World

Ukrainian businesses venture outside the country for growth as war hits home

Almost as soon as Russia invaded Ukraine last year, Ukrainian businessman Rostyslav Vovk realized he needed to look beyond the country’s borders to keep his pet food company growing.

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The ongoing conflict has prompted several Ukrainian firms to focus abroad to reduce their reliance on a shrinking home market and to tap into the millions of people who have left.

More than 5 million Ukrainians who fled the conflict were registered in Europe as of the start of May, UN refugee agency data showed, with Poland hosting over 1.5 million of them.

Ukraine, which had a pre-war population of about 40 million, has seen its domestic economy turned upside down, with corporate investments and growth now rare.

The country’s economy shrank by about a third in 2022, its biggest annual fall since independence from the Soviet Union, and only modest growth is forecast for this year.

A resulting drop in consumer spending is being felt in particular in the consumer and services sectors, where senior executives at four firms said they had turned to new markets in neighbouring Poland and Eastern Europe to boost business.

“Regarding our big expansion, which started after the full-scale war, the first destination was Poland,” said Vyacheslav Klymov, co-founder of Ukraine’s largest private postal operator Nova Post, which was founded in 2001.

“Our choice was to go to Poland, mainly because Poland hosts now the highest number of Ukrainians who fled from the war.”

Klymov said that most of Nova Post’s clients there were Ukrainian, apart from 10-15 percent of customers who were Polish, many of them sending parcels to Ukraine.

Andriy Khudo, co-owner and head of the !FЕST restaurant group, who has years of experience working with partners on projects in Central Europe, agreed the diaspora had helped.

“Before the war we already were in Poland, Romania and Hungary. Then we started a lot of negotiations to attract new and expand existing partnerships,” he said.

“We began to open actively in Poland because in this market our brand and our product were already known and popular and it was easiest to accelerate with existing partners there.”

In Khudo’s bars, including the ‘Piana Vyshnia’ which means ‘Drunken Cherry’ in English, Ukrainians are reminded of home.

“We come here because we know this, it’s cool,” said Tania Krasnik, on a visit from Cologne in Germany where she has lived since the war, to see her friend Hanna Derevianko, 34.

“Today is my birthday. She came from Ukraine and I came from Germany … and we decided to meet in Warsaw,” Krasnik said as the pair sat in high stools by the window, each sipping from a glass of the bar’s signature cherry drink.

More than 24,000 companies with Ukrainian capital were registered in Poland, or 25 percent of all those with foreign capital, the Polish Economic Institute think-tank estimates.

In September, 8.5 percent of all companies opened in Poland had Ukrainian capital, compared with 0.8 percent in January 2022.

‘Not very easy’

Some firms are looking further into Europe, and strategies differ.

Khudo and partners have also launched bars in Latvia and are ready to open in the Czech Republic, Lithuania and Estonia – all countries hosting large numbers of Ukrainian refugees.

Andriy Zdesenko, who over 26 years has built his Biosphere Corporation into Ukraine's largest manufacturer of household and personal care products, had been looking to expand already.

The opportunity arose during the war.

“We bought ‘Alufix,’ the Austrian brand. It is known not only in Austria but also in Hungary, Slovakia, the Czech Republic, Romania and Slovenia,” said Zdesenko, who has also bought a Romanian factory and other assets.

“To enter a new market with an unknown name and, moreover, for a Ukrainian company, is not very easy.”

Before the invasion in February last year, Ukraine’s corporate sector had a mixed reputation abroad, with corruption scandals and questions over transparency damaging its image.

As a result, most Ukrainian companies focused locally or catered for markets in Russia and other former Soviet states.

But war has changed the landscape dramatically.

Early in the conflict, Ukrainian entrepreneurs said they benefited from popular support across many countries.

Vovk, co-owner and CEO of Kormotekh, said Ukraine’s leading pet food producer began by selling in the Baltics as retailers looked to replace Russian products.

“The main goal is to grow abroad much faster than we planned for ourselves in the pre-war period,” Vovk said.

Kormotekh had expanded sales to 39 countries at the start of 2023, from 19 five years ago. Vovk expects exports to grow from 22 percent of total sales in 2022 to 30 percent this year and between 60 percent and 70 percent by 2028.

Zdesenko estimates Biosphere’s revenues will reach $150 million this year, compared with $102 million in 2022 and expects his Ukrainian business to account for about 60 percent of total sales, with external operations some €100 million in sales within the next three years.

Nova Post’s Klymov, meanwhile, plans to invest about €10 million euros to open up to 200 branches across Europe.

Kormotekh has invested in expanding production both in Ukraine and Lithuania.

As businesses in Ukraine battle curfews, Russian shelling, damaged infrastructure, disrupted logistics and stalled production, many are helping civilians and the armed forces by delivering necessities and making donations.

They are also looking to the future, hoping that ‘Made in Ukraine’ becomes a trusted brand globally.

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World

Crown Prince of Abu Dhabi meets with CEOs of leading Norwegian companies

H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, has met with a group of CEOs from leading Norwegian companies, as part of their participation in the UAE-Norway Investment Forum, held alongside his official visit to the Kingdom of Norway.

During the meeting, H.H. Sheikh Khaled bin Mohamed bin Zayed underscored the UAE leadership’s commitment to strengthening economic cooperation with its international partners.

He highlighted that investment in innovation and knowledge is a cornerstone for achieving sustainable development, noting that enhancing collaboration with Norwegian companies across key sectors will open new avenues for mutual economic growth between the two countries.

The UAE-Norway Investment Forum, taking place in Oslo, aimed to highlight available investment opportunities and strengthen trade relations between the UAE and Norway, fostering shared interests and supporting innovation and knowledge-based economic visions.

-wam

World

At the Indonesia International Book Fair 2024, TRENDS inaugurates 10th global office, releases four books

As part of its Asian research tour, partnership with Aletihad News Center, and
primary sponsorship of the Indonesia International Book Fair 2024, TRENDS
Research & Advisory inaugurated its office in Jakarta, marking its 10th location
worldwide. It also released four books in Indonesian.
The inauguration event was attended by ambassadors of the UAE, Bahrain, and
Jordan to Indonesia, chairpersons of the UAE and Indonesian Publishers’
Associations, the Director of TRENDS’ Jakarta office, and a group of researchers
and academics.
Speaking at the event, Dr. Mohammed Abdullah Al-Ali, CEO of TRENDS
Research & Advisory, stated that TRENDS’ international offices—set to reach 15
by the end of 2024—aim to enhance the Center’s research efforts and deepen its
role in disseminating knowledge, thus serving as a global knowledge bridge.
He emphasized, “At TRENDS, we believe in the importance of cooperation
between think tanks and prioritize this endeavor. We believe the TRENDS office in
Jakarta will enhance the exchange of knowledge and ideas between think tanks in
Asia and the Middle East, opening new horizons for collaboration in various
fields.”

Four books in Indonesian
As part of the Jakarta office’s inaugural activities, four books were released in
Indonesian, including the 11th and 12th books of the Muslim Brotherhood
Encyclopedia and Global Trends in AI and Automation and the Future of
Competition between Man and Machine: An Analytical Forward-looking Vision.

Hostility to Arab states
The 11th book of the Muslim Brotherhood Encyclopedia, The Concept of the State
According to the Muslim Brotherhood, highlights its hostile stance toward Arab
states since its inception. The group views them as an obstacle to its ascent to
power. It opposed the modern principles upon which these states were built,
considering them incompatible with the group’s unique interpretation of Islam,
which it claimed to embody exclusively.

Exclusion of nonconformists
The 12th book, The Muslim Brotherhood: Rejection of Tolerance and Exclusion of
Nonconformists, examines the Muslim Brotherhood’s stance towards
nonconformists, individuals, and entities. The book reveals the group’s binary view
of the world, categorizing others as allies or adversaries. It ties these relationships
to the Brotherhood’s internal power struggles and self-serving interests.

Global Trends in AI
The third book, Global Trends in AI, explores significant developments in AI and
its impact on various aspects of life, including the economy, society, and
governance. It also offers a comprehensive analysis of technological advancements
in AI, its applications across sectors, the ethical and social challenges it presents,
and its future trajectory.

Automation

The fourth book, Automation and the Future of Competition between Man and
Machine: An Analytical Forward-looking Vision, addresses the growing challenges
faced by the human workforce in the face of widespread automation and AI
applications. The book concludes that while automation presents a significant
challenge to the labor market, it simultaneously creates new opportunities. It
emphasizes the importance of preparing for this shift through skills development,
continuous education, and adopting economic and social policies that support the
workforce.

Prominent pavilion and active presence
The TRENDS’ pavilion at the Indonesia International Book Fair has attracted
numerous visitors, including academic researchers and officials, such as the
ambassadors of the UAE, Bahrain, Qatar, Jordan, and Turkey. Additionally,
chairpersons of Arab and Indonesian publishers’ associations, authors, publishers,
and students visited the pavilion. All were impressed with and praised TRENDS’ diverse, valuable publications. They also commended TRENDS’ active
international presence and ability to address global developments with rigorous
analytical research.
Dr. Mohammed Abdullah Al-Ali honored the esteemed guests, including
ambassadors of the UAE and Bahrain to Indonesia, Wedha Startesti Yudha,
Chairperson of the Indonesia International Book Fair Committee, Arys Hilman
Nugraha, Chairman of the Indonesian Publishers Association, and others,
presenting them with TRENDS’ publications and commemorative shields.
Additionally, he awarded TRENDS’ Research Medal to Ni Made Ayu Martini
Indonesian Deputy Minister of Marketing, Tourism and Creative Economy
It is worth noting that during its current Asian research tour, TRENDS announced
the launch of the TRENDS Research Medal, awarded to individuals who make
significant contributions to the development of scientific research and promote collaboration with TRENDS in strengthening a culture of research across various fields.

World

US determined to prevent full-scale war in Middle East, Joe Biden tells UNGA79

US President Joe Biden highlighted the US Administration’s determination to prevent a wider war that engulfs the entire Middle East region, noting that a diplomatic solution “remains the only path to lasting security to allow the residents from both countries to return to their homes on the border safely”.

In remarks he made today before the 79th Session of the United Nations General Assembly (UNGA79), the US President said, “Full-scale war is not in anyone’s interest,” adding that a diplomatic solution is still possible.

He also touched on “the rise of violence against innocent Palestinians on the West Bank”, and the need to “set the conditions for a better future”, which he said featured “a two-state solution, where the world — where Israel enjoys security and peace and full recognition and normalised relations with all its neighbours, where Palestinians live in security, dignity, and self-determination in a state of their own”.

President Biden underscored the ceasefire and hostage deal put forth by Qatar and Egypt, which the UN Security Council endorsed. He said, “Now is the time for the parties to finalise its terms, bring the hostages home,” adding that this would help ease the suffering in Gaza, and end the war.

-WAM