UKRAINE

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Bunge and Cargill have begun to make massive investments in Ukraine.

Underpinning many of Poroshenko’s economic and political moves lies a deep conviction in the importance of remov-ing barriers to international trade. Since 2014, Ukraine has established a Deep and Comprehensive Free Trade Area with the EU, signed a free trade agreement with Canada and is in the final steps of negotiating FTAs with Israel and Turkey. In 2013, Russia’s share of Ukraine’s total economic turnover was 30 percent, but today that has dropped down to 9 percent and the EU now represents 40 percent, according to the president.

Several further reforms are also planned for the next year, with a focus on attracting the investment that both reflects and encourages the country’s healthy development. “Our main focus is the improvement of the investment climate,” explained Poroshenko.

When Ukrainian President Petro Poros-henko was elected in 2014, the challenges that lay ahead were vast. Russia had just invaded Crimea and pro-Russian groups were attempting to overtake the region of Donbass. At the same time, Poroshenko’s mandate was to not only completely shift the country’s foreign policy toward the West but also to save the economy and transform the post-Soviet state into a modern liberal democracy.

Four years on, and progress has been re-markable. Through a slew of reforms and strategic alliances with Western nations and international bodies, Ukraine has seen both a return to economic growth and has restored national security.

“When I was elected, any American or NATO officer was prohibited even to enter our Ministry of Defense. Today, we have the most effective level of coopera-tion, which can be demonstrated by the fact that Ukraine’s army is now officially

among the 30 most efficient in the world,” said Poroshenko.

On the economic front, legislative changes have worked to open the coun-try up to investment, cut red tape, boost transparency, strengthen the rule of law and begin a major privatization process.

“Our economy has prevailed and even strengthened despite the attacks,” said Poroshenko. In the first quarter of 2018, GDP grew by 3.1 percent, the country has shot up 61 places in the World Bank’s Ease of Doing Business rankings since 2013, and international companies like GE,

“Our economy has prevailed and even strengthened” PETRO POROSHENKO, PRESIDENT OF UKRAINE

Ukraine President Petro Poroshenko meets with U.S. President Donald Trump during the U.N. General Assembly in New York, September 21, 2017. Photo: Office of the President of Ukraine

With a profusion of reforms transforming nearly every aspect of the country, Ukraine is laying the foundations to become a bea-con of democracy and economic prosperity

When Ukraine declared independence from the Soviet Union in 1991, a wave of optimism swept much of the na-tion. However, the transition from the “old system” into a modern, prosper-ous nation was slow and incomplete, dragging down the country’s economic growth and democratic development.

By 2014, the country was fed up, and tens of thousands of people poured into the Maidan Nezalezhnos-ti, or Independence Square, to protest the government’s focus on Russia and general lack of economic progress. The protests resulted in the appointment of a new government with a massive task ahead of it – to reform nearly every aspect of the country.

“It was a revolution against klep-tocracy, and it was the revolution of the middle class. It was for democra-cy,” said Dmytro Shymkiv, secretary of the National Reforms Council, who was inspired to move into govern-ment from the business community after the revolution.

So, the new administration began the herculean task of modernizing Ukraine. So far, the changes already made include military, pension and health care reform, the elimination of more than 600 business regula-tions, decentralization and significant

reforms in the energy and financial sectors to attract investment. With a new law on privatization recently passed, the country has also begun to sell off many of its 3,500 state-owned enterprises.

To fight corruption, the court system has been cleaned up with new anti-corruption infrastructure and legislation, and an anti-cor-ruption court is expected to come into effect this year. Likewise, an award-winning digital public pro-curement system called ProZorro has been introduced to ensure transparency, as has an online VAT refund system that eliminates the arbitrary arrangement that was previously the norm.

“Americans can understand how complicated and difficult this can be thinking of their own health care reforms,” said Poroshenko. “I’m very proud to say that according to the independent estimations of organizations like the World Bank and the IMF, Ukraine has institut-ed more reforms over the last four years than it had since its indepen-dence in 1991.”

Ukraine President Petro Poroshenko is leading the nation through remarkable political and economic change, with a focus on attracting investment to unlock the full potential of continental Europe’s largest country

Elected in 2016, Ukraine’s youngest-ever prime minister is working overtime to deliver the country’s ambitious reform agenda

What are your current priorities?In 2019, Ukraine will have parliamentary elections and our number-one priority is to keep up the pace of our efforts in order to secure accelerated economic growth, and we must keep moving forward with our reforms, a prerequisite to continue to receive interna-tional support. I would like Ukraine to be a reliable and strong partner for the United States and other demo-cratic allies. We need to be a country that respects hu-man rights and one with a fair and just courts system, and this is exactly the direction we are moving in.

What have been some of the government’s accom-plishments during these years?Our agenda was to build up a new Ukrainian state, and I’m proud to say we have managed to renew stability and macroeconomic growth. This is a time for firsts – the first time in history we have had a roads fund; with

our international part-ners, we have created the first energy-efficien-cy fund; the first fund to support startups; the first agency to support exports; the first office of investment support; and the first council on industry development. We have also started the largest-scale reform of public service in the history of Ukraine.

How would you describe Ukraine today?Ukraine is a modern, 21st-century country with huge opportunities that haven’t been capitalized on to their full extent. The opportunities are impressive compared to other countries on the continent. From a medium- and long-term perspective, Ukraine will become one of the strongest economies in Europe, and those who come to invest here first will be the most successful.

interview

VOLODYMYR GROYSMAN, PRIME MINISTER OF UKRAINE

“Ukraine will become one of the strongest economies in Europe, and those who come to invest here first will be the most successful”

Ukraine has instituted more reforms over the last four years than it had since its independence in 1991

PETRO POROSHENKO, PRESIDENT OF UKRAINE

“Our Main Focus Is the Improvement of the Investment Climate in Ukraine”

Building the New Ukraine

PUBLISHING DIRECTOR BARBARA CZARTORYSKAEDITOR ALYSSA MCMURTRYWORDS ALYSSA MCMURTRY, JONATHAN MEANY, ELEANOR WRAGGCOPY EDITOR ALYSSA MCMURTRYPROJECT MANAGER CARLOS ROBLEDOGRAPHIC DESIGN JUAN CORTAZARPROJECT ASSISTANT CYNTHIA JUMOKE

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The New Ukraine

first quarter of 2018, and credit and deposit portfolios are increasing.”

As a result of the PrivatBank nationalization, state-owned banks now make up over half of the sector, which the government seeks to address through privatization plans. “Our priority is to accelerate eco-nomic growth, which is impossible without an effective banking sector. By 2022, PrivatBank will be ready for the exit of the state from the con-trol of its stock,” said acting finance minister Oksana Markarova.

With the structural overhaul

well underway, the focus now is on maintaining stability, and the central bank is targeting low and stable inflation, banking system transparency and better credit availability in order to drive finan-cial strength. “When our reforms are implemented, the banks will be able to withstand any crisis at each moment of their existence,” said Smolii. “Ukraine’s capital adequacy ratio currently exceeds 18 percent, which means that our current bank-ing sector status is more stable than foreseen by the standards applied.”

As investor confidence in Ukraine continues to improve, venture capital and private equity funds are eyeing the country as an opportunity to unlock a considerable amount of value

For asset management firm Horizon Capital, Ukraine makes good business sense. “We view Ukraine as a ground-floor opportunity. The country’s progress over these past four years has been truly impres-sive and far exceeds what had been achieved previously since Ukraine’s independence,” said Lenna Koszarny, Horizon Capi-tal’s founding partner and CEO.

Founded in 2005, Horizon Capital has its roots in the Western NIS Enterprise Fund, which was launched in 1994. Horizon has over $800 million in assets under management and

has invested over $570 million in Ukraine and the near region in more than 140 companies, unlocking an estimated $1.8 billion in capital. Already one of Ukraine’s most active investors, it recently announced a decision to invest an additional $100-$200 million over the coming years.

“For us, the most compelling investments are export-oriented companies founded and led by visionary entrepreneurs in sec-tors with strong, sustainable cost advantages,” said Koszarny.

After a precipitous drop in GDP during 2014-2015, Ukraine’s economy has steadily returned to health, posting growth of 2.5 percent last year. And besides improving the business climate and financial stability, the government’s unfaltering commitment to reforms has seen it qualify for four tranches of a $17.5 billion program from the Interna-tional Monetary Fund (IMF) to help stabilize the country’s macroeconomic situation.

“This government’s goal is to be the most business-friendly in the history of indepen-dent Ukraine,” said Daniel Bilak, director of UkraineInvest, the country’s investment promotion agency.

In 2017, the country brought in $2.3 billion in foreign direct investment, up from a low of $410 million in 2014, and officials believe that figure is set to increase. A 2017 Interna-tional Investor survey of 214 of the top hedge fund managers in Europe, the Middle East and Africa found Ukraine to be the num-ber-one priority for potential investments.

“Smart, contrarian investors in Ukraine today are attracted by its talented people, solid growth trajectory and substantial antic-ipated returns on investments,” said Lenna Koszarny, founding partner and CEO at the Horizon Capital equity fund.

Improving transparency has been a key fo-cus in boosting investor sentiment and privat-ization has created a slew of unique opportuni-ties, with foreign companies placing winning bids across sectors from energy to infrastruc-ture to retail. Yet, it is not just in public works where opportunities lie. Ukraine is an energy

Accelerating eco-nomic growth is impossible without an effective bank-ing sector

OKSANA MARKAROVA, ACTING MINISTER OF FINANCE

As a result of far-reaching reforms initiated by the National Bank of Ukraine which saw the removal of over half of the country’s banks from the market, Ukraine’s finan-cial sector is in much-improved shape. The 2016 nationalization of Privatbank, the country’s largest commercial bank, after a stress test revealed capital shortages was lauded by IMF head Christine Lagarde as an important step in its efforts to safeguard financial stability. Now, with the clean-up almost complete, confidence in the system is returning.

“The steps we’ve taken have con-tributed to increased profitability and public trust in the banking sys-tem,” said Yakiv Smolii, governor of the National Bank of Ukraine. “The banks that are currently operating have shown a profit of 8 billion hryvnias ($300 million) for the

Ukrgasbank, a state-owned bank and one of the largest financial in-stitutions in Ukraine, is a success story, not just nationally but within Europe. Partnering with powerful institutions such as the World Bank and IFC, it has become a leader in SME finance and the first green bank in the region

What can Ukrgasbank offer poten-tial investors? As a bank, we are number one in the green energy space. We serve as gate-openers to this market for investors. One of our main activities is risk mitigation. This specialization is our competitive advantage in comparison to other banks. Every second megawatt of renewable energy that is installed in Ukraine is financed by Ukrgasbank. Ninety percent of projects in Ukraine in

renewables, energy efficiency and environmental protection go through our bank.

What opportunities exist for inves-tors in green energy? The investment potential of Ukraine in energy efficiency, renewables and emission reductions is estimat-ed to be $70 billion in the next 15 years. According to an agreement between Ukraine and the EU, the share of renewable energy in final consumption in Ukraine must reach 11 percent by 2020. We’re currently at 1.2 percent. We’ve done several projects with munic-ipalities and would be interested in involving partners, particularly related to bringing in energy-effi-cient equipment.

“Every second megawatt of renewable energy that is installed in Ukraine is financed by Ukrgasbank”

The steps we’ve taken have contrib-uted to in-creased prof-itability and public trust in the banking system

YAKIV SMOLII, GOVERNOR, NATIONAL BANK OF UKRAINE

A Country Primed for Big Investment Ukraine’s economy is on the rise and offers a tremendous amount of unique investment opportunities in sectors ranging from IT to agriculture

powerhouse, and its 40 million hectares of farmland offer vast opportunities for agribusi-ness. Likewise, it boasts a growing knowledge economy, with a $3.5 billion IT outsourcing industry. “Our two main assets are brains and grains. We have a tremendously well-educated, competitive workforce,” said Bilak.

The newly-established National Invest-ment Council, an advisory body that pro-vides a platform for direct dialogue between international investors and government bodies, will play a key role in ensuring in-vestors are aware of what Ukraine offers. Its first meeting was co-chaired by the president of the European Bank for Reconstruction and Development in May 2018.

“The council members acknowledged Ukraine’s achievements, mainly in the fields of deregulation, eliminating bureaucracy and judicial reform,” said Yuliya Kovaliv, the council’s head of office. “We also received commitments from many members to sig-nificantly enlarge their investments.”

FDI (2017)National Bank of Ukraine

Infl ation (2018)National Bank of Ukraine

Key investment sectors

GDP GrowthDoing Business Finance

Innovation Technologies

Ease of Doing Business rating World Bank

INVESTOR’S SNAPSHOT

3.5%

#24 $2.3 billion 9%

2018 FORECAST

2.5%2017

Energy InfrastructureManufacturingAgribusiness

April 2018with stable outlook B-/B S&P Rating

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#76

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“Investors acknowledged Ukraine’s achievements in deregulation, eliminating bureaucracy and judicial reform”

YULIYA KOVALIV, HEAD OF OFFICE OF THE NATIONAL INVESTMENT COUNCIL

Stability Becomes New Normal

Why Sharp Investors Are Flocking to Ukraine

Aerial view of Khreshchatyk, European Square and Ukrainian House in the city center of Kiev, the capital of Ukraine.

Partnering with visionary founders to build a New Ukraine

Horizon Capital is the leading private equity firm in Ukrainemanaging over $750 million and backed by 40+ institutions We provide growth equity to fast-growing, export-oriented companies in IT, light manufacturing and food & agriculture

Find out more at:

www.horizoncapital.com.ua

Q&A

KYRYLO SHEVCHENKO, CHAIRMAN OF UKRGASBANK

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We view Ukraine as a ground-floor opportunity

LENNA KOSZARNY, FOUNDING PARTNER & CEO, HORIZON CAPITAL

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INFRASTRUCTUREENERGY

Established in 2005, DTEK is one of Ukraine’s flagship energy firms and has quite literally fueled the country’s growth as the operator of its deepest gas-pro-ducing wells and controller of 25 percent of its electricity generation capacity. Its CEO, Maxim Timchenko, has now set a new vision for the company, and by extension, Ukraine’s energy sector at large, for a future based on digitalization, decentralization and decarbonization.

DTEK is no stranger to leading change. At the World Econom-ic Forum in 2012, it joined 20 of the world’s largest energy companies in developing a set of principles outlining cooperation between the energy industry and society. Today, the company has become the country’s main investor in renewables and the largest wind power producer, partnering with GE Renewable Energy to bring in state-of-the-art turbines, and thus driving the beginnings of a green energy revolution in Ukraine.

ONUR Group is a Turkish com-pany that focuses on infrastruc-ture construction throughout Eastern Europe and the Middle East. The company started in Ukraine in 2004 and rose to public prominence thanks to the successful completion of a key Odessa highway project. Trusted internationally, the multinational company went on to carry out road projects in the Lviv region that were financed by the Euro-pean Bank for Reconstruction and Development and subse-quently worked to upgrade the Kiev-Chop highway to European standards. As the government puts more impetus on construction projects throughout the country, ONUR

has seen an uptick of activity and is working alongside internation-al partners such as the World Bank to improve infrastructure around the country. Comple-mentary to its construction work, ONUR has also made several oth-er investments in limestone and sand quarries. Also, as a compa-ny always seeking to capitalize on opportunities, over the past two years it has begun to invest in Ukraine’s booming agricultural sector. Currently, it holds 5,000 hectares of agricultural land, concentrating on grains, but the company hopes to soon double or triple its landholdings and in-vest in grain silos and elevators.

How has the shift in govern-ment since 2014 affected the construction sector? We are starting to see that construction is growing as the government focuses on allocat-ing more funds for construction projects. Since the Maidan revolution, government policy has changed to make everything better, including opening up the market for business investment. The ProZorro procurement sys-tem, which is totally transparent, has also made the tender system more open for all companies. We see Ukraine’s size and location as a big opportunity and believe

that in a few years, construction-will be the biggest sector in the country.

To what extent is this leading to greater competition in the sector?Thanks to the reforms and the strong economic performance of the country, things are going well in Ukraine and other foreign companies are interested in the country. For us, competition means quality; new companies entering the market will increase the level of the entire sector. Yet, as we have been here for a long time, we have a strong

competitive advantage because we know all of the industrial sectors, the suppliers, and the climate conditions.

In March this year, Ukraine’s long-awaited new privat-ization law came into force, revolutionizing the country’s outdated approach to the sale of state property. For inves-tors, this opens up a raft of ac-quisition opportunities across multiple sectors, and local law firm AEQUO, which recently held a conference for foreign firms entitled “Turning Tides: M&A in Ukraine,” is working to help international investors navigate what’s on offer.

Created amid Ukraine’s 2014 revolution, AEQUO has quickly risen to become one of the country’s most trusted and innovative law firms. Representing major American clients and trusted by international institutions, the company boasts one of Ukraine’s leading indus-try-focused multidisciplinary legal teams.

“American companies are uniquely entrepreneurial and, in our experience, require an extra level of care in their legal and regulatory support on the ground in Ukraine to fully comply with rigorous U.S. laws and business ethics prin-ciples, while enjoying the ben-efits of an emerging economy market,” said Denis Lysenko, managing partner of AEQUO. “This care, we are very happy to provide.”

A Fresh Vision for Ukraine’s Energy Sector

New Privatization Law in Ukraine Opens Door to Investment

Ukraine’s Construction Sector Benefits from New Government Approach

As Ukraine’s government works to shape a new future for the coun-try’s energy sector, so too do its businesses. Leading energy firm DTEK is committing significant resources to improve sustainability, efficiency and environmental performance

As the structural transformation of the Ukrainian economy gathers pace, the latest initiative by the government, which calls for fast and transparent privatization of state-owned firms, is set to bring more outside players to the market

Q&A

MAXIM TIMCHENKO, CEO, DTEK

Q&A

DENIS LYSENKO, MANAGING PARTNER, AEQUO

What is your outlook for the energy sector in Ukraine?The energy sector in Ukraine is the most underdeveloped and promising market in Central Europe; there are huge require-ments for investment and huge opportunities. We are a top country in terms of gas reserves, and we have 100 years’ worth of coal deposits which can be used in an environmentally-friendly way with new technologies. With a good regulatory environment and stable political situation, we will have foreign investment and technology, and Ukraine will increase its energy security.

What are the opportunities for foreign investors in Ukraine’s wave of privatization? Privatizations of large-scale assets are expected to include major industrial targets, such as Centrenergo, Odessa Port Plant, and a number of regional elec-tricity distribution companies. Other targets include Turboat-om and the President Hotel in Kiev. Importantly, the privat-ization authority now has more flexibility to further discount sale prices for auctioned assets.

In 2018, AEQUO was named Ukraine’s most innovative law firm, and has been ranked among the world’s best arbi-tration firms by The Legal 500. What gives AEQUO its edge? AEQUO has a blend of domestic and cross-border projects expertise, local industry insights and international connections, sophisticated legal technology and a high-caliber team of law-yers. Our regulatory expertise is relied upon by the World Bank, the European Commis-sion and the European Bank for Reconstruction and Develop-ment. Our dispute resolution team succeeds in the most complicated of cases. AEQUO is bold enough to lead not only in business transactions but also in wider sectoral initiatives.

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In January, DTEK and GE signed a contract to add 26 new wind turbines to Ukraine’s power grid.

The Kiev-Chop highway, which has been upgraded to European standards, connects Ukraine with Western Europe.

The energy sector in Ukraine is the most underdeveloped and promising market in Central Europe

MAXIM TIMCHENKO, CEO, DTEK

“American companies, in our experience, require an extra level of care in their legal and regulatory support on the ground”

DENIS LYSENKO, MANAGING PARTNER, AEQUO

Spanning the main trans-European corridors, Ukraine unites Eastern and Western Europe, the Baltic States with the Black Sea region, and the Trans-Caspian Transit Corridor connects it with the Chi-nese Belt and Road Initiative. But a combination of mismanagement during Soviet rule and periods of economic instability have meant that the country’s infrastructure is holding it back.

Now the Ministry of Infra-structure has laid out a National Transport Strategy for 2030, which calls for a minimum of $50 billion in investment while creating a pub-lic-private partnerships (PPP) office to attract foreign firms.

EMRE KARAAHMETOGLU, HEAD OF DELEGATION, GENERAL COORDINATOR, ONUR GROUP

In the last 2 years we have constructed more than 3,000km of roads, which is unprece-dented

VOLODYMYR OMELYAN, MINISTER OF INFRASTRUCTURE

The Road AheadWith wide-ranging reform and investment plans, Ukraine is bringing in foreign investors to overhaul its infrastructure sector

The initiative is bearing fruit: last February, U.S. firm GE signed a $1 billion deal to modernize the coun-try’s railway system, switching out old Soviet-built locomotives for new machinery to increase the speed and reliability of goods exports.

“For us, the most crucial thing is transparency. I love foreign compa-nies entering the country – I want them to change Ukraine,” said Volo-dymyr Omelyan, Ukraine’s minister of infrastructure. It’s not just railways that are being

ONUR machinery park.

upgraded. A massive $11.4 billion has been earmarked for upgrades to roads, with half of that coming from the state budget. “In the last 2 years we have constructed more than 3,000km of roads, which is unprecedented,” said Omelyan. And with the entry of low-cost airline Ryanair this year and the expected arrival of multinational container seaport operator Hutchi-son Ports, Ukraine is increasingly unlocking its potential to become a global connectivity hub.

Approval of new legislation to facilitate PPPs

Port tariffs and liberalization of ports services

Modernization of the national railway company

Legal framework governing river transportation

Forthcoming infrastructure reforms

SOURCE: NATIONAL INVESTMENT COUNCIL OF UKRAINE

“We believe that in a few years, construction will be the biggest sector in the country”

Q&A

FOCUS ON ONUR

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LAW

MHP has seen exponential growth in the last two decades, skyrocketing from a 10-person operation in 1998 into the lead-ing poultry company in Ukraine

The backbone of MHP has always been a sound business model. Having carefully studied poultry companies around the world, its founder and CEO, Yuriy Kosyuk, saw an opportu-nity to build a globally compet-itive protein company from the ground up. “We eliminated the problems our competitors have and built a company that was smart and efficient. We have a competitive edge because we control every-thing,” said Kosyuk.Vertical integration is the key to the success of the company, which in 2017 exported 220,983 tons of chicken meat to 63 countries and employed nearly 28,000 people. Through man-aging every step from growing the grains for feed, to incubating eggs, processing some of the highest quality organic chicken products on the market and even using manure for biogas, the company has one of the lowest production costs in the industry.Starting the business in Ukraine was also ideal, not only because

of its vast fertile land but also because of a wide open market – in 1998, the country imported 99 percent of its chicken meat.

“Ukraine is the best place in the world for this kind of production, better than Brazil and the United States,” said Kosyuk. Now, the company is working to achieve its targets of becoming a major player in the industry. This year alone, it plans on investing $250 million to expand its business, and within the next 7-10 years, it aims to produce 1 million tons of chicken protein annually – approximately 1/13 of the total global production.

Known as the “breadbasket of Eu-rope,” Ukraine is endowed with the fertile “black soil” that has helped to make the country one of the world’s most important producers and ex-porters of agricultural products.

Scientifically known as cherno-zem, this soil is one of the most fertile in the world and makes up around 58 percent of Ukraine’s total arable land, which is equal in size to around 30 percent of Europe’s total arable land area.

“Ukraine is like Brazil was 20 years ago, but it happens to be situated in the heart of Europe,” ex-plained Oleg Bakhmatyuk, chairman and CEO of UkrLandFarming, the nation’s largest vertically integrated agricultural holding company. “This is what gives Ukraine clout because it has a dominant position in selling foodstuffs to important markets such as the Middle East and North Africa and Asia.”

UkrLandFarming, founded in 2007, produces a wide range of products including grain, corn, eggs, sugar and livestock. It has

earned a wealth of experience in grain growing, storage and trans-portation, operating a network of grain elevators with a total storage capacity of 2.5 million tons. Fo-cused on the global market, it sells to international players including Bunge, Cargill and Glencore.

“What attracts the likes of Bunge to us is our scale and our volume,” Bakhmatyuk said. “The concept of the company is to show off to the rest of the world what Ukraine can be.”

With its abundance of fertile land and water resources, a favorable climate for large-scale agriculture, a highly qualified and low-cost workforce, and a government working towards the liberalization of the agriculture industry, Ukraine’s agribusiness sector has the potential to grow exponentially. Bakhmatyuk estimates that around $20 billion worth of investment is still needed in Ukraine to unlock the country’s full agricultural potential.

“We need a player who can combine our potential with their fi-nancial clout. The world is inevita-

By the numbers: UkrLandFarming

2.5 million tonsgrain storage capacity

570 haland with black soil

$658 millionrevenue (2017)

$2.128 billionassets

Source: UkrLandFarming

This is an opportunity for anyone to come in with technology and money to grow this sector

OLEG BAKHMATYUK, CHAIRMAN AND CEO, UKRLANDFARMING PLC

Unearthing Ukraine’s Agricultural Potential As the world’s population increases, UkrLandFarming, Ukraine’s largest agricultural holding compa-ny, is set to gain economic and political clout by playing an increasingly important role in global food security

bly going to develop a food deficit, and this is an opportunity for anyone to come in with technolo-gy and money to grow this sector,” he said.

Agriculture is already the third largest sector of the Ukraine economy, contributing around 10-12 percent of GDP and employing 17 percent of the workforce. Food exports have almost doubled in the past seven years, reaching $17.8 billion in 2017. Grains followed by fats and oils make up the largest share of exports. Ukraine is the world’s number-one exporter of sunflower oil, the second largest exporter of grains, and the fourth largest exporter of barley and corn.

“Recall in the ‘80s during the first oil crisis in the Middle East. Oil had been just a commodity, but it then soared in value, not only in price but in global importance and influence. This is today hap-pening in the food market,” said Bakhmatyuk. “It is not only about benefiting economically, it is also about benefiting politically.”

“Ukraine is like Brazil was 20 years ago, but it happens to be situated in the heart of Europe”

OLEG BAKHMATYUK, CHAIRMAN AND CEO, UKRLANDFARMING PLC

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UkrLandFarming produces a wide range of products including grain, corn, eggs, sugar and livestock.

Ukraine is the best place in the world for this kind of production

YURIY KOSYUK, FOUNDER & CEO, MHP

The Ukrainian Agribusiness With a Global Appetite

The MHP headquarters in Kiev.

www.mhp.ua

COMPANY FEATURE

What has been your approachto investment in Ukraine?Compared to our main competi-tors, we have invested afortune. We have put billions into the construction of facilities and creating a new business landscape in Ukraine, which is why we are so profitable.

How do you view doing busi-ness in the country?There is a lot of potential because the landscape is still quite empty. We work in a lot of countries all over the world, and I am completely confident that Ukraine is the best country in the world in which to do business. Our appetite is to be a leader in the world, based in Ukraine.

Are you open to internationalpartnerships?There are many opportunities.We could do business togetherin areas from green energy upto very complicated agriculturalproducts. There are alsoopportunities in technology:we are currently developingan AI system in the companyalongside Microsoft, wherebyour company will be a pilot forthe rest of the world.

“We are currently developing an AI system in the company alongside Microsoft”

YURIY KOSYUK, FOUNDER AND CEO, MHPMHP IS UKRAINE’S LARGEST POULTRY PRODUCER

Industry point of view

Taking Efficiency in Agribusiness to the Next Level

Export dynamics of agricultural products by destination

$17.9bn$17bn $16.7bn

$14.5bn $15.3bn $17.8bn

2012 2013 2014 2015 2016 2017

45%48%47%

41%36%32%

28%

19%

20% 21% 15% 10% 8% 7.6%

15%15% 14% 16% 14.3%

26%29%

28% 27% 32%

ASIA EU-28 AFRICA CIS

UKRAINE’S AGRICULTURAL PRODUCTS IN THE WORLD Main exports (2017)

Grains$6.5bn

Fats & oils$4.6bnOilseeds

$2.06bn

Food industry remnants & waste

$1.05bn

Meat & animal products

$1.03bnOther (inc. sugar, tobacco, vegetables)

$2.5bn

Total$17.8bn

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TOURISM

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