Weiss Chemie + Technik, a traditional medium-sized company and European market leader in the field of adhesive and sandwich element technology based in Haiger in Hesse, Germany, visited the Ukrainian cities of Kyiv, Dnipro and Khmelnytskyi as well as Hlukhy, Haiger's twin city, with a four-person strong management team delegation. Their aim was to explore the possibilities of reconstruction directly on site and to talk to Ukrainian decision-makers in person.

"How can reconstruction in Ukraine be done, what is realistic and how can German SMEs, as the driving force of the German economy, contribute to this? Companies can only answer such questions by visiting on site," says Christian Dölle, the CEO

CEO Christian Dölle, VP Sales Florian Fiedler, General Counsel Sven Ringsdorf and Sales Director East Rudolf Gerhardt visited the state investment agency Ukraine Invest, the German-Ukrainian Chamber of Foreign Trade, the German Embassy, clients, partners and other industrial companies and partner cities. Their aim was to form an idea of the situation on the ground – not only in western Ukraine, but also elsewhere, where the damage is greatest. The team's primary focus was to offer partners and clients moral support, and secondly a realistic assessment of the market, including risks and opportunities, as well as a visit to the partner city. "This trip has made a profound impression on us all on the human and economic level, and has given us many new insights. We are left, more than anything else, with great respect for the people of Ukraine. We have seen with our own eyes how urgently the support of neighbouring countries is needed in human, economic and military terms," says Dölle.

The logistics situation

First of all, logistics problems must be overcome. Ukraine can currently only be reached using darkened trains. It took the group 28 hours to travel from Frankfurt to Kyiv. Tickets for this trip cannot be bought in Germany. "Rental cars are not an option because you need someone who knows the roads, including all the potholes and mines. Road signs have been made unrecognisable to prevent the Russians from finding their way around," says Ringsdorf. Insurance that covers German visitors to Ukraine is not available. Finding even basic insurance cover for the trip, against ransom demands, for example, was a time-consuming matter." The route to the hotel leads along "secured roads, past military checkpoints". A curfew is in place in the evenings. Meetings are challenging, because language skills are not always well developed throughout the country. Use of the Russian language is not accepted. During their trip, the delegation lived through eight bomb alerts in total in Kyiv and in Dnipro, 80 km from the front. On one occasion, a bomb actually hit in the immediate vicinity of the tour group. Life goes on in times of war. Restaurants, bars and cinemas remain open, albeit in crisis mode.

Skills shortage, slump in sales and realistic growth

In addition to the challenging logistics situation, the war is unfortunately also exacerbating the shortage of skilled workers. "The men have gone to war and the often unforeseen recruitment makes planning difficult. The mental pressure is palpable. What's more, Ukraine is still struggling with corruption and, given the circumstances, low productivity," says Christian Doelle, "with the added 'bonus' that raw and primary materials are difficult to come by." Corruption appears to be an omnipresent problem, which locals know how to avoid – so you also need good contacts. Although business in western Ukraine is still growing by 20 to 30 percent, sales in eastern Ukraine have slumped by 70 to 80 percent. In Ukraine, price is the only criterion. "The market is still small, with low margins. High growth is realistic, but the question is: when?" the team finds itself wondering. The next conversation partner is propping up two companies. In one company, he employs his family members, in the other the management has fled and he is keeping many balls in the air personally – from company management to production control: he is involved in every process. "Such admirable commitment with incredible dynamism, motivation and confidence," says VP Sales Fiedler.

The visit to the German Embassy in Kyiv left a sobering impression. Although the embassy welcomed Weiss Chemie's visit and wants to showcase it "as a positive example", no funding programs for investments by SMEs are expected from the German side. Ukrainian subsidies are available for investments upwards of €12 million. Up to 30 percent subsidy is possible. Tax relief is conceivable if a commercial area of more than 10,000 square metres is created that provides for the redevelopment of old buildings or brownfield sites. Doing so would require at least two partners. The Ukraine Division of the Chamber of Foreign Trade is currently being set up and facilitates contacts. All parties are currently rejecting a ceasefire or peace agreement. The unanimous slogan is "We will fight until victory".

The "best location for reconstruction" 80 km behind the front line

Upon their arrival in Dnipro, the delegation is welcomed by the deputy governor and deputy military chief, the head of the reconstruction department and all seven mayors in the region. Expectations are high, and television crews are in attendance. Land could be sold immediately and Dnipro was the best location for reconstruction. One could start straight away. Towards the end of the meeting, the air-raid alarm sounds and the governor's administration runs down the stairwell. Shortly afterwards, they reach the stairs, and the bomb strikes. During the disturbance, everyone huddles together in the shelter. The onward journey to Khmelnytskyi is once again enervating. After the security check at the station, the lights go out. A siren sounds and an air raid attack is announced. Everyone runs into the cellar and waits, in amongst wounded soldiers. Gerhardt offers pastoral care among the wounded during the night.

"It will be difficult for German SMEs to gain a foothold, despite the expected economic upturn (at some point): challenges to overcome include regulatory requirements and legal framework conditions, unclear, inadequate or non-existent economic and investment promotion and a patchy network of suppliers," the delegation concluded.