Ukraine had a tough economic year in 2014, marked by revolution and the start of Russia’s ongoing war, while the Panasonic Corporation had a great one — turning a $1.2 billion net profit after three years of losses.
The Japanese electronics giant is still on a roll — with 2018 net profit reaching $2.1 billion. The good times are expected to roll this year, too, with a forecast of 6 percent growth, according to Panasonic’s Corporation annual report.
In Ukraine, Koji Terajima, director of Panasonic Ukraine, with 50 workers out of a global workforce of 272,000 people, has contributed to the company’s success for more than eight years with sales of a variety of products — home and beauty devices, Lumix digital cameras, TVs, heating pumps, residential solar panels and air conditioning.
But Panasonic’s Terajima’s also sees that Ukraine is still suffering from the after-shocks of the EuroMaidan Revolution that ended President Viktor Yanukovych’s presidency in 2014 and Russia’s ongoing war, which has killed 13,000 people.
The last five years in Ukraine have gone from unpredictability to enough stability to allow business to recover, Terajima told the Kyiv Post.
“Our company’s performance following this trend by growing from 10–20 percent annually,” he said. Moreover, for Terajima, the Ukrainian market has solid prospects in the long run because of its population of 42 million. Panasonic does not break out its financial results by country, but sales in Ukraine are obviously far less than 1 percent of global sales, judging by the number of people employed.
But he has one plea: “Please, stop the war. In Kyiv it is peace and it’s stabilized, but Japan is far away from Ukraine and the most of news about Ukraine is the war, danger and conflict between Russia and Ukraine. It is very difficult to take resources to Ukraine. I expect from the new government, or new president, or new parliament, at least to make peace.”
What customers want?
Since Panasonic positions itself as a premium company, not everyone can afford their products. Despite salaries that are gradually increasing in Ukraine, moving to close to $400 monthly on average, consumers here are very price conscious, Terajima said.
However, sales of TVs are improving, but mostly the cheaper, smaller models. At the same time, in the European Union, consumers demand big-screen TVs and the highest picture quality, according to Terajima.
Ukrainians “prefer lower price even if the quality is not that high. In (the rest of) Europe, price is also important, but the first is quality, second is size and design and then the price,” he said.
It’s a similar situation with residential solar power panels, which Panasonic has sold in Ukraine since 2015. “The demand is huge but it’s mostly occupied by cheaper segment, mainly by Chinese,” said Terajima. For instance, one Panasonic 325 watt solar panel costs around $525, while for Chinese counterparts the price will be 2–3 times lower.
Despite the higher price, Panasonic finds customers, especially among those who have limited space on rooftops, since such panels can generate lot of electricity and last up to 25 years.
Heat pumps are also becoming popular “because Ukraine’s government strategy is trying to use less of Russian gas, especially in rural areas. They are switching from central heating to the heating units,” said Terajima.
Easier to import
Terajima said that the easing of currency restrictions by the National Bank of Ukraine has made it easier to make payments of imports to the home factories in Japan. “Recently we don’t see any problem,” now, said Terajima.
But Terajima said Ukraine is still held back economically by a financial sector that still is not as mature as it could be. Most Ukrainian retailers want to work with Panasonic through credit, but the company needs some security.
“Of course, we trust the partner, but usually in all countries in Europe, including Poland, it is secured. In Ukraine there are not so many financial sectors securing the credit, or account receivables,” said Terajima. “This is one of the bottlenecks.”
Comparing Ukraine
Before Terajima started to work in Ukraine he worked in Russia’s capital. And now he always compares everything to what he experienced in Moscow.
“Here is much better! People are so kind and the atmosphere is totally different — in Russia people not so kind, in stores they are not so polite to foreigners,” said Terajima
