The war has set new challenges for businesses and charitable organizations. Astarta’s practice of building a socially responsible business and supporting local communities has come in handy as never before. Mr.Viktor Ivanchyk, CEO of Astarta, tells Delo.ua about the experience of attracting foreign donors and Ukrainian partners, supporting employees and local communities, internally displaced persons, Armed Forces, using IT solutions for humanitarian initiatives and uniting businesses around the Common Help UA platform.
On the role of humanitarian aid in business
–How have Astarta’s business priorities changed since the start of the full-scale war?
– Since then, everything individual has been subordinated to the common. We have focused on tackling humanitarian problems and helping the Armed Forces.
The geography of the our business operations stretch from Kharkiv to Ternopil regions. And it so happened that these communities housed many people who were moving from the areas of military hostilities to safer places. We set ourselves the task of helping the communities to cope with this large influx of people by providing food and necessities and arranging temporary housing. At the same time, we started cooperating with the civil-military administrations. We delivered food and other necessary goods, including to the combat areas, and on the way back, we picked up people who wanted to evacuate.
–Was this the beginning of the Common Help UA humanitarian project?
-It became a mission for our team. And we realized that we needed to systematize this work to be more effective and increase the volume of assistance. In March 2022, together with the Believe in Yourself charity foundation, we created the Common Help UA humanitarian project.
-What challenge helped to bring Astarta’s charitable activities to a new level?
-During the acute phase of the war, the project helped mobilizing the team, gave new meaning and directed everyone’s energy to find new solutions under critical conditions, significantly scaled up Astarta’s socially-oriented activities. Back then hundreds of employees got involved in our social initiatives, and today there are thousands.
Our experts have developed a digital platform to ensure full transparency of all processes.
Over these ten months, we have managed to help more than 799,000 Ukrainians affected by the war and 433 medical and social institutions in Ukraine.
About business cooperation and partner engagement
–More than 25 international and Ukrainian organizations have united around Common Help UA. Was it your purposeful work to attract donors?
– Cooperation with each donor has its peculiarities. But the most important thing for them is seeing who, when and how they received their help. We have not organized special promotions or significant fundraising events. Instead, we provide each our partner with detailed reports on the joint project results. They help us to see how our support has grown.
Our long-time partner, the Embassy of Switzerland in Ukraine, was the first to respond. They funded 5,100 tons of food for distribution across various regional communities. Another joint project is currently underway. We are restoring the inclusive resource centre in Borodyanka, which was destroyed during the Russian occupation.
Almost simultaneously, the horizontal connections of our employees helped to establish cooperation with the Portuguese community of Ukrainians, Ukrainian Refugees UAPT. Roman Kurtish is the organizer. They sent more than 100 tons of medicines, clothes and food to Poland by air. We brought them to Ukraine on our trucks and distributed them to hospitals and people through our hubs.
Ukrainians who have businesses in Cleveland, USA, also provided powerful assistance. At the outbreak of the war in 2014, Oleksandr Sharanevych and Andriy Voetsky founded the Cleveland Maidan Association, a charity organization providing humanitarian aid to Ukraine to this day. And with the outbreak of a large-scale war, they transported humanitarian aid in ordinary bags. Later, they set up transportation by truck and provided us with tens of tons of medical devices, which we distributed among medical institutions.
–What is the current geography of humanitarian supplies?
-The supplies arrived from the US, Canada, Portugal, Germany, Denmark, France, the UK, Georgia, Sweden, Spain, Poland and France.
–It is challenging to set up logistics – to deliver goods from all these countries – especially in a full-scale war.
– Astarta’s logistics has been serving overseas markets for years. Additionally we created a network of regional hubs near our business operations where we received and sorted humanitarian cargo and distributed it throughout Ukraine.
Our cooperation with the UN World Food Organization has also become a significant achievement for us. In the beginning, we transported their humanitarian cargo internationally and domestically. Then we started participating in the food supply tenders. The result of our cooperation to date is 17,200 tons of food delivered to Ukrainians.
Ukrainian businesses can produce high quality products to supply food programs by international organizations in Ukraine and abroad. Therefore, our current cooperation has good prospects.
–Are your humanitarian initiatives supported mainly by domestic sponsors or external international partners?
– Nearly equally. But some of our projects are not just humanitarian or charitable aid. They are designed to develop small and medium-sized businesses in communities. And later, these entrepreneurs, along with big businesses, will lay foundation for the recovery and reconstruction of Ukraine.
For the last three years, Pact Ukraine and us, with the support from the Government of Canada, have been implementing the program called “Wings”, which helps women in rural areas starting their businesses. Dozens of business ideas have already been funded.
When we showed the project’s results to our partner, the German development bank DEG, they liked our approach and, last November, provided €1 million in grants to finance 60 local businesses engaged in agriculture, food production, and agricultural processing (the “Course to Independence” project). We have a similar project called “Courageous” with Raiffeisen Bank, which supports small entrepreneurs on the verge of survival or needing help because of the war.
–We are continuing with the topic of raising money from foreign financial institutions. You mentioned the experience of partnership with the German Development Bank. Who else dares to invest in the development of Ukrainian business during the war? And is it easy to attract such investors?
– We have been working with banks for almost 25 years. Since the beginning of the company’s public history, the ability to attract loans has been critical for active development. We managed to build a good reputation and credit history, so they supported us during all crises since Ukraine’s independence. In 2022, we also managed to find mutual understanding and financing. Almost all of our partner banks have remained active in Ukraine. They have significantly reduced their financing and support only reliable and impeccable companies in terms of reputation and business projects. Therefore, we are fine with financing. However, we keep our loan portfolio quite conservative.
–What is more important in the aid that Ukraine is receiving now – loans or grant funding?
– As for the military aid, I see it as non-repayable financial assistance, weapons, and equipment. Of course, this goes hand-in-hand with loan assistance, which has to be repaid. And this is normal. As for business, it’s only credit, except for donations for humanitarian projects.
From the point of view of set of values, it is essential to consider that Europe is moving to a paradigm of sustainable development and is ready to finance similar projects in Ukraine. And this is a profound opportunity to start developing such programs now. These are decarbonization and energy efficiency projects. And our company can be a pioneer in this area. We always try to be at the forefront of modern trends and are already working in this direction with banks and influential global players.
The challenges of war for business
–As for sustainable energy, currently, the country has problems with electricity distribution, and it is no secret that russia destroyed many wind and solar power facilities. How much has the electricity shortage affected the company’s operations?
– We had been focusing on autonomy in energy consumption even before the full-scale war, to ensure continuity of production. Almost ten years ago, we built a bioenergy facility that produces biogas from plant residue of sugar production. This allows our soybean processing plant to be fully self-sufficient in biogas and electricity. All our livestock farms and grain silos are equipped with electricity generators as a back-up. During the processing season, sugar plants also generate own electricity. The decentralization of the electricity supply will be a new culture.
–The agricultural business has suffered heavy losses during almost a year of large-scale war. How significant are these losses for Astarta? How do you keep the business going and still have the resources to help citizens and the military?
– Our assets are located mainly in the centre and west of Ukraine, so we have lost almost nothing. And what we have lost is most painful. In May 2022, a russian plane fired a guided missile at our tractor in the Kharkiv region, killing an employee. It is a great tragedy.
We also lost 13 of our mobilized employees in the battlefield. Twenty-one were wounded. Today, 346 employees are defending us in the Armed Forces of Ukraine. We provide them with everything they need, pay their salaries, support their families and will continue to do so until our victory.
Since February last year, our company has put together all efforts to save people, help the families of evacuees, preserve assets, jobs and food production, continue paying taxes and provide assistance. And there are specific figures. In 2022, we paid more taxes than in 2021. UAH1,620bn versus UAH1,590bn. In 2022, we paid UAH1,55bn in salaries and UAH964m for land leases. The financial value of charitable contributions and humanitarian aid from the Common Help UA project approached UAH600m. In addition, UAH41m were allocated for entrepreneurship development projects.
On cooperation with the Government and the reconstruction of Ukraine
–How is cooperation with the Ukrainian Government currently organized? What misunderstandings do you see between business and the Government that should be resolved?
– We can find a lot of negative examples, but I want to focus on the positive ones and see them in the people around me, companies, and the Government. Since the first days of the full-scale war, we have been in close communication with the civil-military administrations. We respond to all requests and inquiries, including the transfer of 139 vehicles for their needs. So the partnership with the Government has improved. And I want these trends to form the basis for further cooperation between the Government and businesses. The state must be a true partner of the business. Provided that partnership is based on mutual trust and respect.
For its part, the business has to conduct its activities transparently, ethically and responsibly.
Neither party can make excuses, such as a problematic situation, war, or “not the right time.” Without this, we will not build a new Ukraine, and we will not be able to join the European Union with confidence.
–What issues and areas will businesses, charitable organizations and the Government have to focus on rebuilding the country after the victory?
– Initially, the most urgent issues will have to be addressed. These include housing reconstruction, energy and environmental restoration, especially decontamination of soil. All of this need to be done in line with the requirements of sustainable development – environmental, social, and governance sustainability. And based on modern IT solutions, which today contributes to effective warfare and tomorrow will help restoring the economy efficiently.
An essential condition for post-war recovery will be the ability of Ukrainian businesses to enter global markets with their products. During the war, Ukrainians created a new culture of charitable and humanitarian activities. I would like to see this culture and our joint efforts transferred to business and create an ecosystem of socially responsible companies to enter foreign markets with our technologies and high-value-added products. The world should know the brand of Ukraine not only as a brand of brave, courageous and resilient people. But also as a brand of Ukraine and its people capable of producing modern, high-tech, high-quality products. And this is fundamental. We need to create production here in Ukraine so that our most entrepreneurial people come back from abroad to set up new production facilities.
–Do you think that those who are now abroad will return?
– They will come back when we start this activity here. Myself, and people like me, who stayed, were not going to leave and will never leave, have to create this foundation for our children and grandchildren who are now studying or temporarily living abroad. When they return here, they can build on this foundation and restore or rebuild the country.
–What role do you see for charitable foundations, including the Common Help UA platform, in this process and post-war reconstruction?
– We will be involved in the reconstruction as much as possible through educational initiatives. Education development is one of the critical investments in Ukraine’s recovery and helping people adapt to new realities. Through entrepreneurship development projects. The projects that I have mentioned, such as the “Course for Independence”, “Wings”, and “Courageous”, have already shown their viability. They need to be replicated many times.
Most volunteers and foundations will need to refocus from supporting military programs to civilian, humanitarian development programs. There will be enough room for everyone.
On the other hand, we realize that the threats will not disappear with Ukraine’s victory. We will need to develop the country’s civil defence system and prepare people for possible resistance in the future. To prepare hundreds of thousands or even millions of people professionally, I emphasize – only if necessary – to leave their civilian jobs and stand up to defend their homeland requires significant investments and efforts. But when we do this, and we will do this, no aggressor would dare to attack Ukraine because they will know that our country can defend itself. This is key today’s agenda; everyone should join forces in this direction because this is our future.