It’s an unusual arrangement for unusual times: Above a factory floor in Lviv, Ukraine, where Volodomyr Mysysk has moved his furniture workshop, he and his 15 employees have become roommates. They have taken their children and their dogs and share a kitchen above the machines where they spend their days reviving a company that could have been destroyed by the war.
But Mr Mysysk, 23, and his workers, who came to Lviv from the bombed-out city of Kharkiv in eastern Ukraine, have benefited from a spirit of solidarity and a government policy aimed at saving industries threatened by an invading Russian army and helping them rebuild piece by piece in cities along Ukraine’s western border.
This region is rapidly transforming into Ukraine’s new economic heartland, with more than 200 transplanted businesses making just about everything, including paint, building materials and parts for electric vehicles.
Factories in Russian-occupied territories have been packed up and moved by trains and trucks, and in the west they are being revived. Manufacturers create jobs and hunt for skilled workers. Now closer to Poland – Ukraine’s gateway to Germany and Western Europe – the reborn companies are forging ties with the European Union, which Ukraine hopes to join soon.
“The main motivation for them to come here is that they stay in Ukraine,” said Andriy Moskalenko, Lviv’s deputy mayor in charge of economic affairs. “Whether they are from Kharkov, Kiev, Chernihiv, they are all Ukrainian. We must support them,” he added, “because Russia has destroyed a lot.”
Ukraine’s economy is expected to shrink by more than a third this year. Inflation is on the rise and is likely to rise above 30 percent, the country’s central bank said recently, and the finance minister recently announced that the country had reached an agreement on stop paying some foreign creditors.
As part of a government relocation program, Mr. Mysysk was able to offer the employees of his small company Roomio a chance: join him in the relative safety of Lviv and keep their jobs, although it meant living close to their boss. until they could find their own shelter.
Emotionally, it wasn’t always easy: “I tried not to seem depressed, because I wanted to encourage everyone,” said Mr Mysysk, who was moving large pieces of the assembly line to Lviv in a bakery truck loaned by a neighboring bread maker. It took a month to get everything out of the old factory, then pockmarked with shelling and gunfights.
“I would smile and say everything is fine, even if I wasn’t sure I believed it,” he said.
But the financial and political support that companies like him have received, Mr Mysysk said, has been an inspiration — and a reminder of how crucial companies are to keeping the economy afloat.
Larger companies are working as quickly as possible to get themselves back together – although charting a business plan amid the constant uncertainty of war is a daunting task.
Oleksandr Oskalenko, the director of Pozhmashina, a manufacturer of fire trucks and agricultural vehicles, stopped production in March at his sprawling, modern factory in Chernihiv, the site of a brutal siege by the Russians, and looked after the safety of its 550 workers.
Our coverage of the war between Russia and Ukraine
“Things were developing very well in Ukraine,” he said. “We still had problems with corruption, but those problems eased and the economy improved. But with the Russian invasion, half the country stopped working.”
When President Volodymyr Zelensky announced an economic program in April to rescue companies from the war-torn East, Mr. Oskalenko seized the opportunity. “We took the factory apart piece by piece and put it on trains to be shipped out,” he said.
The government offered tax breaks and the free transportation of equipment on Ukraine’s railways. Lviv and other nearby cities have competed fiercely to lure the new entrants, offering additional financial sweeteners, including cheap warehouse space, free legal advice, and speedy paperwork to quickly set up new business.
In addition to the 200 companies that have already moved, another 800 have applied for relocation, said Volodomyr Korud, vice president of Lviv’s Chamber of Commerce.
On a recent weekday, a team of welders worked on the refurbishment of Pozhmashina’s paint shop in a giant Soviet-era warehouse, securing massive steel beams under streaks of sunlight through broken overhead windows. When it’s done, farm trucks will appear in crisp olive-green coats and cherry-red fire trucks.
Still, said Mr Oskalenko, it is difficult to say when things will return to normal.
“The Russians have destroyed major industrial centers that produced energy, chemicals and steel,” he said. “Agricultural fields in occupied territories are not producing,” he added. “So making a business plan in one to two years is impossible.”
“But this has given us a perspective for the future,” Mr. Oskalenko said with a smile as he oversaw the rebirth of his old factory. “There are no trenches here, so it helps.”
The war has also led to a tidal wave of Ukrainians settling in the relative safety of the west, with large numbers seeking work. For executives like Pavlo Chernyak, the head of Matro Luxe, one of Ukraine’s largest mattress manufacturers, the move to Ukraine’s western border opens up what he sees as a great opportunity to provide employment for some of the tens of thousands of people who have their jobs. lost because of the war.
Under whooping bullets and a hail of Russian missiles, he said, he moved more than half of Matro Luxe’s equipment from factories in Kiev and Dnipro, in the east, and plans to expand the company. Mattresses are in demand in times of war – not just for soldiers, but also for families in air raid shelters or displacement centers. And when the war is over, he expects demand to only grow during a reconstruction boom.
Chernyak has vowed to expand his workplace in Lviv from 40 people to 200 in six months and to 500 by the end of the year.
“For me, the most important thing is to keep workplaces for people – we need to keep as many jobs here as possible to support our economy and pay our taxes,” he added.
Even as they look for skilled workers, the replanted businesses face additional challenges operating in a wartime economy ravaged by supply shortages and damaged infrastructure.
At the new location of NPO Rost, maker of passenger train interiors, director Aleksandr Pletiuk struggles to fulfill orders in a small warehouse. Before the Russian invasion, the company operated a 33-hectare modernized factory in the now-disputed city of Zaporizhzhya.
Today, Mr. Pletiuk’s warehouse space in Lviv is small in comparison, and the production capacity is only 10 percent of the old location. “We are trying to fulfill all our contracts as quickly as possible, while settling in an empty space that has no electricity yet,” he said.
A handful of employees tried to fulfill orders for train windows, but they were missing essential parts needed to make the windows airtight. Due to the impact of the war on Ukraine’s supply chain, Mr Pletiuk said, it now takes twice as long to purchase glass. Fuel costs have more than doubled.
The company signed contracts with customers at fixed prices before the war, but now costs have skyrocketed: metal prices are 50 percent higher. And investments have to be made in the new warehouse to strengthen the production capacity.
Still, Mr Pletiuk said, “If we win this war, we’ll have a lot more to do.” Russian attacks have damaged at least 3,900 miles of railways in Ukraine. And many of the rail cars that have carried refugees and supplies will have to be refurbished and new ones ordered.
He’s not the only one to see a blessing: the irony of the great corporate migration to the east is that it hasn’t always resulted in financial hardship, but in profits.
Now, only about 60 miles from Poland, Mr. Mysysk realized that it would be easier to export Roomio’s furniture from Lviv to European customers than in Kharkiv. After sending emails to companies all over Europe, he has acquired new customers in Denmark and Slovenia – his first export opportunities.
“In Ukraine, it is considered cool to work with European countries. So I felt really happy when the first contract was signed,” he said. “For our work – I hate to say this, but we’re actually doing better.”
His company isn’t the only one now starting to find new business in Europe, a trend he says is important – not only to help Ukraine keep its economy alive during the war, but also to establish closer ties with the European Union. to get.
“The more we are connected, the more the governments of the European Union and Ukraine will understand that we must be one,” he said.
