You're reading: Greek construction mammoth to expand in Kyiv and Odessa

Michaniki Group to build hotels and retail centers in the capitol and in the busy Black Sea

Greece’s third largest construction company, the Michaniki Group, joined the select-club  of foreign investors to bring at least $300 million to Ukraine when they announced on June 22 that they would build several entertainment and residential complexes in Ukraine over the next four years.

The largest of the projects is the construction of the Dolphin costal resort complex near Odessa. The project, worth $200 million, is expected to be completed within four years. According to George Vrachnis, communication and investor relations manager at Michaniki Group, his company intends to transform a site adjacent to the city’s Black Sea harbor into a mixed-use project of parks, cinemas, restaurants, a hotel and other buildings.

He said Michaniki and then Odessa mayor Ruslan Bodelan agreed on the project last summer. However, newly elected mayor Eduard Hurvits, according to the Greek company, wants to review all aspects of the previous agreement.

“We hope that all the paperwork procedures won’t take more than a year,” said Prodromos Emfietzoglou, Michaniki Group’s chairman of the board. The company hopes to recoup its investment in four to five years.

Michaniki has already invested around $35 million in the commercial center Athena located in Greek Square, the heart of Odessa. Athena was officially opened in September 2004.

Expansion in Kyiv

Michaniki is also looking to expand in the capital.

The company intends to build a top-end retail, office and residential complex called Darnytsia on a 40,700 square meter site near Darnytsia metro.

“We hope that the documents we’ve managed to get will help us start construction of the Darnytsia complex as early as September,” Emfietzoglou said.

Emfietzoglou is optimistic despite a rocky history of investment in Kyiv.

Last year, Michaniki presented two construction projects to Kyiv City Administration for consideration. One of them, a 30,500 square meter mixed-use residential and office project was supposed to be located in the Syrets area, while a commercial complex was supposed to be built in the area of Borychiv Tik, Podil.

Some time later the company received an official letter from the Kyiv City Administration saying that Kyiv municipal council deputies would make their decision regarding the projects in September of 2004. When the deadline passed with no word, the Greek company tried to find out what happened. Officials at the Kyiv City Administration responded they had never discussed Michaniki’s projects. To make things worse, the documents describing the construction projects seem to have simply disappeared.

Then, said Emfietzglou, “We were informed that one of our sites has already been granted to another investor.”

“Michaniki is still facing many difficulties with its investments in the Ukrainian market. These problems are due to bureaucracy that is still raising obstacles to foreign companies and investors. It is a problem of mentality that has to change quickly,” Emfietzoglou said.

He said the group has turned to the Greek Embassy in Ukraine for support.

Bright future

Emfietzglou says Michaniki still remains optimistic about the Ukrainian market.

“According to what was said at the recent World Economic Forum in Ukraine, the horizon looks good for new foreign investments and for a brighter future, both in terms of economic and social prosperity,” said Emfietzoglou, who was in Kyiv during the mini-Davos event.

He said that of the three most promising markets for Michaniki business – Bulgaria, Russia and Ukraine – Ukraine was chosen as the market of the future.

“We feel better in your country. Russia is chaotic,” Emfietzoglou said.

“Ukraine is a big, ever-growing, modern market that no foreign company with a strategy could ignore. I believe that the country has a great future ahead,” he added.