Hans Joachim KERBER: “We see opportunities rather than risks in Ukraine”

Ukraine has a positive view of Ukrainian-German business cooperation, Premier Viktor Yanukovych stressed at a recent meeting with Metro AG CEO Hans Joachim Kerber. This German company recently launched Ukraine’s first wholesale hypermarket. “Our investors are our partners, so we have to jointly work out strategies and secure effective cooperation in the Ukrainian market,” said Mr. Yanukovych. In a word, [Western] capital is taking risks venturing into Ukraine. Below Herr Kerber offers his investor view of the Ukrainian market.

Does the fact that your company is operating in Ukraine indicate that our investment climate has improved?

Kerber: We have closely followed your market and concluded that you have a number of factors promising enough for us to start in business here. First, it’s your stabilization of the market situation in general. Second, it’s your economic growth, most of all your GDP increment. Add here the lower inflation rate. In all, there have been many economic factors testifying that Ukraine is already good to do business in.

Do you anticipate any risks here? If so, what?

Kerber: We see opportunities rather than risks in your country. We can’t specify any particular risks in Ukraine that we haven’t encountered in other countries.

The Ukrainian government keeps the food market prices under strict control. How would you respond to any other governments meddling in market affairs that way, with your company operating there?

Kerber: We aren’t affected by this problem, because our policy consists in offering lower prices to attract consumers. Therefore, we are not concerned about any food cost ceilings.

Do you think that the National Bank’s exchange rate strategy — especially in regard to the euro — is sufficiently transparent, so you could expand your business here?

Kerber: We believe that the reforms in Ukraine are aimed in the right direction. Of course, there are many aspects that could be made more effective. You know it better than we do abroad. There are quite a few problems facing the talks with the World Bank and International Monetary Fund. On the whole, however, we do not find any negatives here, none to damage our business in your country.

How do you feel about the Ukrainian population’s buying power? Is it adequate to what your company can offer?

We operate in a number of former Eastern bloc countries, and we note the stable growth of per capita income there. Even if Ukraine shows a low buying capacity, we see great potential here. This is what decided us on doing business in Ukraine.

What’s the difference between the purchase requirement in Ukraine and elsewhere in the world?

Kerber: It doesn’t differ much, so our shopping centers are practically the same in Ukraine, Poland, or Bulgaria. Of course, we are careful to adjust our assortment to the local market and we cooperate with local suppliers. Europe is now witness to the customer conduct harmonization. With time this trend will obviously embrace Ukraine.

Do you think that corruption is actually rampant in Ukraine? Have you personally experienced it?

Kerber: We succeeded in building a shopping center in Kyiv in five months, a remarkably short period, and we have never experienced any obstructions from authorities, so it’s hard for me to comment on corruption in Ukraine. We have invariably met with official support.

Your company ranks as a major employer in several countries, including Ukraine. Do you think that you will be able to provide the same working conditions here as you have done in other countries? If not, what would be the difference and why?

Kerber: Our company policy consists in fully complying with local legislation. We have 550 persons on staff — young, energetic, career-oriented — paid in accordance with market requirements. Our company will continue to make every effort to keep topnotch experts in our employ. We offer them contracts that correspond to market realities, as is practiced all over the world. There aren’t any differences in principle about how our people operate in Ukraine or, say, Romania or Bulgaria. People in Ukraine are highly skilled and motivated enough to give their jobs everything they have.

Would it be right to assume that your company will pay its staff in Ukraine in keeping with local market realities?

Kerber: Absolutely. We take into account all local market conditions, and our Ukrainian staff seems perfectly content. We started selecting Ukrainian office personnel in November. No one has quit since then, meaning that the people are satisfied with their job contracts. True, we are only starting in business here; we finished selecting personnel only recently, so we can’t be sure [about their performance in the long run]. I would like to point out, however, that our company working conditions mean more than pay envelopes. We are working on the so-called compensation package, which envisions insurance policies for the staff members and their families, opportunities to study in Ukraine and abroad, soft bank loan terms, and so on. In addition, every staff member has an opportunity to work in both Ukraine and abroad, meaning that broader career horizons are opening up.