German agrotech manufacturer Horsch Maschinen GmbH plans to build a factory in Ukraine, and it is not because of a cheap workforce, the company’s founder Michael Horsch said at a panel at the Kyiv International Economic Forum on Oct. 19.
In 2017, Horsch reported the highest turnover of 356 million euros in its history. In Ukraine, the company has been working since 2009 selling agricultural machinery and farming technology to local farmers.
“I made a decision to open a factory in Ukraine within the next 2-3 years. I already bought some land. Because I have to be a part of the localization, not only sell things exported from other countries,” he announced.
He, however, reproached Ukraine for selling itself short referring to the low cost of workforce, often presented as a selling point to attract foreign investors to the country.
“But I hate to hear that I’m coming here only because of cheap labor. It is wrong thinking. If you (Ukrainians) are able to do things very well and as efficiently as everyone else, why should I pay you less?” Horsch said.
The International Monetary Fund recently named Ukraine the poorest country in Europe with a gross domestic product at $2,964 in 2018 and an average salary $325, which leave the country behind Moldova (GDP $3,226), Belarus (GDP $6,020), and Russia (GDP $10,950).
In pursuit of a better pay, millions of Ukrainians go abroad, primarily to European countries, for a short- or long-term work. Businesses in Ukraine have reported a shortage of educated and skilled workers. Agricultural companies, in particular, have been looking for ways to replace human manual labor with tech solutions and robots.
“When you talk about innovation you think only about digital, but the digital is only a tool. I think Ukraine is further ahead (of other countries) in terms of grasping what needs to be done and how to make changes,” Michael Horsch said. “You are able to generate things within Ukraine, and it will be Ukraine’s intellectual property, not something imported.”
