An­dreas Lier says Ger­man busi­nesses bullish on Ukraine


An­dreas Lier, pres­i­dent of the 120-mem­ber Ger­man-Ukrainian Cham­ber of In­dus­try & Com­merce, says his mem­ber com­pa­nies are see­ing "the best Ukraine ever," while ac­knowl­edg­ing "there's still a long way to go" in Ukraine's de­vel­op­ment – in­clud­ing more pri­va­ti­za­tion, less reg­u­la­tion, the on­go­ing need to bat­tle cor­rup­tion and to make deeper struc­tural changes.

"Things are get­ting bet­ter; wait­ing on the side­line can be ex­pen­sive," Lier told the Kyiv Post in an in­ter­view on Sept. 27.

And Ger­many is most def­i­nitely not a by­stander.

Lier counts 2,000 Ger­many com­pa­nies in Ukraine em­ploy­ing 60,000 peo­ple, more than half of them in the pro­duc­tion of automotive parts in western Ukraine as part of the sup­ply chain to Ger­many's lu­cra­tive automotive in­dus­try.

Bi­lat­eral trade is ex­pected to rise to $8.5 bil­lion this year, a healthy boost from last year's $7.8 bil­lion.

And Ger­many's for­eign di­rect in­vest­ment is go­ing in the right di­rec­tion. Es­ti­mated perhaps con­ser­va­tively at $1.6 bil­lion, it got a huge boost with the an­nounce­ment by Bayer of the open­ing this year of a $200 mil­lion corn seed pro­cess­ing plant in Zhy­to­myr Oblast, 100 kilo­me­ters west of Kyiv, and last year's re­sump­tion of pro­duc­tion in western Ukraine's Kalush by Karpat­neftechim, a petro­chem­i­cals plant.

Lier, the mar­ried fa­ther of two sons and a na­tive of Hanover, Ger­many, has been the as­so­ci­a­tion's pres­i­dent since Oc­to­ber 2016, four years af­ter he moved to Ukraine to be­come man­ag­ing di­rec­tor of BASF Ukraine, the gi­ant in­ter­na­tional chem­i­cals com­pany based in Lud­wigshafen, Ger­many.

Lier also sees even greener pas­tures ahead.

He's iden­ti­fied at least $26 bil­lion in in­vest­ment projects that will take place within the next decade, in­clud­ing $5 bil­lion in nat­u­ral gas ex­trac­tion, up to $8 bil­lion in the steel and min­ing sec­tors, $5 bil­lion in roads and rail­ways im­prove­ments, $690 mil­lion in ex­pand­ing metro lines in Kyiv, Dnipro and Kharkiv, $500 mil­lion in air­port im­prove­ments and an­other $400 mil­lion in the mod­ern­iza­tion of sea­ports, among other in­vest­ments.

His mem­ber­ship sees big op­por­tu­ni­ties in many sec­tors, such as agri­cul­tural, in­dus­trial and con­sumer goods, in­clud­ing food pro­cess­ing.

He said the CEOs of mem­ber­ship com­pa­nies have "very pos­i­tive ex­pec­ta­tions" for 2019 and are plan­ning for mod­er­ate growth as well as in­creas­ing em­ploy­ment and salaries.

He took note of Ukraine's leap in the World Bank's do­ing Busi­ness in Ukraine in­dex, to 76th place from its 152nd place in the dark days of Pres­i­dent Vik­tor Yanukovych, over­thrown by the EuroMaidan Revo­lu­tion on Feb. 22, 2014. "You also feel in the coun­try it's com­pletely dif­fer­ent," Lier said. "Cus­tomers and com­pa­nies re­port im­prove­ment. It’s a pos­i­tive story."

One of the more ex­cit­ing parts of the pos­i­tive story is the mas­sive changes brought on by de­cen­tral­iza­tion – which now al­lows 65 per­cent of in­come taxes to go di­rectly to lo­cal gov­ern­ments.

He said de­cen­tral­iza­tion has spurred lo­cal gov­ern­ments to com­pete for in­vest­ment. "Au­thor­i­ties lis­ten more and take ac­tion," he said.

Of the ma­jor re­gional cen­ters, "each of the cities has its own dy­namic: Odesa is a port to the world. Kharkiv is a uni­ver­sity, ma­chin­ery and in­dus­trial cen­ter. Lviv has its own busi­ness cy­cle in western Ukraine and close to Western and Cen­tral Europe."

He said mem­ber com­pa­nies are solv­ing la­bor short­ages in Ukraine by help­ing with vo­ca­tional ed­u­ca­tion pro­grams to train work­ers.

Things are so good that he didn't even bring up Rus­sia's war against Ukraine as an im­ped­i­ment to in­vest­ment.

He in­stead talked about the need for Ukraine to pro­mote its im­age more ac­tively.

"Ukraine has to be­come more ac­tive in self-mar­ket­ing," Lier said. "It's a very good place to live... Here, of course, the Ger­man cham­ber is also work­ing as an am­bas­sador for Ukraine in Ger­many and bring­ing Ukrainian com­pa­nies to Ger­many."

The ris­ing wages in Ukraine, cou­pled with visa-free travel to Ger­many and the rise in low-cost flights be­tween the na­tions, have prompted more tourism both ways, he said. "I meet more and more Ger­mans com­ing over for the week­end and en­joy­ing Kyiv," he said. "We will see this more and more."

In ad­di­tion to his pres­i­dency of the Ger­man-Ukrainian Cham­ber of In­dus­try & Com­merce, Lier is an elected mem­ber of the board of di­rec­tors of the Euro­pean Busi­ness As­so­ci­a­tion, which has nearly 1,000 mem­ber-com­pa­nies.

"It's nice to have an im­pact in a place which is chang­ing, to work for the bet­ter­ment of peo­ple and the coun­try," he said of his com­mu­nity in­volve­ment. "It’s about sup­port­ing and show­ing so­cial re­spon­si­bil­ity to­ward the peo­ple and the coun­try.

"I’m re­ally con­fi­dent that this move (to Europe) will con­tinue and also the mem­bers of our cham­ber see this move­ment. There’s a lot of op­ti­mism among Ger­man com­pa­nies."

An­dreas Lier is the pres­i­dent of the 120-mem­ber Ger­man-Ukrainian Cham­ber of In­dus­try & Com­merce. He works as the man­ag­ing di­rec­tor of BASF Ukraine. (Courtesy)

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