EBRD and USA support Ukrainian entrepreneurs’ resilience with business advice

By Lucia Sconosciuto

EBRD and USA support Ukrainian entrepreneurs’ resilience with business advice

A Donetsk mustard producer successfully starts over in Kiev.

During these times of economic uncertainty, the EBRD has remained strongly engaged in Ukraine, supporting reforms, investing in key sectors and promoting the country’s huge potential.

The entrepreneurial work force, in particular, is a great resource to tap to support resilience, stabilisation and growth.

So the EBRD focuses on promoting a competitive and vital small and medium-sized business sector through finance, business advice and policy dialogue.

As part of this work in Ukraine, the United States of America in 2014 provided donor funding to support the EBRD’s Advice for Small Businesses, which helps SMEs take the next step in their development with the assistance of professional business advice.

One of these projects provided a new lease of life to Factoria, a small agribusiness specialising in mustard and mustard-based products, once based in Donetsk.

The company lost its production facilities in May 2014 as a result of the conflict in the eastern part of the country. It then decided to relocate to Vyshgorod, in Kiev Oblast, and start again.

“Mustard has a healing effect,” said Andriy Shapovalov, managing partner and co-founder of Factoria. “We started our company in 1993 producing mustard plasters to cure various conditions, so resilience is our business and we live by it.” 

After buying 2.5 hectares of land with a new production building and moving into the new premises in October 2014, the company saw an opportunity to optimise its operations and introduce national and international quality and food safety standards to prepare for more export opportunities.

Having heard of the EBRD during a training course, Mr Shapovalov contacted the team based in Kiev to find an expert consultant that could guide the company in the complex process of obtaining ISO certifications for quality, food safety and laboratory management systems.

The project was funded in part by Factoria, in part by the U.S. Government, in consultation with the U.S. Department of the Treasury and the U.S. Director’s Office at the EBRD.

The EBRD project started in spring 2015 and during eight months of work with the consultant Factoria was able to obtain the relevant ISO accreditations and build their own laboratory with new equipment.

In the meantime, the company worked tirelessly on the construction of other crucial facilities such as a warehouse for end products, enormous silos for seeds and tanks for the storage of the plant’s oils.

After so much hard work and determination, in 2016 Factoria was not only back in business with the launch of three new production lines but it also expects to generate more than double its 2013 turnover, before relocation.

The EBRD is the largest institutional investor in Ukraine. The development of the private sector is a priority for the Bank. In addition to finance, the Bank has provided expert advice to more than 650 local SMEs since 2010, thanks to funding from the US, the EU and other donors, increasing competitiveness, stimulating growth, and supporting the creation of over 2,500 jobs countrywide.