JOURNEY INTO THE UNKNOWN: Drivers of the Ukrainian Economy During Wartime

Art Design: huxley. media via Photoshop

The Russian invasion dealt a devastating blow to Ukraine’s economy. However, the Ukrainian business community did not despair or give up. On the contrary, these new and complex challenges pushed many companies to seek new avenues for economic growth. Ukrainian business leaders discussed this during one of the panels at the 10th Kyiv International Economic Forum, «The Power of Challenge: What Will Shape the Future of Ukraine and the World?»

VASYL KHMELNYTSKY

Initiator of KIEF, founder of the UFuture holding

CREATE OTHER LEADERS!

In my opinion, the primary goal of a leader is to create other leaders. Before the war, for 10 years, my team and I traveled the world, studied the latest technologies, and learned from various companies and institutions. We saw the direction in which the world was heading. From this learning experience, we brought back the idea of the UNIT.City industrial park.

I can confidently say that in these challenging times, during the war, these investments are paying off. Everyone I mentored over the past decade has become a successful leader and is working very effectively today. People often ask me how to prevent those I’ve invested so much time and money into from leaving for another company. The answer is simple.

There are many leaders among Ukrainians, but they often hesitate to let other leaders grow alongside them. To retain people, it’s essential to create the right conditions, including offering fair compensation and a stake in the business. When leaders feel valued, they stay and perform even better.

I have examples of people who started as managers who are now my business partners on a 50-50 basis. They grow, and we earn money together.

DON’T BE AFRAID TO MAKE TOUGH DECISIONS!

Another modern challenge for leaders is the ability to make difficult and unpleasant decisions. If your business is uneconomic, sell it! Even at a loss, address your problems immediately.

About six months after the war began, a business owner approached me for advice. He owned a business center, but things weren’t going well. He received an offer to sell the business for 30% less than its estimated value at the time. He hesitated, thinking the war might end soon or the price might go up. I advised him to accept the offer and quickly sell the business center. He didn’t listen. A year later, he came back to me and said, «Now I can’t sell it even for half that price!»

This is a telling story. Even in difficult times, you must keep moving forward: sell the business, turn the page, and start anew.

Before the war, I had a great project — the LvivTech.City Innovation Park. However, two years into the war, I sold it at a loss. Yet, by doing so, I closed loans, stabilized the situation, and redirected investments into UNIT.City in Kyiv. Now, we are moving forward confidently and calmly!

SERHIY TIHIPKO

Owner of the TAS Group of Companies

BUSINESS DRIVERS: HONESTY AND RESPONSIBILITY

Right now, we are in a stable working mindset. We have already signed an agreement with the Polish financial institution Getin Holding to acquire Idea Bank Ukraine for the TAS Group. Our intention is to complete all procedures with the Antimonopoly Committee and the National Bank of Ukraine to become its owners officially.

As for other plans, we are finalizing a deal to purchase a seed plant and a grain elevator with a storage capacity of 40,000 tons. In Kovel, we are building a railcar manufacturing plant that meets European track standards. Additionally, we are constructing an apple processing facility to produce apple concentrate from scratch.

Together with PGD Group, we are developing an exciting construction project covering 140,000 square meters in Obolon. Looking ahead, we plan to construct and commission thousands more square meters in Kyiv.

What are we thinking about now? What concerns us? What drives us during these challenging times for the country?

I believe that a Ukrainian entrepreneur must act with integrity in such situations. What does integrity mean for an investor? It means holding steady under any circumstances and being responsible to our employees, our country, and our military.

APPETITE FOR RISK: BIG CHALLENGES, BIG OPPORTUNITIES

Frankly speaking, doing business in Ukraine today involves not only significant challenges but also great opportunities. Let’s consider this: we have lost our domestic market but opened up the European market. For three years in a row, we have been exporting to the EU without quotas, selling everything we can produce. This means we now have access to an up-and-coming market.

Next, despite the war, the banking system is functioning correctly. Today, you can go to a bank and find relatively low interest rates. You can also secure loans for export shipments. Finally, and most importantly, in my opinion, we now have «agents» of our interests across the globe.

For instance, our company has established three international offices abroad. Trust me, no foreigner will work there as effectively as Ukrainians! Moreover, businesses can now acquire assets at significantly lower prices than they were yesterday, and tomorrow, they could be worth even more.

It all depends on your appetite for risk. Partnerships create issues at certain stages of development, so I’m not particularly fond of them unless the person gets a specific share of the profits: they earn their share and move on. In my view, such team-based incentives work much better.

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VOLODYMYR POPERESHNIUK

Co-owner of Nova Poshta

A LEAP INTO THE UNKNOWN

When it comes to bringing new partners into the business, my partner Vyacheslav Klymov and I aren’t particularly enthusiastic. Perhaps this is because we can’t imagine having another partner alongside us. We’ve often faced choices: whether to sell the company or not, whether to go public or not.

It’s widely believed that startups always dream of being acquired. But here’s my question: if everyone in the market wants to sell, then who’s buying? I concluded that those who buy are cooler than those who sell. I want to be the buyer, which is why our company will not go public. However, interested parties can purchase its shares.

When we started Nova Poshta, everything we did felt more like madness than bravery. It wasn’t courage — it was a kind of «naive ignorance»: you have no idea where you’re going, but you leap into the unknown anyway! Later, you look back and think: «Oh my God! If I’d known how hard it would be, I might never have taken that step!»

In general, uncertainty helps create businesses. We started Nova Poshta without money, experience, knowledge, or understanding of how to do it.

FIND YOUR «LOOPHOLE»

Now we’re taking another leap into the unknown: we’ve crossed Ukraine’s borders and entered the «big world». It’s like moving up to a higher boxing league and starting to fight in the ring with the best of the best. I believe this step is also very beneficial for our business in Ukraine — we come back from our European ventures with new insights. I can see how «Ukrainian Nova Poshta» constantly improves after our overseas experiences.

When we analyze what European clients really need, it becomes clear: they don’t want a Ukrainian version of Nova Poshta. Everything we built within Ukraine can’t simply be stretched to fit all of Europe or the entire world. We need to think differently: What can you offer Europeans? What can you offer Americans?

Who is «neglecting» our potential clients? What exactly are they unhappy about? It’s not about the money. You need to find a service «loophole», something you can slip into and use to be genuinely helpful to people.

Right now, we’re approaching Europeans the same way we approached Ukrainians 20 years ago — without money but with immense entrepreneurial energy!

HALYNA HEREHA

Co-founder of the Epicenter Group of Companies

GIVE UKRAINIANS CONFIDENCE!

Epicenter has been on the market for 21 years, and despite all the challenges of wartime, we continue to operate and invest in the country, supporting its economy and people. The projects we’ve been implementing during nearly three years of war are no longer about business — they’re about social impact.

I remember February 24, 2022 — everyone was in shock! Ukraine nearly came to a halt. No one knew where to run. Epicenter never closed its doors, not even for a day. First and foremost, it was open for our military because their needs were immense.

I recall an incident a month after the full-scale invasion began. We called our contractors and said, «Guys, let’s meet at the construction site in Berezniaky». There was a long silence, followed by, «Are you serious?» — «Yes, we’re serious».

The next day, we brought them to the site, even though they had already moved some equipment out and mothballed their machinery. But we desperately wanted to give confidence to the people who remained in Kyiv, so we had to move forward, no matter what.

Within four days, the contractors brought back their equipment, and we resumed work. Partners and suppliers looked at this bold construction and said, «Epicenter knows something!» It wasn’t about business — it was about faith in Ukraine and its victory. By September of that same year, we opened that very modern shopping center in Berezniaky.

This approach allowed us to retain almost 99% of our suppliers — over 6,000 small and medium-sized businesses — who continue to work with us to this day.

FEAR NOTHING!

Before the war, our group of companies employed 38,000 people. Unfortunately, that number is now 4,000 fewer. This trend continues, particularly in 2024. While the turnover rate in 2022 was around 24%, it has now surpassed 30%. However, the core of our team — a group of strong managers — has been with us since the very beginning.

Before the war, we had many ambitious plans, including a development strategy outlined through 2030. This included shopping and entertainment centers, modern logistics hubs, industrial parks, and projects for deep agricultural processing. Unfortunately, we’ve had to adjust these plans daily. However, we are not abandoning them.

The main thing I want to say is: Don’t be afraid! Move forward boldly. To business owners, I say this: don’t rely on mythical Western investors who will fly in on helicopters and save us all. That’s not going to happen. The people who live here now will save this country.

The people rebuilding Ukraine will be those sitting in this room today — those who harvest crops despite the minefields, those who open small cafes, and those who start new production lines. They are Ukraine’s future.

I believe that together, through our collective efforts, we will overcome all challenges and trials.

Prepared in partnership with KIEF. Huxley is the information partner of the Kyiv International Economic Forum.

Prepared in partnership with KIEF. Huxley is the information partner of the Kyiv International Economic Forum