolitical earthquake for Vladimir Putin and a huge setback for his imperial ambitions in the former Soviet space In early September, Ukraine inched closer to a globally recognized national Orthodox church when Constantinople Patriarch Bartholomew placed the country under the canonical jurisdiction of US Archbishop Daniel of Pamphilon and Canadian Bishop Ilarion of Edmonton. This move was the latest in a series of blows to the Kremlin as Moscow faces up to the prospect of losing a religious struggle in Ukraine that could have far-reaching earthly implications. Since 1685, the Russian Orthodox Church has claimed that Ukraine lies within its canonical territory. However, these claims no longer enjoy canonical credibility.

www.bunews.com.ua

geopolitics

Ukraine prepares for Orthodox independence The two recent appointments by Constantinople are part of preparations to grant the Orthodox Church in Ukraine autocephaly (independence) from the Russian Orthodox Church. It is no exaggeration to state that the granting of autocephaly from the Russian Orthodox Church to Ukraine’s millions of Orthodox believers is as significant for Ukraine as the disintegration of the USSR. Indeed, many observers believe that separating Ukraine’s Orthodox Church from Moscow is the last step the country needs in order to : become truly independent.

57

:

Why Now? Why have the stars suddenly aligned now? Ukraine has been actively seeking autocephaly since before it became independent in 1991. When Metropolitan Filaret broke with the Russian Orthodox Church to establish the Ukrainian Orthodox Church-Kyiv Patriarch (UOC-KP) during the Soviet collapse in 1991, Constantinople did not recognize the move. Meanwhile, facing mounting pressure from the Ukrainian drive for independence, the Russian Orthodox Church revived the autonomous status of its exarchate in Ukraine and renamed it the Ukrainian Orthodox Church (UOC). Due to these rival maneuvers, there have been two competing Orthodox churches in Ukraine ever since. The UOC has been loyal to Moscow and has enjoyed international recognition, while the UOC-KP has been unrecognized but is widely seen to represent an independent Ukraine.

Since Russia’s annexation of Crimea and military aggression in eastern Ukraine, the split loyalties of the Russian Orthodox Church and UOC have left them unable to maintain the appearance of neutrality. Russian Orthodox Church clergy have blessed Russian nationalists traveling to fight in the Donbas. Some UOC clergy have refused to serve at funerals of Ukrainian soldiers, while UOC Metropolitan Onufry (Berezovsky) and fellow senior clergy refused to stand in the Ukrainian parliament in honor of slain Ukrainian soldiers. This has had a major impact on public opinion, with millions of Ukrainians questioning how they can remain within a church that takes sides against their nation.

Political Factors

There is another factor currently working in favor of Ukraine’s Orthodox independence bid. Until 2014, Ukraine’s post-Soviet leaders had lacked the political credentials to secure progress towards Orthodox independence. As the former ideological secretary of the atheist Communist Party in Ukraine, the country’s first president of the indepen-

58

dence era Leonid Kravchuk had no legitimacy on church-state matters.

Meanwhile, President Viktor Yushchenko’s strong support for the UOCKP and was perceived by many within the Orthodox church as being too anti-Russian. President Leonid Kuchma was even-handed, while President Yanukovych openly backed the Russian Orthodox Church.

President Petro Poroshenko is a deacon in the UOC and Constantinople does not view him as “anti-Russian.” Importantly, due to his influence, senior UOC clergy have supported the UOC-KP and the smaller Ukrainian Autocephalous Orthodox Church in seeking autocephaly. The Ukrainian parliament also strongly backs Orthodox independence. In addition to these advantages, President Poroshenko has adopted a legalistic approach to seeking autocephaly that has left the Russian Orthodox Church with little room to maneuver.

Events taking place far beyond the borders of Ukraine are also playing a role in the unfolding religious struggle between Moscow and Kyiv. Russia has overplayed its hand in the Balkans and many believe this has helped to undermine Moscow’s position within the Orthodox world. Russia’s involvement in an attempted coup in Montenegro to thwart the mountain nation from joining NATO garnered international headlines in 2016. More recently, the region has seen the expulsion of Russian diplomats from Greece for allegedly attempting to derail Greek rapprochement with Macedonia (a development that that opens the way for the latter to join NATO and the EU). This was a particularly shocking development in light of the traditionally strong ties between Moscow and Athens.

Patriarchs and Parishes

The decision to grant Ukraine autocephaly has much to do with size and power. Within the Orthodox world, it seems as though both Greece and the Constantinople Patriarch have had enough of Russia’s overbearing

interference. They see the emergence of an autocephalous Ukrainian Orthodox Church as a way of cutting Moscow down to size. Indeed, the process could eventually lead to Russian losses that are disproportionately larger than Ukraine itself. In the USSR, two-thirds of Russian Orthodox Church parishes were located in Soviet Ukraine. Today, despite Ukraine having less than a third of Russia’s population, both countries have roughly the same number of Orthodox parishes (14,000).

This concentration of parishes in Ukraine does not directly correlate with traditional geographical understandings of pro-Russian sentiment in the country. In Soviet Ukraine, the majority of Russian Orthodox Church parishes were in western and central Ukraine, and that remains the case today. It was always therefore wrong to describe Ukraine as divided between “Catholic West” and “Orthodox East.”

There are actually far fewer Russian Orthodox parishes in the Donbas than elsewhere in the country. Due to these regional realities, there is relatively little chance of a “civil war” breaking out in Ukraine over religion. Instead, a majority of the UOC faithful are more likely to join Ukraine’s new autocephalous church.

Identity Issues

Another key issue at stake is national identity. The USSR and Russian Federation have used the adoption of Orthodoxy by Kyiv Prince Volodymyr the Great in the late tenth century in order to lay claim to Kyiv Rus as the “first Russian state.” Many Western journalists repeat this falsehood, which is nearly always included in Western histories of Russia.

Both Russian and Western historiographies tend to ignore the inconvenient existence of Ukrainians. Even when acknowledged, they typically appear as virtually indivisible from Russians and Belarusians.

Russians believe, and Russian President Vladimir Putin constantly reiterates, that Kyiv Rus gave birth to the three eastern Slavic nations of Russia, Ukraine and Belarus. Throughout the Tsarist, Soviet, and contemporary eras, Russia’s goal has always remained to achieve a reunion. These ideas have gained additional momentum in the postSoviet era as the Kremlin has sought to replace the lost ideological arguments for closer union of the Communist epoch. In the late 2000s, the Kremlin began to promote the concept of a so-called Russkiy Mir (Russian World) that stretched far beyond the boundaries of the modern Russian state to embrace millions of ethnic and cultural kinsfolk cut off by the Soviet collapse. The objective was to unite Belarus, Russia, and Ukraine around the Russian Orthodox Church to form the core of the future Eurasian Economic Union.

Putin and Russian nationalists believe Ukrainians and Belarusians to be different branches of the broader “Russian” people, with Ukrainians

geopolitics

“Many observers believe that separating Ukraine’s Orthodox Church from Moscow is the last step the country needs in order to become truly independent” cast in the role of “Little Russians.” Putin is fond of expressing the opinion that Ukrainians and Russians are actually “one people”’. On occasion, he has gone further. At the NATO-Russia Council in 2008, Putin called Ukraine an artificial state. Perhaps unsurprisingly, these overtures have not proved very persuasive to the increasingly self-assured Ukrainian audiences of the post-Soviet years. Ukraine decisively rejected the Russkiy Mir ideology in 2014, resulting in the failure of Kremlinorchestrated uprisings in a host of Ukrainian regions and leading to the current stalemate in eastern Ukraine. Support for membership in the Eurasian Economic Union has likewise plummeted. Autocephaly will reinforce the growth in Ukrainian patriotism while supporting further national integration and spurring a final divorce from Russia.

Kremlin in Retreat

The final factor is geopolitics. An independent Ukrainian Orthodox Church would undermine Russia’s position as the world’s biggest Orthodox Church. The Ukrainian and Romanian Orthodox Churches would both be roughly equal in size. Meanwhile, Constantinople would have a staunch Ukrainian ally in its dealings with the Russian Orthodox Church. While the Russian Orthodox Church is predictably anti-Western much like the Putin regime itself, an independent Ukrainian Orthodox Church would be pro-European. This would radically alter the balance of power within the Orthodox world.

Within Ukraine itself, autocephaly would deepen the ongoing strengthening of Ukrainian national identity. This is an identity rooted in the concept of European integration and increasingly distant from a Russian state perceived as both hostile and unattractive.

Since 2014, Russia’s soft power in Ukraine has collapsed. According to one recent survey, only 1% of young Ukrainians support the Russian model of development, while around 70% of Ukrainians oppose it, including 56% of Russian speakers. This reflects deteriorating attitudes towards modern Russia as a civilizational partner.

The Russian Orthodox Church is the last major source of Putin’s soft power in Ukraine. If Constantinople now completes the process of Ukrainian Orthodox independence, Ukraine’s movement out of Russia’s orbit will become irreversible. In that sense, the creation of an autocephalous Ukrainian Orthodox Church is Ukraine’s ultimate answer to Putin’s aggression.

About the author: Taras Kuzio is a non-resident fellow at the Center for Transatlantic Relations at Johns Hopkins-SAIS. He is the author of “Putin’s War Against Ukraine” and co-author of “The Sources of Russia’s Great Power Politics: Ukraine and the Challenge to the European Order.” www.bunews.com.ua

59

Geopolitical Divorce

of the Century Ukrainians are discovering life after Russia but Putin will go to extraordinary lengths to prevent the current separation from becoming permanent

60

geopolitics Eastern Europe’s final frontier? In the wake of the Kremlin’s 2014 attack, Ukraine began construction of an ambitious new defensive barrier along the Ukrainian-Russian border. The project remains unfinished and has been beset by corruption scandals, leading critics to mockingly dub it “The Great Wall of Ukraine.”

Nevertheless, these incomplete but upgraded border defenses have come to symbolize the escalating split between two nations that many once regarded as practically indivisible www.bunews.com.ua

61

: This autumn, Europe’s leading budget airline will begin regular flights

from Ukraine to a host of EU destinations. This is the latest milestone in a Ukrainian aviation boom that is seeing additional routes announced on a weekly basis and record passenger numbers at airports across the country. Each new flight serves to broaden Ukrainian horizons and anchor the country more firmly within the wider international community. Meanwhile, there has not been a single direct flight between Ukraine and Russia since October 2015.

Ukraine Goes Global

The changes in Ukraine’s air travel industry are just one of the many ways in which the country has turned away from Russia and gone global since the climax of the Euromaidan Revolution in early 2014 and the start of Vladimir Putin’s hybrid war. Since then, Russia’s share of Ukrainian exports has tumbled from 24 percent to around 9 percent, while Russian imports to Ukraine have halved. As economic ties between Kyiv and Moscow loosen, Ukrainian businesses have begun to discover life after Russia. In 2017 alone, Ukraine-EU trade grew by almost a quarter and India emerged as the largest international market for Ukrainian agricultural exports. On the domestic front, American companies are replacing longstanding Russian partners. The first General Electric locomotive engines recently arrived in Ukraine, while the country’s Soviet era aviation flagship Antonov is now working with Boeing.

Increasing international mobility is making it much easier for ordinary Ukrainians to look beyond Russia. The advent of visa-free EU travel for Ukrainian passport holders in summer 2017 is transforming attitudes toward the rest of Europe and helping Ukrainians to shed the psychological shackles that long kept the country penned inside the narrow confines of the post-Soviet world. Even Ukraine’s migrant workers are more likely to go west than north. Poland has become the destination of choice, accounting for almost three times the volume of remittances as Russia in the first quarter of 2018.

Soft Power Separation

To make matters worse for Putin, Moscow is fast running out of soft power tools to counter the collapse of Russian influence in Ukraine.

Kremlin-linked social media platforms like the Russian version of Facebook are technically off limits to Ukrainian users, while quota restrictions and outright bans have squeezed Russian products out of the Ukrainian media market. Meanwhile, many Russian celebrities are no longer welcome in Ukraine as the notion of a common culture falls victim to the undeclared but ongoing war between the two nations.

The Kremlin has not fared any better in matters of the soul. Millions of Ukrainians have turned their backs on the Russian Orthodox Church since the outbreak of hostilities, with entire congregations switching their allegiance to Kyiv. An even greater threat to the position of Russian

Orthodoxy in Ukraine now looms on the horizon. Within the next few months, the Patriarchate of Constantinople is widely expected to grant Ukraine full Orthodox independence from Russia. This would strike at the very heart of Russia’s historic claims to Ukraine, denying Moscow authority over the country’s Orthodox faithful while greatly strengthening Ukraine’s own sense of national identity.

Toxic Ties

Even if Russia still enjoyed all the communication channels of old, a majority of Ukrainians would be unwilling to listen. The trauma of the Russian invasion has caused a massive shift in Ukrainian public opinion, with support for EU and NATO membership surging to unprecedented levels as enthusiasm for closer Russian ties dwindles to single digits.

While it is admittedly difficult to imagine Ukraine joining either NATO or the EU any time soon, a return to the Russian orbit looks infinitely more far-fetched. Indeed, pro-Russian stances have become politically toxic in today’s Ukraine, with the country’s few remaining Kremlinfriendly parties obliged to disguise their positions in the language of pragmatism.

This was not what Putin intended when he first gave the order to invade Crimea. By intervening militarily, Moscow had hoped to derail Ukraine’s defection to the West. Instead, the conflict has spiraled out of the Kremlin’s control, transforming an awkward but ultimately intimate relationship into the geopolitical divorce of the century. It is a divorce fast approaching the point of no return. As Ukraine grows increasingly accustomed to life beyond the familiarities of the post-Soviet comfort zone, a reconciliation becomes less likely and the separation takes on an air of greater permanency.

In public at least, Russian leaders remain in denial over this historic loss of influence. They continue to speak of an inevitable future rapprochement with Ukraine, while blaming outside elements for manufacturing the current rift. Moscow appears to be pinning its hopes on Ukraine’s 2019 presidential and parliamentary elections, but this is little more than the wishful thinking of a great power reluctant to admit it has made a great mistake. In their heart of hearts, the members of Putin’s inner circle must know the days of pro-Russian majorities in Ukrainian politics are long gone.

Delaying the Divorce

With little chance of regaining control over Ukraine, there is a real danger Russia will decide the next best option is open-ended instability. Moscow may be unable to coax or coerce Ukraine into rejoining the Kremlin sphere of influence, but the painful prospect of a definitive departure can at least be subject to indefinite delay. All the available evidence suggests Russia is ready to stomach the sacrifices this would likely entail. Time after time over the past four years, the Kremlin has

“Moscow appears to be pinning its hopes on Ukraine’s 2019 elections, but this is the wishful thinking of a great power reluctant to admit it has made a great mistake”

62

geopolitics

demonstrated its willingness to pay a remarkably high price in order to prevent Ukraine from escaping Moscow’s orbit. By refusing to retreat from Ukraine, Russia has allowed its relationship with the West to collapse. Moscow is in the process of initiating a similar split with the Orthodox Church, all because it cannot entertain the notion of religious independence for Ukraine. These dramatic measures are much more than the irrational actions of a lover scorned or a rejected spouse. They reflect the widely held belief that the emergence of a fully Westernized and democratic Ukraine would spell doom for the Putin regime and, quite possibly, for the Russian Federation itself.

While most Russians take a somewhat disinterested view of former vassal states turned EU members such as Poland and the Baltic States, they tend to regard Ukraine as virtually indistinguishable from their own country. Thanks to this blurring of borders, any successful transformation of Ukrainian society toward the European model would inevitably lead to calls for similar developments inside Russia. Many in Moscow believe popular demands for grassroots democratization would soon place an impossible strain on the essentially imperial structures holding modern Russia together. Fear of a “Ukrainian domino effect” has

haunted the Kremlin since the 2004 Orange Revolution and helps explain why the ostensibly popular Putin feels the need to maintain a vast security apparatus while preventing the emergence of any genuine political opposition.

This desire to defend Russia’s authoritarian model at all costs makes it unlikely that the Kremlin will ever accept Ukrainian membership of the Euro-Atlantic community unless forced to do so. With little appetite in the West for a direct confrontation, it is not clear where this force might come from. Instead, Ukraine finds itself in the precarious position of enjoying considerable international support but essentially standing alone against one of the world’s most powerful and reckless nations. Nor is there any end in sight. Since 2014, Ukrainians have surpassed all expectations with their ability to resist Russia’s hybrid attacks while making meaningful strides toward greater integration into the wider world. They must now reconcile themselves to the idea that Russia will continue to pose an existential threat for many more years to come. This means indefinitely holding a frontline that stretches from the Azov Sea to cyberspace. There is no other option if the divorce is to become final.

About the author: Peter Dickinson is a nonresident fellow at the Atlantic Council and publisher of Business Ukraine and Lviv Today magazines www.bunews.com.ua

63

2019 Ukrainian presidential election in focus at YES conference Ukraine’s annual Yalta European Strategy (YES) conference drew an international A-list crowd to Kyiv in mid-September as geopolitical movers and shakers gathered to discuss the ongoing hybrid war with Russia, assess the status of Ukraine’s post-Maidan transformation, and weigh up the likely frontrunners in the country’s spring 2019 presidential race.

Currently in its fifteenth year, many see YES as the Ukrainian Davos. It is arguably the most high-profile event on the Ukrainian calendar, with host Victor Pinchuk making a habit of attracting big names. This year’s surprise star guest was Irish rock legend and international activist Bono.

However, while the U2 singer stole the headlines and sent Ukrainian so-

64

cial media into meltdown, the highlight of the three-day event was the session led by BBC HARDtalk presenter Stephen Sackur, who interviewed three of Ukraine’s leading presidential candidates. Current frontrunner and former Prime Minister Yulia Tymoshenko, former defense minister and leading reform candidate Anatoily Gritsenko, and rock star Slava Vakarchuk, who still refuses to confirm widespread speculation over a possible presidential bid, all outlined their vision for the country while adding to the sense that the campaign is already well underway.

(Photography by Valentіna Rostovikova, Sergei Illin, Aleksandr Indychii and Aleksandr Pilyugin)

networking events

www.bunews.com.ua

65

Open Data Forum celebrates Ukraine’s role as global innovator Open data has been one of the big success stories of Ukraine’s postMaidan transformation since 2014. This progress is now beginning to earn the country greater international recognition. For example, Ukraine recently took seventeenth place globally in the 2018 Open Data Barometer. This result is all the more remarkable given that Ukraine was languishing in sixty-second position just two years ago.

Ukraine’s impressive embrace of open data principles was in focus in September as Kyiv’s cavernous Art Arsenal venue played host to the country’s second annual Open Data Forum. The event brought together state officials, international and Ukrainian experts, activists and members of the country’s vibrant startup scene. There was an almost evangelical air to proceedings as speaker after speaker

66

outlined the game-changing benefits of open data technologies, which range from transforming state services to conquering corruption. All this is tailor-made for the contemporary Ukrainian environment.

With a population that is both highly IT-literate and receptive to change alongside state apparatus that is often long past its sell-by date, Ukraine is widely seen as one of the most exciting open data environments in the world. The Open Data Forum provided a boost to this progress in the form of financial support for projects using open data, with UAH 2.5 million distributed to winners of the annual Open Data Challenge. Recipients included the Ukraine Regulatory Map project, the ProZorro Infrastructure public portal, Monitor.

Estate, Grinval from Grow in Value, LvivCityHelper, and NORA.

networking events

www.bunews.com.ua

67

68

Kyiv networking event organizer Fryday welcomed Djeyhoun Ostowar from the Economic Affairs office at the Netherlands Embassy in September at an event designed to provide insight into Dutch business in Ukraine. Many members of Kyiv’s sizable Dutch business community joined international and Ukrainian colleagues at the event, which took place at the Radisson Blu Hotel in Kyiv’s riverside Podil district.

www.bunews.com.ua

networking events

Netherlands-Ukraine Business Ties in Focus

69

Early Autumn Networking in Podil Members of Ukraine’s international community gathered in September to mark the beginning of the autumn business season with a lighthearted evening of drinks and networking in Kyiv’s historic riverside Podil district. The event at Barcode was the latest in a regular series of networking evenings in the Ukrainian capital hosted by BigMeetUkraine.

70

Ukraine looking to continue UEFA Nations League success

New international competition offers Ukraine a chance to shine and a potential back door to Euro 2020

Ukraine’s Manchester City midfielder Oleksandr Zinchenko celebrates his last minute goal against the Czech Republic on 6 September in a match that ended in a 2-1 victory for Ukraine. Andriy Shevchenko’s team will be hoping to continue their winning start to the inaugural UEFA Nations League competition in the return fixture against the Czech Republic in Kharkiv on 16 October Ukraine will face the Czech Republic in Kharkiv in 16 October with Andriy Shevchenko’s side looking to build on a promising start to UEFA’s new Nations League competition. Ukraine go into the match with a perfect Nations League record of two wins from two games, having recorded early September victories in the Czech Republic and against Slovakia in Lviv. A further win in eastern Ukraine would leave Shevchenko’s team virtually assured of top place in their 72

League B group and on track for promotion to the heady heights of League A. More importantly, it would also open up a potential back door to qualification for Euro 2020.

Most football fans remain unconvinced by the UEFA Nations League. It is the first new international competition to appear on the football scene for many decades, lending it an inevitable air of intrigue. However, a complex and opaque format has left many

observers scratching their heads. The immediate objective is clear enough – to replace meaningless international friendlies with a competition capable of filling the gaps every two years between World Cups and European Championships. Nevertheless, the structure of the Nations League has proven somewhat impenetrable, with a total of 55 European national teams split into four leagues and each league divided

www.bunews.com.ua

2020 via the traditional route, first place in their Nations League group will secure the national side another opportunity to book a place in the finals.

Ukraine began the country’s inaugural Nations League campaign in some style. The team came from behind in the Czech Republic to grab victory via a last minute goal from Ukraine’s Manchester City midfielder Oleksandr Zinchenko, who capitalized on confusion between the Czech goalkeeper and a defender to net the winner. Zinchenko’s strike followed on from an equalizer on the stroke of halftime by Ukraine’s flying winger Yevhen Konoplyanka, who plays his club football for Schalke in the German Bundesliga. Ukraine will be counting on further heroics from this pair in Kharkiv, but expectations will be even higher for national team star Andriy Yermolenko, who recently opened his account in the English Premier League with an impressive brace of goals for new club West Ham United against Everton at Goodison Park in Liverpool.

Yermolenko went through an indifferent patch last year following his big money transfer from Dynamo Kyiv to Borussia Dortmund. The previously swashbuckling

Ukrainian striker often appeared strangely subdued in the German Bundesliga, managing just three goals all season before departing via a summer transfer to London. His encouraging start to the new campaign with West Ham United will raise expectations among Ukraine fans and encourage speculation that the national team’s talisman is once again returning to the top of his game. With 36 goals in 78 internationals, Yermolenko is the country’s second highest all-time top goal scorer behind current team coach Andriy Shevchenko. He scored the winner from the penalty spot against Slovakia in Lviv on 9 September to secure Ukraine’s second successive Nations League victory. Many will be hoping he can now help Ukraine complete a double over the Czech Republic and increase the country’s chances of making it to Euro 2020.

sport

into a further four groups. The result is a multi-divisional structure that will allow for relegation and promotion at the end of each biannual Nations League season. Ukraine are currently in League B, but if they finish top of their group this autumn as expected, they will be promoted to League A for the next Nations League season in autumn 2020.

Promotion would allow Ukraine to rub shoulders with the elite of European football. Winning their group would also earn Ukraine the right to a playoff spot for Euro 2020. This back door route to UEFA’s premier competition is the primary reason why national sides like Ukraine are liable to take the Nations League seriously. Despite boasting one of the top ten domestic leagues in Europe and being home to some of the finest players and most renowned clubs in Eastern Europe, Ukraine has a miserable record of qualification for major international tournaments. The Ukrainian national side has fallen at the playoff stage on five separate occasions and has only managed to qualify for three finals since the country first gained independence in 1991, with one of these qualifications coming via Ukraine’s host nation status at Euro 2012. If Ukraine fails to secure qualification to Euro

UEFA Nations League League B Group 1 Ukraine vs Czech Republic Metalist Stadium, Kharkiv 16 October at 21:45

73

and finally...

Ukrainian animation hit earns five million dollars and counting

Ukrainian animation blockbuster “The Stolen Princess” has generated around USD 5 million in global box office revenues since its spring 2018 release, making it by far Ukraine’s most successful ever feature-length animated film and representing a major breakthrough in the country’s efforts to develop an internationally competitive animation industry. The movie’s producer Egor Olesov made the USD 5 million figure public during an appearance at a 19 September media forum in Kyiv. He said the process of selling the rights for “The Stolen Princess” to more than fifty countries worldwide had been a steep learning curve for him and his team at Ukraine’s leading animation studio Animagrad. “It has allowed us to gain great experience in international sales. We have learned in real time. Now the next projects will be easier for us.”

“The Stolen Princess” is a traditional fantasy love story based on Pushkin’s fairytale “Ruslan and Lyudmila”. It premiered in Ukraine in March 2018 and immediately broke Ukrainian box office records, generating slightly less than USD 1 million during its first weekend. The film has since appeared in dozens of countries. It has enjoyed particularly wide distribution in Central Europe and the Middle East, achieving a number of notable successes.

It outperformed several major Hollywood animation films in Romania

and currently ranks as one of Turkey’s top three animated film openings in 2018. Additional releases in major markets such as Japan, South Korea and China are in the pipeline alongside general English-language distribution, leading to expectations that global revenues will eventually climb well above the current USD 5 million total.

This is an impressive return for a movie with an estimated budget of UAH 95 million, with Ukraine’s State Film Agency contributing approximately 20% of costs. It is a triumph for Animagrad animation studio as it sets out to establish Ukraine as a significant player in the international animation industry.

Animagrad was founded in 2012 as a subsidiary of Ukrainian movie industry powerhouse FILM.UA. Preliminary work on what would become “The Stolen Princess” began in 2013. It is the first in a planned series of Ukrainian animation features by Animagrad that will also include a Ukrainian fantasy epic based on the writings of Lesya Ukrainka calling “Mavka. The Forest Song”, which is set for release in 2019 and has already generated considerable industry buzz. Other animated blockbusters in the works include “Roksolana and Suleiman”, which will explore the incredible tale of the sixteenth century Ukrainian girl who rose from the imperial harem to marry the Ottoman Sultan and become one of the most powerful women of the epoch.

Letters to the editor: editor@bunews.com.ua Advertising inquiries: +38-067-4032762 Business Ukraine magazine is distributed every month free of charge at a wide range of leading business centres, embassies, international organizations, hotels and restaurants throughout Kyiv.

Registration: KV 15006-3978PR Published by: Open Borders Media Director: Susanna Dickinson

74

No reproduction, use or adaptation of contents, logos, titles or designs is permitted in any manner without the prior written consent of the publisher. The opinions expressed by individual authors and contributors each month in Business Ukraine magazine do not necessarily reflect the position of the publishers. The publishers of Business Ukraine do not accept legal responsibility for the goods and services advertised within the publication.

www.bunews.com.ua

DISCOVER MORE: AMERICA WITH THE AIRLINE THAT FLIES TO MORE COUNTRIES THAN ANY OTHER

CHICAGO

MIAMI

NEW YORK

this winter

CELEBRATE WITH US

Co nf e re n c e & Even t s Cen t er

R estaurants

Hotels

Book your party today! dbihotels.com +38 044 205 15 20

103, Stolychne Shose

Podil 21, Sahaidachnoho Str.

Atmosphera Mall 103, Stolychne Shose