Arguably every Ukrainian has used a product of Ukrplastic, one of Europe’s top flexible packaging producers.
The company will provide packaging for anything from food products to tobacco, cosmetics and pharmaceutical goods. Some of its top clients are such mammoths as Mars, Nestle, Kraft Foods and Coca-Cola Ukraine.
But it only has a plant in Kyiv and wants to build one somewhere in the European Union, with the hope of the 28-nation bloc becoming the firm’s main business.
“This is our goal,” Irina Mirochnik, Ukrplastic’s CEO, told the Kyiv Post. Mirochnik will be one of the speakers at the Kyiv Post’s Capturing New Markets Conference on March 29 in the Hilton Kyiv Hotel.
EU exports
While many Ukrainian companies are trying to find the starting gate for entering the EU market, Ukrplastic is ahead of the game.
Ukrplastic exports to Romania, Bulgaria, France, Lithuania, Latvia, Estonia, Poland and Hungary. The enterprise is now looking at Spain, Denmark and Sweden.
“50 to 60 percent of our total sales are for export,” Mirochnik says.
Getting into one EU market doesn’t mean getting into them all.
“The EU consists of many different countries, each one with its own mentality. They have their own peculiarities, their own laws,” Mirochnik says. “There are the general EU guidelines, but each country has its own standards, some countries are more difficult.”
The Czech Republic, for example, is pickier than Hungary and Poland.
Exporting to an EU country requires a three-step process: receiving a global producer qualification, winning a tender and then starting preliminary tests.
“This is a long process,” Mirochnik says.
The EU only makes up 10 percent of Ukrplastic’s sales. Other export destinations include South Africa, North Africa and post-Soviet countries such as Azerbaijan, Kazakhstan, Moldova and Belarus.
Trade with Russia
Despite two years of war, Russia still remains the company’s main export destination, although Russian purchasing power is not what it used to be. Also, some Russian customers are shifting to domestic suppliers.
While the company keeps working with Russian clients, “we need to actively develop the other direction,” Mirochnik says.
Background
Ukrplastic traces its origins to 1926 as a state-owned company that made packaging out of wood.
Mirochnik succeeded her late husband, Alexander Galkin, as CEO in 2013. He died from injuries in a car crash; he had held the job since 1997.
“Unfortunately, I became the CEO because of a horrible case since we got into a car crash… a car drove over us. I stayed alive and Sasha died over there in three hours,” Mirochnik recalled the tragic event.
Mirochnik took over after serving as chairman of the supervisory board taking care of the financial and legal side. The couple has invested more than €100 million into the factory, which now employs 1,500 people.
Unhappy with politicians
Mirochnik has an impressive resume: she is rated as the 81st most influential woman in Ukraine by Focus Magazine and Forbes Ukraine estimates her net worth at $51 million in 2014.
The powerful lady is not afraid to be critical of Ukrainian politicians.
Neither Ukrainian nor Russian politicians “look after the people, businesses,” she says. “Both sides deeply ignore the needs and demand of business.”
She supported the work of former Economy Minister Aivaras Abromavicius, who quit on Feb. 3, citing obstruction in fighting corruption from lawmaker Ihor Kononenko, a key ally of President Petro Poroshenko. Kononenko denied wrongdoing.
“This was the only adequate ministry as well as the infrastructure ministry,” Mirochnik says. “What Abromavicius did was normal. You could come there and normally talk with people. If they could take care of issues, they did.” If not, they offered their advice.
By the time Abromavicius took over on Dec. 2, 2014, Ukraine’s Economy Ministry had been degraded as a cash cow for vested interests. Under Andriy Klyuyev, a loyalist of ex-President Viktor Yanukovych, the ministry “was just completely liquidated,” Mirochnik says.
EU vs. Ukraine officials
The difference between EU and Ukrainian officials regarding business is day and night, Ukrplastic’s CEO says.
EU government officials treat businesspeople as equals, prepare in advance, offer free advice and even provide land plots with developed infrastructure.
The Ukrainian side, however, is overwhelmed with corrupt bureaucratic rules. Ukrainian “politicians don’t understand that their goal is to provide social and business development of the country as much as possible.”
Recycling
The majority of Ukrplastic’s raw materials are imported from an EU factory of American Dow Chemical Company. If Ukraine recycled more, the cost of plastic would be cheaper, making Ukrplastic’s products less expensive. It would also take care of some major ecological problems in Ukraine, Mirochnik says.
“It’s nonsense,” Mirochnik says. “In our country, since cardboard and paper factories don’t have recycling, they have to import paper from Europe… If the local government is not interested then a business can’t do anything.”
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Irina Mirochnik
Job: President of Ukrplastic
How to succeed in Ukraine:
“For me the rules are the same everywhere: you need to communicate, socialize first. There is no other method. If you know many people, have many friends, you receive timely information and you can deliver your information… Take initiative… Competition exists as only one sort: you either die or become better than those who you compete with.”
