BUSINESS WITNESS DATABASE
One year on from russia’s full-scale invasion of Ukraine, the Ukrainian people have demonstrated unwavering resilience and unity. Ukrainians’ fight for freedom is taking place not just on the frontlines, but in homes, schools, and businesses across the country, where their battle is linguistic, cultural, and economic.
As russia has sought to destroy Ukraine, the nation’s enterprises have resisted and rebuilt, doing all in their power to keep supply chains operational and to support their communities. Factories have been turned into bomb shelters, essential products have been diverted from private customers to the Ukrainian Armed Forces, and countless civilians have been supported through the war by their employers.
DATTALION’s business witnesses represent the strength of Ukraine’s private enterprises. Our economic data and analysis, created in partnership with Capital Times and with support from the Center for International Private Enterprise (CIPE), draws attention to the devastation inflicted by russia’s war, the fortitude of Ukraine’s people, and the reparations that Ukrainians are due as they seek to rebuild their businesses and lives.
Our business witnesses are drawn from private enterprises across Ukraine, covering a variety of sectors and sizes. Their testimonies were collected by the DATTALION team between November 2022 and January 2023, and translated into English for use by DATTALION, our partners, and the media.
Below you’ll find summaries of each interview along with a full transcript and photos.
Russia Has to Pay for Ukrainian Business Losses
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Victor Levit, Zeus Ceramica
Surviving Two Invasions | DATTALION Interviews | Zeus Ceramica
Viktor Viktorovych Levit owns two enterprises in the city of Sloviansk, Donetsk region: Zeus Ceramica, a ceramic tile company, and Donbass Ceramic Bodies, which produces the raw materials needed for the production of ceramics.
Both businesses were hit by shelling in 2022 (probably by S-300 missiles): four missiles hit the Zeus Ceramica plant in August and, in October, two missiles hit Donbass Ceramic Bodies. Production buildings, lines, and communication channels at both businesses were seriously damaged. The roof of the Donbass Ceramic Bodies workshop was completely destroyed.
While estimating repair costs at USD $4 million, Levit says that limited Ukrainian law enforcement capacity means that an official assessment of losses and recording of the crimes has not taken place.
Reporter: Victor, please tell us about your business—what it was like before the full-scale invasion, what you were doing, where it was located, what your priorities were, as well as your thoughts and plans for development.
Victor Levit, the owner: In 2003, for a few reasons, we decided to set up Zeus Ceramica, a joint venture with Emil Ceramica, an Italian manufacturer of ceramic tiles. The first driver was the nearness and accessibility of raw materials. The second driver was the quite developed eastern Ukrainian market, as well as the one in southern Russia. The third driver was people’s knowledge. Sloviansk [in the Donetsk region] is a city of ceramicists with a fairly large number of people who have been producing ceramics for a long time. There were four large factories in the Union of Soviet Socialist Republics that produced ceramics. When they shut down operations, more than 500 small pottery factories took their place. That is, people knew what it was, and held the feeling of ceramics and clay in their own hands.
The enterprise began in 2005 and in the same year we produced our first products. The total investment amounted to about $40 million. We received the majority of the funds from the International Finance Corporation (IFC). The company successfully completed loan repayment in 2013. By 2014, the business had good financial outcomes, was developing, and had found market success. At that time Donetsk, and Ukraine in general, were developing quite well. It was akin to Germany’s development, in which several cities are in competition—for instance Donetsk, Dnipro, and Kharkiv. That is to say that the Donetsk region was developing rapidly, alongside the Dnipropetrovsk, Kharkiv, and Odesa regions. Everything was fine with the markets, but then came 2014. In 2014 we thought, perhaps for the first time, that we had made a mistake with our location. This was because Sloviansk became the center of the separatist movement in 2014. I have my own thoughts concerning how and why this happened, which I can share later if you find them interesting. So, our enterprise was caught between two fires: the National Guard of Ukraine, located on the Mount Karachun hill, and the separatists’ roadblock, which was at the crossing. The factory was situated between these two firing points. Therefore, most of the shells fired between those two sides hit the plant. It was in 2014 that we incurred our first losses in the amount of €3 million. Of these losses, €1.5 million were for equipment and buildings, and another €1.5 million accounted for a burned-down warehouse, which was also partially robbed by looters.
R: Looters from which side?
V: From the city. They, the separatists, were the same way. There were a lot of Sloviansk residents involved.
R: You call them separatists, but Strielkov-Hirkin [a colonel from the Russian FSB] was in Sloviansk.
V: I think there is a deeper problem here, actually. Since we have arrived at this topic, I will give you my opinion on the matter. The separatist movement in Sloviansk was formed in advance, a long time ago. It was financed through “Ukrainian Choice” organization, and it seemed not like a separatist movement, but like a “movement against shale gas extraction”.
Members of the organization met and gathered for rallies. There was a paid «core» of the organization. The day before Hirkin’s invasion, we saw that the former deputy of the Verkhovna Rada of Ukraine, the head of this movement, had organized a group of people to come to and capture the police station on Saturday morning. That is, at first it was an organized movement, the existence of which was not notable. Then Hirkin came to them, initiated by the FSB and the intelligence service, with weapons. There were also caches of weapons.
R: The caches were in Sviatohirsk Lavra?
V: I don’t know. Let’s not blame them, because no one has proven it in the past eight years. But those were the rumors. That is, initially the separatist movement was financed by the intelligence services and our local figures. And then Hirkin came with his squad. The group was also divided into two parts. There were people who really came as volunteers [who were locals], and there was, obviously, a cadre of Special Forces, which then left.
I lived in Kyiv at that time, visited Sloviansk from Monday to Friday, and flew back to Kyiv on Fridays. This time I left on Saturday. On Wednesday and Thursday—two days in a row—nine unmarked helicopters came from the north in flocks. I called the Border Guard, but they wouldn’t tell me anything. The helicopters would fly into the region from 8 pm to 9 pm and then return north. I saw it with my own eyes.
R: What were they transporting there?
V: Probably people; probably those units we spoke of earlier:people and weapons. In those two days, 18 unmarked helicopters came and went.
R: And what happened next? Your factory, as I understand, was partially destroyed.
V: Yes, partially destroyed. And in July, when they left, we started rebuilding it. We came in with a group of people and cleared it out. We once again invested money from our own funds as well as those of our Italian partners. By the end of 2014, the plant was up and running. In October, we had a big concert in the square, and Radio ROKS came.
R: Did you sponsor it?
V: Yes, my friends and I sponsored it. And you could see how people were slowly beginning to “thaw out”. Up until then, the situation had been very sad. From July to October people were afraid to talk, afraid to express their position, afraid of everything. Everybody was still internally at war. And then step by step Sloviansk was being revived. By 2022, in terms of capital construction, repairs, and occurrence of new enterprises for those 8 years (and these 30 years of independence), the maximum was achieved. So much had not been done before that.
R: How was that achieved?
V: I think there are several important factors. From an economic perspective, why did decentralization come about? It was because of utility rate reform. The state stopped subsidizing everyone and everything; it was also the exchange rate of the dollar. Those two reforms were carried out successfully enough, leaving the state with money. When money appeared, thank God, they decentralized and local authorities got money.
And once the local authorities were finally able to do something, the second question was who should use the money. In any case, they got money for those infrastructural projects that nobody had worked on for 30 years and they finally started doing them. In my opinion, until 2014, there was a silent collusion between the people and the government: The government was giving people cheap rates and a cheap dollar, and so the people did not act.
When the government no longer had sources to take money from, and when problems with associated membership in the European Union appeared, then the “bad” [market] utility rates we talked about appeared. However, there was money for infrastructure: roads were being built and sidewalks were being repaired. In Sloviansk, the sidewalks had not been repaired for about 50 years, that’s for sure. And when they repaired the sidewalks and began repairing communication channels, it was a big step forward. That is, thanks to the reforms.
R: What was going on in your business before the invasion in 2022?
V: Since the renewal, in 2015, we’ve had some serious problems. We were exporting 40% of our goods at that point, of which 60% went to Russia and 40% to the United States, Canada, and Europe. So, I will say, my internal impression is that all of our Western partners understood that we could not fulfill contracts on time, so everyone just waited and said, “We understand.”
Russian clients, on the other hand, simply stopped paying and said, “You broke our contracts”. Yet we managed to get over that. Some paid, and some did not pay at all. But we left that market almost completely.
R: You stopped working with Russia, right?
V: We were selling a few small things. Out of our overall business, it was 3 to 4 percent. If there were some buyers, they just came to buy a truck. We redirected our exports primarily to Europe and, again, to Canada and the United States. Step by step, over the course of 3 years from 2015 to 2019, we rebuilt our market. Beginning in 2019 things were going well, but then came COVID-19. We thought, “What could be worse than COVID-19?” Now we already know how lucky we were to live during COVID-19, compared to during the war (laughs).
R: As I understand it, COVID-19 has affected you because your clients are partly business centers.
V: Well, those are under construction. During COVID-19 nobody was building.
R: On the eve of the war, how did you feel in terms of business? What were your plans and intentions?
V: Again, we were probably deeply shortsighted. Despite COVID-19, we were pretty successful in 2020 and 2021, so we decided to invest additional funds—€3 million—to upgrade and expand production. We invested this money. Fall to spring 2022 was to be the time of reconstruction. We planned to start our new production in March. We bought equipment and partially installed it. Then we had to partially remove it and take it to warehouses in central Ukraine during the summer. So, we invested again at the wrong time and in the wrong place. I was sure there was a problem, that there would be a problem with war, but of course many of the people with whom I talked (even those who understood there would be a war) did not think it would be like this—a full-scale invasion of the whole country, with Russia turning from a close country into a lifelong enemy.
R: Tell us, please, what happened after February 24, when the war started all over Ukraine.
V: Well, if you look at it now, we were in a pretty good situation, since the plant was not working at that time due to our reconstruction efforts. Some people were on vacation, some were working on reconstruction. The equipment was being brought in and installed. So, we did not start up the plant, we considered how long the war would last, and for the first 3-4 months we kept the whole team. But then, little by little, we had to fire people or not pay salaries.
As of today, out of 280 people only 40 are working. We moved a tile warehouse to Kyiv, but they [those tiles] are selling slowly. Four missiles have already hit the plant, I think the C-300 type. Two missiles flew into the yard of the plant in August or September. Two more in mid-October, maybe a little later. Now we have one mosaic shop destroyed, with no possibility of restoration. However, it’s an auxiliary production site so I do not consider it critical. In the main workshop, all the windows have been blown out and the walls are destroyed, but the equipment is still okay. Some of the equipment is damaged but can be restored. The majority of the equipment is okay. However, two more missiles flew in on the other side of the building, disrupting our connections to water and electricity. It is hard for me to say what is working there now and what is not.
R: There is just no power supply?
V: Well, our power supply was out, and we can’t check right now. We recovered a piece of cable, but it’s hard to tell what’s happening further underground. Those two missiles hit near the plant and just the incoming supply was disrupted. We have 2 plants in Sloviansk, and both plants have already been hit by missiles, totaling 6 missiles overall. The factories are next to each other, across the street.
Now we have also launched a ceramic mass factory, which produces a semifinished product for ceramics, called ceramic bodies. This is because some ceramicists who had dispersed and moved their workshops to other cities asked us to make ceramic bodies for them because all other production had stopped. So now we’re running production in a broken shop. Two rockets crashed there, disrupted the electricity and water supply, and blasted the walls. Nevertheless, we relaunched it and it is operational now. But we relocated a small part of the operations to Kyiv to produce stairs, mosaics, countertops, etc.
R: By your rough estimation, how much of your production did you lose because of the shelling?
V: The financial loss that I saw as of yesterday was 28 million hryvnias (UAH) of direct losses. This is something that cannot be restored. I estimate that today the plant’s resumption will cost somewhere in the ballpark of €2-3 million. And the war is not over yet.
R: 28 million UAH lost plus €2-3 million to rebuild it.
V: Well, 28 million UAH lost, but if you account for depreciation the pure financial loss is 21-22 million UAH.
R: Well, that is half a million dollars more, roughly speaking.
V: More. Well, financially, yes.
R: Plus another half a million in lost profits. In nine months.
V: Yes, plus the loans we have to pay back.
R: Are those still the ones from 2015?
V: No, those are the ones we have taken out now for reconstruction.
R: For this development that you have planned, right?
V: Yes, that’s the most significant part.
R: At this point you were both in Kyiv and in Sloviansk? You were no longer coming to Sloviansk, but staying in Kyiv?
V: No, I come to Sloviansk from time to time for short visits, generally related to volunteering more than business.
R: Whom do you help?
V: The army.
R: If I may, could you please say a couple of words about that? It’s always very interesting to hear.
V: We have several subdivisions that we help. My daughter lives in London. She collects some money, and our family provides some money also. As of today, we have spent £150-200,000 on various purchases for the army—mostly drones, thermal imaging cameras, and body armor. Nowadays, we are working on bringing sleeping bags and karri mats [ground mats] to our Sloviansk Local Territorial Defense.
R: Yes, winter is close.
V: Yes, we must keep them warm.
R: That’s true. Tell me, please, this is the second time that your business has been destroyed because of the war. But now, at least, it’s clear who did it.
V: It was clear even then.
R: So, who do you blame? Here’s a straightforward question: In 2014, who was to blame for your business being destroyed? I mean directly responsible. Not accidentally, that something happened there, but direct responsibilities— who do you place it on, for what is going on now?
V: I’m certainly not a judge or court of law. I would say that everyone is to blame. Even Ukraine is partly to blame for allowing this to happen. The Donetsk People’s Republic (DPR) is an organization that has existed in Donetsk since 2004. It had an office on the main street. For some reason, Ukraine did nothing about it. That is to say, there are a lot of guilty sides. As you remember, in 2004, during the first Maidan, there was a division in the participation of Russian political technologists and the FSB: here live the reds and here the blacks, here are ours and here are theirs. At that point we probably should have started to examine it more carefully and fight it off.
Soon after this, the east of Ukraine suddenly began to say that they “feed everyone”. As a result, this led to the events of 2014. It was all there on the ground, and the FSB took advantage of it very skillfully. That is, in the aftermath of the 2014 “coup d’état” [national revolution] as they call it, everything was initiated and organized by Russia. The invasion, the whole war—it is all clearly Russia.
They took advantage of that. They took advantage of the fact that they planted the seeds for a long, long, long time, and, in the end, they started picking the sprouts in 2014. I remember back in 2014…I have a house in Crimea. And I went there in February, right after the Maidan, because I realized that something was starting to happen there. Again, I saw how a bunch of these Cossacks came from Kuban, as well as Serbs, whom I met at checkpoints wearing these Serbian hats. The public there was ready for this, the local population was also ready for this—for the invasion and the capturing of territories.
The authorities were not ready because the people were very pro-Russian. Well, how could it be that with President Viktor Yushchenko living in the neighboring dacha, (I have a house next to the President’s dacha and I have sometimes seen him there), there was not even a single Ukrainian radio station in Crimea?
Well, how could it be that before 2014 there was not a single Ukrainian radio station in Crimea? There was one radio station that provided the southern coast of Crimea with Russian news. How could that be? Well now, of course, we can throw up our hands. In reality, though, we need to understand that we are all to blame for the way it turned out. It is clear that everything was orchestrated by Russia, that they took advantage of the situation and continue to do so. In general, everything related to them is bad, and I cannot justify it by any means.
R: Well, you mean it’s your own fault for missing the signs that Russia was preparing the ground for the invasion? If we had reacted in time, maybe it would have stopped the invasion or it would have been less painful. But that’s about 2014. What about 2022?
V: Well, look, for Putin and the very small number of people all involved in this conflict, in this war, this is a joyride. Unfortunately, they were preparing for it all along. I remember… I studied in St. Petersburg, I have many friends from there. When they [the Russians] came to Crimea, they told me,
“Well, wasn’t it bad for us in the Soviet Union?”
I told them,
“Yes, it was bad, I don’t want to go back.”
“Well, we all want to go back to the Soviet Union”.
In other words, they were all prepared long ago to believe that the Soviet Union should be restored. This propaganda was at work for a very long time, for 30 years. And now this is the result. What are they fighting for? Are they liberating anyone?
R: I don’t think they know what they are fighting for.
V: They do know. But you need to understand whom we are talking about. Are we talking about the cynical leadership that fights for its goals, for its money, for its stupid ambitions? Or are we talking about the people who are dying, who are in the army from national minorities, who are gathered from everywhere? This is a different mentality – they are there for the salary. There is a part of the middle class and the elderly that clearly believes in this, that is nostalgic for the Soviet Union. Of course, we also have such people [in Ukraine].
R: But once again, I want to return to the question. Theoretically, if we imagine that one day someone will compensate you for the losses you have suffered now in 2022, who should it be, in your opinion?
R: Russia, as a state?
V: Well, that’s also such an interesting question. I don’t know how it works from a legal point of view. I think that investors in this country should be compensated by the state—I mean by Ukraine. Where Ukraine will get the funds for this…this issue is already related to reparations, international funds, etc. In all scenarios, considering both 2014 and today, in any case, the state must provide investors with a “normal life.” If you invest money, you will invest in a country where everything is good, everything is calm. For this purpose, we have a government that should try to maintain calm. That is, in general, the main role of the authorities—to make life calm, peaceful, etc. If such conflicts are allowed to happen, the state is responsible. It is clear that in this case the state is not to blame for this situation, but then the state is looking for payment from the perpetrators of such events.
R: So, your concept is the following: the state should receive reparations or create some sort of international fund, essentially, to help businesses.
V: In any case, it follows that the state must compensate. The next question is the way in which it should compensate. Here is the way in which it should do so… I would probably stick to the opinion that it should be some international organizations that distribute these funds. Even if they are too bureaucratic, at least there is more confidence that they will reach the right people.
R: Do you believe that this is possible?
R: Tell me, please. This is the second time you are experiencing a partial destruction of your facility. The first time, you and your partners invested your own funds to restore it all and start the business again. Now the business is partially destroyed and partially works in the part of the line that you took to the suburbs of Kyiv, and in the part of the line that is in Sloviansk, which deals with ceramic bodies.
V: No, not quite. The ceramic bodiesplant is a separate business that had two areas of production: the production of stairs and tabletops and the production of ceramics. We moved the production of steps and tabletops, but the production of ceramics remained [in Sloviansk]. There is also another business, the ZEUS Ceramica plant, which produces only tiles.
R: So, the tiles are now on hold?
V: The tiles are on hold, yes.
R: The ceramics are operating in Sloviansk.
V: Well, they are for a week. Then we will stop them because we need to repair everything.
R: You launched work for a week, but what will happen next is not very clear. My question is about your future path: Do you somehow plan to restore it? When do you plan to do so?
V: Of course. I console myself with the thought that we will relaunch in the spring or summer.
R: Do you tie this somehow to the victory of Ukraine and the pulling back of the frontline?
V: In this case, I tie it to Bakhmut. If they pull back from Bakhmut, if Russian troops are at least pushed back to the borders as they existed before February 24, then we can do something.
R: At that point you will see the logic of investing money, right?
V: Well, firstly, it is not only money but also bringing people there to work. Now we are trying to do something with the windows, glass, and walls, but these are just cosmetic repairs.
R: Well, that’s to survive the winter, but the restoration of the lines…
V: Well, if Russian troops are moved away from Bakhmut, then there will be enough distance, at least to have time…
R: The S-300 will not reach you?
V: No, the S-300 will be able to reach us. Well, recently there was a shelling of Kramatorsk, for example, and they didn’t even have time to activate the alarm. Multiple launch rocket systems (MLRS) arrived, and the alarm was activated only after that. This is very sad. If there is an alarm, at least people can hide. But if there is no alarm…
R: One more question. Do you have bomb shelters on the territory of the plant?
V: On the plant territory, no. But there are good concrete walls behind which you can hide. We have a bomb shelter on the grounds of our cultural center. But we are now using it for the residents of nearby buildings.
R: You allow them to use it?
V: We allow them to use it. They sleep there.
R: Another question: Your partners, the Italians, how did they react, and how did your clients react to this whole story?
V: Our partners are pained. It is not only a question of finances. The first thing they said was, “You have to evacuate people”. This is what we were doing in the first month of the war. We are still working for Ukrainian clients, but now that market is not so big. We are selling something to them now, but we have stopped working in foreign markets. Although there are requests, it is logistically too expensive. And, frankly speaking, I would not occupy our roads with export trucks now. Let more artillery come here instead.
R: I understand, you want to give way to the supply of weapons.
R: Did you somehow record all this destruction yourself to help get compensation in the future?
V: We took photos and videos. A month ago, there was no one who was ready to come and record our losses. Now such an opportunity has appeared. Maybe we will get experts to fix it.
R: Do you mean state experts or private ones?
V: Perhaps the Ukrainian Chamber of Commerce and Industry. What I know now is that no one is recording anything. The prosecutor’s office does nothing. There is a lot of work to be done, and if you look at what is happening in Sviatohirsk or in Lyman, they are utterly destroyed.
R: Objectively, specialists have a lot of work to do now.
V: There is something to do, but I think there is no one to do it.
R: There is no one, there are just not that many people anymore. And one last small question to end on a positive note. Do you think Ukraine will win?
V: I am sure of it.
R: And when they open the borders to leave Ukraine, will you stay in Ukraine to work or will you leave?
V: I could leave [now], there are many ways to leave—some legal, some illegal. But I don’t want to leave. I want to live, create, and work here. This is my homeland.
R: Will your partners help you to restore your business for the third time?
V: I am sure they will.
R: Great, thank you very much! Maybe you would like to say something to us in the end, some message to the international community that might be watching this interview. What would you like to say to people outside of Ukraine?
V: I have a great wish. I want everyone to think about the time when all will be restored, and I think it will be soon. I wish that the international community would invest in some kind of insurance mechanism. This is a very important issue for Ukraine, as well as for any investors in Ukraine. This insurance should cover all risks, including war or some act of terrorism. This will encourage investment in Ukraine. Because there will also be a very difficult period when we will be rebuilding, and everyone should be able to think that they are protected, at least by the insurance. Maybe it will be the first such kind of insurance in the world, but it will be an incentive to invest in Ukraine.
R: So the idea is that any investor investing in Ukraine would have the opportunity to insure against all risks.
V: There are such insurance organizations in Germany, one being Euler Hermes. There is such an organization in Italy, Simest. Ukraine needs to make such an insurance organization into an international partner. I do not really trust any state bodies, so it may be easier to make some insurance companies agents of this program. But anyway, this insurance must be present.
R: Well, I take it this is to remove the barrier even for your partners to come in here again.
V: Yes. Anyway, we will restore everything, we will do everything. We have not already invested this much to just give up everything and leave. But new investors should come under the guarantees of insurance funds.
And secondly, I have another big wish. Now there is a really threatening situation with investments related to their geography. It is very clear that everyone wants to invest near the market. The market is Kyiv, the Kyiv region, the Kharkiv region, Dnipro, the area around Odesa, Lviv, and the Zakarpattia region. We have a very, very great danger on the borders of the country. It is very important for the state to think about what to do in Donetsk, Luhansk, Sumy, and Chernihiv regions…Each of these locations borders Russia. And it is important to think about how to help investors. There are more risks, there is a smaller market, and fewer people will be there now. And if this is our country, we must think about these regions.
R: So the message is that you need to have some kind of separate story to attract investors to these regions.
V: To attract investors and to organize life.
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Volodymyr Martsenyuk, Managing Partner,
TK Home Textiles
Frontline Fabric // DATTALION Interview // TK Home Textiles
Meet Volodymyr Martsenyuk who serves as a Managing Partner at TK Home Textiles, the largest manufacturer and importer of textile products in Ukraine. Prior to russia’s full-scale attack in 2022, TK Home Textiles employed over 550 people and exported textiles across Europe for over 25 years.
One of TK Home Textiles’ main enterprises, which served as the only fabric production facility in the country, was located in Chernihiv. Chernihiv was the first city to be reached by the russian army at the start of the war, and for over 30 days, Volodymyr’s team used the facility as a bomb shelter before the building was destroyed. However, much like the Ukrainians who fought off the russian soldiers from Chernihiv, TK Home Textiles refused to back down and rebuilt the space – spending hundreds of thousands dollars.
Today, TK Home Textiles serves as one of the main suppliers of home textiles for the Armed Forces of Ukraine, Ministry of Defense and National Guard – providing necessities such as uniforms, bedding and towels. In addition, they’re working closely with the United Nations and Red Cross to produce home textiles and clothing for refugees and internally displaced people (IDPs).
Reporter:Mr. Volodymyr, first of all, thank you for agreeing to meet and let me ask your permission to record this video interview and publish it on the Internet.
Vladimir: I don’t mind at all.
R: Great! Thank you very much. Then let’s start by telling us about your business: What was it like before the full-scale invasion before February 24th?
V: I am the managing partner of the company «TK-Domashniy Tekstile» (TK Home Textile). This company is part of the Textile-Contact holding group. This holding company employs about 1,700 people in different regions of Ukraine. Today, it is made up of (we have already lost count) about 14 manufacturing enterprises: retail and wholesale trade, import, export, and various other activities. However, it all revolves around textiles—fabrics, home textiles, accessories and much more. I manage the direction of home textiles. It is called home textiles, but we have various activities—the production of fabrics, knitwear, garments, home textiles.
We are also distributors for many household chemical companies. How did this arise? This arose because, even before the war, and especially now after the outbreak of the war, there are a large number of different humanitarian foundations that have funding both abroad and within the country, which want to help refugees, internally displaced people (IDPs) and collect humanitarian kits. These kits generally contain not only textiles, but also basic necessities for the victims, including household chemicals, hygiene items, beds and much more. Therefore, we have expanded our knowledge of these things and became distributors for many companies producing these products. Although, for us the most important thing remains textiles, home textiles.
The structure of our business, namely home textiles, includes a fabric production enterprise. It is unique because we are probably the only one in Ukraine which produces fabrics for home textiles. This enterprise is located in Chernihiv.
Also, before the war, we started producing fabrics for the Armed Forces of Ukraine—that is, fabrics for overalls. At that time, it was more like a «whim», the main thing was still home textiles.
R: Maybe it was a prophecy?
V: Yes. But then, after the outbreak of the war, and after the enterprise was restored, and as of today we have 80% of fabric products that we manufacture for the needs of the Ministry of Defense, the National Guard and other military structures that defend our country.
In addition, we have a sewing enterprise in Chernihiv, which produces home textiles.
We have an enterprise in Odessa, which is also quite large, employing about 150 people. There are various workshops in production — a knitting workshop, a home textiles workshop, and a workshop for mattresses, pillows, and blankets. We are also engaged there in the regeneration of textile waste. We, so to speak, give a second life to those second-hand clothes that no one will wear anymore, to waste from garment enterprises and textile enterprises.
In Kyiv, we have 3 production sites: a knitting shop, a sewing shop, and a quilting shop where we produce blankets, and a home textile production shop.
In total, 550 people work in the home textile business. The company’s turnover is more than 20 million dollars a year. This is our business.
R: Okay. You said that you were exporting your products as well.
V: Yes, we cooperate with different countries of the world, although we do not prioritize and have never prioritized exporting our products. Why? Well, because the demand inside the country significantly exceeds our capabilities as of today. Before, this was the case because the company, so that you understand is almost an exclusive supplier of home textiles for the Armed Forces of Ukraine. That is, this year we probably produced 90% of all mattresses, pillows, blankets, bed linens, and towels for the Armed Forces of Ukraine. Huge contracts. Also, we manufacture products for hospitals.
The demand inside the country significantly exceeds our production capacity. In the light industry, which remained after the start of the full-scale invasion, all light industry enterprises have this load. This is due to the fact that many enterprises have stopped working: in Donetsk, Luhansk, Zaporizhzhia, Kherson, and Mykolaiv regions. Therefore, there are not enough remaining enterprises, and many products are now imported.
Every year we make deliveries abroad, but it is more for our portfolio—perhaps for pleasure. We have some regular partners which ask us to supply products, such as the Baltic countries, Georgia, Israel.
Two months ago, the largest textile interior exhibition was held in America. It occupied 2 million square meters of exhibition space in the United States. This is a very expensive exhibition, but this year 20 Ukrainian enterprises were given the opportunity to participate free of charge as a grand prize—they only had to pay a few expenses, such as flights and so on, but the participation itself was free of charge.
Of course, we can only speculate, but today we have a load for 4-5 months in advance. And then you must think and choose what to do.
R: Well, is the military your priority now?
V: 50% is the Armed Forces of Ukraine, and 50% are probably our companies, which are in the UN rankings of all international organizations of the highest class. In the first place, we cooperate with the all-season basic outfit set, UNICEF, UNOPS — that is, we have permanent, very large projects in cooperation with these initiatives. They trust us, so we win tenders. Unlike in Ukraine, they do not always choose the best by price and authority, but by how well people can perform their duties.
Since 2014, we have been consistently participating in all auctions and tenders held by the UN organizations and the Red Cross. Probably no one in Ukraine has had so much honor as we have, to work with these organizations.
If the first half of the year our major focus was on the production for the Ministry of Defense, today the priority is the production of home textiles and clothing for refugees, IDPs — that is our main profile. We do not sew home textiles for the Armed Forces ourselves, we produce fabrics and sell them to working sewing factories that work — these are all the largest factories in Ukraine that buy fabrics and sew things for the Armed Forces of Ukraine. We have now directed our sewing workshops to the production of clothes and textiles for refugees and IDPs. That’s it!
V: We are also suppliers for railway transport, all structures of the Ministry of Education, and the Ministry of Social Policy.
R: What an interesting direction you have. I did not even know that it exists here. Well, what happened to your business after the 24th?
V: Our enterprises are in different regions…Now, for example, we were applying for a loan in a bank, and if they did not believe in us, they would not have approved it, because all our industrial enterprises are located in red, black, blue and other zones. They have a map, for example, for where they credit and where do not, and all of our enterprises are not located in favorable places: Chernihiv, Odessa, Kyiv. We still get loans. They trust us.
By the way, a few words about what happened at the textile enterprise in Chernihiv, which produces fabrics. Chernihiv is a city which was the first to be reached by the Russian army, and Chernihiv was surrounded by Russian troops from almost all sides for about 30 days, because it was bypassed to reach Kyiv. Chernihiv was not captured. The defenders did not allow [the Russians] to enter! They stood on the outskirts of the city. Russian troops were in all villages, and even in the suburbs. The city was 30% destroyed, including our enterprise.
On the 24th, when the war started, we ordered all employees not to go to work. We shut off the energy at the enterprise, sent the employees home to find places to hide, to find bomb shelters, and they had the opportunity to leave, because it was [the fighting was] very hot in Chernihiv!
When they started shooting from hail and tanks on residential areas, houses, then many people even asked permission to hide at the enterprise. The company has a basement, as a bomb shelter, and about 30 people lived there for almost a month.
Textile production, by the way, cannot be stopped like sewing production, which can be stopped and then started again. If the process is stopped, then within 3 days the amount of semi-finished products at various production stages, which are available, will lead to the loss of about several million hryvnias in spoiled goods.
People also understood this. We did not ask them to do it, but they came out (I scolded them for that) and during the shelling and bombing they tried to save the semi-finished products and release the finished products.
Employees lived there, they just went up from the basement to the first and second floors and tried to somehow save the products. We are very grateful to these people! They are true patriots of the country and the enterprise!
In general, what happened from February 24 to March 1 was that no one worked. By March 1, everyone got used to the fact that there were explosions everywhere, and people said, “We will work now, because in 1-2 more days all the products will have to be thrown away”.
On March 1 and 2, they managed to get the dominant share of the products to the final product. Thus, several million hryvnias of products were saved. On March 1-2, the industrial zone was shelled with all types of ground weapons. The enterprise burned down there; everything was completely destroyed. But on the night of the 2nd to the 3rd March at 2 am there was a hailstorm that hit our enterprise. At first, there were 2 hits: the roof of the 1st floor and the concrete ceiling were hit. Since people lived there, after the shelling ended, they managed to get out of the basement, they found a fire. There were all means for fire safety: fire extinguishers, industrial water in fire hydrants. 12 people were involved in firefighting, and they managed to save and extinguish a lot. The fire was put out. People went down to the basement again and until 7 am there were several more hits on our enterprise, but after that it became so “hot” that they were too scared to come out, so they stayed in the basement and did not go out. Thank God, the second wave of hits did not lead to a fire. Everything seemed to be fine and calm, but on May 4th we completely closed the enterprise. I categorically told them not to make any movements there, but it seems that a cinder [spark] landed there and within a day it led to a fire. It smoldered here, smoldered there, and as a result about 10 thousand meters of finished fabric, as well as about 20 thousand meters of semi-finished products burned. In addition, the dyes of textile chemicals were broken by debris and damaged, and these are very expensive things. A kilogram of dye costs about $150, and they are stored in barrels of 250 kg. That is, about 20 thousand dollars’ worth of dye chemicals were damaged.
In general, about 50 thousand dollars’ worth of raw materials, semi-finished products, dyes and chemicals were damaged at the enterprise. In addition, of course, the equipment was damaged, but thank God, we were lucky that the shell did not hit the place where the machines were located, and there were wide passages between the machines. I suppose a hail shell hit between the vehicles, the roof fell and these fragments of concrete slabs and the fragments themselves fell on the aisle. The equipment was hit by small fragments, possibly some construction debris. In general, we were lucky in this regard, because there was raw material on the passage, so the raw material was damaged, and the equipment was intact. Each new textile machine costs about a million dollars. If there had been a hit, it is unlikely that we would have been able to recover so quickly.
Yes, it was just an echo. We changed the wiring, motors, some parts of the machine housings, but the main equipment remained intact.
The laboratory, where templates for printing machines were made, was significantly damaged. In general, the company suffered about 60 thousand dollars in damage. This does not include construction work, because we spent most of the money on restoration.
R: When you say 60 thousand dollars, do you mean direct losses from the destruction of products, semi-finished products and other materials?
V: Yes, this is not including buildings and structures.
R: Without capital works?
V: Yes, without capital works!
R: And how much did you spend on them?
V: We spent 2 million hryvnias on raw materials and the actual employment of builders. Much was done on our own. If we had hired another organization, the repair would have cost us 4 million hryvnias. But we did a lot on our own. The company is large, it employs about 100 people, there are fitters, builders and other professionals.
R: And electricians?
V: And electricians, we have them all. Therefore, it cost us a little bit less, but in general, 2 million hryvnias were spent on the restoration of the building and facilities. We did not do as it was before, but we brought everything to a working state. That is, people started to return to work on April 10-12.
R: Is this after the liberation of Chernihiv region?
V: Around March 23 or 24, the bridge over the Desna River was destroyed and Chernihiv was cut off from the routes of movement. But around April 10-12, people began to return to the enterprise, put everything in order, sweep, clean, remove debris, repair equipment. At the same time, we started purchasing materials, looking for builders, and at the end of April the company started working [again]. There were big holes in the roof: one hole was 4m², and the other one was 6m². The 6m² hole was hit by two shells. That is, we have two holes in the roof and 3 hits. As people say “A shell does not hit the same place twice”, but in our case it happened. They hit the gap first, then another shell hit the same place. Not nearby, thank God, otherwise the damage would have been much greater.
R: A third more.
V: Yes! By the way, I have photos, I will show them to you. How it all looked with all the debris, with parts of shells. Today we smile talking about it, but when I remember the beginning of March…
R: Weren’t you afraid that they would come back when you were starting to restore everything?
V: We are afraid even now, and we were afraid then. But we did not go anywhere, we stayed here and were not going to change our direction. None of our company’s managers, owners, or directors left the country, everyone stayed here. And there were never such plans, we always believed that the victory would be ours. And if you sit back, as many did at that time and say, “No…,” then…
By the way, there are many enterprises in Chernihiv that are still destroyed and are not being restored.
I had meetings with some owners, I told them, “Why don’t you do anything?” and they answered me, “Now I will repair it at my own expense, and who will compensate me later?” So, they sit and wait, they have fired people, their enterprises are not working.
R: I understand that they helped you a lot.
V: Yes! They did so because they also understood that they had to continue living and hope that the enemy would not come to Chernihiv again.
In a nutshell, I told you about our enterprise in Chernihiv. Thank God, in Odessa, in Kyiv, we restarted working everywhere during the first days of the war. For example, in Odessa, we returned to work on February 28, in Kyiv on March 1. Everything around us was exploding, and the seamstresses put on headphones and listened to music so as not to hear the explosions, and they continued to sew. When we chased them away with the words, “Leave, what are you doing?”, they answered, “It’s worse at home. Here we are all together, it’s not as scary as at home.”
R: That’s a very interesting story! Tell me, please, did you manage to fix all these damages? Are there any open implementations? Do you plan to do something with all this further?
V: We recorded the damages only by way of our employees, who took videos and photos on their mobile phones; we have acts drawn up by us, our economists, our financiers, that is, and the material damage was recorded only within our company. When we tried to appeal to the police in late March-early April, well, first of all, there were practically no police there, because everyone, apparently, had gone to the territorial defense or to the front. We tried to apply several times in April, and we were told, “Guys — hospitals, schools and kindergartens were damaged here…”
R: They had no time for you?
V: Yes! And for the next month no one would come to us to record anything. Therefore, we could not officially record the damage at that time, before the repairs began. We decided to put everything in order, take it out, clean it up, invest money and make repairs.
R: And then restore everything?
V: By the way, what is very interesting is that some leaders continue to twiddle their thumbs, and we continue to buy materials and make repairs. Over the summer we bought more than one piece of equipment in Poland, from some enterprises in Ukraine, and brought it to Chernihiv. We mounted, relaunched, and with the beginning of the war — contrary to expectations — expanded production by importing used equipment from Europe to Ukraine and successfully implementing it. It is now producing goods. We also have plans for significant investments and our bankers support us, they are ready to lend to us in principle. We have convinced them. There are also potential investors, although they are still afraid, but they are also interested. We want to considerably expand production, purchase new equipment, modernize, and expand our area of production.
R: I wish you good luck in that direction.
V: Thank you.
R: And one last question: Will Ukraine win?
V: There is no doubt! Even if there were doubts, I would not leave Ukraine. I do not see myself abroad. Of course, I am a person who will not starve to death there, I will always find something for myself. But I do not want to go anywhere, I feel comfortable here, it is good to live in my country. Plus, I want to do everything to make this war end as soon as possible and to win it. I hope that in 2023 we will celebrate the Victory!
R: Great! Thank you very much!
V: Thank you!
Yurii Filipov, CEO, Darnytsia Railcar Repair Plant (DVRZ)
Resisting russian aggression // DATTALION Interviews // Darnytsia Railcar Repair Plant (DVRZ)
As a CEO for the Darnytsia Railcar Repair Plant (DVRZ), a branch of the Ukrainian Railway and a specialist in railcar building and repair, Yurii Filipov was on track to play a major role in one of President Zelensky’s newly announced programs to modernize the country’s infrastructure.
However, on February 24, DVRZ began housing the district’s 1,500 residents in Soviet era shelters on the property built for nuclear war, becoming one of the safest places in Kyiv. Yurii and his team jumped into action as russia began attacking Ukraine’s railway infrastructure on a daily basis by repairing railcar fleets and grain carriers.
On June 5, DVRZ was the target of a heavy missile attack resulting in key production buildings and the water supply unit being reduced to rubble. While it’s difficult to estimate the cost of damage, it’s even harder to estimate how and when DVRZ will receive the funding needed for repairs to function at full capacity again. It could be years or decades. Remarkably, DVRZ has yet to miss a monthly quota and Yurii is confident that one day he’ll fulfill his dream of building high-speed trains from the plant.
Reporter:Mr. Yuriy, thank you very much for your willingness to meet with us, and let me officially ask you to allow us to record this interview for further publication on the internet and social networks.
Yuriy: I don’t mind.
R: Great! Please tell us about your business: What was it like before the full-scale invasion, before February 24?
Y: Darnytsia Railcar Repair Plant (DVRZ)) is a key enterprise in the market that specializes in railcar repair, including railcar building. The enterprise has mastered the construction of new gondola freight cars. Initially, it was created in the Soviet era as a repair enterprise. Then, the challenges of reality pushed us to venture into new products and build something. The enterprise mastered the construction; this is the main area.
The company previously employed about 2,000 people . Gradually, since there were fewer orders in the country, even before the war, there was a staff cut, and people left. At the time of the invasion, this enterprise was fulfilling its goal of repairing about 50-60 railcars per month. It repaired mainly gondola cars of its own fleet. It is a full-cycle enterprise that has main workshops and auxiliary workshops for the production of semi-finished products for basic needs.
The company employed, well, and now employs, about 700 people–that’s how we were on February 24. That is, if not for February 24, the company would have been a key participant in the President’s “Big Construction” program, which started at Ukrzaliznytsia.
However, people did not give up. We concentrated on what we can do – the enterprise provided assistance to our defenders to solve everyday issues (e.g., food needs), and providing other feasible assistance to local authorities, hospitals, and schools.
On February 24, about 1.5 thousand people — residents of the district — were standing near the plant, asking to go to the bomb shelter on the territory of the enterprise. I can say that the enterprise at certain point of time was at the second place in Kyiv for the quality of the bomb shelter.
R: So, you have your own bomb shelters?
Y: Yes. There are shelters. They were designed back in the Soviet era in case of nuclear war. So, these are capital structures.
R: Were they used as bomb shelters or as a warehouse?
Y: No, they are just shelters, but without the word “bomb”. They are radiation-bomb shelters. I decided to let in the residents of the area, both employees and non-employees of the enterprise. First priority was given to women, the elderly, and children. We also organized what we could: food, water, and first aid.
Around the enterprise, district residents formed an initiative and also participated in solving some issues, such as protecting the security of the enterprise. We have a lot of employees who are non-residents (for example, security guards who come from villages by train to work). On February 24, when everything happened, the trains stopped running. Accordingly, those who were at the enterprise were stuck there. Those who did not come to work were stuck at home. Therefore, among the employees of the enterprise and some of the residents of the district — who were once employees of the enterprise — there were brigades with different roles, such as protecting the enterprise, controlling passage, and monitoring the procedure for remaining in the bomb shelter.
If we talk about strong companies, they are, first of all, about strong people. I am proud of the strong people who work in this company. They work at enterprises, work at middle levels, work at higher levels. [Our company is strong] because of all of these people who have been able to work under crisis conditions, to make decisions, to implement those decisions, and to sacrifice themselves for the sake of a great goal. This is to save not only themselves, but to save something bigger. They think not only about themselves, but about something else, about others.
Many different people came in, and we realized that a sabotage and reconnaissance group could break into the bomb shelter, so it was necessary to check people’s identities.
Therefore, we carried out joint procedures with the police and checked the people who were allowed to come in. This process had to be organized. I believe that we coped with this task at the first stage [of operations].
We did not stop production. Yes, we did not build anything, but we repaired the railcar fleet. There was a great need in Ukrzaliznytsia, including the repair of grain carriers. During this time, before the missile and bomb strike that took place on June 5, we mastered the process of overhauling and extending the service life of grain carriers, well cars [container cars], and universal platforms. We expanded our ability and our services in order to work in the market repair grain carriers.
R: Is this repair of grain carriers related to the fact that Ukrzaliznytsia exported some part of the grain?
Y: Yes, among other things. A grain carrier is a seasonal product. Ukrzaliznytsia has always managed with the planned volume of repairs that it carried out at other enterprises. However, due to the naval blockade [in the Black Sea], a lot of grain appeared either as a storage facility on wheels or as a commodity for export. This required additional, and many times larger, volumes of grain carriers. Accordingly, we mastered this [production] and started to do it.
On June 5, 2022, 5 cruise missiles were fired at the enterprise. One was shot down, so it did not reach the enterprise and fell somewhere in the forest. Four flew onto the territory of the enterprise. Five workshops and a water supply unit were destroyed.
In the aftermath of the strike, both the workers of the plant and the initiative group of district residents, who are not indifferent to the fate of the enterprise, organized brigades to dismantle the rubble. Everything had turned to rubble. They began to dismantle bricks, metal, etc.
It took us 3 days for the enterprise to restore production volumes, even though most of the auxiliary production was destroyed. In the dilapidated workshops, where there was access to equipment and materials, we were able to dismantle that equipment and install it in new locations. We grouped and transferred part of the staff from the auxiliary production to the main production. Thus, even in June, we were able to fulfill and exceed our plan. Since then, the company has only continued to do so. There was not a single month when we did not fulfill our quotas and goals. We are moving forward, looking confidently into our future.
R: Please tell us about this shelling. Did it happen at night? Were there people? Were they injured?
Y: It happened at 6 AM. There were 32 people on the territory of the enterprise at that time: security guards, people on duty, specialists dealing with the gas supply, electricity supply, and dispatchers. One of the victims was a security guard. His face was cut by glass fragments. He was taken to the hospital, and the wound was sutured, but he refused to be hospitalized. Thankfully, that was a minor injury and the rest of the people were not injured.
We reckon people were not injured because, since February 24, we have been very careful to ensure that the workers at the enterprise immediately go down to the shelter during air alarms. There was one rule and it was simple: If you didn’t go down, you are fired.
R: : So, everyone was in the shelter at the time of the bombing? The rest you had already fired.
Y: Well, we didn’t come across such people.
R: : You mean people followed the rule?
Y: Yes. Well, there may have been just one case [of someone not following the rule]. The rest of us treated it with understanding. Although at first, perhaps, there was a perception that, “I am at home during the air raid, I am not hiding anywhere”. Nonetheless, our position is as follows: “At home you can behave as you like, here you are at work, and the administration is responsible for you”. Therefore, when the siren started, people went down to the shelter and when there was a rocket and bomb attack on the enterprise, there were no significant injuries.
R: Okay. How do you assess the scale of damage? I understand that so far you have not made an examination, and it is difficult to calculate, but at least approximately. I think you, as a specialist, can tell the cost of the damage.
Y: I would refrain from specific figures. A person who does not understand the nuances of the enterprise can simply name damaged things: machines, equipment, buildings, and structures. But if you look inside, there is also a lost profit: How many valuable products could we have produced with this equipment, in these buildings and structures? If the war and shelling did not take place, how many new products would we have produced, which we should have produced according to the President’s program? Therefore, this is definitely a large amount, which will take into account both direct losses — directly in the terms of the destruction of non-current assets — and losses that include profits that we should have made but did not. We were striving for something, investing in production, in new jobs, in new technologies in order to create new products.
Therefore, we are now at the stage of selecting a licensed professional appraiser. This assessment will be carried out through the ProZorro procedures, in order to further file a lawsuit in international courts against the aggressor.
R: Whom are you going to sue? Through which court?
Y: It will most likely be a complex action in both Ukrainian and international courts.
R: Ok. That is, you will prepare a claim or many claims that will cover direct damages caused by the missile strike, plus indirect damages related to lost profits, etc. Accordingly, you will make an appropriate assessment and have some kind of calculation with which you will go to court. The defendant in this lawsuit will be russia, right?
Y: The russian federation.
R: As a state?
Y: As a state.
R: Will It be a direct lawsuit against the aggressor state?
Y: We are not sure whether it will be directly the branch of the Darnytskyi Railway Car Repair Plant or JSC Ukrzaliznytsia that will file a complex lawsuit. A final decision on this will be made in the future. Now, we are talking about preparing for this process. We are preparing a comprehensive package of documents with all independent assessments, calculations, conclusions, and so on. In the future, yes, it will be a trial with the russian federation.
R: This is an interesting question, by the way, because I talked to representatives of another business and they, for example, believe that the compensation should be paid by the state of Ukraine. Another question is how the state of Ukraine will receive this money from the russian federation. Well, perhaps there is another mechanism, which is to go directly to the russian federation. There are some people who think that this should be done by the state of Ukraine by extracting reparations from russia and then compensating the business on behalf of the state. What do you think about this?
Y: I believe that the one who caused the damage should definitely pay for it. If we are talking about the state of Ukraine, then we as a state-owned company, and as a business in Ukraine, believe the main task for the state is to create conditions for further business, including recovery, etc. Specifically for the losses, in my opinion, the one who caused these losses should pay.
R: You mean the direct aggressor? The one who destroyed half of your company with missiles should pay.
R: If we are talking in some numerical percentages, what is the percentage of the enterprise’s capacities that were destroyed as a result of this rocket attack?
Y: It is difficult to estimate in percentage terms because, roughly speaking, what the auxiliary shops produced was a unique refinement of specific types of semi-finished products. That is, this is something that you can’t just buy on the market.
Many enterprises have auxiliary production in order to finalize some things there, to show an individual approach to some things. Therefore, it is difficult to answer how much we have lost production capacity in this context. But we have definitely lost [capacity].
R: Well, you don’t want to give any figures. [That’s fine]. Just for understanding, though, would you say 10-20%, 20-40%, etc.? You don’t need to be very specific. Just an idea for understanding.
Y: What we stopped doing, definitely someone needs to start doing it. Who will do it, depends on investments, how much…
R: So, a certain production cycle has been broken?
Y: Yes, that is, it became more difficult for us to do. We have replaced one thing with another. We have adopted some equipment for the products that we produce on another type of equipment that was destroyed. However, this requires additional non-standard approaches, skills, and experience.
R: Accordingly, it becomes more expensive, most likely.
S: It becomes more difficult..
R: Harder is always more expensive.
Y: It depends. Well, what is more expensive? We see the inflation rate in the country. Depending on the fact that we are losing a lot of basic assets, urgent replacement is required either by imports — where there are currency rates — or there is consumer inflation. So, yes, something is getting more expensive.
R: Okay. How do you imagine this process of preparing claims and assessments — how long will it take?
Y: For the quality preparation of such a [large] volume of documents, it will take at least a year. This is to prepare qualitatively. Well, we can say from six months to a year.
R: Will you file a lawsuit as soon as you are ready, or will you wait for the day of victory?
Y: Well, why wait for the day of victory? Until the day of victory, penalties may accumulate.
R: Yeah, the sooner you file, the …
Y: Well, I think that it’s not just for the record. There should be a shot here; and a shot to the head.
R: And from a thousand Ukrainian enterprises at the same time.
Y: The concrete result depends on the quality of the prepared material.
R: By the way, do you think it will be a specific process or a standard one? Well, I have an idea, but I am not an expert in this. At some point these international courts, including the ECHR and others, will be overwhelmed with these lawsuits — yes. That is, an international lawyer in a month or three — as we get closer to victory — will be absolutely invaluable in Ukraine, because someone has to collect it all, and prepare these lawsuits. There will be thousands of lawsuits. Well, some large enterprises told me that they are preparing between 100 and 200 lawsuits for various kinds of losses. Do you think it will be a separate process, for each of them, or eventually some special court will be created, well, like the Nuremberg Tribunal over the Nazis. A special court may be created to deal with claims from Ukrainian businesses against Russia. Because I simply cannot imagine a system that will be able to consider such a number of claims, in principle.
Y: Based on this, the most likely conclusion is that there will be some kind of special proceedings. Perhaps, within the framework of the United Unions or the International Criminal Court. There will be a separate criminal court and a separate arbitration court.
R: Okay. Two more questions. Most likely, as a result of the war, Ukrzaliznytsia lost railcars and, most likely, those that are still in operation now require more repairs. We can predict that from the moment of victory and the restoration of railway communication with the currently occupied territories, the demand for the your company’s products will increase significantly. [Railcars] will need to be repaired. Are you ready to meet this demand? Will you plan any preparations for this moment? Any additional investments in the restoration of what was destroyed?
Y: I will say that we, as a team, perceive what happened in June as a challenge. A challenge for our future, a successful, good future. This does not give us the right to retreat, does not allow us to say, “Well, whatever happened, happened” and we did not sit down, cry and forget. No, we sat down, rolled up our sleeves, and went back to work.
Today we are working on a project of the modern reconstruction of this enterprise. Of course, it will be after our undisputed victory. But, nevertheless, until then, there is also a long period of work, which is design work. We proceed from the fact that modern business should be based on the principles of being fast, cheap, and high-quality. There must be balance. Also, modern realities suggest that it should be exclusive.
We are considering the reconstruction and creation of modular production facilities, to simplify the logistics chain of internal production and complicate the products. Most likely, we will go into mastering other innovative types of products in the future.
R: For example?
Y: My dream is to make high-speed trains.
R: Like the Hyundai express?
Y: Yes, like Hyundai. Why is it believed that Kriukiv Railway Car Manufacturing Plant in Kremenchuk can make electric and diesel trains, but we cannot — we only make freight cars? We used to make passenger railcars, including covered railcars. We even had experience in repairing electric trains. That is the whole range of rolling stock. It can be modern trains, modern subway railcars, or suburban trains — better put, high speed trains. Why not? If you invest, then invest in something new.
R: I understand that you will not tell me any figures, so I will ask you this: Do you think that the amount of compensation or reparations that you will receive from the aggressor country will be enough for you to realize your dream?
Y: I will tell you why you should not only focus on the numbers. I don’t want the numbers to make your head spin. [The numbers are] just a calculated figure that will be presented to the aggressor. The question is to how get this money. The mechanism of recovery is very important here. We understand that courts are one part of the issue that can last for years.
R: If not decades.
Y: We hope not decades.
R: Well, they were investigating the MH17 crash for eight years.
Y: Maybe now there will be political will to speed it up. However, all this still needs to be collected somehow. From what we hear in the media about how many assets of the russian federation and private russian businesses have been seized or frozen, it is clearly not enough. These are not the figures that can be paralleled with the damage caused to the [Ukrainian] state and, in particular, to business.
R: More than $350 billion were seized, as far as I remember. These are the assets of the Central Bank of the russian federation, their reserve.
Y: Yes. [I have also read somewhere that] up to $100 billion of business funds in Europe [were frozen].
R: Well, okay, $450 billion.
Y: Well, we understand that this is not enough. There is a huge amount of destroyed housing, roads, bridges, airports, and infrastructure. And what about the energy sector?
R: And how do you think we will get this money from Russia? What is the mechanism?
Y: I hope with our heads held high (laughs). I am not prepared to discuss how we will receive it. Hopefully, we will receive it somehow — there is no other way. Anyway, you can’t do that in the 21st century — come, break everything, and leave saying, “I was wrong” or “I was not wrong”.
R: Okay. Now for the last question. What will you do after the victory? We do not know when and we do not know how, but this beautiful day will come.
Y: I will work four times more.
R: How? Will you spend the night here?
Y: If it will have an effect, it can be done. In any case, after the victory, the need for this enterprise and Ukrainian business, in particular, will increase significantly. That is, we will need to produce more products. It will be necessary to master new products, which we temporarily lost due to the hostilities. Therefore, there will be a lot of work. I will be working a lot.
R: That’s great! Thank you very much! If you want to add something or say something in the end, please.
Y: I wish all of us a peaceful sky and a speedy victory.
Svitlana Romanova, Head of Legal, Metinvest
Steeled to Survive / DATTALION Interviews // Metinvest
Svitlana Romanova, a lawyer at Metinvest, has helped her company and its subsidiaries survive russian aggression since 2014. In 2021, Metinvest was the world’s 42nd largest steel company and the largest private company in Ukraine. Its vertical integration model has allowed it to expand operations into mining, metallurgy, the service sector, logistics enterprises, and even the production of coke chemicals.
Since the first day of the war, Metinvest’s Azovstal and Ilyich steel plants in Mariupol have served as vital bomb shelters for Ukraine’s military heroes and civilians. Steel once used to construct monuments was instead made into bulletproof vests, protective structures for trenches, and anti-tank hedgehogs. The company established a partnership with the Rinat Akhmetov Foundation to help over 6,000 internally displaced people, coordinated evacuations from Mariupol, provided equipment to hospitals, and purchased vehicles and defense equipment for the Ukrainian Armed Forces.
According to Romanova, the biggest motivator of the Ukrainian people today is unity, which has driven Metinvest’s ongoing charitable work. However, with over 1,455 instances of damage since February 24, and over USD $2.6 billion in losses, unity alone will be insufficient to restore Metinvest’s operations to their former glory.
Journalist(J): Ms. Svitlana, good afternoon! First of all, thank you very much for agreeing to this interview. I would like to ask your permission to record it for further publication on the Internet and social media.
Svitlana: Thank you for the invitation! Of course, I agree, and I will be happy if your readers and viewers will see, listen to, and read everything that we discuss today.
J: Great! Then please introduce yourself and tell us about your company before the war.
S: My name is Svitlana Romanova, I work in the Metinvest Group as a lawyer—or legal director—and this is my eleventh year with the company. In 2014 we moved the company from Donetsk when the first russian invasion took place. This year we are still standing with the company, trying to save the company, leading it forward, and hoping it will continue to work.
Now, about Metinvest and what the company does. Well, first of all, it is one of the largest and most powerful companies in Ukraine. In 2021, Metinvest was included in the list of the world’s largest steel companies. We were ranked 42nd out of 50. We were producing more than 15 million tons of steel per year. In the same year , we were among the 10 largest iron ore miners in the world. According to Forbes, we are the largest private company in Ukraine.
The company was built as a vertically integrated company, including many smaller enterprises. These cover the mining industry, metallurgical cycle enterprises, coke-chemical enterprises, service enterprises, logistics enterprises, and more.
I personally believe that Metinvest is the pride of our country. Each of us—not only the employees of the company, but each Ukrainian—should be proud of how we are represented in the world [by Metinvest].
Huge world facilities are built from our steel. The Shard, the tallest skyscraper in London, is made of our steel. The world’s largest sailing ship, the Flying Clipper, is made of our steel. Huge navigable ships are built from our steel. Major infrastructure projects are built from our steel. In particular, in Kyiv, the Olympic Stadium, the Glass Bridge and a lot of other monuments were built from our steel, which you can learn about by visiting our website.
J: What happened to your business after February 24? I know that a lot of businesses are concentrated in the east of Ukraine, particularly in Mariupol.
S: Yes, unfortunately. Those who didn’t know about Azovstal before February 24 found out about it thereafter. In fact, Azovstal is one of the oldest enterprises in the country with almost 100 years of history. It is a huge metallurgical production site that was built in Mariupol, where Ilyich Iron and Steel Works are as well. These are the two most important steel producers in Ukraine.
Being a company, or a nation, or a Ukrainian, we cannot forgive what happened in Mariupol. This is something that is not forgotten.
Thus, Azovstal has become not only a manufacturer of quality steel. Azovstal used to support our country during the German invasion [in WW2], producing steel for armor and helping with other military needs. Today, Azovstal is an example of courage, bravery, and resistance on a national level. We are proud that this enterprise belongs to the Metinvest Group. We are proud that this enterprise protected civilians and infrastructure while sheltering our employees, their families, and their children in bomb shelters during the first days of the russian attack [on Mariupol]. We are proud that our defenders held the defense to the last man at our enterprise. We are proud that this enterprise, even if its history is over, died with dignity. We cannot talk about this calmly, because this is not only the history of the enterprise, not only the history of the equipment, not only the history of any location or place. This is the story of thousands and thousands of people. Those who were there before us, who worked with us. This is the history of thousands of families; this is the history of dynasties. This is the history of the whole city. This is a huge story.
We prepared the enterprise, we preserved the enterprise, we hoped and continue to hope that our enterprises in Mariupol will be rebuilt, restored. From the first days of the war, the enterprises were passionately discussed. We thought about the possible consequences of a sudden shutdown of the enterprises. We were preparing and trying to protect both our hometown and the environment from disasters, emissions, and irreparable disruptions in the production cycle. We took care of our enterprises and prepared them for the worst. We really do not have access to the city today. We do not know whether the damage to our production is repairable or not, whether it can be rebuilt or not. Nonetheless, we have high hopes.
In Mariupol, of course, Azovstal is an enterprise that everyone knows about, that the whole world knows about. But, unfortunately, other huge historical enterprises such as Ilyich Iron and Steel Works—our other enterprises—and such as the Mariupol Mechanical Repair Plant and the Promservice repair enterprise (a Mariupol branch of Metinvest) have all stopped working in Mariupol; it is also the case with several other, smaller companies.
Even as I am talking about enterprises, my emotion is not about them. My emotion is about the people who survived in Mariupol, who left Mariupol on foot. It is about the people we evacuated, rescued, took out of the city, and continue to evacuate. We continue working with those people, doing everything possible to ensure that their lives go on, that their history with the company continues, that their stories live on.
As of today, the company, unfortunately, has already lost 501 employees, as well as our employees’ family members, including their children. They have died, unfortunately. Out of more than 500 people, 140 are people who gave their lives in the ranks of the Armed Forces of Ukraine. The rest are civilians. They are children, and more than 20 children of our employees were killed; the youngest was less than a year old.
We remember, care about, and try to help not only those who have lost their lives. We have almost 600 wounded, 600 people who have suffered, and not only in Mariupol. The Metinvest Group’s activities are not only concentrated on Mariupol. There is also Avdiivka, which is suffering. Avdiivka Coke Plant, the largest coke plant and the largest coke production facility in Europe, is currently suspended. Our group reaches Zaporizhzhia, which is currently holding the line very close to the front. Our group is in Kryvyi Rih, Pokrovsk, and Kamianske. We have a huge presence across Ukraine and we take care of all the people who work with us, and their families. We are trying to help them once again to restore their lives after the horrors they have experienced. We provide housing, medical care, psychological assistance, and, of course, financial assistance; all this concerns employees. However, our assistance as a company is not limited to employees in these difficult times, because not only our employees deserve help. We are only a force together. It takes everyone: the residents of Ukrainian cities and non-Ukrainians who live in, work in, and defend our country today.
J: Ms. Svitlana, you said that you were preparing and trying to protect the enterprises. I understand that after February 24, realizing the level of threat, you tried to stop the environmental disaster and somehow safely shut down these enterprises.
S: Unfortunately, we all remember very well—even too well—the morning of February 24. Speaking about my personal experience, on that day I was in Kyiv at my home and I awoke from these sounds at 5 am, realizing the essence of what was happening. At 6 am I came to the office, and not only was I there, but so was the whole management. We had a crisis meeting. We made a number of quite important decisions. One of those decisions was to stop the production in Mariupol, to prepare the production for hot preservation, for safe preservation of production. This was to protect from environmental consequences, in order to ensure a safe transition to a quiet course. We did this to make sure that when we could, we would safely, quickly, and efficiently restore our production. So, on February 24, when all of this happened, and it happened primarily in Kyiv, we, as a management, understood that we needed to prepare for a number of other risks, including the risk of a sudden shutdown of our operations.
Since Mariupol has been almost on the frontline since 2014, close enough to the so-called “DPR” [Donetsk People’s Republic], we understood that there was a threat of an attack on Mariupol. We realized that on February 24, when we felt that it had started.
If we talk about strong companies, they are, first of all, about strong people. I am proud of the strong people who work in this company. They work at enterprises, work at middle levels, work at higher levels. [Our company is strong] because of all of these people who have been able to work under crisis conditions, to make decisions, to implement those decisions, and to sacrifice themselves for the sake of a great goal. This is to save not only themselves, but to save something bigger. They think not only about themselves, but about something else, about others.
All these people were preparing the enterprise not only in terms of the enterprise, not only in terms of the equipment. We were preparing bomb shelters, we were thinking about bringing food and medicines. We communicated with our employees, we asked them to move to safer places, to hide in bomb shelters, to bring their family members, to bring their children there. Thanks to this, many of our employees were able to escape, were able to survive, and were able to save their families.
J: I understand that the guys stayed there for quite a long time because there was something to hold on to.
S: I really hope so.
J: You have a lot to be proud of. Thank you! I know—as everyone, as the whole world knows—what Azovstal is. It is a synonym of courage, resistance, invincibility. However, there is very little talk and even very little information on the internet about Ilyich Iron and Steel Works, which was the second largest [steel plant] in Mariupol. In fact, it is also a huge facility. Please tell us what happened to them. Everyone knows about Azovstal, that there is nothing left there. What happened to Ilyich Iron and Steel Works?
S: If you look at a map of the city, even a person who is not well-versed in some more specific topics, you will see that Azovstal is in the south, on the seashore, and Ilyich Iron and Steel Works are located in the north, a little further away, in the direction of Donetsk. Accordingly, when the massive offensive took place from the sea, Azovstal held the defense—it was the first in line. Ilyich Steel, we hope (again, we don’t have enough access [to be certain], but we hope) suffered less. What we know is that for a long period of time a huge number of people were in the bomb shelters of the Ilyich plant. Their vital needs were provided for by our employees: The heads of shops who heroically rescued children, fed, brought water, provided medicines, and then brought them out of the bomb shelters and tried to save these people, providing ways to get out to the unoccupied territory—to the territory controlled by Ukraine. This is a separate story about our efforts to provide safe corridors. This is a story about repeated agreements, about the green corridor, about the violation of those agreements by russians, the other side.
J: You mean you, as in Metinvest?
S: Yes, we as a company tried to work with our Armed Forces. Of course, we did not [participate in negotiations with russians], but we provided transport, communications, and fuel [to Mariupol residents and the Ukrainian Armed Forces]. We are very used to a comfortable life in general. For us, the availability of mobile communication, the availability of fuel is something that is taken for granted. These are things that we are used to, and we do not understand how to live without them.
Mariupol residents know what it is like to live without all this. Mariupol residents know what it is like not to have fuel to leave the city. Mariupol residents know what it is like to walk out of the city on foot. Mariupol residents know what it is like to walk without a road, just to walk. Mariupol residents know what it is to have no means of communication, and we know what it is to have no communication with our employees. We know what it is to try to dial people, when you dial, dial, dial people on the mobile, again, and again, and again. Hoping to hear at least some signal. Hoping for at least one single word, “I am alive”.
So, yes, as a company, we have made many, many efforts to help these people get out, to help these people survive, to help these people find that way to freedom, to life, to safety.
J: Did you take a lot of people out?
S: A lot. We evacuated and helped many people. And this is not about whether someone is our employee. We took people out not only from bomb shelters. We had a huge communication campaign about the location where the buses would be waiting. Of course, we could not go to Mariupol, so we gathered people at the points we could reach. The information was constantly changing, the circumstances were constantly changing. It was a bit of a word of mouth, but, again, we did our best to help, to evacuate and save those people. We took them, first of all, to Zaporizhzhia, to Kryvyi Rih, where we arranged more than 6,000 places for temporarily displaced people. We provided housing, helped with food. In general, we helped not only during that time. We continue to do it now. We have our own humanitarian headquarters, and work together with the Rinat Akhmetov Foundation. We help not only with food but also with hygiene products: we put together packages and deliver them to the places where people are most in need. We help hospitals, which is a separate huge program that provides not only medicines but also medical equipment.
Our history of cooperation with the Armed Forces of Ukraine is a separate story. Overall, we have spent more than UAH 2 billion to help the civilian population and the armed forces. Of these UAH 2 billion, if I am not mistaken, UAH 1.4 billion is only for the needs of our army.
As a company we are re-profiling, in these times we have learned to produce special steel for armor. We produce plates for bulletproof vests. We produce protective structures for trenches. More than 75 thousand anti-tank hedgehogs were manufactured from our steel.
In general, we are engaged in the purchase of various kinds of equipment. We have transferred 268 cars and 20 ambulances for the needs of the army. We continue to purchase bulletproof vests, and so far we have supplied more than 150,000. Also, we have purchased 23,000 helmets. We are working on the purchase of thermal imagers, and we have bought and delivered 1,750 thermal imagers, 800 drones, 100 radios, etc. The list is quite long, and we continue to work on it all, to help.
But, as I said, it’s not only about money, it’s about the emotion with which everyone does it. It is about the emotion with which people do all these things. They make this steel, make these plates, purchase, consult, and solve legal, financial, organizational, logistical problems.
If I, as a manager, had been asked some time ago what the biggest motivator of my employees was, I probably would have had a different answer. Today, the biggest motivator is unity. The unity of us as a nation, as Ukrainians. Unity for the sake of victory. I am very proud that we as a company have been able to unite with each other. Also, with [all] Ukrainians. It is about unity. So, yes, money is important, and we spend a lot of money. However, the most important thing that we do, I think, as a company, is unite this country. We really unite it.
J: Someone once told me that no one has done as much to unite the Ukrainian nation as the russian federation. But let’s talk a little bit about money. Look, it’s a huge business, it’s billions, and I would really like to hear your estimate of what (roughly – we understand that it’s impossible to estimate exactly) your direct losses are, from what russia has done to your business in Mariupol and other cities. At some point the flag of Ukraine will appear in Mariupol, at some point Metinvest will go there, to its office or whatever is left of it and say: “We are rebuilding it”. And the question will arise: how much does it cost?
S: You know, here we’re going to talk about something that is actually done by, well, not only lawyers, but other employees of the company. This is the documentation of the damage caused. As I said, unfortunately, for us as a company this is not the first experience of evacuation, this is not the first experience of such a crisis. Accordingly, it seems to me that we were a little bit more prepared—psychologically—than others for what awaits us. Because we survived 2014. Because back in 2014 we were preparing for martial law, we analyzed, prepared algorithms of actions, etc.
When February 24 took place, firstly, we were shocked, it was the first wave. We already knew what we had to document. We already knew that we had to work. [We knew] there is no time to waste. Otherwise documents disappear, certain facts are lost, unfortunately, people and witnesses die. Accordingly, we had to work. We started documenting the damage back in March. As of October 1, we have almost completely documented all the damage in Mariupol. Almost 300 people worked on this project, a working group of 300 employees. Why so many? Because you think: “God, why so many people?”. Imagine these huge enterprises, imagine the amount of property, both movable and immovable. We have documented almost 6,000 units of real estate. If we talk about movable – about 4,000 units. If we talk about the fact that all these efforts had to be made in the absence of title documents, in the absence of communication, in the absence of all the property was not accounted for in one way or another. It was also necessary to restore the picture, restore the plans of the enterprise, restore the drawings, restore financial, accounting, and legal documents. To date, we have drawn up 1,455 acts of damage, acts of destroyed property.
When I say act, probably everyone thinks that it is a piece of paper with two signatures on it. No, it’s not. 1,455 acts equal 124,000 pages. 124,000 pages of description, pages of documenting what exactly was damaged, how exactly it was lost and what the assessment of all this is.
Thanks to those efforts, the damage is documented according to the accounting data, and the exact residual value (I emphasize, this is only the book residual value) is more than UAH 96 billion.
J: Roughly USD $2 billion.
S: This is just the residual book value. We are not saying that lost profits should be added here, other losses should be added here. This is not the amount that we are actually talking about. This is not the amount of fair assessment of the damage that has been caused. This is only the data of the residual book value of accounting.
J: That is, the price of recovery will be many times higher.
S: At times. Today we are moving to the next stage of our work with the damage – we are determining the damage with the assessors. We need to make an economic assessment of everything that has been damaged, everything that we have lost. So now we have documented it, but the amount of fair assessment will be determined by economic calculations. This is our next step, on the threshold of which we are standing.
Despite this, so far we have already submitted 19 applications to the European Court of Human Rights (ECHR). We expect the movement of those applications, we expect some progress in that direction as well. In general, of the affected enterprises of the group, we are talking about the damage caused to 21 enterprises. This means not only the Mariupol enterprises, but also our enterprises in Avdiivka, Zaporizhzhia, Kryvyi Rih, Pokrovsk and Kamianske. These are our enterprises all over Ukraine. All over Ukraine, because the war cannot concern some and not others.
So, the work continues and we are confident that we will get there, that we will receive [compensation] not only as a private business. We will get it as a nation, as a country, fair compensation for everything we have gone through. First, the people who suffered it firsthand will get it.
J: Who is responsible for your claim? Whom are you suing?
S: Of course, these are people who give orders that contradict international law, that contradict the laws of conscience and morality, and, in general, contradict common sense. In the ECHR, respectively, the defendant is the sovereign. There is a country that is a party to the Convention, according to which this court was established. That is, there we are talking about the defendant-sovereign, the russian federation as a country. Still, we are thinking about how to bring specific individuals to justice. Now it is a matter of analysis, now it is a matter of imperfection of the global legal mechanism in general.
But we already know that on November 14 there was a breakthrough, we received the resolution of the [UN] General Assembly, thanks to our diplomats, thanks to the work of our entire state apparatus. This is also the basis for our capabilities. This is the step that will help us as a private company. We hope to reach the results, the compensation that we all deserve. The United Nations General Assembly resolution actually confirmed russia’s obligation to pay reparations.
J: Please tell us, there is a well-known story that the last batch of Azovstal’s metal was used to make bracelets that are sold through UNITED24 to raise money to help the Ukrainian army. In a nutshell, can you tell us how the idea came about, where this steel came from, and how you made the bracelets or who made them?
S: You know, for people who don’t deal with manufacturing, let alone metallurgical manufacturing, it’s not really clear. For most of our people, it’s just steel, it’s just a metal from which bridges are made, from which some other things are made, and buildings are built. For those who work in metallurgy, it is another thing. Steel has a soul, it has strength, it has energy. This energy, this power is symbolic. It inspires, it gives support. I think we wanted this support and this power to be felt not only by us. That is why we came up with the idea to use steel from one of the last pre-war shipments of Azovstal to help our army. We came up with the idea to use this steel to make something that every Ukrainian wants to receive, as a piece of this energy, inspiration, motivation. A piece of steel from the legendary Azovstal.
The first batch of 3,000 bracelets raised USD $1.2 million – it was almost sold out in a day. Therefore, on October 14, on the holiday of The Day of Defenders of Ukraine, it was decided to make a festive batch of 1,000 pieces. This 1,000 bracelets has already raised USD $4 million for the Shahed Hunter project. Today, the next batch is being manufactured, the proceeds from which will be used for maritime drones, for means of protection that will be used at sea. The only difference is that we offer this not only to Ukrainians, to join this force, to get this drive, but we offer it to the whole world.
J: These are great stories. Azovstal is resisting even though it no longer exists.
S: Yes. It continues to give that energy, it continues to work, it continues to inspire. Azovstal continues to give us everything for which we are probably all sitting here with you, fighting and working. It continues to give us hope, even with its last breath, with its last batch [of steel].
J: It’s a very beautiful story. I personally saw this company with the Commander-in-Chief of the Armed Forces General Valeriy Zaluzhny. It was awesome. In the end, two more questions. Will Ukraine win?
S: Oh! This is not a question! It is an axiom. And it is a fact. It is a fact of the future. It is a fact of history. It is already written, that fact, do you understand?
J: When this happens in Mariupol, when the flag of Ukraine will fly there, what do you plan to do? Your vision. One day the flag returns in Mariupol, sees Azovstal, sees Ilyich Iron and Steel Works, sees other enterprises, sees your office. What do you think you will do? Starting from the day of victory.
S: To work hard, hard, hard, hard. From the beginning of this happy day. We will work hard. We will start with what we really want to see. To assess the technical condition of our enterprises, to assess the possibility of their restoration, to assess the effectiveness of certain actions. We want our future to be the best possible, in the best possible form. We will work on it, from that first happy day when it happens. We believe that we will have a lot of work to do. We believe that despite the fact that there will be a lot of work, we will do it…because we have such people; because of the power that will overwhelm us at that very moment, the energy, the motivation—they will be irresistible, they will be unbreakable. Nothing is impossible. Absolutely nothing.
J: Even if there is nothing left there, will you build it from scratch?
S: It will be a matter of evaluation. It will be a question of opportunity. It will be a question of many, many things. It is difficult to talk about it when you do not see the actual state of the enterprise today.
J: Well, let’s assume it’s just zero. If not less than zero. There can also be a negative, due environmental consequences, and all sorts of other issues. Well, let’s say it’s zero, that is, there is nothing left, no stone. Will you strive to restore it? Will you find funds, attract investors, in some way will you rebuild it again?
S: Today, the main shareholder of the company, Rinat Akhmetov, has already announced that he will invest in the revival of the city. He will invest and try to revive the city not only to the state it was in before the war, but to an even better state. Therefore, the intention is there. The desire is there. The emotion is there. The aspiration is there.
J: Well, we have to wait for this victory, don’t we?
S: And [victory] it will be. I believe that… It is very difficult to say when. Everybody asks: “When?” I believe that it does not matter. The only thing that matters is that it will happen. That’s the only thing that matters. I will explain why I think so. When we talk about “when”, it’s very easy to get discouraged and give up if that “when” doesn’t happen exactly when you thought it would happen. But we must not give up. We cannot say that in one more month we will be victorious. No. Because if it does not happen (though it may happen) in a month, we need this strength, this inspiration, this thirst to go forward. And in another month, and in two, and in three. Therefore, for me it is not a question of “when?” For me, it is a question of what comes next. And that is already a fact written in history.
J: Thank you very much!
Oleh Shmakov, Co-Founder, Briz Ltd
Overcoming Occupation // DATTALION Interviews // Briz Ltd
As Co-Founder of Briz Ltd, Oleh Shmakov and his wife Albina have seen their electric water pump enterprise grow from its humble start in a garage in 2000, to the thriving operation it had become by 2022. As a self-sufficient company, Briz Ltd produced raw materials as well as assembled products, and was expanding into international markets in the months leading up to russia’s full-scale invasion of Ukraine.
Then, on February 24, 2022 Shmakov awoke to a fiery horizon and set off in the direction of the blaze to help employees who were working the night shift at the Briz plant in Tsyrkuny, Kharkiv Oblast. After he and his employees vacated the plant, russian occupiers took hold of it, stole valuable equipment, and established the site as their living quarters. Eventually, the plant was cleared of russian forces, only to be bombed and left to burn.
When Shmakov and his employees returned to the site, they found it covered in debris with at least half of their equipment damaged beyond repair. Despite millions of dollars in damage to the enterprise, Shmakov and his employees are already laboring to restore the production plant and restart operations.
Reporter:Good afternoon! Please tell us about your business before February 24, 2022.
Oleh (O): The company was founded in 2000. It is a manufacturing enterprise. We manufacture various submersible electric water pumps. We started in 2000 as a small team – all employees were enthusiasts. As they say, “We started in a garage.” Then we rented [our own] premises and reached a more industrial level of production. We began to develop and produce new models every year. Then an opportunity arose outside the city, where the land of a former agricultural enterprise with premises was for sale, so we decided to buy it and eventually move there. For seven to eight years we worked in Kharkiv and invested money in the new enterprise in Tsyrkuny, Kharkiv region, so that we could move there, too. The premises were built to be high quality because we knew that people would work there. People need comfort, to make them feel as good going to work as going home. Everything was done at a good level – there were tiles everywhere, repairs everywhere, flowers hung under the ceiling, and there was gas heating, electricity, light, and internet. Even when it was freezing -20ºC, our employees walked around the enterprise in t-shirts. That is, we made it comfortable for people to work, regardless of whether someone is the director of the enterprise or a loader. Everyone lived and worked in good conditions.
Well, our enterprise in the new location was developing according to a larger model of business development. We had new production facilities. We completely processed all the raw materials that came to us. We outsourced some services, which were no longer critical for us. Basically, we produced everything ourselves. That is, in the production cycle, we had become completely self-sufficient. Recently, we have also increased the number of external contracts in foreign markets. Every year the share of exports in the company’s business has been increasing. We could not but rejoice. The very sad thing is that there were foreign economic contracts for the year when the war broke out. Well, the war, of course, ruined all that.
R: What happened after February 24?
O: : I live with my wife not far from the enterprise. This is our family business. My wife is the director, I am also a co-founder of this enterprise. I also have a son. On February 24, when we woke up in the morning due to rocket explosions, we could see everything through the window. The horizon was burning, everything was red. The first thought that arose was that there were people at the enterprise who were working the night shift. Jumping up, I told my wife to collect documents, passports, and everything that could be collected, and I ran to the garage, took the car, and drove to the enterprise. It was dark, all the cars were driving toward me, and I had the feeling that I was the only one going in the other direction.
When I arrived at the enterprise, there was no light at that moment, because the transformer substation was destroyed. It was dark, and we were going by headlights. I put the people who were working there in the car and took them to the city by subway. There was one employee, who was willing to help and we returned with him to the enterprise again, letting the security guard who lived near the enterprise go home. And the two of us stayed at the enterprise. It was already dawn, there was no mobile communication. There were a few rare calls: employees were calling, asking, “What should we do?” I told everyone, “Stay at home, wait to see how things develop. No one is going to work.”
We continued to stay at the enterprise. Then we heard tanks coming, about two tanks of armored personnel carriers (APC), I can’t say for sure now. They drove towards the Kharkiv ring road, which was about 1 km away. We could see everything from the windows, as we were on the second floor of the office building, and we were watching these tanks. After a while, we heard the first explosions on our Kharkiv land. Apparently, there were two powerful explosions on the Kharkiv ring road, and we realized that the war had already come to Kharkiv. So, we stayed here.
I was with one man who stayed with me, and we were at the enterprise for some time. He said to me, “Oleh Adolfovych, you should probably go to the city, and I will stay here. If something happens, I will either walk away or you will come back for me. We need to know what happened on Okruzhna Street”. We talked and then shook hands without saying goodbye.
I went by car. I was driving slowly, carefully. When I got to the intersection of Okruzhna Street, which is in North Saltivka, I saw a burnt tank without a turret on the side of the road. It looked like a burnt APC and our military was already standing there. I could barely drive my car between this debris, I thought that all the wheels would remain there. I asked the soldier, “If I go to Kharkiv to my wife now and come back in an hour, will I be able to drive through?” He said, “We will not let you back. You have passed the intersection, and we are not letting you in, because there will be fighting.” I understood that I had a person left at my company. I called him, but there was no connection. The military did not let me go back.
R: Did you get into production after the village was liberated?
O: After the village of Tsyrkuny was de-occupied by our glorious armed forces, it became possible to go there. However, because only locals were allowed in and out, I was forced to use the services of our employee who lived there again. He followed me to Kharkiv, we met there and went to Tsyrkuny. He went home, and I went to the enterprise. Of course, the situation was depressing: the fence was completely broken by tanks and APC, there were no gates, no doors, all the windows were broken, everything was stolen. Most astonishing was the way the russian occupiers lived. I do not know how people can live like that. Although it is probably hard to call them people. Their place of residence was literally reduced to eating, sleeping, and using the toilet. I was shocked by how it is possible to live like that, wherever they were, they did all this. In the office, the toilets were dirty, they threw garbage, rags, bottles, rations with the logo of the russian army, mattresses that they had stolen from nearby dachas [seasonal or year-round second homes]. They slept on them here, under the equipment.
We had expensive Swiss winding machines, and they put a bunch of bags of cement on them – I do not even understand where they got them. They made sleeping places for themselves there. So yes, even in my worst imagination people could not live there.
The length of our stay at the enterprise was limited; we were given two hours to look and leave. Having looked at everything, we left the enterprise in a not very good mood, realizing that everything that remained would have to be restored and all this would take a lot of effort, time, and money. But, as they say, eyes fear, but hands do. With the hope that we would return, we went to Kharkiv. But then the military once again stopped letting us into Tsyrkuny, because the occupiers, who had retreated, began to shell both the village and the industrial zone where the enterprise was located.
Through about 15-16 social networks, I found out that the Briz enterprise was burning. Some local residents wrote about it. I called our firefighters, who, in those days, went to extinguish fires if there was no shelling and gave them the address of the enterprise. They came, then called to say that they had extinguished the fire. That is, I understood that the enterprise was bombed and there was a fire. At that time, no one was allowed in at all, neither locals nor non-locals. They told us to wait until the situation improved. Being in the dark, knowing that there was a fire and not knowing what was left intact or damaged left a bad feeling in my heart. Different thoughts came, I had to drive them away and not panic.
When the opportunity to visit the enterprise appeared again, we immediately took advantage of it. I went by myself in my own car, not involving anyone, and looked at what was burned. The office had burned down, the second production room, where the equipment was located, burned down completely. The equipment was not completely burnt, but about half of it was. There were craters from missiles, everything was in debris, pits, burnt everywhere. The company suffered significant damage. All this can be seen in the photos, which can be published with my permission. Some time has passed, three or four weeks, and the Ukrainian military already drove the occupiers as far as possible, to the border with russia. We were given the opportunity to come to the enterprise and do something, such as removing garbage and so on.
We removed 11 trucks of garbage from the premises, [which had been] one of our most beautiful sites where people assembled products, and it was the final assembly place. We could not even understand what was there. There was everything you can think of, but it was definitely not ours. When we unloaded it all, we just did not understand how people could live like that. They were living pigs. They ate here, littered, smoked, made fires. There were bottles, cans, food, garbage everywhere — it was all in a pile. We took out 11 trucks of garbage from just one room.
In all this mess, the workshop foreman found a drawn map. One of those who came to “liberate” us had drawn such a map. Unlike Lukashenko, who had three directions of attack on Ukraine, [note: may be referring to Belarussian plans to attack Ukraine] but no one saw those who came to “liberate” us drew a plan of attack on Ukraine. “Ukropia”, “Batka”, “Boss”. Here we see how we were “liberated” As I understand it, they came with the idea of committing all the outrages we have seen here. To say that they were on a business trip, came by accident, or were just carrying out military exercises — it’s all a lie. This picture shows their true nature: to enslave, rob, destroy, and throw Ukraine back to the Stone Age. It was painted by some of their military artists. If I can show you, this is it [the map]. This picture made a deep impression on us, and we understood the essence of this “russian world”. If we do not resist it, what we had at the enterprise will be waiting for the whole Ukraine. But we are strong people, we are a strong nation, we have a strong President. We will revive everything, restore both enterprises and the country. I have positive plans for this and all employees working at our enterprise; no one wants to give up, everyone wants to work and return to the place where we worked before February 24, before the attack.
R: Can you roughly estimate the amount of damage done?
O: Yes, of course. Thanks to the fact that we had an accounting database, all this was documented. All the information we had as of February 24 was saved in the cloud service. The amount of damage caused, including the destruction of our site, theft of stocks, and raw materials is about USD $2 million.
R: Did they steal all your inventory?
O: They stole the stocks, and what they did not have time to steal, they burned with the last bombing.
R: What was the amount of investment in the company before the war?
O: Before the war we invested about USD $1.5 million. That was not in one year, but over five to six years.
R: :How much money is needed to restore the enterprise?
O: To restore the enterprise we do not need extra, we would return what we have lost, we would be happy to rebuild everything ourselves, it is about USD $2 million. This is to return the stock and turn it into money, to work for this money and restore the buildings, to make repairs, overhaul somewhere [a site] and build a new [site] somewhere. In addition, they have destroyed accounting, destroyed archives, drawings — all this needs to be restored. All communications. We had electricity, gas, water, all this needs to be done anew. Power grids, gas facilities, water supply, all the necessities that people need to work. Roofs, walls, heating, fences, security, alarms, video surveillance, everything that is included in a normal enterprise.
R: :Have you recorded any losses?
O: : I can say that the investigation took place. The authorities engaged in fixing all the damages caused by the occupiers visited the site. A criminal case has been raised, and an inventory and register of damages are being kept.
R: How did you assess the losses?
O: The assessment was carried out by our Kharkiv licensed appraisers. They went to the site, documented everything, and took pictures. Now they are assessing the damage to our buildings, and it is already at the stage of registration. I know the approximate amount. From now on they will be engaged in the material assessment of damage to equipment and stocks.
R: Do you plan to file lawsuits?
O: Yes. There is already a company that is waiting for an expert assessment. We will continue to act as our laws allow regarding compensation for damages. But, as I understand, the mechanism has not yet been developed, we will do everything according to the law.
R: What are your further plans?
O: Of course, we have plans. We want to return. Even now there are employees at the enterprise who come every day and clean up the rubbish of the “russian world” that was left there. People come with purpose, every morning, every other day (depending on the situation), but they do not leave the company. We clean it, board up the windows, take out the garbage, with the idea that we will return there anyway. No one is going to leave anything there.
R: Are you now at the stage of cleaning up the aftermath of the “russian world”?
O: Yes, we are at the stage of cleaning. We took some of the equipment to Kharkiv — the equipment that was left without as much damage, the ones that can be repaired. We transported it to Kharkiv and began to restore it and prepared it for the work process. We will continue to work in the future, in Kharkiv, with the idea of returning back to our premises.
R: And what are plans after the victory?
O: The plans after the victory are to return to our previous place of work as soon as possible, because the primary problem there is electricity. Now, of course, this problem exists all over Ukraine, and especially there [in the Kharkiv region], where there are no poles, no networks, nothing. As soon as the state extends the power grids there, we will return there immediately. Maybe not all at once, but a certain number of people. We will restore there and gradually move back to our former site.
R: Do you expect to receive compensation for losses?
O: Frankly speaking, of course I hope to receive compensation. How it will happen, I do not understand yet. Yes, of course, from those [russians] who brought us so much grief and destruction, so that they pay for it — so that they understand the grief they brought to Ukraine and how many lives were broken because of it. That is, the aggressor state should be punished, including financially.
R: Will Ukraine win?
O: Of course, it will win! We all believe in it. The whole company, my relatives, everyone believes in it. There can be no other option, because if we do not win, Ukraine will not exist. russia, which has the largest border with us, turned out to be our biggest enemy, whereas those states that have the smallest border with us turned out to be our biggest and most loyal friends. Even those states that do not border with us. For this, we are grateful to them for supporting us. The war has demonstrated who is a friend and who is an enemy.
Ihor Matveyev, Head of Logistics, ARDIS Group
The aggressor must pay // DATTALION Interviews // ARDIS Group
Prior to russia’s full-scale invasion of Ukraine, the ARDIS Group was on a mission to use cheese as a means of cultural exchange between Ukraine and the rest of the world. ARDIS hosted the Pro Cheese Awards in Kyiv in 2021 and was set to host the World Cheese Awards there in 2022 when the war broke out and the company’s ambitions were shattered.
The enterprise’s objectives soon turned to evacuating employees and their families from the Kyiv region, redistributing cheese that could no longer be sold, and moving its operations to the west of the country. Within two months of the full-scale invasion, ARDIS’ warehouse was cleared of occupying forces and their employees were back to work, but they had suffered damages to rental properties as well as significant losses in profits.
The russian war in Ukraine has complicated ARDIS’ importation and exportation of cheeses, with an initial drop in sales of almost 90 percent, which has since been restored to about 50 percent of pre-war imports and exports. With much uncertainty about the future of ARDIS, Head of Logistics Ihor Matveyev is sure of one thing: “The aggressor country must pay for everything.”
Journalist (J): Please tell us about your business, the business you represent. What was it like before February 24, 2022, before the full-scale invasion? Your plans, ambitions, ideas, what you wanted to do, what you’ve already managed to do?
Ihor (I): I represent the logistics department [at] the ARDIS group of companies. This is a Ukrainian, structured group of companies that has been operating for over 24 years, dealing with cheese, and cheese imports, and which has its own cheese production. Five years ago, there was a turning point when we started to develop cheese services and introduce a culture of cheese consumption in Ukraine.
Imported cheeses are very diverse, and there are a lot of rules on how they should be priced, and what they should be eaten with. In 2021, we held a festival in Kyiv. The “ProСheese Awards” was a very significant event, it was the first such event in Ukraine, where Ukrainian cheeses were presented. The Ukrainian record for the largest cheese plate is 9.1 meters.
There is a similar event, but on a much larger scale, called the “World Cheese Awards”, which is held every year in different countries of the world. For the first time, in 2022, ARDIS was supposed to present and host this festival in Ukraine.
But on February 24, the war broke out, and this festival was held in Newport, UK, not in Ukraine. But the company did everything possible to ensure that our 20 producers from Ukraine were represented in this competition. Maybe this is not quite the story for this interview, but we are very proud that we did it. It was quite difficult, but after that we got the moral satisfaction of having represented Ukraine at such a time.
We had very big plans to develop our products, to bring even more cheese, more varieties of cheese, to develop a culture of cheese consumption, and to represent Ukraine in the world through cheese. So our philosophy is to bring world culture and cheese consumption to Ukrainians and try to represent Ukraine through cheese. I don’t want to talk about how many tons of cheese we would like to produce now and how much we want to achieve in the future. Of course it is a business, but the ethos of it was very important for us and it remains so.
J: Could you please tell us how many people you employed before the russian invasion?
I: The company ARDIS had on [its books] about 200+ people. I’ll talk about the logistics department now. There were 50 people working there. The department consists of a warehouse (warehouse workers), transportation department, and the trade department. There were 50 people, and now there are 45-46 people.
J: So you didn’t cut people significantly?
I: Not significantly. We have three guys in the Armed Forces, and all those who went abroad (not many people from the department left, just two to three girls [women]) have already returned, all these people are here.
J: Tell us what happened after February 24.
I: On February 24, it happened unexpectedly.
J: Some other businesses told us that they were preparing…
I: Apparently, they weren’t… We were preparing, but from the point of view of “what will we do?” “what suitcase to pack? ” general things. Then on February 24, people left in mass. On the first Sunday, we didn’t really know what to do, because we didn’t have any orders. But on the second day, February 25, we equipped two drivers with their families and sent them first to Lviv, and they went there with the goods (to the Metro supermarket, if I’m not mistaken), and then we went to our production site, which is located in Blahovishchenske, near Uman, where we rented a hotel for them. These two families lived there for more than a month or two. Then we moved the cars there.
J: Did you set up a sort of remote office there?
I: Yes, we started transporting everything from there. It was clear that the fighting had moved close to Kyiv, almost immediately.
Our warehouse is located in Myla, near Borodianka, Hostomel (Zhytomyr highway), and almost from the first days it was difficult to get there. We have trucks – a fleet of 16 vehicles, and 10-12 of them were at the base:they all arrived and left on that Friday. We have one [truck] that stayed in Kyiv, and didn’t leave our head of transportation of one department… One of our drivers lives nearby and somehow negotiated with the checkpoints, our cars were coming in and out, several times under fire. But I left, not to go abroad, but to stay with my family in Western Ukraine.
Sometimes I called Serhiy (one of the workers) and asked him “Why did you go there, I was told that there was heavy shooting there?”
J: Were they saving products?
I: They were saving cars, the fleet. If it was possible to load and take the products out, then yes, they did it. But first, they saved the fleet.
J: Did they take all the cars out?
I: All the cars were taken out, and not a single car was damaged. Our trucks were taken out, as well as those of the company next door, which asked us to take theirs out as well. They took away their products. The trucks were taken all over Ukraine. And a week later we gathered them all in one place.
J: So you also helped your neighbors.
I: Yes, we helped our neighbors.
J: What happened to your warehouse?
I: On March 7, when there was shelling. A shell hit our office and there was an explosion on the roof. We had a warehouse and an office next to it, on the 2nd floor. There was a fire:the office was destroyed, the entire 2nd floor burned down and the fire spread to the roof. The roof burned down, our refrigeration equipment was damaged, and our ramp burned down. The fire barely got into the warehouse itself, there was only heavy smoke. There was a very big problem – firefighters could not get to the places where there was shelling. There was no access to the warehouse for almost a month afterward – until the russians withdrew. We managed to take the cars out, but they (the russians) were still close.
I came back almost at the end of March and we started going there. The checkpoints let us through because they knew us by sight since there were five people from the local territorial defense who were our employees and who lived next to the warehouse. We could go there and distribute some goods. We decided that if there would be no access to the warehouse, we would try to look around and see what we could take out, what we could not. We distributed a lot of the products that we could barely remove. The volunteer movement was already there. And since April, it has become even more so.
J The thing is that cheeses, depending on the type, some of them spoil very quickly.
I: Yeah, but we didn’t have a lot of them, and we didn’t give them away. When we got to the warehouse a month later, we collected everything for disposal and several trucks left with it.
J: And what you couldn’t take away, you just gave it to people?
I: We even gave away what we could have taken away.
J: Why did you do that?
I: Because we had a lot of people in the volunteer movement.
J: So you had your own people everywhere, am I right?
I: I think everyone did. There was a lot of volunteering. I was a volunteer myself. We went there to Drohobych, and we were sheltered by very nice people and they found out about us through third parties, through third acquaintances who hosted us, who then also started volunteering there. Probably 20 trucks were transported and I had to recall my youth, how to pull out a box, how to arrange the goods in the warehouse… Everyone was doing this.
J: Do you know to whom you distributed these products? Or did you just give it to volunteers?
I: On the first day, February 24, two trucks arrived with “Philadelphia” and “Buronka” products. We made a decision to give them away. It took us more time to decide who to give it to and to organize the way to give it to them. It was almost 40 tons. We couldn’t just give it out on the streets. It was impossible. So we contacted the Kyiv City Administration and they gave us an address to bring it to. All this time, these cars were [sitting] in the warehouse …when one arrived, on February 25 we said, “Get out of there,” and [instead the cheese] went to our partners at AGROTEP in Kyiv, who provide us with transportation.
They were on the left bank, their refrigerators were not running at all at this time. Then we figured out where to take them. Two cars were brought in, and one of our employees was able to get there. Everything was unloaded, and everything was given away.
J: You had one of the hottest areas in the Kyiv region there near Hostomel… Tell us how it happened, how you experienced it? I mean, how did you realize it? How it was, especially the first two weeks when nothing was clear, tanks were driving around Kyiv, and in Hostomel there were landings [of russian missiles].
I: From the first days, we had meetings, I think twice a day online who was there? – It was the whole company, I’m not talking just about my unit. About the divisions: we have several message channels – warehouse, transportation, and general. So this is about the whole company. The whole company met on this way in the morning and in the evening. Everyone told us who and where they were, what help they needed, and [as a result] we took our people out of Bucha and Borodianka. In the first days, we helped as much as we could. Those who left took someone with them. Everyone knew who was where.
Many people from our unit said they were not going anywhere, they said “Kyiv is a fortress. We will be here”. They answered categorically that they would not go anywhere. We were most worried about them. Especially when you would call and ask “Where are you?”, “We are going to the warehouse now”, “There’s a lot of shooting there now, don’t go.”
In the evening, we called and asked, “Are you okay?”, “Everything is fine, we went, we took two cars, everything is fine.”
J: You have heroic logisticians and drivers.
I: But apparently, not only drivers and logisticians. There are many stories from the whole company, from those who volunteered here. Here is one story that was told to me a week ago. There was a volunteer group trying to take several families out of Bakhmut, “Give us a car, please, we need to go and to take some things out” [they asked]. I said, “Okay, I’ll give you a car, but I won’t force the drivers [to go].” I called [my driver] Tolik and said, “Tolik, give me the car, because you’re going on vacation, and [these other] guys will drive it.” And he asks, “Where?” I answered, “To Bakhmut.” He didn’t agree to [let them use his car]. He said instead, “No way, I’m going [with them].” “Okay, I was told that when you get to Kramatorsk you will spend the night there, then they will put on helmets, and bulletproof vests, take your car, and come back”, “Okay”. When he arrived, I asked him, “Well?” “Everything is fine. We went, everything is fine,” [he said]. And [then they were] showing me a video, and there’s Tolik, wearing a bulletproof vest and a helmet, driving to Bakhmut, his hand is shaking, but he’s driving. There are a lot of such stories now.
J: Please tell us, what is your vision, and how much have you lost because of this whole story? There are direct losses in terms of what was destroyed, lost products, and destroyed products and indirect losses – lost profits, let’s not consider that. Only direct, what was destroyed, lost, spoiled…
I: What was destroyed, lost, spoiled – you can look at the utilization of the goods when they were handed over, it was recorded there.
J: We took out 10 tons of what we could not distribute because the goods in the warehouse were practically inaccessible for almost a month. Those goods that had expired which we couldn’t distribute, we just threw away.
J: And the destroyed office?
I: The office was destroyed, and the warehouses – all of them were rented.
J: I see, so it was not your problem.
I: Yes, it was the landlord’s problem. He has now almost completed the construction of the roof in the office, but he will not do any further repairs until the war is over. But there was another office on the territory, when one company left, we were there. The roof of the warehouse and refrigerators were destroyed. The refrigerators were rented, the tenant did everything. We helped him find specialists so that they could repair and replace the equipment properly. At our own expense, we repaired the ramp, washed and whitewashed the warehouse when the goods had not yet been delivered there. When almost everything was taken out and it was empty, we cleaned everything. We did it all on our own, almost everyone has returned to work. We built two rooms on the ramp, one for the operators, the second one was for the warehouse manager. The warehouse burned down [so] we destroyed it completely and built it ourselves.
J: So you did it at your own expense?
I: We did it at our own expense and our employees did it.
J: But it’s not your property, it’s the landlord’s, right?
I: The property is not ours, but we will work there. And to put everything on the landlord… We agreed with him right away that it would be this way, that we would make the ramp ourselves while he does the rest. These are our employees and, as it turned out, in our warehouse we have builders, and electricians, and everyone knows how to do everything. You know, sometime in late March – early April when we were already moving out, we estimated that we would need about a month or two to repair the warehouse, but we would also need to work.
From the first day, we started with the dairy workshop, because everything was fine and production was working. At first, we didn’t know where to transport it, but the milk was accepted. We found a warehouse, another one, because the production there required very small warehouses. We rented a warehouse in Uman to which we partially transported everything from Kyiv, and I think in April, we started new deliveries there. We rented a not-very-big warehouse there, but then we managed to expand it a bit. It turned out that there were free cameras [warehouse boxes] there, so we got a small one at first then more and more. Our employees went there: they were on duty on a shift basis. Now I have 16 employees in the warehouse – four shifts, three people each, plus a deputy warehouse manager, packers, etc. At first, two people went there, then three, then they changed the order of duty: one week there, one week at home.
When they found out that we were starting to do something, that we were renting a new warehouse, that work was starting, people wrote in our chat “I’m going too, give me something to do.” I replied, “Guys, I can’t take everyone.” They said, “We will do it for free, we are coming. We will come and work”. When we arrived here, we had all the employees, no one was fired, everyone had been on vacation, some money was credited to their salaries although some of them were not involved in the work. And when they started to do something everyone told me, “Come on, we’re coming, you don’t have to pay me anything, let’s restore it.” It was the same story with drivers.
We set up a hub with them at the dairy workshop, and we brought the trucks there. Some of the drivers might not have been there;some were in the Cherkasy region, some were in the Lviv region, and others were somewhere else. But when we made the route they would come in, pick things up, leave, then stay there, then come back again. So they did all this.
From the beginning, we organized a new experience at the dairy workshop. We organized a new system, a field trade. Workers of the dairy workshop, our drivers, those who were there, took these products and went to the markets. We didn’t have this before.
J: By the way, this is the next question I wanted to ask you. How did you rebuild your business?
I: It’s not exactly about rebuilding, it’s about adjusting.
J: Yeah, how did you adjust to [this new] reality?
I: The first thing we started with was when it became clear that we had no access to the warehouse. We didn’t have access to the warehouse yet, so we worked with what we had, which was production. Some customers in Western Ukraine continued to place orders; where a lot of people have gone, where it was possible to order and deliver, there were orders there. As I said, there was a field trade and we would go out three or four times a week. Employees who made cheese, they also worked in shifts, and they would work one shift and then the next. Our drivers, who were there, would take a car, leave, and spend half a day loading. Then they went on a business trip to deliver something.
We also had this group of “sales agents” – employees who worked in the accounting department and were somewhere else.
J: They were also looking for customers, sales?
I: Yes, where they lived. If they found something, they brought it there.
J: And the import component? We’ve talked about your production, but what about imports?
I: The goods that remained in the warehouse were delivered to us around the beginning of April, once it was a little bit safer there after the russians withdrew in early April. At that point it was possible to drive in from Bilohorodka: the demining was done quite quickly and a military group was stationed there for some time (either the Armed Forces of Ukraine or the territorial defense). They visited the warehouse, and taking into account the fact that we had a destroyed ramp at the warehouse, the doors were almost open.
We arrived, opened the warehouse, and almost nothing was missing. No one took anything. Our guys from the territorial defense were coming in, and we allowed them to take what they needed. But it wasn’t the case that everything had been destroyed or stolen – that hadn’t happened.
And when we got access to the warehouse, we started to take out everything that was still usable. There was cheese, temperature condition [refrigerated at an appropriate temperature], and it was March, [so] it was cold. We had thermometers in the warehouse. The automatic fixing system was destroyed, but the temperature allowed us to preserve the cheeses. If it had been in the summer there would have been nothing to do.
J: So you were very lucky with the weather.
I: And then we found this other warehouse, and partially started to move the dairy workshop there, some small orders came in, and we took them to the dairy warehouse. There, the workers who were engaged in production began to learn new skills: the operators tried to make invoices on their own, which was quite a challenge, especially doing it remotely. But they managed, first with the dairy workshop then we rented a warehouse, and we moved everything we could there. For the most part, we decided right away what we would transport and what we would distribute.
J: How much did you take out, approximately, and how much did you distribute? And what percentage did you recycle?
I: We threw away about 10-15 tons. We managed to take out 20-30 percent for further sale. Since April, we have started importing supplies, we have already started bringing them there.
J: So, in fact, the period when you were not working at full capacity was very short, just two months.
I: Yes, for a month we barely worked with imported products. And we started working with our production immediately.
J: I see, thank you. So, in fact, you have no such direct losses instead you have additional expenses that you invested in the rented premises. Am I understanding this correctly? That is, it is not yours, it is not destroyed, you just interrupted the standard activities.
I have a question for you as a logistician. How much has the complexity of logistics increased since the beginning of the war? We know that airplanes are not flying, business trips abroad are very difficult for men. How do you cope with this?
I: We’re not taking our production into account now, it is in Ukraine. We have a well-organized transportation system: our transport goes on trips, carries goods and returns to collect the goods. As I said, our transportation has not disappeared, so almost nothing happened to our supplies to the dairy workshop. We didn’t lose anything. And with the imported [cheese products], we had great difficulties at first. We deliver imported goods through our partners, through our partners’ trucks, we don’t deliver with our own vehicles. There were difficulties at the border.
In the first months, from April and during the first half of the summer, there were fewer orders, almost half as many [as usual]. Normally, we would deliver 25-30 cars a month (before the war), but then we delivered three-to-four cars a month.
J: Five-to-six times less.
I: Now we are starting to reach the level of half as much as before the war.
J: So now you are at about 50 percent of the pre-war level in terms of imports?
I: Yes. The plans for the next year are to reach the pre-war level, the indicators. Now it’s 50-60 percent. Seasonality plays a role. We [are aiming to] have achieved the same level as it was in January last year. And January is always the busiest month. So we go out, the goods are delivered, and people are all in place.
J: In your opinion, who should pay for this damage that has been done to Ukrainian business? Maybe these are not relevant questions for you, because you don’t have direct damage to your property, but let’s say it was your warehouse and your office space and your equipment and it would be destroyed.
How do you imagine it, and, secondly, who should pay for it? Should they?
I: The aggressor country must pay for everything. This is clear after the victory – these are reparations which should cover losses. They will never cover what they did from a moral point of view, human lives – no one will ever cover that. And the financial losses – yes, they have to compensate everyone. How it will be distributed – who will distribute it, how it will be distributed, to whom, how much, who has what losses, who will do it? We have a state, they will take care of this.
J: As a business, you did not record your losses, as far as I understood from our conversation. You utilized [your products] , you gave something to volunteers, but it was your decision. But your direct loss is the utilized products, this is a direct and lost profit for the whole period of time.
I: This can be calculated. How much product was there, how much was it worth, and how much it was unsold, what is the lost profit? Well, what was given for utilization is all documented.
J: So you don’t see any problems with the state collecting all this from the affected businesses later?
I: I would really like to see this done.
J: It’s very difficult for me to imagine this mechanism if the business doesn’t do it itself. Well, let’s imagine: thousands of businesses have suffered, thousands, and there are a huge number of businesses that do not have access to their property – Mariupol, Volnovakha, Bakhmut, Soledar. There is simply no access, so how do you determine what is lost and what is not? In fact, there is no mechanism to confirm this. There is a story I was told in which people’s elevators were destroyed, they repaired them, and they started working again. How do you fix it? What happens afterwards, if there are no open cases, no enforcement mechanism?
I: I’ll talk about what I’ve encountered. We had a visit from the city administration, the State Emergency Service, they recorded everything, drew up protocols.
J: So, your tenant had protocols drawn up, and losses were recorded?
I: Yes, our lawyers also took information on how much of what was distributed from the warehouse, shipped, utilized. So, I think there is some kind of process going on.
Our neighbors, Hammer [another company], had one of their warehouses completely destroyed, and the damage is significant. I also know that they are applying somewhere and doing something. I don’t know the details, but they are taking steps in this direction. But it’s not like you can apply and get a response like “goodbye, we don’t know anything” – [I don’t think so].
J: But you expect the state to come to you with a request?
I: No, this will not happen, the state will not come. But I think that if you go deeper into these processes, there are probably some procedures, regarding where to go and what to do in this situation. Or there will be. If not, there should be.
J: Last question. Will Ukraine win?
I: You don’t have to ask such questions here, it’s a must. This is the first desire which everyone now says “Glory to Ukraine”, despite the holidays or when they are greeting each other. “Ukraine will win!” is the most important thing that everyone needs.
J: Nowadays, people say “Happy New Year of Victory” on my birthday. Thank you.
I: Thank you.
Alex Lissitsa, CEO, IMC Ltd
The Silo Stronghold // DATTALION Interviews // IMC Ltd
IMC was one of Ukraine’s seven largest companies, a titan of agriculture, leading in Ukrainian exports of grain and dairy. When russia launched its full-scale invasion of Ukraine in February 2022, IMC’s long-term plans to ‘go green’ and expand internationally were quashed. Instead, each day became a test of survival as their dairy farm fell under occupation and their grain silo in Chernihiv was shelled by russian forces.
As IMC’s volume of exports dropped from 80,000 tons per month to almost nothing, their facilities were shelled and their farmlands mined, all that seemed to matter was the survival of their employees and the civilians of their communities. Lissitsa and his colleagues coordinated civilian evacuations from Chernihiv and turned a grain silo’s basement into a bomb shelter for 300 civilians.
Now, as Lissitsa looks into Ukraine’s future, he realizes that long-term rebuilding will require major changes to Ukraine’s laws and banking system, and feels that it will ultimately be up to businesses to find success in a post-war Ukraine.
Journalist (J): Please tell us about your business. What was it like before the full-scale invasion? What were your plans? What were you doing? What were you thinking about?
Alex Lissitsa (A): We have an agricultural company, previously called the Industrial Milk Company, then we renamed it, leaving only the three letters ‘IMC’.
The company operates in three regions of our country and is engaged in the production of agricultural products in two main aspects: storage of these products, processing, and export. We are talking about the fact that IMC operates specifically in the Chernihiv, Sumy, and Poltava regions, cultivating 120,000 hectares of land. These 120,000 hectares are used to grow staple crops such as corn, sunflower, wheat, and fodder crops.
Also, on the border with Belarus, we used to have a large dairy farm, one of the most modern in Ukraine, with a herd of cattle of about 1,000 heads. We also have six silos with a total storage capacity of 550,000 tons.
Accordingly, we are an export-oriented company, with total exports of about 800,000 tons in recent years. We were among the top five to seven largest companies in our country.
Since we are talking about the development of the company before the war, ours is one of the few companies whose shares were listed on the Warsaw Stock Exchange.
We planned to publish and approve the new IMC-2030 strategy in May 2022. The plans were that IMC was to become a ‘Smart Green Company’ – to go green, so to speak. This process of going green would cover a lot of aspects over the next 10 years, including carbon agriculture, emission reduction, partial transition to new technologies, etc.
We were preparing accordingly, so before the war, we had a very clear idea of where the company should be in 2030. We wanted to announce this vision not only to the Ukrainian community, businesses, and politicians but also to the whole world. In Chernihiv, where our main base is located, [we would have announced it] in May. But it didn’t happen as we thought it would.
J: [But] the “muscovites” came…
A: I would say they crawled.
J: Crawled, what a great term.
A: Yes, they have, and in our case, they really came from all sides. To be honest, I was preparing for a commotion. Why? Because the situation has actually been quite tense in recent months. The team and I talked a lot with the management about what the options might be. One of the options was that there would be a full-scale invasion, including from northern Ukraine and from eastern Ukraine, where our main production assets are located. At the time, our understanding was that this outcome was one of the most unlikely, but, nevertheless, that’s what happened. This was very concerning because out of our 120,000 hectares of land, 100,000 are located in the border regions. The dairy farm was located on the border with Belarus, and out of six silos, five are located in the border regions of Chernihiv and Sumy. I figure it’s not hard to guess that for the first two days, our territory (80 percent of our business) was actually under occupation.
This, of course, affected our work. In fact, we were completely paralyzed for two months, especially in the Chernihiv region where there were numerous people who suffered from the invasion, including those on our dairy farm, which was occupied in the first two to three hours, cutting off our access to the farm.
As we know, it is usually cold [in Ukraine] in February, and the supply of feed, electricity, and so on was cut off; during the 40 days of occupation, the dairy farm turned from a state-of-the-art facility into a bunch of half-dead, sick animals.
J: Did they die?
A: Many animals died, but in most cases, they were just sick with many different diseases. Obviously, since there was no electricity, there was no supply of feed and there was nothing to feed them with. I am very grateful to the people who worked during that difficult time, sometimes milking [the animals] themselves. It was a complicated story. I’m not even talking about the fact that there was no milk to sell. The farm was almost destroyed, and we [were forced to] shut it down.
We had a modern chemical mixing laboratory, but it was smashed to pieces.
Our 100,000-ton simultaneous storage silo was located on the outskirts of Chernihiv, where more than 48 different kinds of missiles landed. Part of the warehouse was burned down, and some of the grain spilled out. The only thing that saved this silo from complete collapse was the fact that there were almost 80,000 tons of corn inside, which actually held it together.
Even more, we had prepared before the war and purchased more than 200 cubic meters of fuel. Miraculously, none of the missiles hit these 200 cubic meters of fuel–if they had, half of the Chernihiv district would have burned down. This fuel ended up being used during the occupation for the needs of the city of Chernihiv.
J: Did you give it away just like that?
A: Of course! We gave it away. The mayor and the governor approached us, they were in the city at the time, so of course we gave it to the city. Thanks to this, the critical infrastructure survived. We have not yet fully restored the silo, because the losses were quite significant, ranging from a modern dryer, equipment, laboratories, and the roof. We lost a lot, but the most important thing is the basement of the silo. It had a wonderful basement, and during the massive shelling of the city of Chernihiv, 300 people sheltered in it, most of them children. This was the silo’s main merit during the war, that 300 people were able to survive this terrible invasion for more than 40 days [by sheltering inside]. Also in the Chernihiv region, in the first days, it was difficult to remove our equipment, servers, etc., because all offices were closed. Our colleagues were able to remove a few things, but some could not be taken out, and we moved all our work to the Poltava region, to the only center we had left there.
During the first 45 days of the war, I was also in Poltava. First I was in Kyiv, then in Poltava. It was a similar story with us, with our Sumy enterprises, but I must say that everyone remained calm.
In the Chernihiv and Sumy regions, there were casualties, but because the team remained calm and kept the situation under control even during the occupation, we managed to prevent the worst-case scenario: massive human losses in our [occupied] villages. Therefore, what we lost in the form of property, grain, or stolen cars is not considered to be such a great loss for me, although it is [significant]. The main thing is that we managed to save lives. Our company employs more than 2,000 people. We managed to save people’s lives by evacuating them to Poltava and to Cherkasy. We simultaneously opened an office there. So, it saved our hearts, our souls–our people.
J: As far as I remember, Chernihiv was semi-surrounded, there was only one working bridge, and the only connection [to the outside] once the highway was blocked came after the battle for Skybyn, through Kozelets to Oster. It was a very difficult path. Even to get out of there…I remember humanitarian convoys were standing there for six to eight hours on the way to Kyiv.
A: In general, the humanitarian convoys stayed there after the liberation…
J: No, no, not during. There was a battle in Skybyn, I think on March 3, during which the main road to Brovary was blocked, and the only route was Chernihiv to Kozelets to Oster or Chernihiv to Oster. Then they blew up the bridge, and they were driving through Oster, through the Chernihiv ring road–there was only one exit, and they destroyed everything else.
A: As a matter of fact, our silo is located on this ring road, 1.5 km away. That is, near Chernihiv, the entire war took place along the ring road, from all sides. Chernihiv is located on the Desna River, so the remaining bridges–a railway bridge and a transport bridge, which were blown up – were on the Desna. The only bridge left was a pedestrian bridge, and it was the one and only way to escape for many people. Everyone was fleeing across the pedestrian bridge, across the Desna River, and trying to leave through the nearest villages. However, since the “orcs” came from the other side to the villages of Yahidne and such, the situation there was extremely difficult, and many Chernihiv residents who fled across the pedestrian bridge died. Across [the river] in Oster, it was a different story: there was a lot of russian equipment that destroyed everything with hailstones, and the part of Chernihiv where there were private enterprises and houses was almost all destroyed. Now, they have started to rebuild there, but it is a difficult situation. Indeed, the only possible way out was to go towards the town of Oster, where there was the only bridge over the Desna that remains today. The other one is in Vyshhorod. It was the only way to escape.
J: What is your estimate, in general, of your losses? I don’t mean lost profits, I mean direct losses. Your subjective estimate. I understand that this is very difficult.
A: Yes, it’s actually very difficult to calculate, but what we have reviewed in terms of book value naturally needs to be reviewed in terms of certain prices as of a certain date. The dairy farm was worth UAH 106 million before the war, and if we use an exchange rate of USD $26, that’s about USD $4 million. It is difficult to calculate the silo–we can calculate the book value since the dryer that was destroyed is worth USD $1 million. So that’s USD $1 million, and the other issue is the roof and the grain. According to my calculations, not counting lost profits or other losses, we lost about USD $15-20 million. That’s just counting the property.
J: Is that just property? Products? Direct losses?
A: Only property.
J: Could you please tell me what you did with it, or what you plan to do? This is regarding a legal process, a mechanism for obtaining compensation. How do you imagine it, and do you believe it will be possible?
A: Lawyers are approaching us because they also need work. Both our own [Ukrainian] lawyers and those from abroad come to us and offer services. The services are understandable: they offer to collect all the documentation, sue the russian federation, and bring cases to international courts. In most cases, these are the UK and the US because, as I understand it, there are more opportunities for funding there. This most likely means the money that was frozen.
J: Confiscated [russian] assets?
J: Yes, the things that have been confiscated.
A: But what are the chances of receiving this? My lawyers say there is a zero percent chance. That’s why we didn’t apply.
J: Did you record these losses in any way?
A: Of course, we recorded them. We are a public company.
J: I mean, did you record them yourself, or did you open criminal proceedings through the law enforcement system?
A: Criminal proceedings can be opened only when there is someone to open them against. One of the biggest problems for our company is the 35,000 hectares of mined land out of 120,000 hectares in total. This is where we have the biggest problem, and we were really thinking about how to proceed. But against whom should we file a lawsuit?
J: Against the russian federation.
A: That makes sense. But procedurally, there is really no chance of doing anything at the moment.
J: Here I agree with you. Another question is that, while there may be no chance today, tomorrow there may be one. But what is not done today cannot be done tomorrow.
I have talked to so many businesses, and almost no one believes this story, but there are two approaches: Some collect everything and document it with an appropriate act, make an assessment through affiliated representatives as much as possible, and open criminal proceedings in the hope that it can be used in some way.
You see, if you don’t do it now, how will you be able to get something in, say, five years? Or do you not believe this is possible and consider it a waste of time?
A: Firstly, in five years, this business needs to be kept alive, it needs to be supported. The story is not very simple. This business needs to be supported.
J: And that’s not very cheap…
A: No, that’s not cheap. By my calculation, if I spend USD $1 million to support this case in Ukraine or somewhere abroad, for it to have any results, I need to spend USD $5 million over five years. Currently, I don’t have enough funds to pay salaries. If I go to my CFO and say, “Give me USD $1 million to go to court right now…”
J: He’s going to quit.
A: Exactly! He’ll say, “If I can’t pay out salaries, why do you need USD $1 million?
J: In your opinion, the costs associated with this process and the probability of a positive outcome are simply incompatible.
A: This is one [part of the] story. The second [part] is about priorities. Our current priority is to survive. You don’t think about what will happen in five years, because there is only one thing on the agenda. If we understood when the war would end and [when] there would be victory, we could think about it and plan what to do next. In that case, there would be some clear economic and legal plan regarding where we live, how we live, and where we are moving.
If we have a war going on, and we don’t know when it will end–we don’t understand the date of the end or the way it will end–then we must think about how to save 2,000 people and their families, and 46,000 landowners living in our villages. You wake up with completely different thoughts, not about how to spend half a day telling British lawyers how, where, and what we lost, but about how to sell the leftover corn, how to pay the rent, how to survive, how to sleep, where to find a generator. That is, you, as the head of the company, have completely different priorities on your agenda.
J: Operational activities.
A: And these priorities today are related to the process of survival. I don’t call them operational activities, I call them survival activities. They are fundamentally different. In operational activities, you can plan your operations for a certain period of time; If you are surviving, you think every day about how, where, when, and everything else. You don’t have an operational task that you have for a year. I’m not talking about five years at all.
J: Our task now is to survive for the next week, a month at most.
A: Two. I set myself tasks for a week, then for two weeks. In my understanding, this is already strategic planning.
J: Our planning period has shrunk a bit, from 10 years to two weeks. Tell us about exports. I read that IMC was 70 percent exports before the war, and it is clear that you were hit hard by the closure of ports. Then they reopened. How are you dealing with this? Have you started exporting anything? Do you export by sea or not? How did it happen? How did you recover?
A: For the first three months of the war, there was no exporting whatsoever because, first and foremost, a) we were far away, and b) we were under occupation for two months. While we were clearing all the rubble that remained, old contracts burned out, seaports were closed, the western border was far away, and while we were getting involved, we shipped the first large shipment of 7,000 tons, even though we exported about 80,000 tons per month before the invasion.
We shipped the first batch of 7,000 tons, “crossed ourselves”, and it was enough to pay taxes but not enough to pay salaries. In fact, in July and August, we exported 7-10,000 tons and ate up the remaining balances we had, and stopped paying off loans because there were times when I thought we might have to suspend all production in September. Thanks to the opening of the ports, we have slowly started exporting, despite difficulties with logistical problems, especially with regard to the city of Chernihiv. Not only with Chernihiv itself but also with big problems with the silos in Chernihiv. Today [January 2023], thank God, we have reached 70,000 tons per month. Of course, if the grain corridor continues to work, we may reach 80,000 tons per month, which will eventually help us to reach our spring targets. That is, for the first six to seven months of the war we were in a state of complete absence of exports, there was minimal export, and in the last three months, we have finally re-established it.
J: With no exports, you still sowed and harvested about 70,000 hectares, but there were 30,000 hectares you could not sow because they were mined?
A: For anyone who does not understand Ukrainian agriculture, you need to understand one simple thing: In 2021, everyone who planted a stick of birch or willow got a good harvest. That is, 2021 was a successful year for Ukrainian farmers in terms of production indicators, such as tons, hectares, etc., and in terms of financial indicators. In fact, the agricultural sector survived 2022, during wartime, thanks to the residuals from 2021, both in bank accounts and in the form of grain. These assets helped us get through the first six to seven months. If it had been a normal year, we would have gone under last year.
J: I didn’t know that. Well, please tell me… I read that, in addition to the fact that you have a terrible business situation, you are in a semi-blockade in the Chernihiv region, and I saw that your business in the Sumy region was not actually operating, but you were actively helping the Armed Forces.
I saw a charity event called “Borsch” I think, where you distributed seeds of various crops to people after the de-occupation. How did you find the resources for all this? Was it also thanks to 2021?
A: First of all, we gave a lot of resources, such as cars, fuel, and computers, to the Armed Forces from the start of the war. In agriculture, we had numerous drones, and we gave them all to the Armed Forces. We also donated a large number of meteorological stations, which are also extremely important. Everything that we used for precision farming, for digitized agriculture, we handed over to the Armed Forces of Ukraine from the very first days.
J: Do they use them?
A: Of course they use them. And computers.
J: Computers, I understand, but agricultural drones, are they changing them?
A: Why should they change them? They are flying these drones–though they are without thermal imagers. At that time it was very good for them.
J: Is it for military reconnaissance?
A: Yes, it’s for reconnaissance. They use meteorological stations to understand what the weather will be like. That’s why we’ve had huge donations from the very first days, we’ve transferred a lot of money to the Ukrainian Armed Forces.
As for the “Borsch” initiative, it was not an IMC initiative, it was my personal initiative. It had to be done differently because I worked abroad for a long time, in Europe and Australia. One of my Australian friends, a farmer who owns 30,000 hectares of land, approached me at the beginning of the war and said, “Along with other Australian farmers, I want to support your farmers, help them in some way. Let’s do it in such a way that from the sale of our products, we will charge a certain amount so that you can buy what you need.” [I said,] “We have a big problem with fuel right now.” “That’s what we’ll do. We’ll buy Australian grain for fuel in Ukraine.”
But there was a problem: selling the grain in Australia and getting the money was one story, and buying fuel and delivering it to Ukraine was another story, as we remember.
So I realized that it would look bad and unfair to people; that is, I gave something to one group, but I didn’t give it to another–I brought it to one, I didn’t bring it to another. You can’t buy a tanker with that kind of money; you just can’t.
We decided that if we were going to go, we would go to those people who needed help. These people have household plots, spring is starting now, and they need to sow, plow, and do something, and this is the only chance to help them. So I came up with this initiative and went to my friends with a request to raise money for various needs so that we could buy and deliver [supplies]. In this way, I was able to raise €1 million from my friends, which we spent entirely on packages of seeds that our IMC colleagues delivered to Chernihiv, Sumy, and Kharkiv regions, the northern Kyiv region, Вorodianka, and all district centers, and distributed them together with the leaders.
J: Okay, the last question, let’s fantasize. One day, the day of victory will come, and we will liberate our land, and it is not clear what will happen to russia. Theoretically, russia should pay us for it. Do you think businesses will get something out of it?
A: Actually, we already have examples of how this has happened. We have the example of the Second World War, when the aggressor country was punished in the form of certain payments to those who suffered. After the Second World War, this ended quite unexpectedly because the Soviet Union captured East Germany and took everything from there that could be taken by train to russia or the Soviet Union. Until recently, Germany paid a large amount of money to Israel because a large number of the victims were Jews. Of what was left to the Western partners, they decided for themselves that there was nothing to take from Germany. Moreover, [they decided that if they took] something, it would be even worse and [would breed more fascism] and after a while, we would have to fight again. That’s why they created the Marshall Plan, which is much talked about, but very few people know how it worked. The Americans worked on it for a long period of time, coordinated it for three years, and only launched it three years later. One of the main goals of the Marshall Plan was to partially provide funds and products, but the German Bank for Reconstruction and Development (KfW) was created, which exists to this day and operates with Marshall Plan funds. Both municipalities and private businesses were financed through this bank. I think it should be the same in Ukraine because I don’t believe in compensation for businesses. Every business, every businessman, takes certain risks. Also, any business has force majeure circumstances, and you have to accept them.
If you sit there and believe that in four years the russian federation or someone else will pay you a conditional compensation of USD $50 million, then you are not a businessman, you are just a Ukrainian grandfather sitting on a bench waiting for change.
J: Do you think the business will recover?
A: We have no other choice!
J: You have no other way out because you haven’t lost your business, there are people who have lost everything, and they simply need to have the start-up capital to start something new. Funds can always be found, I understand that. The question here is to punish those that are responsible.
A: Let’s separate the two. Punishment of the guilty is one thing, business is another. Because to punish [someone for destroying a] farm, you need to find out who really did it, who gave the command, and why they shot at civilian infrastructure–this is one thing, and business is another. I repeat, perhaps after the war, for example, a Ukrainian bank for reconstruction and development [should be] created, where Ukrainian businesses will be provided with funds at 0 percent financing, for those businesses that have suffered. Not compensation, but for businesses that have suffered and will be the first to stand in line, it will be a plus and it will be a victory.
J: Do you see the mechanism as the creation of a certain financial constitution, which will receive funds from foreign donors through the Marshall mechanism or in the form of reparations?
J: This will conditionally be the manager and be responsible for these funds, but will act within the legal framework. For example, the priority is not long-term, interest-free loans for Ukrainian businesses that have suffered.
J: This is the mechanism. Do you not believe in any direct payments from russia?
A: I don’t believe in it. I just don’t believe it. I don’t understand how it can be…
J: Honestly, I don’t understand how it should look either, because Germany was conquered, invaded, and “dismembered”. So, until this happens to russia, it’s hard to expect them to pay someone voluntarily. I was just curious about your opinion.
One last small question. What will you do when we win?
A: The same as always. I’m going to do business. My plans are not changing.
J: Maybe you have a specific vision of what you will do on this day and after this day? This extends the planning horizon from at least two weeks to a couple of years.
A: Once upon a time, when I was studying science, I spent a lot of time on my dissertation “mathematical modeling with econometric models,” so I know very well that in fact in econometrics there is always some part that you can never explain, no matter how hard you try. Similarly, in probability theory, if you have a distribution, then according to it, everything should be in the middle, but if we only consider the theory, then we would have lost the whole war to the “katsaps” [slang: a disparaging word for russians] in the first three days.
J: Probability theory worked against them here.
А: Yes, against them, so to be honest, I don’t want to think about how things could have been, I would like to be sure that… or rather, I have other thoughts and feelings about what will happen after the war. I have no doubts about our victory–that we will win and the “katsaps” will lose. As for me, we will have new problems after our victory, because our Ukrainian essence has united as a nation in some places, and we have helped each other in other places. A large number of issues will arise after the war, and how we will solve them as a nation, and as a people, is not clear to me at all. There are a lot of problems, and one of them is how we will solve the demographic situation.
J: Do you mean the return of people?
A: We understand that they will not all return. But with our current beliefs that we are the Ukrainian nation, and we are united, how do we allow, for example, foreigners to come freely? We will have no other choice, we will have to do it.
J: We will have to rebuild.
A: It’s just like the Germans did, they had to allow Turkish people to come freely, and there are many examples of this. To be honest, I have no idea how we are going to do it now. Which politician, for example, will take it upon himself to go and invite 2 million Filipinos or Colombians, or Venezuelans to come to us, I cannot imagine. There are many such topics that we are not yet ready to discuss.
J: Do you mean mentally?
A: Mentally. Mentally, we are not yet ready to answer how we want to see our Ukraine.
J: We are now living in survival mode. In this mode, you cannot plan for the future, that is, the time for planning will come sometime later…
A: Last week I had an online meeting with Austrian businessmen, all of them working in Austria. One of the questions (because I do represent the agricultural sector) was what is my opinion on the legalization of marijuana? The legalization of marijuana…
J: Do you mean for medical purposes?
A: No, for ordinary purposes. This could be a big market for Ukraine, and why should we wait for victory if we can do it now? What’s the problem? This is both medical and technical hemp cultivation. There is a huge market that is related to this. We could do it; Why not?
J: The Netherlands has done it and [it’s] nothing.
A: As of now, most countries in Europe and many US states have legalized marijuana. It is possible to do this. Another question arises when it comes to the chances we have. We don’t need to wait for victory, we need to do it now. The second question is, why don’t we legalize prostitution in Ukraine?
J: I believe that any labor should be legalized. I mean voluntary labor.
A: Legalized, with pension contributions and so on. Why not? The third issue, where we spend the most money, is medicine. We spend UAH 100 billion every year on medicines, and nobody knows where [it goes]. Let’s say that we are at war, we have no money, let’s just say that all medicine that does not go to the needs of the Armed Forces does not go through the budget but through private institutions. I understand that this is a scandal.
J: Do you mean that we should introduce health insurance in any format? What about paid medicine in general?
A: Both paid medicine and health insurance. There is no state medicine that is not connected to the Armed Forces of Ukraine. What do you think? I am convinced that this can be done.
J: This is likely to cause a lot of public resistance, unlike the legalization of marijuana.
A: But we need to take these steps. Another question is… how many classical universities did we have in Ukraine during the Soviet Union?
J: I don’t know, to be honest.
A: Seven. Now there are 350. If we talk about the demographic catastrophe in Ukraine, 350 universities, which receive billions in state funding that we don’t have anymore and which are waiting for donors, then we will wait for some funds to come from russia, USD $ 500-700 billion. You see, we can’t sit around forever waiting for something to come in.
J: So you think the state needs to behave like a business now?
A: We all need to behave like a business.
J: To reduce taxes?
A: We all need to get used to the fact that if we receive, for example, USD $300-500 billion, we will have somewhere to spend it. We have big problems with infrastructure, roads, schools, and so on. We have a lot of problems. We don’t need to think now that we need to use these potential funds for business. For business, we need to make the rules of the game within the framework I mentioned. That is, if you want, let’s produce cannabis: Why not produce cannabis when the export capacity is huge? It’s the same in many other aspects, that is, we have to cover those “cracks” where we have total corruption, and this is primarily medicine, etc., although as we can see, the Ministry of Defense has recently been exposed.
J: With the eggs? [referring to January 2023 reporting alleging the Ukrainian MoD bought eggs for soldiers at inflated prices]
A: Not only with the eggs but in all other aspects. The bottom line is that there are a lot of opportunities for the state and for businesses now. Yes, we don’t have a strategy, but the question is whether we should wait three to four years for some possible USD $500 billion to appear, which businesses can count as reparations. I believe that then it will not be business, then it will be some kind of scheming.
A: Parasites are scheming.
J: What are the main steps that you, as a businessman, would welcome from the state now?
A: Exclusively bank financing. Banks are now reluctant to provide financing because of the risk.
A: Financing in the form of long-term loans with low-interest rates.
J: Affordable loans for businesses for a long period.
A: Yes, and that’s it.
J: Is there anything else you need?
A: Nothing more is needed. Nothing else is needed now. Everything else should go to the Armed Forces of Ukraine.
J: Corruption? Taxes?
A: I’ve already said, we have low taxes.
J: I don’t mean low taxes, I mean their complexity.
A: What is the complexity?
J: Everything is fine. Are you satisfied as a business?
A: I lived in Germany for 15 years.
J: This is a question for you. Some people say they should be simplified.
A: Those are the people who have not worked in Germany. If they had worked in Germany or Spain, they would realize that there is no room for simplification. We have nuances in accounting, labor laws, and so on. Yes, this needs to be changed, but when people say that our tax system is much worse than in Germany, it means that those people have not worked there. We have a lot of unnecessary controls, I agree. Yes, there are VAT refunds, I accept that. We have nuances. But now we need to return to the issue of prioritization.
J: That is, the priority is cheap money for the long term and businesses will recover.
A: Of course. We will work, we have no other choice.
J: Great! Thank you very much!
Oleksiy Zozulya, CEO, GC Foxtrot Ltd
The Business of Defense // DATTALION Interviews // Foxtrot Ltd
Oleksiy Zozulya is the CEO of GC Foxtrot Ltd, a company supplying Ukrainians with household and electronic appliances. By February 2022, Foxtrot had become a national company with 169 retail stores across Ukraine and about 12 million Ukrainian customers.
When russia launched its full-scale invasion of Ukraine on February 24, Foxtrot’s central warehouse in Hostomel quickly came under occupation and heavy fire–eventually burning to the ground–and they were forced to close 100 of their retail locations due to hostilities. Zozulya himself joined the territorial defense and later allocated a share of Foxtrot’s budget to provide electronic necessities to Ukraine’s defenders.
With the majority of their facilities destroyed or under occupation, Foxtrot sustained approximately 1 billion UAH in direct losses. Zozulya still sees challenges and losses ahead, but believes that someday Ukraine will win and Foxtrot will rebuild.
Journalist (J): Please tell us about your business. What was it like before February 24, what were your plans and ambitions? What did you want to do this year and what could not be done because of the war?
Oleksiy (O): Our business is the Foxtrot company, an omnichannel network of household and electronic appliances. We sell equipment, and we have been doing it for more than two decades. At the beginning of the war, we operated 169 stores and a website. As an omnichannel retailer, we were in contact with our consumers in shopping malls, on the streets, and online. During this period [i.e. before the war], [and] for many years, we had about 12 million Ukrainian customers. We had penetrated every region, every regional center, and every city. Our geography covers the whole of Ukraine – the central office is in Kyiv, and the central warehouse is near Kyiv. These are the main parameters. What has changed during the war? During the first days, there was a lack of understanding of the scale it could reach and all the scenarios that could be. Although, a month before (I had this document in my next office) we adopted an emergency action plan, but we avoided the word “war” in every possible way. We really did not want to believe [it was possible], probably. When we were at the CEO club meeting, where American experts were invited and were sitting together with Ukrainians on the chair and taking turns to speak, [our people] said that maybe there were certain signs, certain hints of invasion. The Americans said, “We clearly understand that you will have a war. By all indications, it is obvious that this is the preparation of war. And we are talking about weeks or, at most, months until it starts.” That was in winter. After that… I am just remembering now that it was just wild to listen to such things in that audience, with these people with whom you were discussing economics, prospects, business, commerce. They were saying that the world is going to turn upside down, and there is going to be a war. Not in 1945, but now…
We accepted the plan, managed to do something with it. In some ways it was optimistic, in some ways pessimistic. In general, the war took us all by surprise. What we managed to do before the war took place was to remove valuable materials from the eastern borders; from our eastern stores [we moved materials] further to the west and to the center. We also managed to somewhat limit the supply of goods there. As it turned out, it was, on the one hand, done in time, because we had to evacuate less later. On the other hand, it was not enough, because the scale of the war turned out to be completely different from what we all thought it would be.
What changed our business the most during the war, during the first months, was the loss of the central warehouse. The central warehouse was in Hostomel. Those who are familiar with the retail business and with the premises of material assets understand that the central warehouse is now the heart of any company, which drives the goods through the veins, where all information flows and is processed. Well, it is impossible to live without it. In our case, it was completely burned down during the hostilities, in particular due to attacks from the enemy. The sheer figure of losses we remember for sure is that we owe UAH 650 million for the goods that burned in the warehouse and in some stores, which we owe to vendors, our partners. This was the amount of the product already received [that was] in our ownership, but the products that we could not sell and earn money back on, they were simply lost.
Therefore, this was the first thing that was tangible for us and for our local economy and for our local business, which completely changed all our further work for the next six months.
J: Could you please tell me about this warehouse, it was destroyed by whom?
O: Well, we think it was destroyed by rockets. When we went there later, we saw the remains of the rockets. The damages that we identified were the consequences of the missiles. There is an examination and there are legal records with the State Emergency Service, with all the authorities, where all official conclusions are available.
J: So, the warehouse was destroyed by russian missiles?
O: Yes, it was.
J: And why?
O: Listen, there is an airport next to us in Hostomel, a military airfield, which we defended from the first days. For several days, Hostomel and the airfield and the area around the warehouse changed hands, and there were street battles. Corpses were not removed [from] there for weeks. That is, we were really in the epicenter of hostilities. We were very unlucky that our warehouse was located there. Other market participants have huge warehouses – on the left bank near Brovary, on the right bank, along the Zhytomyr highway -and those were also damaged to varying degrees.
In our case, the warehouse helped us. But our main asset is customers and stores. So, we found a way to get out of this situation and continue the business.
J: And how did you find a way? If it is not a commercial secret?
O: When we realized that there was really no warehouse, we analyzed what we had. We had stores, some of which had already burned down and some of which were located near the combat zone in the east. So, we moved all the goods that were in the country from east to west. That is, the first task was to remove the goods from the warzone. The zero [most basic] task that was solved in the first weeks was the ability of the staff to protect their families, their families, and to solve personal issues. Only then did we ask our people to help with the evacuation of goods. As a result, we closed 100 stores and [kept] 60 stores [open]. With the remnants, we were able to fill the stores in relatively safe locations. For several months, the entire fleet of hired trucks drove from east to west, distributing the goods to the working stores. Then we would move goods again. It was a manageable but imperfect process. But we achieved the goal. At first, customers’ requests concerned two things. The first was the requests from the military and territorial defence to provide them with various gadgets. And the second was the requests from people to buy various gadgets, again, related to relocation across the country and settling in a new place.
J: You mean for refugees? For the general public, or for your employees?
O: No, for customers, for the general public.
J: Could you please tell us about the requests from the territorial defence and the military. What they wanted from you and how you helped them?
O: At the beginning of the war, I was in the territorial defence myself. The queue that we stood in on the first day to get there was long: we stood for half a day, there were 500 people in the queue, and it moved just a little bit. They had problems with the registration process. We wanted to help a little. We took multifunctional devices [a printer] from the Foxtrot store and helped their headquarters to make it [the process] work faster. And my friend and I were taken out of the queue the next day so that we did not have to wait.
What I’m getting at…are the supplies. There were weapons. Everything else was provided by volunteers and the population. We received cargo from volunteers several times a day. We needed equipment. These were banal [i.e. simple necessities including] extension cords, power banks, tablets, televisions, that is, those gadgets that helped to see better, especially in remote combat, especially with aerial photography and other such things.
Looking at all this, we created a group on Telegram of five to seven people, which we called “Help for ours”. All the requests that we received from different sides, we accumulated there. We allocated a budget (it was created spontaneously), thanks to which we can help all the military, and the territorial defence every month. So, this is how we respond to these requests.
J: And please tell me, what is the approximate number of shops that were under occupation, which were then liberated, and how many now remain in the occupied territories. Approximately, in percentage, if you can estimate.
O: At the beginning of the war, we operated 169 stores. Now we have managed to restore 116. The rest of them were either closed or completely destroyed, or remain in the occupied territories: in Mariupol, in Enerhodar, in Berdiansk, in Nova Kakhovka, in Tokmak. Recently, when our troops liberated Kherson, we restored one of the Kherson stores, for the time being as a point of delivery for online orders, on the central square [note: since December 24, due to massive hostile attacks, it has temporarily stopped working for the safety of employees]. We restored a store in Bucha, and one in Irpin. In Irpin, when the city was under occupation, the situation was interesting. Through Facebook, I was contacted by the local territorial defense. We agreed over the phone, via Telegram, to the delivery of equipment: I was sitting in a basement in the Kyiv region, and they were there. We were discussing how many gadgets they could come in and take, what kind of gadgets, where they were in our store.
J: And you just let them come into the store and take what they needed?
O: The store there was formally closed, but you could still get into it. When they left the store, some of the goods were relatively openly accessible. Some other goods, more valuable ones, were hidden in other places, which could be reached by knowing where to go. That is, leaving the premises, we tried to understand the psychology of those people who remain in these areas. Because in 2014 in the east we also lost a certain number of stores, and we understood what happens when the fighting starts.
One of our stores was hit by a rocket in Kharkiv. It was our first store in this city, opened two decades ago. It was located on Vernadsky Avenue, and a russian missile hit it. Some of the stores are now under occupation.
J: You hardly managed to take anything out of Mariupol?
O: Yes, nothing. Our store in Kherson, which we recently reclaimed, we can say it is relatively intact, it is located in the central square. We have another store in the Fabrika shopping center, which itself is damaged, and we do not yet understand what is inside it. We know that there are no goods there anymore, because during the war, when it was still possible to communicate with our people, we confirmed that, unfortunately, there are no goods there anymore.
J: Do you know who looted it? Ours [Ukrainian people] or russians? It’s just interesting, as far as I remember, you had two stores in Kherson. You launched one on November 26 in the mode of issuing goods. Just what is your impression? Can you tell the history of Kherson? russians came and seized it. You had no time to take anything out of there. In fact, everything remained there.
O: We traded there as much as we could. That is, we traded for hryvnias, we converted these hryvnias into non-cash form and sent them, receiving the money here. By some strange…you could even call it a curiosity, a coincidence, the store that was in the center of Kherson, in the central square, where the administration was, where there were anti-russian rallies, where tanks came – the epicenter of event – it was working until we were able to sell most of the remains at very low prices.
No russians came to our store and demanded re-registration, recalculation, etc. I remember, they came to us with such a question in Kakhovka, in Enerhodar. We refused, and the next day the store was sealed, our people were expelled and then something happened to the goods.
J: Did the russian military seal it or local collaborators?
O: Collaborators, people whom we conditionally called commandants, that is, obviously some powers were given to them by the occupation authorities. Accordingly, we had a clear position, agreed with the shareholders, that we would not enter into any cooperation, we would not trade for any non-hryvnia currency. It was a principled position. In the two cases we refused, we were taken away.
J: Sorry for one more rough question, but if it is a commercial secret, do not answer. How much do you estimate for the direct losses? I mean direct, not meaning lost profits, but losses from destroyed warehouses, destroyed stores, destroyed or seized goods. That is a very rough figure that you are working with.
O: About UAH 1 billion.
J: UAH 1 billion—those are the direct losses?
O: Yes. In addition to goods, it is also the cost of fixed assets, the cost of those expenses that we would not have incurred if not for the war. That is what is the consequence of the war, let’s say.
J: Do you somehow, from anyone, hope to get this money? And from whom, when, and how? And what are you doing to achieve this?
O: We have not eliminated this possibility. We hope that this money can be received from the culprits of all this, from the russian federation. Or, at the expense of the property of the russian federation. The first thing we did after we received the news of the first losses, was to realize that we need to properly record and document it. We had a group of lawyers and financiers who recorded all these losses. This is quite painstaking work, but they were doing it for several months and submitted it to the appropriate authorities. We figured that even if it does not work, we will at least have a detailed report, and this is also better than nothing. And if it works, then we are good.
O: We filed claims for damages with the competent authorities. There is an act of the State Emergency Service for Hostomel. But I will say that if we had waited or relied on at least some help, we would not be here anymore. Because we truly realized that it is up to us to survive in this situation. So, if we get it, it will be a nice bonus.
J: Did you make any independent assessment of these losses, I mean through the Chamber of Commerce and Industry (CCI) or other independent assessors?
O: We are currently restoring the original documents [destroyed in the warehouse in Hostomel] and preparing other information for an expert assessment of the damage. The thing is, it is very easy for us to estimate these losses, because we have the value of the goods. We know, according to the accounting, where everything was, what its cost was – there are invoices, and it is absolutely transparent when it comes to the goods.
J: Are you planning any lawsuits, I mean, as a company, to initiate compensation? Or do you think that the state of Ukraine should do it and demand it from russia? What is the mechanism?
O: Well, probably, the state should create the conditions for this money to come to Ukraine. Without these decisions or this environment, or this mechanism, I consider all other actions of economic entities such as us ineffective. This is because we focus on our work, our consumers, our money. If this is done [by the state], then we are ready to participate in these processes, but now we rely more on our own forces, resources, energy and so on.
J: From your point of view, the mechanism should be as follows: the state should organize the process of receiving money from russia or from russian assets, and then in some way redistribute this money among businesses affected by russian aggression, according to some proportions, losses, priorities, queues, etc. Right?
O: Yes, that would be more appropriate, in my opinion.
J: So, you don’t think that business itself can achieve anything in international courts or in Ukrainian courts? I am very interested in what businesses think about this and what they want from the state.
O: Well, look, every business has its own parameters. There may be a business that has a huge staff of lawyers and experts on all these legal issues, which is so big and state-forming that it can act as an independent entity in the international arena and will be heard.
We are not such a business. We have billions of dollars, but we are a local business, and we have local responsibilities. Accordingly, the resources that we have are quite limited. By the way, compared to the pre-war time, we do the same work with half as many staff, given the economic situation. And, accordingly, we are ready to do it where we see tangible results.
J: Okay then an example: Suppose a company that is comparable to you in terms of, let’s say, local turnover, etc., seeks compensation from russia through some international courts. Accordingly, from that moment, I understand, you will see the sense in it, invest money in it.
O: If there is a positive precedent, then, of course, we will follow such people.
J: During this period, which was extremely unusual, what was the most unusual decision you made as a director of the company?
O: There were several of them, and all were subordinated to one overarching decision and desire, which is the desire to survive. Accordingly, we adopted a business model, quite tough, for the next 10 months, and then it was strictly adhered to. It included decisions related to costs, the number of people, the number of stores. We closed stores ourselves. This is an absolutely unnatural step for a merchant. But we understood that in this way we could organize cash flows properly.
The decisions were made, we are satisfied with the way we have implemented them, and we are satisfied with the result that we can now sit and talk with you. We have confidence in what will happen tomorrow.
J: What will happen tomorrow?
O: The day after tomorrow there will be a victory. We know how to work tomorrow in military conditions, we know how to protect ourselves and our customers, we know how to respond to changes in the situation, how to work without light, without communication, without electricity, without many things. And we see that we, as people and as business, can be very adaptive. This flexibility allowed our country and all of us to go all this way from the beginning in February, at least until this new year.
J: You know, today is exactly the 300th day of the war. 300 days since they tried to take Kyiv in three days. I have one last question for you. Tell me, after these 300 days, do you still have something that surprises or frightens you? Is there something that can knock you out of the rut in terms of business, not in terms of personality? Is there anything that you haven’t experienced in these 300 days?
O: Yes. We see a big risk in the following things, which no one has ever worked out in Ukraine, including us. When there is no electricity for more than a day or two. Second, when there is no communication. Third, when there is no connection with our information core. These are probably three such things that could be very critical for any business and for us in particular. Either for our consumers or for us as an entity, as a business.
J: Yeah, I think you’ll come up with something. I have a shop in my house, they write everything down in a notebook, they say: “if you have cash, you bring it”.
O: If there is no light, but there is a connection, there is an opportunity to sell in any store through the website or from another store. That is, we have learned many things that seemed impossible three years ago. What we were doing a year ago, implementing them, seemed like something interesting, cool, modern, but maybe not very practical. But, in fact, any innovations, they definitely pay off and you always need to think about what else to do, because there is always at least the slightest chance that this scenario will work, and it will become normal. That’s how we are now with the lack of light.
J: A small last question. Did you, as a person, personally believe that russia would attack?
O: I assumed. I did not think that it would be so large-scale and cinematic. I mean, like the Second World War.
J: So, you thought it would be something local, in the area of Donetsk, Luhansk?
J: Ok. Ukraine will win!