After 50 days of the war: 41% of AmCham Ukraine member companies are fully operational, 50% continue to work partially. 29% of member companies have relocated within Ukraine, and 19% are relocated outside Ukraine. 15% of businesses had to close offices in some regions, 2% had to shut down totally.
The American Chamber of Commerce in Ukraine conducted the latest Survey “Doing Business during War in Ukraine. Week 8” to show the current state of business and what changes and challenges organizations are going through.
103 CEOs and top managers of AmCham member companies took part in the Survey, conducted on April 11 – April 18, 2022. 71% of the respondents are CEOs.
The AmCham members were asked to identify what their companies were doing differently during the war to continue operations. 52% indicated they had to reshape business models, 40% – implemented cost-cutting efforts, 20% – launched new business directions or services. 17% – took projects from the parent offices in other countries, 13% – search for new clients outside Ukraine, 9% – search for financing in different countries. Unfortunately, 2% of members were forced to sell assets. Only 17% indicated they had no changes at all.
72% of AmCham Ukraine member companies continue to pay full salaries during the war and provide extra support. 16% pay full salary, 6% – partially reduced salary, 6% of businesses pay 50% of salary.
20% stated that their company’s plants/factories/facilities/storehouses/offices have minor damages, 3% have unrepairable damage, 3% are still under occupation, other 3% don’t have information yet. 57% of member companies had so far no damage during the war.
AmCham Ukraine member companies continue to provide support to the humanitarian drive. The most common ways of support are financial support (76%), volunteering drive within the companies’ employees (75%), providing in-kind goods (44%), providing services (41%), providing medicines (24%), providing protection means (17%).
AmCham member companies continue to support Ukraine’s territorial defense units and defense forces: 71% of members indicated that some of their companies’ employees joined the territorial defense units, 35% of companies provide goods and medicines, another 34% – provide financial support, 22% – provide services or protection means.
The business representatives were asked to indicate the biggest challenges for their organizations after 50 days of the war. Safety and security of employees (79%), logistics and transport (50%), and absence of clients or orders (36%) were identified by business representatives as the top-3 major challenges. Among others are export-import operations (26%), relocation (14%), and damaged assets and property (10%).
The most difficult question of the Survey was about the safety and security of employees. 76% of respondents said that all of their companies’ employees are safe. Sadly, there were painful numbers also, with 14% of companies’ having instances of employees injured and 7% – having instances of employees killed.
87% of AmCham member companies are ready to actively participate in Ukraine’s post-war economic rebuilding.
85% of business representatives support that companies following business ethics and ESG policies mustn’t work in the murderous pariah regime in Russia that continues to commit genocide and war crimes across Ukraine.
“After more than 50 days of war, 41% of AmCham Ukraine members are fully operational, and 50% of AmCham Ukraine members continue to work partially in Ukraine. To continue operations in Ukraine means to continue keeping Ukraine’s economy running. 87% of AmCham members are ready to actively participate in Ukraine’s post-war economic rebuilding. We have a lot of work ahead to make Ukraine flourish, and we see how lionhearted Ukrainians lead Ukraine to victory,” commented Andy Hunder, President of the American Chamber of Commerce in Ukraine.
Full Results of the Survey are available here.
About the American Chamber of Commerce in Ukraine:
The American Chamber of Commerce is Ukraine’s most influential international business association that has been serving members in Ukraine since 1992, delivering the shared voice of US, international and Ukrainian companies, who invested over $50 bln in Ukraine and remain committed to the country till today, during the war. For more information, please visit our website https://chamber.ua/ and #StandWithUkraine page with daily updates on how you can help Ukraine and Ukrainians during this significant time of need https://chamber.ua/news/standwithukraine/
Sending law enforcement officers in balaclavas armed with Kalashnikovs kicking down a company’s office door in a frantic search for financial records or tax documents is quite possibly the worst message a government can send to business owners, shareholders or executives. This is what I told President Petro Poroshenko a couple of years ago in a hall packed with five hundred business leaders during one of his regular meetings with the international business community. Consequently, parliament introduced new legislation curtailing the brutality of business inspections. These dramatic raids on business are now all but a memory of the low points that investors faced while doing business in Ukraine years ago. Many reforms have been introduced since 2015, and Ukraine has started reappearing on investors’ radar screens. However, foreign direct investment (FDI) remains too small, around 2 percent of GDP.
As Ukrainians prepare to elect their next president later this month, whoever wins, either Poroshenko or newcomer Volodymyr Zelenskiy, he will need to focus on attracting FDI. Though the president bears responsibility for the nation’s defense, foreign policy, security service, and prosecution service, he should play a key role in attracting investors to launch their operations or manufacturing in Ukraine. Especially since both candidates are successful businessmen, the next president should watch closely that investors are welcomed and treated well.
I hear numerous success stories of businesses profitably operating in Ukraine, something that I learn day after day when speaking with our members. In March, I visited Uzhhorod, a city 500 miles west of Kyiv, for a factory expansion opening by Jabil, a global manufacturing services company headquartered in Florida. The company employs 177,000 staff globally, with 3,300 in Uzhhorod, one mile from the EU border with neighboring Slovakia. Jabil Ukraine makes hundreds of thousands of Nespresso coffee machines, those same machines advertised by actor George Clooney and sold around the world. A stone throw’s away from Jabil stands the Yazaki factory, a global automotive parts supplier. The plant produces cable harnesses for the new all-electric Jaguar I-Pace electric crossover SUV. In neighboring Mukachevo, Flex, an American multinational technological manufacturer, has a workforce of more than 3,000 people manufacturing consumer electronics that are exported around the globe.
The business community in Ukraine knows what to expect with another five years of a Poroshenko presidency. If reelected, it will likely be a business as usual approach.
We know much less about Zelenskiy. Although he is a household name, a highly talented TV performer, comedian, and a successful business owner, we don’t know how he may perform as president. His election program, thus far, is extremely thin on any details.
I met Zelenskiy a fortnight ago. He delivered a message that he is surrounding himself with reformers, the likes of former Economy Minister Aivaras Abromavicius, former Finance Minister Oleksandr Danyliuk, and MP Serhiy Leshchenko. During the meeting, Zelenskiy focused on assuring us that his views and intentions are aligned with the business community’s priorities, specifically on rule of law, macroeconomic growth, and fighting corruption.
I raised the topic of intellectual property (IP) intensive industries, something Zelenskiy understands well, as his entertainment business has made him a small fortune. IP-intensive industries with proper copyright, patents, and trademarks enable people to earn recognition and financial benefit from what they invent or create. Such industries account for over 38 percent of the United States’ GDP. This is an area where Ukraine can grow significantly.
Ukraine’s economic growth at about three percent over the past three years is positive, but the country must increase this growth significantly in order to augment national wealth. This can only be achieved by significantly boosting FDI.
Stories like Nespresso coffee machines being made in Ukraine are lost in the international media today due to the clutter and noise around the elections. Whoever wins on April 21, attracting FDI will be absolutely crucial in boosting Ukraine’s sluggish but highly promising economy.
Andy Hunder
President
AMERICAN CHAMBER OF COMMERCE IN UKRAINE
