BIIR, a Danish engineering company with an office in Odesa, has had a good-run of fortune since becoming one of the few foreign companies to have won a court case in Ukraine.
Buoyed by that success, the company now plans to expand in Ukraine, the company’s board chairman Thomas Sillesen told the Kyiv Post in an interview on Feb. 14.
BIIR entered Ukraine in 2013, when it hired a couple of software developers in Luhansk, the Luhansk Oblast city of 400,000 people located 750 kilometers east of Kyiv. When the war started in April 2014, the company had a strong presence in Luhansk, Sillesen says. But when on May 29, 2014 the company’s office was raided by Russian-led forces, the company decided to move to Odesa for the summer. It’s been there ever since.
The move brought more problems, however. In 2017, after buying a building in Odesa, the company faced attacks from both its previous owners and the city authorities, resulting in a yearlong legal case, which BIIR eventually won in February 2018.
Multiple attacks
“Looking from the positive side, the first time we could have been killed off (in Luhansk), while the second time (in Odesa) we might only have lost a building,” says Sillesen, referring to the two biggest problems the company has faced in Ukraine.
All the same, the company has had to fight several other legal battles while trying to do business in Odesa. So far, it has won all of them. The latest court case — the fourth to be exact — concerns Hr 2 million ($75,000) that the State Pension Fund owes BIIR, according to Sillesen.
“We’ve had some cases with the State Pension Fund in which they don’t follow the law, we take them to court, we win, and then next year they try again,” says Sillesen.
While the company has won all of its previous cases, Sillesen points out that these attacks on them discourage other foreign companies from doing business in Ukraine.
“A former director at Lehman Brothers was finding investors for an agro project in Lviv, raising 18 million euros,” Sillesen said.
However, one of the investment funds the would-be investor talked to had their office in Kyiv raided, and their servers seized, which caused the company to move out of Ukraine, Sillesen added.
“Now he’s afraid to invest in Ukraine altogether.”
“The raided servers were worth $40,000. (The raid cost Ukraine) 18 million euros in lost investment.”
There is a lot of interest in Ukraine from foreign investors, but after they hear stories from those who have already battled bureaucracy and corruption in Ukraine, they look elsewhere, he said.
“Our small company (160 people in Odesa) pays a lot of taxes, which should be spent on roads and schools, which in the end would help officials in Odesa get reelected,” Sillesen said. “They should love us.”
Sillesen points out that since Ukraine is in such need of foreign investment, the country has to favor foreign companies, concentrating specifically on stopping attacks on those who decide to enter Ukraine.
“As a Dane, I have 192 countries to invest in, why should I invest in a country where I would get into so much sh*t?” said Sillesen.
Ukraine expansion
Even though BIIR has faced multiple setbacks in Ukraine, the company is growing at 50 percent a year and is planning to create a broader network in Ukraine. Half of its total personnel are based in Odesa, last year it opened an additional office in Lviv, and it now plans to open a sales department in Kyiv to attract a wider range of both local and international clients.
Back in Odesa, the company plans to open a packaging factory, investing 7–10 million euros in its construction and equipment. In terms of logistics, the port city of Odesa is a logical choice, according to Sillesen.
And for that reason the company plans to build its headquarters there, invest in housing for the company’s employees, and substantially increase its staff numbers in Ukraine. All the same, the company is looking to expand its presence nationwide.
Sillesen is planning to live in Ukraine on a permanent basis.
“I decided to move to Ukraine, because we’re not satisfied with the speed we’re growing at,” said Sillesen.
“We want to double our output every year.”
