Ukraine’s Industrial Champions Are Crucial to Reconstruction

After two days of discussions and meetings, those of us invested in the future of Ukraine leave the German capital with «revived hope», as Deputy Prime Minister Yulia Svyrydenko put it. It is encouraging to hear from our German hosts, that at the end of two days, an estimated €16 billion worth of pledged contributions for Ukraine were realized.

In my view, two major themes from the conference emerged. First, the need for the private sector to play a central role in Ukraine’s reconstruction, and second, the need for turnkey industrial initiatives to unlock funding pledges. In her opening speech, European Commission President Ursula von der Leyen said that the EU’s aim is to «improve access to finance for Ukrainian businesses, especially for SMEs and start-ups that can help modernize the Ukrainian economy». I agree, but only in part. 

While modernizing the Ukrainian economy is essential to the future prosperity of the country, we should not forget that SMEs are part of an ecosystem that work with big companies. SMEs depend on big business; and big business depends on SMEs.

There are several major companies that have been standing by Ukraine, acting as industrial champions throughout the war, and have emphatically demonstrated their ability to support Ukraine through this brutal invasion and eventually emerge from it stronger. These entities will provide the foundation of the private sector’s effort to help Ukraine’s reconstruction, facilitating SMEs.

Our company, Ferrexpo, a major Ukrainian iron ore producer, is one of these companies. Since the beginning of 2022, it is estimated that we have contributed 20% to the GDP of our home region, the Poltava Oblast, and accounted for 3% of Ukraine’s exports by value.

Despite the challenges of operating during wartime, my colleagues have work tirelessly. They have learned to be more nimble, and adapt to the endless challenges we have faced, and still operate at an optimum capacity. I am encouraged that this flexibility has been rewarded, as the reopening of the Black Sea corridor has enabled them to bring back production and increase exports.

Companies like Ferrexpo are well-placed to assist Ukraine obtaining the foreign direct investment needed for reconstruction. We have long-standing relationships with investors around the world, with many of these sovereign wealth, investment and pension funds, staying with us throughout the war. 

This has enabled us to continue supplying our European customers, including premium Austrian and German steel producers such as Voestalpine, Salzgitter, thyssenkrupp.

Ferrexpo also has an eye to the future. We are committed to helping Ukraine realize its potential as a major enabler of the transition to green steel, especially in Europe.

It is my view that we are one of the few companies that is fully bought into the Iron Ore and Steel recovery initiative.

Ferrexpo is already producing the high-grade iron ore pellets that are crucial for the steel industry’s transition to more eco-friendly practices. Our participation in this multi-party recovery initiative is a demonstrable example of our willingness to play our role in Ukraine’s resilience and recovery. The sooner this initiative starts, the better.

The measures the EU has demanded of Ukraine as part of the accession process are precisely those the country and its industries need, and are ready for. Ensuring effective reforms focused on accountable governance, transparency and fair legal procedures will be crucial to the accession process. In Berlin, Ukraine was applauded by international stakeholders for making progress in this area, and we encourage these efforts to continue.   

The Ukraine Recovery Conference has provided an opportunity to reflect on the state of the economy and the challenges ahead. What shone through most during the two-day event was the emphasis that the private sector must play. We are ready.