How grants help create processing facilities in Ukraine during the war
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Already during the full-scale war, in 2022, the man decided to significantly expand the business and open another line of work – for this, he used the possibilities of the state program eRobota.
A new reality
18 staff members, branches in Lviv and Kharkiv, prospects for business development – all this was before the Russian invasion. February 24, 2022 radically changed the future. Already in March, when the hostilities came close to Boryspil, Volodymyr had to change the calculations of business plans to evacuation plans and take the property of his company to his own and partner warehouses in the west of the country.
The man recalls that they did not use state aid. Everything was done at the maximum pace and on their own.
However, it was not possible to predict everything – the company’s property in the Kyiv region survived, but in Kharkiv during the period of active bombing, all the company’s goods were looted. ST-PROZORO suffered losses in the amount of UAH 1 million.
After the departure of the enemy army from the native Kyiv region, the company began to return to work and assess the new reality in which it will have to build a business. According to Volodymyr, logistical problems were the most difficult.
Previously, ST-PROZORO actively worked with suppliers from Kazakhstan and China, but the time of delivery of goods from there increased by three times, and costs – by six times.
The company itself experienced logistical problems, when the time of delivery of goods increased three times, and costs – six times. We had to look for alternative suppliers. Currently, the company works with companies from Bulgaria and Turkey.
Possibilities revealed by the crisis
Having overcome these problems, Volodymyr decided not to stop and decided to implement a new project – to create a line for the production of granulated pellets. The man is convinced that the energy crisis and the need for alternative fuel creates a favorable environment for the development of such a business.
The place for the new workshop was chosen in Zhytomyr Oblast, as it is close to raw material suppliers. In addition, the production will be located near the tracks going in the western direction. This will create undeniable logistical advantages for the enterprise.
The entrepreneur estimated that the costs of starting a new business will amount to UAH 18-20 million. The most expensive is production equipment, which costs UAH 12.5 million. And it was precisely in this that he was helped by a state grant under the YeRobota program.
Common goals
The government declares an increase in industrial processing as one of the key areas of economic policy. This, in particular, will make it possible to export more finished goods and services and less raw materials. Therefore, grants for the development of processing industries are issued within the framework of the large business stimulation program YeRobota. Last year, the state paid UAH 958.6 million in grant funds to entrepreneurs for the creation and modernization of processing facilities.
According to Prime Minister Denys Shmyhal, the war will significantly change the structure of the Ukrainian economy. The government is interested in supporting business that creates added value. We have to move away from the principles of exporting raw materials and therefore create conditions for the development of the processing industry. The government program isWork supports medium-sized businesses that create such a processing industry in our country.
Having learned about such an opportunity from the mass media, the entrepreneur turned to Oschadbank, where he was consulted in detail about submitting an application and the conditions under which funds are provided. Volodymyr’s business plan clearly fell under the direction of the development of the processing industry. We are talking about grants of up to UAH 8 million for the purchase of basic means of production, commissioning of equipment and its delivery. In turn, the entrepreneur undertakes to create at least 25 jobs, work for at least 3 years and pay taxes.
The State Enterprise, the entrepreneur emphasizes, has allowed the minimum amount of the company’s working capital to be used for the implementation of the project. Thanks to this, ST-PROZORO managed to open branches in Dnipro, Zhytomyr and Vinnytsia.
Business must work
Two months passed from the submission of ST-PROZORO’s application to the positive decision on granting the grant. The same amount of money was deposited into the entrepreneur’s bank account. As a result, the company received a grant of UAH 8 million, which covered most of the equipment purchase costs.
It took 2.5 months to manufacture the production line ordered from the Ukrainian manufacturer. The problems, Volodymyr recalls, were due to a power outage, but once the situation was rectified, things went much faster. Currently, production is already at the start-up stage.
The entrepreneur plans the payback of the new line of business in two years. So far, Volodymyr explains, the main goal is to pay the salaries of 25 employees on time and in full.
Despite the difficulties, Volodymyr is optimistic and believes that business should work and develop even in today’s extremely difficult conditions. After all, these are new jobs, salaries for people, taxes for the state, goods for the domestic market and for export.
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