Ukrainian companies in rising Europe eye westward growth

By Michael Kahn and Anna Koper

PRAGUE/WARSAW (Reuters) – Ukrainian companies that arrange or expanded in central Europe after Russia’s 2022 invasion are shifting their focus from primarily refugee to native clients as they turn out to be extra established, with some now eyeing a transfer additional west.   

Because the conflict closed off alternatives at house and to the east, together with Russia, Ukrainian-owned companies sprang up in neighbouring international locations, initially concentrating on their displaced compatriots with meals, drink and providers. 

In Poland, which has a Ukrainian inhabitants swelled by the conflict to greater than 1.5 million at present estimates, Ukrainians opened each tenth new enterprise in 2024, in keeping with Polish enterprise associations and economists.

Andrii Halytskyi’s Lviv Croissants now has 12 retailers in Poland after launching there two years in the past. It opened its first Czech outlet in October, a part of what its founder says is a method to construct a geographically various enterprise by increasing westward and past the diaspora.

“Whereas the Ukrainian refugee neighborhood in Europe is critical, relying solely on this buyer base just isn’t a sustainable long-term technique,” Halytskyi informed Reuters. 

Sturdy cultural similarities with Ukraine have helped make Poland a pure base for Ukrainian companies. However many are additionally wanting past rising Europe’s largest economic system to a a lot greater pool of shoppers.

“Corporations initially view Poland as a bridge or springboard to European Union markets,” stated Dariusz Szymczycha, first vp of the Polish-Ukrainian Chamber of Commerce. 

“They need to study … the fact, requirements, laws and guidelines of working within the European Union.”

The Piana Vyshnia chain of bars is themed round a standard cherry liqueur from Ukraine however sees native clients as its principal goal, founder Andriy Khudo informed Reuters.  

His !FЕST restaurant group has grown the model – often known as Drunken Cherry in English – to fifteen areas in Poland and 9 in different Baltic and japanese European international locations, ramping up westward growth since February 2022, Khudo stated. 

The group plans to open in Germany, Switzerland and France in 2025 and relaunch a venue in London, he stated, including that the bars are attracting new clients and are worthwhile. 

“Earlier than the conflict we targeted on Ukraine as a result of our enterprise was creating there so shortly. However the conflict kicked us to look extra west due to the chance in Ukraine,” Khudo stated. 

REFUGEE BOOST 

Though Ukraine’s economic system grew in 2023 and is prone to develop in 2024, Economic system Minister Yulia Svyrydenko informed Reuters in November it was nonetheless solely at 78% of its measurement earlier than Russia’s full-scale invasion in February 2022.  

With no finish to the battle in sight, companies like Khudo’s have needed to look elsewhere – an financial flip for close by international locations which have additionally seen labour market strains eased by the arrival of Ukrainian employees.  

A Deloitte report in March 2024 estimated that refugees from Ukraine would add as much as 1.1 % to Poland’s GDP in 2023 and as a lot as 1.35 % longer-term.

“Once they come to Poland, for instance, whether or not to work or arrange companies, that is a further stimulus from the financial perspective for consumption and bettering the provision of labour,” Andrzej Kubisiak, deputy director of the Polish Financial Institute, informed Reuters. 

One other Ukrainian restaurateur, Olga Kopylova, informed Reuters she had no plans earlier than the conflict to take her Chornomorka model overseas however now has three retailers named Czarnomorka in Poland and two apiece in Bratislava and Vienna.

Espresso chain Aroma Kava moved to Poland in 2022 and has since expanded to 10 areas, whereas Ukrainian ice cream and frozen merchandise maker Three Bears purchased Polish firm Nordis.

Poland is now the second most essential marketplace for digital leisure supplier MEGOGO which has grown by interesting to native residents, primarily by means of household programming, co-founder Volodymyr Borovyk informed Reuters. It entered Poland and Romania – rising Europe’s two most populous international locations – in 2023.

“The wholesome Polish market not solely motivates us but additionally encourages different Ukrainian firms to enter this market with merchandise tailor-made particularly for Polish shoppers,” he stated.

On the newly-opened Lviv Croissants department in Prague, the workers served a mixture of vacationers, locals and Ukrainians who sipped coffees and nibbled on sandwiches as they took a break from the vacation rush.

“This was my first time consuming right here, however for me it is sort of a feeling of house,” 20-year outdated Ukrainian scholar Tatiana Melnyk stated.