It's not all bad news for Polish businesses in Ukraine. Despite the hryvnia devaluation, war and instability, some are doing well, while others are just surviving. Their health matters to the Ukrainian economy.
Poland, Ukraine’s 12th biggest investor, had a trade turnover of $6 billion with the crisis-hit country, a 17 percent drop.
Empik
Empik Media and Fashion Group, a Poland-based language schools operator and one of 1,100 Polish companies in Ukraine, does its best to survive.
In 2014, because of the sharp devaluation in the hrvynia, the company experienced a 7 percent decline in revenue in its Speak Up English-language school. They suffered the loss despite increasing the numbers of students to 8,000, up from 6,500 a year earlier.
Now the language school chain is for sale.
“EM&F Group is in the process of sale of its language schools,” according to the company’s statement “For that purpose it hired a renowned investment bank that holds talks with potential buyers.”
But 37-year-old Vladyslav Shvyduk from Kyiv, the general manager of Speak Up Ukraine, says that the company is simply reselling its shares and that it is still plans to keep operating.
“The shares of the company are on the stock exchange… My target as a general manager is to increase the value of the company,” he says.
Speak Up has 12 offices in Ukraine that take more than 3,000 square meters of office space in Ukraine. It makes it a major player on the market.
Even though Speak Up is being hit by the crisis, the company is planning to open at least two more offices in 2015. It employs 200 Ukrainians with the only foreign staff being a few native speakers from the U.S., Canada, Australia and Great Britain.
While the company has not released its 2014 revenue figure, it made $7 million in 2013.
Speak Up is planning to stay in Ukraine in the long run. “We do understand that opening schools is a long-lasting process which is at least five years for each location,” says Shvyduk. The only factor that would make the company leave the market is if Ukraine decides not to integrate more closely with Europe, says the general manager.
Kredobank
Dmytro Krepak, the chief executive officer of Kredobank, a Polish-owned bank operating in Ukraine, says the bank’s Crimea and Donbas branches contributet only 7 percent to its overall revenue.
Kredobank’s operating profit grew twofold in dollar terms from $2.5 million to $5.3 million in 2014, or four times in hryvnias, from Hr 20 million to Hr 84 million.
Furthermore, Kredobank’s shareholder PKO Bank Polski made a $13 million investment in 2014 indicating that the bank plans to stay in Ukraine.
In return Krepak wants to see the Ukrainian government providing budget stabilization, liberalization of foreign trade, capital movement across Ukraine’s borders and a radical improvement of Ukraine’s business climate.
“Foreign business is not looking for preferences. It simply needs a bearable business climate, economic freedom and equal opportunities with the local market players,” says Krepak.
Poland at a glance
Total area: 312,679 km2
Population: 38.5 mln
Government type: Parliamentary republic
Head of state: President Bronislaw Komorowski
GDP: $543.75 billion (2014 estimate)
GDP per capita: $14,112 (2014 estimate)
Main sectors of the economy: machinery, coal, iron and steel, chemicals, ship building, food processing
Ukrainian-Polish relations:
Trade: $5.7 billion (2014)
Exports from Poland to Ukraine: energy sources, chemicals, machinery, reactors, plastic
Exports from Ukraine to Poland: metal goods, mineral products, food and agricultural products, electromechanical goods
Polish investment to Ukraine: $0.82 billion (cumulative as of Oct. 2014)
Main investors: Amica (engineering), Can-Pack (metal packaging) , Maspex (soft drinks), Sniezka (paints), PZU Insurance group.
Sources: European Union, World Bank, Polish Ministry of Economy, BBC, Ukraine’s State Statistics Service
Kyiv Post staff writer Ilya Timtchenko can be reached at [email protected]
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