Is Ukraine on the road towards EU?

Ukraine – on the road towards EU?

Briefing on business conditions in Ukraine!

Is Ukraine on the road towards EU?

9. April 2015


Will Ukraine succeed in re-directing its export flow to the West?

Can EU replace Russia as Ukraine’s primary

trade partner?

Energy?

9. April 2015

Northern river reversal!

The cast

USA - They lost! Followed by the role as the reluctant chess

player – and believing in partnership!

EU/Nato – Neighbour program with democracy, equality, trade and energy – to share strategic resources (energy and steel)!

Russia – To re-establish idendity via power (from coast to

coast), ready to use force - a certain eurasian civilisation!

Ukraine - Rule of law, honest government and competent leadership

9. April 2015

The arsenal!

The sanktions - reflects the European and American pain threshold – not the Russian!

Green men – destabilising and power play! Capital – financing transformations! Dedicated flows of information – but the truth is , that people

only read what they beleive in. Both in Russia and in the West!

The challenge of the West – We have lost the ability of

understanding Russia from the inside.

9. April 2015


• The press, reporting war and financial

collapse. • Financing sources drying out. • Currency going down the drain. • Many political signals. • Many red threads • Ophill on all channels.

9. April 2015


The dominating theses!

To do the right things

To do the right things real fast To ensure visibility

Self-promotion is the dominating rule both in UA

and the West

9. April 2015

Den 22. oktober 2014


Shortly: Caos!

9. April 2015


Both actors and observers seem to be

missing the greater picture!

Many opportunities are lost, and the ghost of non-confidence does appear!

9. April 2015


The fight under the carpet has moved out in the open – but without changing the

rules of engagement!

9. April 2015


A summary!

• Putin’s plan – the eurasian costums union. • The problems of the region started

allready in 2012. • This is the time when it is decided if

Ukraine will survive as a sovereign state. • The East-West confrontation is ultimative.

9. April 2015


Leaving the key question to be answered:

Will Ukraine succeed?

Will Ukraine succeed in re-directing its export flow to the West? Can EU replace Russia as Ukraine’s primary trade partner?

What can Ukraine offer to the EU? Will the Ukrainian people carry the reform

burden and for how long? The energy ghost!

9. April 2015

Ukraine - Business unplugged!

It all started in 2012/13

Currency

Oil

Trade

9. April 2015


The currency


The Hryvna – a special case!


The oilprice!


And became critical in 2013/14

The customs union Vilnius - DCFTA

Maidan Krim

Novorossiya Sanktions and embargos

9. April 2015


Status • A political window of opportunity has opened. • Ceasefire in the East. • The gas situation de facto cleared. • The DCFTA is signed, but a russian ”Njet”. • The financing is thin, but the new IMF funding & and

reform package is robust and functioning. • The GDP outlook for 2015 is a drop of 5.5 %. • The energy prices will by 1. April cover 50 % of costs. • The currency situation is balancing and the banking

sector is undergoing restructuring. • De-Oligarchisation has started

9. April 2015


Business status • 98% of all ukrainian goods do now have free

access to EU. • The trade with Russia has dropped drastically. • The export to EU picks up exponentially. • DHL volume out of Ukraine grows. • The business is operating for most. • The political risk in the regionen is again being

visible.

9. April 2015


The challenge for Ukraine

– to explore the potential of DCFTA’en.

9. April 2015


The financials


Their relations

Den 22. oktober 2014


The Ukrainian export


The Ukrainian import


The future trading structure, enpowered by necessety – and opportunities:

• EU as the driver (Russia’s oil economy in crises). • Russian arms sector supplies to be ended.

This requieres: • Energy efficinecy and modernising of production

are priorities • Conversion of the millitary production sector

9. April 2015


What will finance this restructuring?

DCFTA is expected to provide an additional growth in GDP around

12 % point in the coming 5 years.

9. April 2015


The tree sectors, creating value!

• Energy – because it is necessary!

• Agriculture – because it is possible! • Knowledge/IT – because it is available!

9. April 2015


A target for Danish companies:

Energy efficiency - driven by the individual

companies and households.

Necessary reforms: Naftogaz

9. April 2015



Agriculture & food production – driven by the retail sector

Upgrade of the supply chain Developemt of prof. suppliers

Necessary reforms: Landowner structure to be

changed

9. April 2015



Viden/IT Reformatting of the supply chain Inclusion of key competencies.

Products in stead of hours.

Necessary reforms: Business conditions to be simplified

9. April 2015


And finally:

Ukraine's unique combination of skills and low cost being located right on the EU's doorstep will remain an asset for a long

time to come.

Barriers are decomposing. Border crossing and administration will be

simplified.

9. April 2015


A fresh exampel

UA compared with Poland. 20.000 M2 and 1.000 employees

Cost of establishment Logistics

Feasibility Pay back period

9. April 2015


Some specific advises!

9. April 2015


Energy efficiency on the level of companies and households.

Conpetent distributors.

Key components/koncepts, that can ensure profitability.

Financing (Nefco).

9. April 2015


Agro & Food.

Fix the supply chain

Opgrade of the food processing sektor

Inporter/agent with competencies or

Own establishment

9. April 2015


Knowledge/IT, inklusion of key competencies via own establishment.

9. April 2015


Summary • The crises was already there.

• The level now reflects the real situation. • The transition/reorientation is driven by

both political and economic factors. • The DCFTA effect is dependent upon

reforms. • The three sectors are a fair match for DK • The lowcost status will remain important

9. April 2015


De three sectors!

• Energy – because it is necessary!

• Agriculture – because it is possible! • Knowledge/IT – because it is available!

9. April 2015

Selected references

Giract

Thank you for your attention!

Questions are welcome!

Aarhus, Denmark +45 70 22 84 55 [email protected] www.mafcon.com/dk

Ukraine – Business unplugged!

Om at drive forretning i det tidligere

Sovjet!

Kulturelt og strukturelt er regionen ikke på linje med internationale business standarder, men er præget af hvad man kan kalde institutionelle mangler og sammenhænge.

Ukraine – Business unplugged!

Og lad det være sagt straks!

Vi er overbeviste om, at succes i det tidligere Sovjetunionen er meget mere er viden og hårdt,

struktureret og disciplineret arbejde end kunst, blandet med lidt held.

Det starter med en undren og et spørgsmål….

• Hvorfor er landene så ens? -Rammebetingelserne: Juridisk, Institutionelt,

Organisatorisk, Bureaukratisk -“Way of doing business” -“80–15–5 reglen” -Hvorfor er det så svært at få succes?

Og hvorfor er det så svært…

• Ny zone, nye normsæt - CE, DIN oma er ukurante Erkend kravene, forstå dem, vælg en vej

• Kritisk masse en forudsætning Store ”igangsætningsomkostninger” og omkostninger til

vedligeholdelse af ”service links”, administration & normer Lønsomhed forudsætter volumen

• Kompetencer Ledelse og evne til at ”tæmme distancen” kræver noget

andet og mere, end man umiddelbart forventer. Det skal ikke være den der har bedst tid, der sættes på

opgaven, men den der er bedst til opgaven

Ukraine –

Taler vi Ukraine er der 3 spørgsmål, som

altid rejses

-Korruption -Sikkerhed -Hvorfor er det så svært at få succes?

Ukraine – korruption

Korruptionen i 4 områder

-Råstoffer og naturressourcer -Koncessionerede områder (tele, energi) -Det offentlige som kunde eller regulerende myndighed (alkohol) -B-t-B, B-t-C

Ukraine – sikkerhed

-EURO 2012 erfaringer -Mafcon erfaringer -Klienterfaringer

Hvorfor er det så svært?

• Den kulturelle forskel • Godhed, venlighed og dumhed er synonymer • Den sproglige barriere • ”Sovjetunionens 5. P” –paperwork! Og Bureaukrati er ikke det samme som korruption

Udslidt, nedslidt og til grin, men med super god datadisciplin !!!

Bliver det nogensinde anderledes?

Rammebetingelserne

• Det administrative system fra

Sovjettiden repræsenterer sammenhængskraften i CIS i dag

• DET BLIVER IKKE ANDERLEDES PÅ DEN KORTE BANE.....

Trosbekendelsen –”Sovjetoconomy”

• At gøre forretning i det tidligere Sovjet er anderledes end i den øvrige del af verden

• Landene er forskellige, men rammebetingelserne er ganske ens og forandringerne sker langsomt

• Virksomheder & personer skal have specielle kompetencer for at få succes i det tidligere Sovjet

• Det tidligere sovjet er ikke for alle!

Nye ”papers” til disposition!

• Vesten forstår ikke Rusland. • Business Alignment • Business excellence in the CIS • Outsourcing i CIS

Leadership & Management

Is Ukraine on the road towards EU?