European economic powerhouse Germany now has its own business lobby in Ukraine to help its businesses negotiate the tricky waters of investing here.
The German Economic Club was launched in February by Sven Henniger, a native German who has worked for a consulting firm that helps German companies enter the market.
We need a German community. None of the German investors knows who else is also active in this country. It’s a big gap and we would like to change this state.
– Sven Henniger
With more than 1,200 companies operating in the country, Germany is one of the largest investors in Ukraine. German companies now have their own platform alongside the American Chamber of Commerce and the European Business Association.
“We need a German community. None of the German investors knows who else is also active in this country. It’s a big gap and we would like to change this state,” Henniger said.
Despite high-profile drives by the current government, Henniger said corruption is one of the most serious problems for investment from abroad.
Nevertheless, the reason why German investors should come to this country is clear – at least for Marc-Tell Madl. He works in Ukraine for PwC, one of the so-called “Big-Four” auditing and accounting firms.
“Two of the main advantages are the large population of Ukrainians as consumers and the low-level income,” he said.
This was also a reason for Martin Schorsch to come to Ukraine almost 20 years ago. He is what Germans call a “pure medium-size businessman.” And there are a lot of them in Ukraine.
Martin Schorsch is in the windows business.
“This is a large market in Eastern Europe because the [Soviet] windows are insulated quite badly. And because of the cold winter, there is a need for our product,” he said.
The fact that you could save a lot of money through better insulation would convince many Ukrainians, adds Schorsch. At his three manufacturing locations he employs around 80 people.
Martin Schorsch advises new companies on how to open representative offices and grow their business from there. He cautions that investors should be aware of the lack of legal security in Ukraine. “There are really good laws, but unfortunately only on the paper,” Schorsch said.
Ukraine’s promising agriculture sector has long caught the eye of German investors. Germany’s Bayer Crop Science has, for example, been offering its Western know-how, farm equipment and seeds.
As Ukraine rebounds from the 2009 recession, Henniger says German investors are taking a fresh look, starting to come back.
“There is a light upward trend,” he added.
Pauline Tillmann is a contributor to the Kyiv Post. She can be reached at [email protected].
