Maintaining a business in a country at war is a complex task for any entrepreneur. In the conditions of occupation and regular hostile shelling, which most frequently target cities like Kherson, Zaporizhzhia, and Kharkiv, industrial enterprises located in conflict zones are under constant threat of complete ruin. Protection from such threats largely relies on luck. It might seem that business owners have little control in such circumstances. However, that’s not entirely true. Relocating production, which has gained traction since the war’s onset and proven effective in safeguarding domestic industries, has protected and significantly secured hundreds of companies whose owners took the bold step to move their operations to safer regions of the country.<\/p>\n
For those companies fortunate enough to operate in more secure conditions, the concept of “preserving business” takes on a deeper meaning. It includes reaching pre-war levels of production and sales, as well as attempting to develop their companies further. Our industry boasts numerous examples of successful endeavours achieved under such circumstances.<\/p>\n
We invited Vyacheslav Kovalchuk, owner of “Lacover<\/a>” company, a domestic manufacturer and supplier of powder coatings, including those used in furniture production, to share his thoughts on this topic. His company has recently become a member of the Ukrainian Association of Furniture Manufacturers (UAFM). Kovalchuk analyses this issue based on his experience and the state of his own business.<\/p>\n – The war forced Ukrainian entrepreneurs to learn many things anew, reconsider familiar concepts, and learn some things from scratch. Take renovation, for example \u2013 a complex and costly process. Entrepreneurs were not prepared for it in advance, just as they were not prepared for the war \u2013 neither financially, organizationally, nor psychologically. They had to learn on the go. Our entrepreneurs, faced with this necessity, learned and adapted remarkably well.<\/em><\/p>\n We rightly call our soldiers heroes, but it’s not an exaggeration to say that entrepreneurs who continue to work in Ukraine are heroes too. They produce goods, provide employment, contribute to the economy, maintain social stability, and are heroes of the labour front. Even greater respect and support are due to those who, in times of war and economic turmoil, dare to initiate businesses from scratch.<\/em><\/p>\n The state has done something significant to support domestic small and medium-sized businesses \u2013 tax relief, credit and grant assistance, and export facilitation. However, financial support alone appears inadequate. There are very few state social programs that truly assist businesses. This has led some companies to relocate or consider relocating their production abroad. Entrepreneurs often find better opportunities for themselves overseas. It would be a significant national loss if the state doesn’t address this process if it fails to provide compelling economic and social reasons for entrepreneurs to remain in the homeland.<\/em><\/p>\n At the state level, it’s also important to consider that traditionally industrial eastern regions of the country are losing their advantage as production capacities shift towards the centre and west. This process will inevitably lead to social shifts and problems both in former industrial centres and in the current ones.<\/em><\/p>\n – Currently, one of the most pressing social issues for the country’s economy is the shortage of skilled labor force. This issue is also acute for your furniture industry partners.<\/p><\/blockquote>\n – Indeed. Unfortunately, this issue will likely intensify. Therefore, skilled personnel are one of the most critical elements in preserving a business. The state is taking some steps in this regard. For example, it encourages entrepreneurs to hire temporarily displaced individuals. However, there’s no targeted state program aimed at bringing back millions of Ukrainian refugees who are still abroad \u2013 they are a much-needed workforce. Nevertheless, relying solely on the state to address the labour shortage is imprudent for us, entrepreneurs. Companies that devise mechanisms to attract new talent and offer enticing employment opportunities are making prudent and forward-looking decisions. Perhaps there will come a time when traditionally male-dominated professions must be entrusted to women, and we need to start preparing for this now \u2013 both at the national level and within each company’s leadership.<\/em><\/p>\n – What specifically helped your company not only stay afloat but also practically achieve pre-war indicators?<\/p><\/blockquote>\n – Among other factors, significant stockpiles of finished products and raw materials for the production of coatings played a vital role. This helped us immensely during the challenging initial months of the war. Our employees had work and means to sustain themselves. Responding to customer requests, later on, was possible due to our stock of finished products; we didn’t need time to restart production, which was a struggle for many enterprises in the first weeks and months of the war. I know that some of my entrepreneur colleagues, even now during ongoing hostile shelling in many regions, are hesitant to build substantial stockpiles of finished products and raw materials. Others, however, embrace the risk because business without risks doesn’t exist, even in peacetime.<\/em><\/p>\n We are a company that also resorted to relocation. We moved the Kharkiv and Dnipro branches \u2013 offices with warehouses \u2013 to the capital city and initially planned to move further west. However, we changed our minds and returned from Khmelnytskyi, deciding to stay in Kyiv after all.<\/em><\/p>\n It’s worth noting that the company not only stabilized its production and trade indicators but also experienced substantial growth during the war. It’s sufficient to mention that during this time, we obtained more certifications affirming our competence in producing powder coatings than we did throughout the pre-war period. We began to actively develop in terms of research and to address this, we’re educating our employees and certifying our laboratory.<\/em><\/p>\n – Some companies were able to preserve their businesses with the help of foreign partners, parent companies that they represent. They refrained from raising prices for their products, postponed settlements, provided equipment through leasing, and so on. Is “Lacover<\/a>” among these fortunate ones?<\/p><\/blockquote>\n – Unfortunately, no. None of the foreign companies from which we procure raw materials were willing to offer any payment deferrals or even slight leniency. They require 100% upfront payment, without exception. I understand their stance without taking offence.<\/em><\/p>\n However, with our Ukrainian clients, I practice flexible payment relationships, which means offering certain payment deferrals when they provide all necessary warranty documents. This strengthens our business relationships and benefits not only our clients but also enhances our company’s image.<\/em><\/p>\n – Industry associations are designed to support and develop the businesses of their members, especially during difficult and crisis periods. At least, that’s what our association does through various means and on a significant scale.<\/p>\n One of the ways to preserve businesses in the furniture industry amid an uncertain domestic market is to increase exports. Therefore, promoting exports is a top priority for the Ukrainian Association of Furniture Manufacturers (UAFM), particularly by assisting members in finding international clients through participation in international exhibitions. Regular training sessions, educational seminars, business tours to colleagues for experience sharing, and initiatives for clustering and company cooperation to execute joint projects are regularly organized as per the current needs.<\/p><\/blockquote>\n – I’m aware of this, which is why our company has been a member of UAFM for several months now. Even though we supply the industry with metal coatings in smaller volumes compared to our colleagues supplying wood coatings.<\/em><\/p>\n\n\t\t