Supply and demand: relocation of business from the ATU zone to Ukraine.
Evgeny Strimov, RIA Novosti Ukraine.
One of the victims of the war in the Donbass was business: in the Ukrainian Ministry of Revenue and fees since the beginning of the summer, it was said that large and medium-sized enterprises are leaving the war zone massively.
Companies one after another underwent the process of re-registration, withdrawing from the records in the “rebellious” Lugansk and Donetsk regions, and transferred to other regions. The small business, in its turn, tried to survive with all its might, but the artillery bombardments did their job, and these enterprises also hastened to leave Donbass.
As of December of the current year, about 60% of companies in the ATU zone ceased operations & mdash; were destroyed because of fighting or moved to peaceful areas of Ukraine or even to Russia.
Financial experts estimate the losses of the Ukrainian economy due to such migration to billions of dollars.
In general, according to the information of the Ministry of Finance, by the end of the year the budget will not receive 18 billion hryvnia due to the war in the Donbass: it is not only taxes and fees from the enterprises of the region, but also a stop of exports to Russia, as well as a general decrease in economic activity due to the unstable situation in the country.
The most difficult to rise and move was predictably a big business & ndash; enterprises in the field of engineering, metallurgy and the chemical industry, with their work providing multimillion-dollar contracts and hundreds of thousands of jobs. Largely thanks to them, Donetsk and Luhansk oblasts jointly generated 27% of Ukrainian exports and 16% of GDP.
Difficulties with logistics, dozens of checkpoints, robbery and the refusal of foreign counterparts to work even for an advance payment forced even the “titans” to turn things over.
In the region, SCM Group enterprises controlled by Rinat Akhmetov, Group DF Dmitry Firtash and ISD Sergey Taruta are concentrated. Relocate assets or suspend work for them & ndash; extremely difficult task.
The main asset, which is transported by the owners, & ndash; staff. So, one of the first employees of Metinvest Rinat Akhmetov was removed: some of the staff of the head office of the company was temporarily moved to Mariupol and Zaporozhye, and a small part of the services, which had been partially occupied in Kiev, was transferred to the capital.
One of the world’s largest grain traders Cargill stopped the work of the unit in Ukraine. It is very difficult to work in military conditions, they say.
There was no choice and the giant of power & mdash; the company DTEK (also owned by Akhmetov). First, the work of four mines was suspended here & ndash; Krasnopartizanska, Rovenkovskaya, Luganskaya and 71 Industriya, then two concentrators were added to them. Krasnopartizanskaya and Rovenkovskaya.
By August, the DTEK mines in the combat zone had changed the schedule of work & ndash; established a shift at 12 o’clock, part of the employees of the power holding was transferred to the enterprises in safe regions.
However, according to experts, the process of migration from the eastern regions of large enterprises is just beginning.
“The main problem for migration from the ATU area is frozen assets with liquidity approaching zero.” DNR “and” LC “are already carrying out an inventory of a number of plants. For the export of warehouse balances or equipment, permission is required from these” republics “, which is connected with significant costs and risks of “expropriation.” With real estate, the situation is even simpler and sadder, “& ndash; says the senior partner of the law firm Kashporov & Partners Vladimir Kashporov.
In addition, the lawyer notes, significant problems are caused by losses related to idle capacity and the need to support them, the crisis of non-payments inside the ATU zone and the inability to protect their interests in court.
“The problem of the lack of working capital and the development of business in new markets as such is exacerbated, even a competitive production asset can not always be transferred anywhere, and it only has to crawl to the state of insolvency”, & ndash; concludes the expert.
The last few months have also been a period of severe trials for smaller companies: according to the data of the Donetsk Region Council of Entrepreneurs, more than 85% of small and medium-sized businesses have left the region.
Among enterprises leaving the East, & ndash; distributors and importers of food and non-food products, representatives of the hotel business, developers, service companies, producers of everyday goods and others.
From the “left” small businesses most dental offices, beauty salons, cafes, restaurants: managers say that business in the ATO now does not make much sense, because it depends on the specific flow of people, and most of the customers left the military Donbass.
The most popular for moving business and production facilities are Kiev and the capital region, as well as Dnepropetrovsk and Kharkov regions.
Vice-president of professional real estate managers Anatoly Topal confirms that in the autumn every fifth request for a warehouse or office search came from businessmen from Donbass.
“Thanks to their activity, the demand for rent of premises does not fall,” & ndash; he explains.
Confirms the thesis and executive director of the “European Business Association” Anna Derevyanko.
“Basically, companies that have such an opportunity have moved staff and relocated functions to their offices in cities with population over one million: in Kiev, Dnepropetrovsk, Kharkov, Odessa and Lviv,” & ndash; says Derevianko.
Another big problem for business was the disconnection of the Ukrainian Treasury in the ATU zone, the ban on non-cash payments and the lack of access to state registers.
In fact, it became impossible even to pay taxes, not to mention other operations, in particular, & ndash; on liquidation of the enterprise.
In the IT company iLogos, based in Lugansk and engaged in outsourcing development of games for large studios, as early as the beginning of May they realized: it’s time to move. For the full evacuation of all personnel from the war zone, the management opened two new offices & ndash; in Kiev and Lviv.
“We allowed our employees to move to any of the cities where we have offices (Kharkov, Krivoi Rog, Dnepropetrovsk, Nikolaev), where they are comfortable.” Who needs & ndash; we provided support from the company, people were dealt with by our field managers. Kiev, we have long planned to open an office here, and this situation accelerated us, because many wanted to move to the capital, “& ndash; says the managing partner of the company Elena Lobova.
The history of iLogos is also remarkable by the fact that the building belonging to the company and serving as one of the Luhansk offices suffered the most in the city: the two-story house completely burned out & ndash; there was only one wall left. All property, a lot of equipment that did not have time to take out & ndash; was lost. But the company assures that they do not sad for the lost.
“Burned property, part of which we managed to save in advance,” is a trifle compared to the safety of our team, “& ndash; says Lobova.
In general, the specifics of the work have not changed: the company still cooperates with European and overseas customers. The period of difficulties, when foreigners were afraid to conclude contracts because of the “unsettled situation in the east of Ukraine,” is already over. & Ndash; orders are carried out qualitatively and on time, albeit even in a long business trip.
“Whatever happens, we do not forget Lugansk, as soon as the situation changes,” the office in this city will not only resume its functioning, but it will become even better. “We are waiting for this moment and preparing for it,” & ndash; hopes Elena Lobova.
The owner of two cafes in Donetsk, Dmitry left Donetsk, moved to Kharkov, and from the middle of summer visits the capital several times a month & ndash; to “business intelligence.”
“Neither now, nor in the next few years, if Ukraine’s policy towards the Donbas remains unchanged, I do not see any opportunities for running small and even medium businesses in Donetsk.” All died, almost six months ago. “The reason is simple: there are no people & ndash; there are no customers, I closed my cafe, because no one walks elementary in them – on the streets there are many people with machine guns, the townspeople have money to spare, they do not have to restaurants and cafes, “& mdash; says the entrepreneur.
Now Dmitry is eyeing the capital, hoping to launch his new project:
“Yes, I’m looking for opportunities in Kiev, even if, hypothetically, Ukraine regains control over Donetsk, all militants will leave, at least a few more years will go to resume business.” “Business in Donetsk will definitely return, the main question is when.”
Another problem the businessman calls “walking”, capable at any time to fire a weapon.
“The population will have tens of thousands of unaccounted weapons remaining, gangsterism will begin.” How to deal with this? A long and painstaking work, only so, and it can last for several years, “& mdash; says Dmitry.
He does not believe in state promises:
“It’s a good initiative that the government promises to help displaced businessmen, but we understand very well that this is usually only in words.” The authorities have their own problems, and I think we will figure it out ourselves. ”
The story of Alexander is similar to the story of Dmitry from Donetsk. In Lugansk, the entrepreneur had a network of stores for the sale of draft beer “Beer Shop”, which was popular, but with the advent of the city of “LNR”, the business started to decline. Closing and leaving had in early July:
“It became physically dangerous to be in Lugansk, instead of profits there were huge losses.” I left, most of my staff, as far as I know, too. ”
Alexander decided not to lose time and opened a few more shops “Lavka”, only in Kiev, in the Obolonsky district.
“I heard that a lot of Lugansk residents, Donetsk residents, moved there, in principle, in many respects counted on,” & mdash; he says.
But so far the experience can not be called successful: the businessman admits that the demand for draft beer in the capital is several times lower than it was in Lugansk.
“We are still poorly known, low recognition. Now we are preparing the shares, we will advertise, fight for the client,” & ndash; Alexander is optimistic.
Supply and demand: relocation of business from the ATU zone to Ukraine.