Talking business in Ukraine: Conversation with Bayer on war and investing in Ukraine’s future
Russia's full-scale invasion in February 2022 did little to shake German pharmaceutical and agricultural giant Bayer's commitment to its business in Ukraine. Operating in Ukraine since 1992, Bayer today employs around 700 people in the country, and last year, announced a 60-million-euro investment from 2023 onwards in its corn seed production facility in Pochuiky, Ukraine. Even though Bayer Ukraine suffered losses between 2021-2023, Managing Director and CFO of Bayer in Ukraine, Oliver Gierlichs, told the Kyiv Independent those losses have been less than those of competitors and the company has seen an overall gain in market share in specific categories.
The company has also donated nearly 20 million euros in seeds, medications, and other financial aid since the start of the full-scale war, and has supported farmers and vulnerable populations. Notably, the company purchased a large demining machine worth around £900,000 in 2022 in collaboration with the Swiss Foundation for Mine Action to work toward demining Ukraine -- a third of which is believed to have been mined as a result of the war. Key to its ability to continue to invest so much in Ukraine during the war has been its continued presence on the ground, and the resilience of the business community, Gierlichs told the Kyiv Independent in a recent interview.
"The solidarity within the business community has been the most exceptional throughout my career," he said. As part of its interview series Talking Business in Ukraine, the Kyiv Independent sat down with Gierlichs to discuss business development during the war and why investors should come to Ukraine now. "The unique selling point of being a part of the country's development during challenging times cannot be overstated for companies considering investment in Ukraine.
Coming now demonstrates a commitment that goes beyond mere opportunism," according to Gierlichs.
Oliver Gierlichs is Managing Director & CFO at Bayer Ltd. (Bayer press service)
The Kyiv Independent: How has Bayer lived through these almost two years of war? Oliver Gierlichs: Our response to the full-scale invasion was swift and adaptable. We've remained steadfast in our commitment throughout this tumultuous period, never halting our operations.
This is paramount for us. Ensuring the continued flow of our products to consumers, patients, and farmers has been a constant priority. Our focus also shifted rapidly, with the safety and security of our people taking precedence, reaching a new level of significance.
Our priority became the well-being of our team, a value always held high but now magnified. The second focus was on maintaining business continuity amid the evolving circumstances. Thirdly, we asked ourselves how we could support Ukraine--donations became our means of preserving the essential healthcare and agriculture sectors during these challenging times.
What fortified us from the outset was the resilience and flexibility of our people. This proved invaluable as we navigated the complexities. Our unwavering support for Ukraine has been central to our mission, with nearly 20 million euros donated, particularly for agricultural seeds, medications, and financial aid.
Through challenges like fuel shortages and power outages, we've adapted by enhancing energy resources and securing alternative fuel sources. As we delve into the company's development amid the war, despite business contractions from 2021 to 2023, our losses were less than those of our competitors, resulting in an overall gain in market share in specific categories. Looking ahead, we are investing 60 million euros in expanding our production of seeds, strategically positioning ourselves for present and post-war support to Ukraine.
Our focus on growth and investment underscores our commitment to enlarging our footprint in Ukraine's future landscape.
L: Demining machine. (Bayer press service) R: Distribution of corn seeds donation. (Bayer press service)
The Kyiv Independent: How do you plan to develop your business for the next year, considering different scenarios based on the war's resolution? Oliver Gierlichs: Our focus is crystal clear -- we are dedicated to supporting the functioning of agriculture and healthcare, two pivotal sectors for Ukraine during this challenging time and at the core of our business. Our primary goal is to ensure the availability of our products in the market, serving farmers and patients.
This is vital for Ukraine's resilience and aligns with our business's essence. Given the unpredictable nature of the war's development, we've crafted various scenarios to plan for every possibility. We are prepared for both scenarios if the war concludes in 2024 or extends into a prolonged conflict.
Regardless of the outcome, Bayer is committed to operating in Ukraine and retaining our personnel. Our substantial long-term investment of 60 million euros demonstrates our belief in Ukraine's enduring future. The Kyiv Independent: What advice can you offer entrepreneurs and international companies to plan for the 2024 year?
Oliver Gierlichs: In the face of the anticipated challenges in 2024, resilience is paramount. Leading by example, transparency, and clarity are crucial for CEOs. My approach is to hope for the best but prepare for the worst, considering the full scale of potential scenarios.
The key is to keep our business operational, provide stability for our employees, and sustain their livelihoods. Ensuring their safety and motivation is fundamental -- it's not just about the job but also about contributing meaningfully amid arduous circumstances. Our employees take pride in the company's efforts for the country.
In essence, maintaining business continuity, prioritizing employee safety, and fostering motivation are the cornerstones of our strategy.
The initiation ceremony for Bayer investments. (Bayer press service)
The Kyiv Independent: How do you assess the current business climate in Ukraine from Bayer's perspective? Oliver Gierlichs: We've successfully maintained our business processes and community connections, mainly due to a remarkable understanding among our partners and clients about the unique challenges we face today. The solidarity within the business community has been the most exceptional throughout my career.
There's a profound acknowledgment of the shared difficulties, fostering an atmosphere of collaboration. Additionally, we appreciate the open dialogue with the government and authorities, who are ready to listen and adapt to business needs. In challenging times, we must work together rather than against each other.
The Kyiv Independent: As a European Business Association board member, what are the government's expectations from major businesses, and what support do businesses need in Ukraine? Oliver Gierlichs: The government expects major businesses, including us, to contribute to current needs and the post-war rebuilding efforts. Our ongoing investments in high-tech solutions demonstrate our commitment to supporting the country.
However, there's room for improvement in making Ukraine a more favorable business environment. Legislative and regulatory alignment with the EU, acknowledging Ukraine's specificities, is crucial. We urgently need transparency and predictability in the mobilization process to plan for our workforce and future.
The Kyiv Independent: How has your perspective on leadership changed during the war? Oliver Gierlichs: Leadership during war demands navigating high levels of uncertainty and ambiguity. It requires maintaining team morale and making swift and effective decisions amid constant external factors, legislative changes, market fluctuations, and fuel shortages.
Being on the ground in Ukraine has proven crucial, earning appreciation from the people, especially expats. Proximity to the team in both good and challenging times is vital. Their acknowledgment of leadership in adversity emphasizes the importance of being present and accessible.
Davyd Arakhamia, head of the Servant of the People party (L) and Oliver Gierlichs, Managing Director & CFO at Bayer Ltd (center) at the . (Bayer press service)
The Kyiv Independent: Does Bayer currently have employees in the armed forces, and how does the company support them?
Also, do you integrate returning veterans into your workforce? Oliver Gierlichs: We currently have employees in the army. We strive to stay in close contact with them, offering comprehensive support such as continued salary payments and the maintenance of all benefits.
Our internal solid camaraderie extends to regular collections to provide additional support. We've ensured those serving receive unique gifts for the winter season, demonstrating our commitment and appreciation. We are actively preparing for their integration with training programs covering various aspects, including psychological support and effective collaboration.
The Kyiv Independent: Amid wartime challenges, some entrepreneurs see opportunities. What business development opportunities do you foresee for Bayer and other businesses in the current climate? Oliver Gierlichs: There are significant opportunities amid the challenges.
Key among them is the chance to contribute to Ukraine's modernization, bringing innovative solutions to sectors such as healthcare and agriculture. The latest medical innovations can positively impact the country's healthcare system, and in agriculture, modern practices like digital farming offer the potential for optimizing resources and improving yields. The Kyiv Independent: If you were to invite other companies to invest in Ukraine now, what message would you convey to encourage their participation?
Oliver Gierlichs: The unique selling point of being a part of the country's development during challenging times cannot be overstated for companies considering investment in Ukraine. Coming now demonstrates a commitment that goes beyond mere opportunism. Early investors can benefit from competitive rates for offices, state support for production facilities, and a qualified workforce.
Investing now allows companies to become integral contributors to Ukraine's future, earning them a unique position and favorable conditions that may not be available. The Kyiv Independent: How have you changed as a CEO and person during these two years of full-scale work amid the war? Oliver Gierlichs: Resilience has become a central focus for me and our employees.
Being a people-centric leader, I've further emphasized the importance of empathy, understanding, and leading by example. The war has reinforced the significance of human connections, highlighting the need for solidarity and leadership that prioritizes humanity over hierarchy. My values have undergone a recalibration, emphasizing proximity with leaders, leading from the front, and showing calmness and composure even in challenging situations.
Ukrainian companies are moving west.
It's changing the country's economic map
When Russia intensified its shelling on Nikopol in Dnipropetrovsk Oblast in July 2022, Yuriy Atanasov knew he had to get his company out of harm's way.
His steel pipe manufacturing company Centravis, located just 20 kilometers from Russian troops stationed across the Dnipro River at the occupied Za...
