Interview Top Interview Ukrainian macroeconomics

Our business will never be successful unless we take care of the people and the country where we work.

Andreas Lear, General Director of BASF, told LDaily about the company’s place in a changing domestic market, its way that took more than a quarter of a century, and the specific situation of the corporate social responsibility: enrichment of products with vitamins, scientific research and raising curiosity for chemistry through educational programs for children.

: How long is the company present on Ukrainian market?

A.Lier: BASF launched its presence on Ukrainian market in 1992. It was immediately after establishment of official German-Ukrainian diplomatic relations. Thus, BASF was among the first representatives of big European business to enter Ukrainian market. Over 25 years, the company has changed considerably and turned from a small representative office into a well-developed middle-sized business. In 1992 we started with 10 employees. Today with more than 150 employees and representatives in almost all regions of Ukraine BASF serves the needs of all the main industries. With the focus on agriculture, we have strong positions in providing effective and sustainable solutions for automotive and transportation, construction, consumer goods, home care and cleaning, nutrition, packaging, paints and coatings, personal care and hygiene, pharmaceuticals, and plastics and paper.

: When did you become a Managing director of BASF in Ukraine?

A.Lier: I took this role in 2012. Before coming to Ukraine, I had an opportunity to use my professional experience on various management positions in BASF offices worldwide, in particular, in South Africa, Middle East, China, Russia, Turkey and Eastern Europe. Currently I am also responsible for Country Cluster East Europe, which includes Ukraine, Moldova, Georgia, and Armenia.

: What were the criteria when the company decided to enter Ukrainian market?

A.Lier: BASF entered Ukrainian market 26 years ago. Why did we make this step? The answer is very simple – because we believed in Ukraine and saw good perspectives for development of our business here. Location in the center of Europe, favorable conditions for agriculture with 30% black soil, good educated population and a large in many areas not fully developed market – all these factors made Ukraine attractive for BASF. Thus, in 1992 BASF came to work on Ukrainian market to make Ukrainian customers more successful and to support them in developing their businesses by bringing here new technologies, products and solutions.

: How has the company changed during the period of its development in Ukraine?

A.Lier: Well, BASF in Ukraine has made a considerable development over this time. Now I am telling not only about the team and business growth, but also about the role BASF plays in the country. In 2017 we enjoyed the most successful business year during 26 years of BASF presence on Ukrainian market. Today we have well-balanced industrial businesses and a very strong agricultural division, which continue to grow with the development of the country. In our everyday work with customers and partners we are always reflecting, analyzing and striving at providing them with the best solutions and expertise on the market. As a German company with over 150 years’ experience we bring to Ukraine European standards of doing sustainable and compliant business, trying to change the business environment in the country for the better. Besides, over the last 2-4 years, BASF in Ukraine became more engaged in social responsibility as we understand that we will never be successful in business without taking care about people and the country we are working for.

: You are right, social responsibility is very important for sustainable business development. Can you please tell us more about social projects, implemented by BASF in Ukraine?

A.Lier: We are doing a lot to support development of chemistry education in Ukraine. Last year we launched BASF Kids’ Lab in Kyiv, which is an advanced interactive educational program for children aged 6 to 12. In a specially equipped laboratory, children spend a day acting as little scientists and conducting experiments in order to learn more about the structure of the world around them. We believe that this project will help them to get interested in science and acquire a sincere passion for chemistry in the future. We also try to support talented students by providing them with trainee programs within BASF. Also in partnership with German-Ukrainian Chamber of Industry and Commerce we are engaged in implementation of vocational school program in Ukraine. In June BASF in Ukraine initiated a reconstruction of the entrance group of Sharivka palace and park complex, which is a unique cultural heritage object and a national architectural monument. The project became possible due to the Ukrainian farmers, as the company pays 25 hryvnas from the sale of each liter of the Architect™, a unique morphoregulator and fungicide for sunflower for renovation of the palace. We have a lot more initiatives and even more plans and we strongly believe that by doing all these we make a good impact on Ukraine as a whole and Ukrainian people in particular.

: We’ve also heard that BASF supports Food Fortification initiative in Ukraine. What has been done so far and why is it important?

A.Lier: The trend of food fortification (enrichment with vitamins and microelements) is growing in many sectors of food industry as an answer to the human need in nutrients. The deficit of vitamins and minerals affects about one third of the population globally. Meanwhile in Ukraine the sphere is emerging, and it offers the wide prospects for dairy, fats and oils, and other industries. On the one hand implementation of Food Fortification is good for health of Ukrainian citizens, on the other hand it helps Ukrainian sunflower oil producers to enter new markets (e.g. in Africa, Asia and South America), where fortified oil is obligatory, thus creating new opportunities for development of business of our customers and partners. So far we have created a Food Fortification working group, which unites representatives of the respective ministries of Ukraine, non-governmental organizations, science, and business. We believe that the actions we take with regards to Food Fortification will create impact and provide advantages for public health and prospects for business in Ukraine and abroad.

: BASF is the world leader in chemistry production. Have you ever faced faked or counterfeit products?

A.Lier: Of course, counterfeit products are always an issue. We see fake product coming onto the market in different areas, in particular in agriculture and crop protection. But it is not purely BASF problem, it creates obsticles for other market players as well. BASF is always about the exceptional quality of its products and solutions. Every year our company invests about EUR 2 billion research and development. However, fake products put BASF quality benchmark into a risk. We do regular job to fight counterfeit products. Together with business associations, in particular EBA, and Ukrainian government we put a lot of joint actions into finding the right answer to fake products on the market.

: How does counterfeit affect the company’s profits?

A.Lier: It is difficult to estimate. As you can imagine, there is a significant impact, otherwise, we would not fight it that strong. Actually, it is not only about the damage to the company’s earnings. Since fake products have no registration certificates, they may create considerable danger to people and environment. With counterfeit product you never know what are their content and application standards are. So, together with other market players, professional associations and Ukrainian government we take all possible measures to fight counterfeit down.

: BASF is a global company, which operates on different markets all over the world. What is the profitable part of BASF in Ukraine on the global scale?

A.Lier: Ukraine is a very important market for BASF. Especially if we consider Country Cluster East Europe, which also includes Moldova, Georgia, and Armenia. We strongly believe in the country and its potential and will continue to support our customers and partners in the region.

: How do you rate the investment climate in Ukraine?

A.Lier: At BASF we work very closely with representatives of almost all industrial sectors, which gives us an opportunity to feel the everyday pulse of the country. And I must admit that investment climate has improved. European business is coming to Ukraine. There is still much to change. There is still much work to do. But we are very much optimistic about the development of Ukraine.

: What was the aim of becoming an EBA member?

A.Lier: The answer is simple. EBA unites many companies and provides a lot of instruments that may be effectively used to change the business environment in the country for the better. For BASF as a company and for me as its representative it is important to support the society, contributing to a sustainable future of the countries we operate in by driving and influencing significant changes as well as lobbying interests for fair and competitive business processes. At the moment Ukraine is going through the challenging time, but it is also a new stage in the life of the country. On the way towards European integration Ukraine needs support and global companies working there should take the lead and share knowledge and professional experience with their Ukrainian partners. They should also set compliance rules, high European standards of doing business and interacting with the key stakeholders, government and local authorities. I believe that by uniting efforts within EBA activities, Ukrainian and European business will move together in one direction having the opportunity to continue the development, to meet the new challenges, to take advantage of new opportunities and to succeed.

Please read: To be successful in Ukraine, you need to forget everything you’ve ever known before entering its market

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