VIDEO - Challenges and positive aspects of running business in Ukraine

March 16, 2016 Pieter Kinds

Peter Kinds,  ControlPay's very own Global Business Development director of freight audit and transport management solutions, discusses challenges and positive aspects of running business in Ukraine. 

On April 6, the Netherlands will vote yes or no to a deeper cooperation between Ukraine and the EU.

The destiny of Europe's biggest nation is potentially in the hands of the citizens of the Netherlands. The future of nearly 46 million people now depends on whether the Dutch decide to support Ukraine's association with the European Union.  This is exactly why, Ukraine Today with the cooperation of Euromaidan Press has launched #DUTCHINUA project.  Our goal is to gather the views and opinions of the Dutch businessmen and entrepreneurs who work in Ukraine.  As well as provide analysis by the experts from the Netherlands who can assess the influence of the referendum on the future of Ukraine and the E.U. as a whole.

The referendum itself is on-binding and it's more about Euroscepticism in the EU than about Ukraine itself, according to some experts. What exactly does this mean for Dutch businesses and what exactly could be lost if this referendum receives the green light? Joining us here on Ukraine Today is Peter Kinds, Director of freight audit and transport management solutions company.

You started your company almost 12 years ago. Can you tell us what motivated you to come to Ukraine and to start over a business?

I had experience in Ukraine before. I knew the country and I knew the opportunities for our business and for IT development in Ukraine. So we decided to have our system, our own platform to be developed in Ukraine, in Kyiv.

If you were in the country before and you knew the nature of the business in Ukraine, you also knew that there was unfortunately a lot of corruption. Especially for the business and for the foreign business and this was a very difficult moment to tackle with. So how did you deal with that?

To be honest we did not see so much corruption. We focus really on the business and we worked with people, with companies. We found out that if you really do your own thing, corruption maybe is around, but can be overcome and becomes actually quite limited and we have not really experienced much difficulties because of that.

So when you started the business here in Ukraine what were the main challenges which you had to face?

I would say it is bringing the right set of people together. It really comes down to people and finding a balance in having a western culture in your company and to have the right local culture and to find the right mix which makes for a very interesting atmosphere in your company. You do not want to have completely local view on your business if you are a foreign business, but you want to have international atmosphere in the company, so it can be the main challenge in the beginning.

Mr. Kinds, can you tell a bit about your business, how big is your company and how do you operate?

In total we have around 150 people in our company of which 140 are located here, in Kyiv. And what we do is that we control an audit freight invoices freight costs for large multinationals and we have set up our own system for that here in Ukraine. So we have IT department, customers service department and audit department that takes care of date to day processes in our company.

So apart from facing the challenges of finding the right people, by the way how difficult was to find the right people for your company, because twelve years ago there were quite a few multinationals, but it was still early 2000s, was difficult to find highly qualified workforce in the market.

Yes, so we have done some in-house training, but what we are really looking for is people who are really motivated and who want to work and who want to succeed. So typically you end up with young people, many people in over office come from the regions, but people have strong willingness to succeed and also willing to learn and to learn and to learn in their own time in order to make their knowledge larger and to expand in the company.

So what is your secret or your recipe for motivating a young talent apart from financial benefits?

I think it is whole package. I think you want to create first of all a very positive atmosphere in a company. You want to create a comfortable atmosphere. So that the people feel that they are reward for what they do, but that also in day to day life there is just a pleasant atmosphere, pleasant colleagues and the things are organized in the company. I think the western atmosphere plays a role, people have the opportunity to travel abroad, so there is exposure from different angles. So it is not only money, it is also looking at the potential, order benefits. Like travel for example.

If you compare the people your employees who work in your company, Ukrainians and the people in the Netherlands what are the qualities that Ukrainians have which differ them from work force in other countries?

I think Ukrainian people are very analytical, they are very motivated, strong willingness to learn and to grow and basically you see younger workforce in general average age than you would see in the Netherlands, but it creates very interesting atmosphere, so in the Netherlands you would have more specialists in a certain area. Here people are maybe more generalistic, but at the same time the atmosphere is very different because the age difference. But analytical skills are very strong here, mathematical skills as well.

Did you find that to the advantage to your advantage that Ukrainian employees were more generally specialized as opposed to narrowly specialized?

Yes, because we employ a lot of linguists, so we are able to receive people that have good language skills. I would say that in Ukraine there are good language educational programs. And apart from that we are able to train them in logistics and other areas where they maybe lack the skills, but have enough ambition and the willingness to learn and to grow. So that was very beneficial.

Mr. Kinds, can we talk a little bit about the political climate. Your business has weathered at least two revolutions in Ukraine. In 2004 where you probably have just started your business or were about to begin. And than in 2013-2014. First of all, how this political turmoils affect your business and if so in what way?

It did not affect our business. I remember the revolution of 2004, part of our office was completely orange because many people were taking orange streakers and flags with them. It were very enthusiastic people, wanted to see change, wanted actively participate in that. And to certain extent we have seen it also now. I would say what happened two years ago was way worse than the first revolution, but it did not affect our business. But we did take a lot of measures to assure that we can continue our business if things would have turn worse.

What were these measures?

To make sure that we can evacuate our people, because we need to assure that we can continue our business process, so we could evacuate our people to the Netherlands or to Poland. So we have supplied them with visas for the Netherlands in case they could not stay in Ukraine to work we could get them over to the Netherlands.

So basically you had a plan to put in place which allowed to your business to relocate very quickly.


How close you were to this plan?

I would say not close, because Internet would be turned off and thing would have been really bad if that would happen, but our customers they do require from us a specific approach to their business processes.

When this finally did not happen, we are talking about the political turmoil in 2014, the Euromaidan revolution, when you saw that actually things are not as far as they were at the seem to be in beginning, how relieved you were?

I am not really relieved because I know Ukraine very well and our management knows Ukraine very well. So we know that things have happened in the past and things can happen and we are more sad because of what happened. I personally never thought that we would need to evacuate our people and the things would get worse than they already were. But in general it is very sad situation what happened, of course.

A lot of businesses were concerned about openly supporting protesters, about allowing their employees to go on the streets and demonstrate, because obviously nobody knows how the events would turn, which way, How did you feel about that?

I think if people want to demonstrate, it is up to them to decide that and we do not have an official policy on that and I think that the things which have happened are very strong to many Ukrainians.

You saw that in the country where you were operating the government did not want that people go out and demonstrate.

Yes, but it has nothing to do with us. We still have our own opinion and I personally believe that if people want to go to the streets for a case they feel very strong about, they should do it.

One of the reasons why people went out on the streets in November 2013 was not signing by president Yanukovych of the EU Association Agreement, but also in general because people were fed up with the massive corruption, with very systemic corruption, they wanted changes. And it was not just a people. The businesses were also really affected by this corruption. So going back to the question of corruption which you tried to avoid at the first place, how did affect your business? Because of course at some cases the businesses do this voluntarily and pay bribes in order to get certain services from the government, but there are cases when the government creates the condition for the business that there is no other way than just to give a pay-off.

I am not avoiding the question, but the fact is that we operate a bit different than the other companies, that we do not work directly with Ukrainian companies or the Ukrainian producers or suppliers for that matter. We really work for foreign customers, big multinational. They trust us with their business processes in Ukraine. And I think it is very big. And we feel comfortable in Ukraine because we did not experience corruption ourselves. But it maybe has to do with the nature of our business. Generally of course we know that there is a lot of corruption around and there has been a lot of corruption around, but it has not really affected us.

Now that the Association Agreement has been signed and some of the provisions of this Association Agreement are coming afar from January 1, 2016. Do you expect the increase of your business because as you have said you are working with foreign companies, so there will be more logistics, more movements, more and more businesses will be coming, foreign businesses, European businesses will be coming to Ukraine. So for your business is this a positive development?

Yes, as I said as we are working with multinationals for them it is very important to understand where do they suppliers operating within which legal framework and obviously within the European framework if Ukraine takes part in that it will really benefit us, because people will see our pace of working here in Kyiv as a more stable secure place. So it will give us more business and in general I think it will give Ukraine a lot more credibility as a partner where people can actually locate their business in a safe way.

 In April the Netherlands is about to host a referendum were the people will vote whether the Dutch citizens want the government of the Netherlands to ratify the Association Agreement, even though this referendum has an advisory nature, there still will be an important signal for the government how the Dutch people feel about this Association Agreement with Ukraine. What do you think about this referendum?

I think it is unnecessary referendum. I do not think it is contributing to positive atmosphere about Ukraine. I think that the people who have created the referendum, who organized it the have used the power of social media to get where they are at this moment. Most people in the Netherlands do not now Ukraine so well and they make advantage of that and they spread lies and misinformation on Ukraine just to get support to say no to Ukraine taking part in this treaty.

Will you taking part in this referendum? Will you be voting?

Yes. Because as we have this referendum now, there is a choice, so I will definitely vote yes.

Would you agree that following the tragic events with MH17 there is a lot of negative information in the Netherlands associated with Ukraine and this most likely will impact significantly the voting by the people in the Netherlands?

I am not sure because I think many people in the Netherlands do realize that the situation has been created by Russia in Ukraine. And I do not think it is contributes to choosing in the referendum. It is more what is being said right now which is really wrong which influences the opinion.

Do you think that following the referendum your business will continue to operate as previously that this will somehow influence your business?

I do not think so. I think the referendum is more difficulty for the Dutch politicians if there is a negative outcome than as it is for business as it seems that the Association is going ahead nevertheless.


About the Author

Pieter Kinds

Pieter Kinds (41) is Director at ControlPay, a global Freight Audit provider and the CEO of TenderTool, a cloud-based logistics sourcing platform. Active for over 14 years, Pieter is eager to share insights, thoughts and experiences via his blogs.

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