Business

To Escape the War, Ukraine’s Factories Are Moving West

Abnormal On the floor of a factory in Lviv, Ukraine, Volodymyr Misysk moved into a furniture manufacturing business, where he and 15 employees became roommates. They bring their children and dogs, share a kitchen above the machines, and spend their days reviving a company that may have been destroyed in the war.

But Misysk, 23, and his workers, who came to Lviv from the bombed eastern Ukraine city of Kharkiv, are benefiting from a spirit of solidarity and a government policy aimed at rescue. Help rebuild industries threatened by invading Russian forces in cities along Ukraine’s western frontier, piece by piece.

The region is rapidly transforming into Ukraine’s new economic center, with more than 200 transplanted companies producing everything from paints to building materials to parts for electric vehicles.

Factories in the Russian-occupied territories are being packed up and moved by trains and trucks, making a comeback in the West. Manufacturers are creating jobs and looking for skilled workers. Now approaching Poland, Ukraine’s gateway to Germany and Western Europe, the reborn company is forging ties with the European Union, which Ukraine hopes to join soon.

“The main motivation for them to come here is for them to stay in Ukraine,” said Andriy Moskalenko, Lviv’s deputy mayor in charge of economic affairs. “Whether they are from Kharkov, Kyiv or Chernihiv, they are all Ukrainians. Russia destroyed a lot and we have to support them,” he added.

Ukraine’s economy is expected to contract by more than a third this year. Inflation is on the rise and likely to exceed 30%, the country’s central bank recently said, and the finance minister recently announced the country had reached a deal. suspend payments to some foreign creditors.

Under a government relocation program, Mysysk was able to provide workers for his small company. LumioOpportunity: Join him in the relative safety of Lviv and continue their work.

Emotionally, it wasn’t always easy. “I wanted to cheer everyone up, so I tried not to look depressed.” It took him a month to move everything out of the old factory.

“Even if I wasn’t sure I believed it, I smiled and said all was well,” he said.

But Maisisk said the financial and political support companies like him have received is inspiring and a reminder of how important businesses are to sustaining the economy.

Big companies are trying to get back on track as quickly as possible, but developing business plans in the constant uncertainty of war is a daunting task.

Managing Director Oleksandr Oskarenko Posimacinaa manufacturer of fire trucks and agricultural vehicles, ceased production in March. Built a sprawling modern factory in Chernihiv, site of a brutal Russian siege, with an eye on the safety of its 550 employees.

“Things were going very well in Ukraine,” he said. “We still had problems with corruption, but those problems were less and the economy was improving. But the Russian invasion left half the country non-functional.”

When President Volodymyr Zelenskiy announced in April an economic program to save businesses from the war-torn east, Oskarenko jumped at the chance. “We took the factory apart and put it on a train to ship,” he said.

The government provided tax breaks and free transportation of equipment on Ukrainian railways. Lviv and other nearby cities are competing hard to attract new entrants, offering additional financial incentives such as cheap warehouse space, free lawyers and fast paperwork to quickly launch a new business. We provide sweeteners.

Over 200 companies have already moved, Another 800 people have applied for relocation, said Volodymyr Korud, vice president of the Lviv Chamber of Commerce.

On a recent weekday, a team of welders worked to rebuild Pojmashina’s paint shop inside a huge Soviet-era warehouse, installing massive steel frames in the sunlight streaming in through broken windows overhead. When the work is complete, the farm truck will appear in a fresh coat of olive green and the fire engine in cherry red.

Still, Oskarenko said it was difficult to know when business would return to normal.

“The Russians destroyed large industrial centers that produced energy, chemicals and steel,” he said. “We do not produce farmland in the occupied area,” he added. “So from a year it’s impossible for him to make a two-year business plan.”

“But this has given us perspective for the future,” Oskarenko said with a smile as he surveyed the regeneration of the old factory.

The war also caused many Ukrainians to seek work and settle in the relative safety of the west. Matrolux, One of Ukraine’s largest mattress makers sees moving to the western Ukrainian frontier as an excellent opportunity to provide employment for some of the tens of thousands of people who have lost their jobs due to the war. I’m here.

Amid a barrage of bullets and a hail of Russian rockets, he said he plans to expand his business by moving more than half of Matro Lux’s equipment out of factories in Kyiv and Dnipro in the east. In times of war, mattresses are needed not only for soldiers, but also for their families in bunkers and shelters. And after each war, he expects demand to rise amid the reconstruction boom.

Chernyak promised to expand the 40-person workplace in Lviv to up to 200 within six months and up to 500 by the end of the year.

“For me, keeping jobs for people is of the utmost importance. We need to keep as many jobs as possible to keep the economy going and to pay our taxes,” he added.

Although looking for skilled workers, rebuilt businesses face additional challenges operating in a wartime economy roiled by supply shortages and damaged infrastructure.

in a new place NPO Lost, manufacturer of interiors for passenger trains, managing director Alexander Prechuk rushes to fulfill orders in a small warehouse. Before the Russian invasion, the company operated his 33-acre modernized factory in the now troubled city of Zaporizhia.

Today, Pletiuk’s warehouse space in Lviv is relatively small, with a production capacity of only 10% of the old site. “We are trying to meet all the contracts as soon as possible while settling in a vacant lot that doesn’t even have electricity yet,” he said.

A small number of employees tried to fill an order for train windows, but they were short of the parts needed to make the windows airtight. Prechuk said it now takes him twice as long to procure glass because of the war’s impact on his Ukrainian supply chain. Fuel costs have more than doubled.

Before the war, the company had fixed-price contracts with its clients, but now costs are skyrocketing. Metal prices are 50% higher for him. We also need to invest in new warehouses to increase our production capacity.

Still, Prechuk said, “If we win this war, we have a lot of work to do.” Russian attacks have damaged at least 3,900 miles of her railway in Ukraine. Also, many of the rail cars that were carrying refugees and supplies need to be refurbished and new cars need to be ordered.

He is not the only one to benefit. The irony of the large-scale migration of Oriental companies is that it did not necessarily lead to economic hardship, but rather to benefits.

Now about 60 miles from Poland, Mysysk found it easier to export Roomio furniture to European customers from Lviv than from Kharkiv. After emailing companies across Europe, he landed new clients in Denmark and Slovenia. This is his first export opportunity.

“In Ukraine, it is considered cool to cooperate with European countries, so I was really happy when I got the first contract,” he said. “About what we do — I hate to say it, but it’s actually worked out for us.”

His company is not the only one starting to find new business in Europe. He believes this trend is significant. This is not only to help Ukraine keep its economy alive during the war, but also to promote closer ties with the European Union.

“The more we connect, the more the European Union and the Ukrainian government will understand that we must come together,” he said.

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