Business in Ukraine

LONDON - As Ukrainian energy monopoly Naftogaz begged Deutsche Bank for a loan of $1.55 billion to buy gas, a Ukrainian businessman, who last May listed his family-owned business, started a European road show to convince investors to pump more money into his poultry business.

But the timing of Yuriy Kosyuk, chief executive of MHP, to start trading publicly couldn’t be worse in a market that seems to lack a clear direction. “I share the pain of investors leaving the market. But there is only one way to regain their trust and that is by outperforming expectations,” Kosyuk told Forbes.com in an interview at the Dorchester Hotel in central London.

Amid the current market turmoil and as the world’s political forces enter a new “cold war” following the Russian invasion of South Osetia, Ukraine has become the forefront of the new power play. In this context, Kosyuk, who describes himself as a nationalist, understands the mindset of businessmen with big pockets.

Forbes: What is your reaction to the current financial situation?

Kosyuk: It is a very hurtful situation for me because my firm’s performance beat analysts’ expectations ( last Wednesday MHP posted a 441.0% higher first-half net profit) but the market situation has been difficult. Investors also tend to associate Russia and the Ukraine and put them in the same boat.

What’s the feedback you are getting from investors?

They’re saying we like everything you’re doing. And if your overperformance wasn’t as good as it is, your shares would be worth nothing. The fact that they are worth something is good.

It is an awful situation at the moment.

I’m quite nervous about the situation but people put their trust in me and my country … investors know me very well and we are very open to them. And while other big players in my industry are declaring losses in their production, our profitability is going up and our sales are going up as well.

What are your long-term plans?

What I am expecting from Europe is investment and trust. By 2012, our company will start pushing Americans and Brazilians from the poultry market and supply the poultry meat to Europe as Ukraine has been traditionally the breadbasket of the continent.

Some argue business in Ukraine is undermined by a Soviet Era-like mentality.

Political populism is one of the main drivers of inflation, as politicians try to win votes by giving people extra salaries. But I would say this is not just Ukraine’s disease.

After the invasion of South Osetia by Russian troops, some argue Ukraine is next.

I think the conditions in Ukraine and Georgia are different–we don’t have any breakaway republics in the Ukraine. We are also hoping for membership in NATO.

What needs to happen for Ukraine to enter NATO?

For this to happen, the West need to see the difference between Ukraine and Russia. All we want is investors to see this difference. Ukraine has a democracy, Russia is living under a Tzar. Investors still see Ukraine as part of the old Russia, which means investment and the availability of cash in the country and the economy may be negatively affected.

In a nutshell, how would you describe yourself?

I am a convinced nationalist. I mean first I love the country in which I live and work. I love it and trust it endlessly. But I am also a businessman and I realize that all love and relationships must be seen in terms of supply and demand.

Tags: Macroeconomics //